oversight

Nuclear Regulation: Preventing Problem Plants Requires More Effective NRC Action

Published by the Government Accountability Office on 1997-05-30.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                  United States General Accounting Office

GAO               Report to Congressional Requesters




May 1997
                  NUCLEAR
                  REGULATION
                  Preventing Problem
                  Plants Requires More
                  Effective NRC Action




GAO/RCED-97-145
          United States
GAO       General Accounting Office
          Washington, D.C. 20548

          Resources, Community, and
          Economic Development Division

          B-276754

          May 30, 1997

          The Honorable Joseph I. Lieberman
          United States Senate

          The Honorable Joseph R. Biden, Jr.
          United States Senate

          As requested, we reviewed the Nuclear Regulatory Commission’s (NRC)
          oversight of the nuclear power industry. NRC, an independent agency
          created by the Congress in 1974, is responsible for, among other things,
          ensuring that the operation of the nation’s 110 commercial nuclear power
          plants occurs in a manner that adequately protects the health and safety of
          the public. Identifying plants with safety problems and making sure that
          the owners of the plants (licensees) correct their safety deficiencies
          promptly is critical to NRC’s safety mission.

          As agreed with your offices, we focused our review on how NRC

      •   defines nuclear safety,
      •   measures and monitors the safety condition of nuclear plants, and
      •   uses its knowledge of safety conditions to ensure the safety of nuclear
          plants.

          As part of our work, we looked at three plants that had long-standing
          histories of uncorrected safety concerns. Specifically, as agreed with your
          offices, we focused on the Salem Generating Station (Salem) in Salem,
          New Jersey; the Millstone Nuclear Power Station (Millstone) near New
          London, Connecticut; and the Cooper Nuclear Station (Cooper) near
          Brownville, Nebraska. We chose these three facilities because of your
          concerns that some nuclear plants have reached serious states of decline
          despite NRC’s oversight efforts. The Millstone and Salem plants were shut
          down by their licensees because they violated NRC regulations. The
          licensees of these plants must address many long-standing safety problems
          before NRC will allow them to restart operations. Cooper is currently
          operating but was shut down by its licensee in 1994 because of safety
          concerns. As with Millstone and Salem, Cooper could not restart without
          NRC’s approval. (App. I describes NRC’s regulatory program; apps. II, III, and
          IV describe these facilities in more detail.)




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                   To achieve NRC’s safety mission, it is critical that the Commission maintain
Results in Brief   a high degree of confidence in its regulatory program’s ability to ensure
                   that the nuclear industry performs to high safety standards. While we are
                   not making judgments on the safety of plants, the many safety problems
                   identified in some plants raises questions about whether NRC’s regulatory
                   program is working as it should. Determining the safety of plants is
                   difficult because NRC does not precisely define safety. Instead, NRC
                   presumes that plants are safe if they operate within their approved designs
                   and in accordance with NRC’s regulations. Because of the many redundant
                   safety systems built into the plants’ designs, NRC believes that plants are
                   safe to operate even when some of their safety systems are not working
                   properly. However, according to recent findings in some plants, including
                   Millstone, NRC is no longer confident that all plants are still operating as
                   designed and is requiring all 110 nuclear plant licensees to certify that they
                   are maintaining their plants in accordance with their approved plant
                   designs. NRC is also concerned that as nuclear plant owners pursue
                   cost-cutting strategies to meet future competition, safety priorities may be
                   jeopardized.

                   NRC is responsible for laying out clear requirements for operating nuclear
                   plants and for overseeing its licensees to ensure that they are performing
                   as they should. NRC has on-site inspectors that prepare reports on the
                   plants’ activities about every 6 weeks, and comprehensive assessments are
                   assembled every 12 to 24 months for all nuclear plants. NRC also collects
                   and publishes safety performance indicators, such as the number of safety
                   system failures at all plants. These data, which are supplied by the
                   licensees, show that the overall safety performance of the nuclear
                   industry, as a whole, is good and improving but that some plants are
                   chronically poor performers. Currently, NRC has placed 14 nuclear plants
                   on its “Watch List,” which includes those plants whose declining safety
                   performance triggers additional oversight attention by NRC. This is the
                   highest number of plants on NRC’s Watch List since 1988. Thirty-seven
                   percent of the nation’s nuclear plants have been on NRC’s Watch List at
                   some point over the past 11 years, and many of these plants have stayed
                   on the Watch List for many years. For example, Units 1 and 3 at the
                   Browns Ferry site in Alabama have been on the Watch List for 10 years,
                   and Dresden’s two plants in Illinois have been on the Watch List for 7
                   years.

                   For some plants, NRC has not taken aggressive enforcement action to force
                   the licensees to fix their long-standing safety problems on a timely basis.
                   As a result, the plants’ conditions have worsened, making safety margins



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             smaller. For example, Salem, Millstone, and Cooper were closed for safety
             deficiencies. In each of these cases, NRC’s inspection records show a
             pattern of licensees that are not adequately identifying and correcting their
             plants’ safety deficiencies over long periods of time. NRC allowed safety
             problems to persist because it was confident that redundant design
             features kept plants inherently safe and because it relied heavily on the
             licensees’ promises to make changes. NRC forced the licensees to correct
             their problems only after the licensees voluntarily shut down plants. In
             addition, NRC lacks a process for ensuring that the licensee uses competent
             managers, which is widely recognized by NRC and industry officials as
             important to ensuring plants’ safe performance. Finally, NRC was slow in
             placing plants on its Watch List, which it uses to trigger more regulatory
             attention at an early stage so that a plant’s performance conditions can be
             improved. Salem was not placed on the Watch List until after the licensee
             shut it down for safety reasons. Millstone was eventually placed on the
             Watch List years after first being recognized as having many safety
             problems. Cooper was never on the Watch List, even though it was shut
             down by the licensee in 1994 because of many safety deficiencies.

             NRC’songoing reforms, which include expanding its inspection program
             and revamping its process for identifying plants with long-standing safety
             problems, show a strong commitment by the current Chairman and
             Commission to strengthen the Commission’s oversight capability.
             However, changing NRC’s culture of tolerating problems will not be easy.
             Achieving fundamental reform starts with holding the licensees
             accountable for fixing their plants’ problems more promptly and
             addressing management issues more directly.


             Under the authority of the Atomic Energy Act, the NRC licenses the
Background   construction and operation of nuclear power plants; develops,
             implements, and enforces the rules and regulations that govern nuclear
             activities; inspects facilities to ensure compliance with legal requirements;
             and conducts research to support its programs. NRC also maintains at least
             two inspectors at every operating nuclear reactor site and supplements
             their inspection activities with staff from any of its four regions and from
             NRC headquarters.


             NRC’s fiscal year 1997 budget is estimated at $477 million. Its staff of about
             3,000 is responsible to five Commissioners appointed by the President and
             approved by the Senate. About 55 percent of NRC’s professional staff is
             dedicated to nuclear reactor activities. The 110 licensed nuclear plants



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                           operate in 32 states and provide about 22 percent of the nation’s
                           electricity. Six states (Connecticut, New Jersey, Maine, Vermont, South
                           Carolina, and Illinois) rely on nuclear power for over half of their
                           electricity. The utility companies that own and operate nuclear plants
                           include both public and private enterprises.

                           Utility experts agree that aggressively attending to safety deficiencies is
                           good business strategy because safety problems are a significant economic
                           burden on both licensees and ratepayers. Plants that perform poorly must
                           shut down for repairs more often than those that perform well. According
                           to NRC, a shutdown costs a licensee between $249,000 and $310,000 per day
                           in operating costs and in purchases of alternate power. Also, NRC reports
                           that the nuclear industry has matured to the point that plants have been in
                           operation long enough for reactors’ aging to be a major issue that can
                           affect cost and safety. Aging affects all of a plant’s structures, systems, and
                           components. These conditions can cause safety concerns that, if not
                           appropriately addressed, would require a licensee to shut down the plant.

                           NRC  officials are also worried that safety levels may be compromised as
                           licensees cut costs to stay competitive. A private research report
                           concluded that because competition will result in lower electricity prices
                           in the future, as many as 37 of the nation’s nuclear sites are vulnerable to
                           shutdown because their production costs are higher than the projected
                           prices in the market.1 Together, these sites represent over 40 percent of
                           the nuclear generating capacity of the United States.


                           NRC’s statutory obligation when it grants an operating license is to require
Nuclear Plant Safety       sufficient information from the licensee to enable NRC to “provide adequate
                           protection to the health and safety of the public.” NRC approves the plant’s
                           design, monitors the plant’s performance, reports on conditions, and
                           inspects the plant to ensure compliance with its regulations as part of its
                           statutory responsibility. NRC has three primary enforcement
                           sanctions—notices of violation; civil penalties; and orders to modify,
                           suspend, or revoke licenses:

                       •   A notice of violation informs the licensee of one or more violations of legal
                           or regulatory requirements.
                       •   Depending on the severity of the violation, a notice can be accompanied
                           by a civil penalty (fine) of up to $110,000 per violation per day. The

                           1
                            Nuclear Power Plant Shutdowns and Implications for Future Natural Gas Demand, Washington
                           International Energy Group (Feb. 1997).



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    amount of the fine, if any, depends on the safety significance of the
    violation and on the licensee’s responsiveness to the violation, including
    any corrective action that the licensee has already taken. In fiscal year
    1996, NRC levied fines totaling $3,700,000 on 28 plants; Salem led all plants
    with fines of $600,000.
•   NRC uses orders to demand more information from the licensees
    concerning potential hazardous conditions, in more severe cases to
    require a licensee to shut down or, to prevent a licensee from restarting its
    plant’s reactors if the NRC feels it would be prudent to force the licensee to
    fix an accumulation of safety problems while the reactors are idle.

    Only once in its history has NRC issued an order to shut down an operating
    plant (Peach Bottom, Pennsylvania, in 1987). On other occasions, NRC
    issued a shut down order after the licensee suspended operations.
    Typically, licensees shut down a plant when they violate certain
    regulations or their plant specifications. They may also shut down a plant
    if they believe such an action is appropriate for safety reasons, usually as a
    result of substantial involvement by NRC. Once a plant is shut down, NRC
    can keep it shut down until the licensee addresses its problems to NRC’s
    satisfaction. NRC can also place plants on its Watch List when the plants’
    performance indicators and other data show a pattern of deteriorating
    safety performance. This action prompts additional oversight by NRC and
    more intensive inspection activity.

    NRC’s regulations and other guidance do not provide either the licensees or
    the public with the specific definitions and conditions that define the
    safety of a plant. According to NRC, nuclear plants are presumed to be safe
    if they operate as designed. NRC reasons that the many safety features and
    systems built into a plant’s design provide an adequate level of safety, even
    when some of them are not functioning. System redundancies—the
    duplication of a plant’s safety systems and components—provide in-depth
    protection to help prevent an accident from releasing radiation to the
    public. The concept of defense-in-depth forms the foundation of NRC’s
    confidence that nuclear plants are safe, even those that may be shut down
    for safety problems.

    The conditions found at Millstone, however, have challenged NRC’s
    confidence that it can rely on licensees to ensure that the plants are
    operating within their approved design basis. In 1996, NRC discovered that
    Millstone had been operating outside of its plant design for many years, a
    condition that contributed to the licensee’s decision to shut down the
    plant. NRC’s on-site inspectors were unaware of the extent to which



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                          Millstone was operating outside of its design basis because, according to
                          NRC’s Chairman, the agency stopped doing design basis inspections too
                          early (NRC is now re-emphasizing design basis issues in its inspection
                          program). The Chairman also said that NRC should have put more
                          resources into discovering the problems at Millstone at an earlier stage.
                          Concerned that Millstone’s conditions exist in other plants, NRC is now no
                          longer confident that all nuclear plants have accurate information on the
                          extent to which they are operating as designed. As a result, NRC is requiring
                          all licensees to certify that they are in compliance with their approved
                          design basis.2 At the time of our review, the licensees were in the process
                          of reporting back to NRC on this requirement.


                          NRC collects an enormous amount of information on nuclear plants, both
NRC’s Safety              from its own inspectors and from the nuclear plant licensees. Taken
Performance Data          together, these sources provide NRC with an extensive knowledge base
Show That Several         with which to measure and monitor a plant’s safety conditions and safety
                          performance. These data characterize an industry that has improving
Plants Are Poor           safety trends overall but that also has several chronically poor performers.
Performers
Inspections and           NRC’s on-site inspectors prepare reports about every 6 weeks on a plant’s
Performance Indicators    performance, using a comprehensive guide covering the aspects of nuclear
Provide Extensive         plant operations. These reports are then rolled up into a Systematic
                          Assessment of Licensee Performance (SALP) approximately every 12 to 24
Information on Nuclear    months. SALPs, which form NRC’s basic performance rating for each nuclear
Plant Safety Conditions   plant, cover broad areas, including operations, maintenance, and
and Performance           engineering. NRC also conducts special inspections if they are warranted by
                          a plant’s conditions. The plants with histories of poor performance are
                          often the subject of additional inspection activity (app. I describes SALPs
                          and other inspection activities in more detail). NRC also prepares a
                          summary of plant performance at least every 6 months. NRC uses the
                          summary as a guide for determining the plants’ need for additional
                          inspection attention. In addition to these NRC activities, licensees report
                          daily to NRC on the plants’ conditions and events. Unusual events, such as
                          equipment failures and accidents, are included in these daily reports.

                          Performance indicators are an important tool to gauge plants’ safety
                          trends. Following a series of events, including the Three Mile Island
                          nuclear accident and a loss of feedwater at the Davis-Besse, Ohio, plant,


                          2
                           A plant is designed to operate according to a “design basis,” which includes the specific functions to
                          be performed by the plant’s structure, systems, and components.



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                             NRC developed eight indicators for monitoring the safety performance of
                             licensees (see app. I for a description of these indicators). The indicators
                             were needed, according to NRC, to improve its ability to predict declining
                             performance. Collected quarterly from the plants’ reports, the indicators
                             cover many safety performance aspects of operating reactors, such as the
                             number of safety system failures and the extent of workers’ exposure to
                             radiation.


Several Plants Continually   While NRC’s indicators show generally improving safety conditions
Perform Poorly               throughout the nuclear power industry, the indicators on a plant-specific
                             basis also show that several nuclear power plants continue to plague NRC
                             with chronically poor performance. Currently, 14 plants are on NRC’s
                             Watch List, which contains those plants identified by NRC as needing close
                             attention because of their declining performance.3 This is the highest
                             number of problem plants listed since 1988 (see fig. 1).




                             3
                             NRC develops the Watch List semi-annually at its Senior Management Meeting, which is discussed in
                             more detail later in this report.



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Figure 1: The History of NRC’s Watch List

Number of plants


15




10




 5




 0

 1987              1988   1989       1990            1991         1992          1993       1994        1995         1996        1997

 Years


                                            Source: GAO’s analysis of NRC’s data.




                                            Over the past 11 years, 41 plants, or 37 percent of the nation’s nuclear
                                            power plants, have been placed on the Watch List by NRC, as shown in
                                            figure 2.




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Figure 2: The Nuclear Plants on NRC’s Watch List

Nuclear plants
Maine Yankee
Salem 1
Salem 2
Crystal River
Davis-Besse
Fort St. Vrain
Palisades
Lasalle 2
Surry 2
Fort Calhoun
Lasalle 1
Surry 1
Millstone 1
Millstone 2
Millstone 3
S. Texas 1
S. Texas 2
Fitzpatrick
Brunswick 2
Zion 1
Zion 2
Brunswick 1
Nine Mile Pt 2
Rancho Seco
Nine Mile Pt 1
Fermi 2
Calvert Cliffs 1
Calvert Cliffs 2
Turkey Pt. 4
Turkey Pt. 3
Sequoyah 2
Sequoyah 1
Peach Bottom 2
Peach Bottom 3
Pilgrim
Indian Point 3
Browns Ferry 2
Dresden 2
Dresden 3
Browns Ferry 1
Browns Ferry 3

                   0    1        2         3          4          5          6        7        8         9        10        11
                                                   Total years on Watch List

                                          Source: GAO’s analysis of NRC’s data.




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                           Twenty-four plants have been on the Watch List for 2 or more years.
                           However, about half of the plants that NRC placed on the Watch List were
                           known by NRC to be poor performers long before they were placed on the
                           list. NRC’s senior managers formally discuss plants that are experiencing
                           declining safety performance. Although about half of these plants are
                           eventually placed on the Watch List, NRC has not precisely defined the
                           criteria for when a plant is formally discussed and/or placed on the Watch
                           List. Salem and Millstone were under discussion by NRC for 3 to 4 years
                           before they were placed on the Watch List in 1996 and 1997, respectively.
                           NRC discussed Cooper as a problem plant but never placed it on the Watch
                           List. In their letter commenting on a draft of this report, NRC said that 43
                           other plants have been discussed but not placed on the Watch List (see
                           app. V for NRC’s letter).


                           Our review of three facilities with a history of poor performance shows
NRC Is Not                 that NRC has not gotten licensees to fix safety problems at these plants in a
Effectively Overseeing     timely manner. Identifying and correcting safety deficiencies are among
the Plants That Have       the licensees’ most important safety responsibilities and a major focus of
                           NRC’s inspection program. Yet NRC allows licensees repeated opportunities
Problems                   to correct their safety problems, often waiting for a significant problem or
                           series of events to occur at a plant before taking tough enforcement
                           action. We found that NRC fined licensees, in some cases long after
                           problems became apparent, and was very slow to place problem plants on
                           its Watch List. NRC also lacks an effective process for ensuring that
                           licensees have competent management in place, which is considered by
                           NRC and nuclear experts as an important influence on a plant’s safety
                           performance. Finally, the Senior Management Meeting process, a tool
                           created by NRC to provide an early warning of problem plants, is not
                           working effectively.


NRC Is Not Getting         NRC’s regulations require nuclear plants to have an effective program to
Licensees to Fix           “assure that conditions adverse to quality . . . are promptly identified and
Deficiencies in a Timely   corrected.” NRC places importance on evaluating plants’ corrective action
                           programs to ensure that they will lead to timely correction of the identified
Manner                     problems. However, in all three facilities we examined (Millstone, Salem,
                           and Cooper), the licensees did not fix their substantial and recurring
                           safety problems in a timely manner. For example, NRC concluded in its
                           1995 performance review of Salem that




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“. . . overall performance has declined and . . . the challenges to plant systems and
operators caused by repetitive equipment problems and personnel errors . . . had the
potential to, or actually did, adversely affect plant or personnel safety.”


Of the 43 deficiencies that NRC required to be addressed before the Salem
reactors can be restarted, all but 5 were conditions that were present
when the reactor was operating. Two of these deficiencies had been
continuing problems for 6 to 7 years—a control air system and circulating
water for a motor—and one had been on NRC’s followup system since 1989
and was addressed in three separate NRC inspection reports. The licensee
has identified approximately 31,000 work items that it feels should be
completed before restarting the units.

Similarly, at Millstone, a special NRC inspection team reported in 1996 that
it found several instances in which the licensee failed to identify safety
problems and lacked an adequate system to track corrective actions. The
team also reported that the licensee inappropriately closed corrective
actions before they were completed. A former Senior Resident Inspector
at Millstone told us that the plant’s managers were notoriously late in
correcting problems. Also, the unpublished 1995 SALP on Millstone was
very critical of Millstone’s inattention to a growing backlog of unresolved
safety concerns.4

Like Salem’s, Millstone’s problems were also long-standing and well
known to NRC. Moreover, NRC acknowledges that Millstone’s performance
declined for years before the plant was first discussed as a potential Watch
List candidate in 1991. In a 1990 meeting in which NRC officials determined
which plants should be placed on the Watch List, they noted that
“[Millstone] . . . has acknowledged that weaknesses existed prior to 1991 in
their programs for timely resolution and reporting of deficiencies.” A
former Millstone Senior Resident Inspector also told us that he saw
performance slip over several years as maintenance backlogs grew,
violations increased, and management’s responsiveness to NRC waned. He
also said that NRC should have pursued more aggressive enforcement
action. A 1996 independent auditor’s report summed up the Millstone
situation as follows:

“[Millstone’s] attempts to regain [confidence that it can operate safely] will be complicated
by the fact that the NRC has also publicly admitted that, by failing to take more aggressive




4
 In accordance with NRC’s policy, Millstone’s latest performance assessment was not published
because Millstone is shut down.



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                            action against [Millstone] over the years, the agency itself has lost the confidence of the
                            public it serves.”5


                            Similarly, problems in identifying and correcting the deficiencies at
                            Cooper were long-standing and were well known to NRC. Cooper was shut
                            down for 9 consecutive months in 1994 and 1995 because of safety system
                            failures that were, according to NRC, of long standing. Some of Cooper’s
                            problems dated back to the plant’s first start-up in 1974—problems that
                            Cooper’s management should have addressed years earlier, according to
                            the NRC inspectors we interviewed. An NRC audit reported that the plant’s
                            managers were “living with problems, not fixing them” and that
                            “ineffective self-assessment” and a “weak corrective action program”
                            characterized operations.

                            Several reasons may account for why NRC tolerated safety problems in
                            these plants. As previously discussed, NRC believes that the multiple safety
                            systems gives NRC and its licensees confidence that plants are safe even
                            when they have many safety problems. Therefore, unless an accident or
                            serious event poses an obvious safety or health risk to workers or the
                            public, NRC appears reluctant to take swift enforcement action. In addition,
                            since NRC does not precisely define safety, perceptions of safety levels and
                            risk are subjective and are not always consistent from inspector to
                            inspector. Several current and former NRC inspectors told us that they
                            cannot easily distinguish a safe plant from an unsafe one and that the
                            guidance on when to shut down a plant does not cover all situations.
                            Finally, as discussed below, NRC inspectors are heavily influenced by
                            licensees’ promises to fix identified problems. As a result, NRC inspectors
                            allow licensees’ managers considerable time and effort to fix a problem
                            before enforcement action is considered.

                            NRC’s Chairman has expressed concern about the consequences of NRC’s
                            past patience with licensees. The Chairman has stated that nuclear plant
                            safety is based on full compliance with all of NRC’s regulations.


Relying on Plant Managers   NRC  gives licensees considerable latitude to fix their problems. This
to Fix Problems Is Not      strategy works well when the licensees’ managers place priority on
Always Effective            maintaining a strong safety culture. However, we found that this condition
                            was not present in the problem plants we examined and that the
                            conditions worsened when NRC did not hold the licensees accountable for
                            fixing their problems.

                            5
                             Focused Audit of the Connecticut Light and Power Company: Nuclear Operations, prepared for the
                            State of Connecticut’s Department of Public Utility Control (Dec. 31, 1996).



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For example, Salem’s managers developed several action plans over time
to correct deficiencies and, at one point, established an independent team
to evaluate why prior action plans had failed to correct ongoing problems.
Salem also made changes to its senior management team several times and
met with NRC officials many times with promises to make improvements.
After several years of recurring problems, management changes, and
disappointing action plans, failures in several of the plant’s safety systems
forced the managers to shut down the plant. NRC then stepped in and
conditioned restarting the plants on correcting previously identified
problems.

Similar conditions existed at Cooper. Relying on the licensee’s promises to
fix the problems, NRC allowed Cooper to restart its reactors after the plant
was shut down in 1994. After a period of improvement over several
months, the plant’s performance quickly declined. A subsequent NRC audit
report discovered that many of the safety problems that Cooper’s
management had promised to correct had not been corrected. NRC
inspectors told us that NRC’s restart decision relied not only on Cooper’s
plans and promises, but also on Cooper’s monitoring its own progress.

At Millstone, NRC relied on the licensee’s plans to correct deficient
conditions without success. The NRC’s OIG found that

“[Millstone’s] change in program initiatives and management reorganizations lulled the NRC
staff into allowing an excessive amount of time for [the licensee’s] proposed corrective
actions to take effect. [Millstone’s] sporadic improvements in some areas neutralized the
NRC staff’s willingness to take prompt action.”6



The OIG also noted that Millstone managers would often identify a problem
and develop a “grandiose” plan to address the issue. Although some
improvement would occur, permanent change was never achieved.
According to the OIG, NRC would then take a “year or two” to determine the
effectiveness of the plan or a change in management. A Connecticut State
audit described how NRC was influenced by management’s promises and
was reluctant to place Millstone on its Watch List:




6
 Management Implications Report-NRC Staff Handling of Millstone/Maine Yankee Issues, Office of
Inspector General, NRC (98/MIR-1, June 13, 1996).



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                          “The NRC did not advance any of the Millstone units to its Watch List, as various
                          combinations of improvement initiatives and management changes led the NRC to believe
                          that sustained improvements at the site would be forthcoming.”7


                          A 1993 incident at Millstone illustrates how NRC’s tolerance of the efforts of
                          the licensee’s management to fix problems can affect safety. A May 1993
                          leak in a high-pressure steam line was discovered by workers at the plant.
                          To avoid shutting down the reactor to fix this valve, workers made about
                          30 unsuccessful attempts over 74 days to fix the leak. Eventually, the
                          workers’ attempts worsened the condition, causing the reactor to be shut
                          down. NRC later fined Millstone $237,500 for its actions, referencing three
                          violations of the law and noting the “egregious” nature of this event, which
                          NRC said had placed the workers at an unacceptable level of risk. NRC
                          inspectors and regional management were aware of the attempts to fix the
                          leak but took no immediate action, deferring instead to the management’s
                          efforts to make repairs. An NRC inspector assigned to Millstone during this
                          incident told us that NRC should have taken more aggressive enforcement
                          action at the time. He also told us that NRC’s Senior Resident Inspector had
                          recommended a shut down but was overruled by regional management,
                          who believed there was not a regulatory basis for shutting down the plant.
                          NRC’s former Executive Director of Operations, told us that he would have
                          ordered the reactor shut down immediately if he had known that the
                          plant’s managers were struggling to fix a problem that had potentially very
                          serious safety consequences.


NRC Enforcement Actions   NRC’s  enforcement program is designed to ensure compliance with NRC’s
Are Too Late to Be        regulations, obtain prompt correction of violations, deter future violations,
Effective                 and encourage licensees to operate their plants safely. Salem, Millstone,
                          and Cooper were all fined amounts well above the industry average (see
                          fig. 3). However, Salem’s fines were levied by NRC well after the plants
                          were in periods of significant decline. Furthermore, NRC still has not
                          completed its enforcement action against Millstone for violations that
                          were first discovered in 1995, partially due to, according to NRC, the need
                          for close coordination with the U.S. Attorney for consideration of criminal
                          prosecution.




                          7
                           Focused Audit of the Connecticut Light and Power Company: Nuclear Operations, prepared for the
                          State of Connecticut Department of Public Utility Control (Dec. 31, 1996).



                          Page 14                           GAO/RCED-97-145 NRC’s Oversight of Nuclear Power Plants
                                  B-276754




Figure 3: Fines That NRC Levied
Against Three Nuclear Plants      700   Total fines ($000)


                                  600


                                  500


                                  400


                                  300


                                  200


                                  100


                                    0

                                    1989           1990       1991         1992       1993        1994       1995       1996

                                    Year

                                                  Salem
                                                  Millstone
                                                  Cooper
                                                  Average



                                  Source: GAO’s analysis of NRC’s data.




                                  Another NRC enforcement action is to prevent shutdown plants from
                                  restarting until all of their safety deficiencies are addressed. This is an
                                  effective strategy for correcting long-standing problems. Unfortunately,
                                  this NRC action sometimes occurs long after plants’ performances are in
                                  significant decline. Usually, a specific incident or a series of problems
                                  causes plants to shut down. The economic impact of keeping a plant
                                  idle—$249,000 to $310,000 daily—is significantly more than the fines
                                  levied on a licensee.


The Importance of Quality         The nuclear industry and NRC officials widely agree that the competency of
Management to a Plant’s           a nuclear plant’s management is a critical factor in safety performance.
Safety Performance                Despite the importance of management, NRC does not have an effective
                                  process for ensuring that licensees maintain competent management in




                                  Page 15                            GAO/RCED-97-145 NRC’s Oversight of Nuclear Power Plants
B-276754




their nuclear plants. Although NRC’s regulations do not require the
evaluation of plant management before a license to operate a nuclear plant
can be issued, NRC must determine if the prospective licensee is
“technically and financially qualified to engage in the activities authorized
by the operating license . . . .” These are important components of
management that could also be part of a licensee’s overall ability to
manage a facility competently on an ongoing basis.

NRC’s audits frequently cite management weaknesses as the major cause of
the declining performance of nuclear plants. For example, NRC’s audits
made many references to management’s performance in the Commission’s
reviews of why conditions deteriorated at Cooper, including a “poor
management safety culture,” “weak management oversight of engineering
programs,” a “fragmented approach” to problem resolution, and failure to
provide an “adequate level of oversight.”8 Cooper’s own self-assessment
team also reported many management-related problems in its 1994 report,
including “management’s ineffectiveness in establishing a corporate
culture that encourages the highest standards of safe nuclear plant
operation” and the “failure of management to establish the vision
supported by adequate direction and performance standards to improve
station performance.” The self-assessment also noted the “. . . failure to
direct critical self assessment activities that recognize program and
process deficiencies and identify necessary improvements.”9

At Salem, NRC’s audit reports also cited the licensee’s management as a
cause of safety problems. Inspection reports indicated that Salem’s
problems could have been addressed. We believe a shutdown could have
been avoided if more competent management were in place. Also, audit
reports frequently cited management weaknesses as a root cause of
Salem’s performance problems.

The management’s decisions in the late 1980s were the cause of
Millstone’s current conditions, according to a 1996 comprehensive review
by an independent auditor.10 Concerned about the need to trim costs in the
face of future competition, the managers chose to manage close to the
regulatory margin. This decision translated into deferring maintenance and
allowing corrective action backlogs to grow, eventually creating a


8
 Supplemental Plant Performance Review, NRC (95-04, Oct. 3, 1995).
9
 Diagnostic Self Assessment, Nebraska Public Power District, Cooper Nuclear Station (Sept. 1, 1994).
10
 Focused Audit of the Connecticut Light and Power Company: Nuclear Operations, prepared for the
State of Connecticut Department of Public Utility Control (Dec. 31, 1996).



Page 16                             GAO/RCED-97-145 NRC’s Oversight of Nuclear Power Plants
B-276754




situation that led to a shutdown and several hundred million dollars worth
of repairs.

Senior NRC managers are aware of the importance of competent
management to safety performance. For example, the NRC Chairman
recently stated that the “. . . recent events at Maine Yankee . . . resulted in a
failure to identify and promptly correct problems arising in areas that
management viewed, not always correctly, as having low safety
significance.”11

From the minutes of NRC’s January 1997 public meeting on operating
reactors to discuss the nuclear industry’s safety performance (the Senior
Management Meeting), NRC stated that safety performance problems were
found at the LaSalle and Zion nuclear plants in Illinois and that the
principal reasons for the problems were weak management processes and
a lack of management involvement.

Despite the clear importance of management to safety performance, NRC
does not assess management factors in its plant inspection program.
Individual inspection reports specifically avoid any references to
management’s competency. NRC’s references to management weaknesses
are usually made retrospectively, often after the licensee admits to
management deficiencies, or by NRC audit teams or special
investigations—long after the window of opportunity to provide an early
warning of potential management weaknesses has passed.

NRC’s inspection guidance once contained a management assessment
component, but this requirement was eliminated when NRC streamlined its
inspection process in the early 1990s. Both industry and NRC officials have
advised us that management competency is considered the licensee’s
responsibility and that NRC lacks the skills and experience to properly
assess management. NRC officials also told us that they agree that
management competency is a key to plant performance and that they
discuss managerial competency in meetings involving senior NRC
management. Furthermore, they cite instances in which senior NRC
officials interact with the licensee’s management to discuss matters that
lead to management improvements and, in some cases, to changes in
management.

We recognize the sensitivity of this issue and the technical challenges
posed by assessing management factors. To assess management,

11
  Remarks by NRC Chairman Shirley Jackson, November 7, 1996.



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                            B-276754




                            professionals with the proper training and experience would be needed,
                            along with objective criteria for making judgments. We also believe that
                            gauging management factors is critical to the goal of the early
                            identification of the problems in nuclear plants. A 1996 Arthur Andersen
                            report to NRC agrees. Arthur Andersen noted the importance of
                            management, stating that “To assess plant performance proactively, the
                            NRC needs to remain fully aware of plant management activities.”12
                            Andersen recommended that NRC hire experts or train staff to evaluate
                            management performance and changes, which they viewed as necessary
                            steps to allow NRC to be more proactive. They also noted that by evaluating
                            management factors (and other factors as well), NRC would be better
                            positioned to identify problems earlier, which would in turn reduce safety
                            risks to the public and lead to an earlier and less costly resolution of
                            problems. NRC is currently evaluating Arthur Andersen’s
                            recommendations.


The Senior Management       A major tool for intervening in plants before they become major
Meeting Needs Revamping     problems—the Senior Management Meeting (SMM)—is not working
to Aid Early Intervention   effectively. The SMM process was created in 1986 for the purpose of
                            providing NRC with an early warning on plants exhibiting declining
                            performance. SMM meetings, which are held twice every year, include NRC’s
                            senior managers from headquarters and regional directors. Data on plant
                            performance are drawn from NRC’s performance indicator program and
                            from inspection and audit reports so that senior managers can take steps
                            to prevent the problems at these plants from worsening. An important
                            outcome of the SMM is the Watch List. A plant’s inclusion on the Watch List
                            can lead to more oversight by NRC in the form of additional inspections,
                            letters to licensees expressing NRC’s concern about declining performance,
                            or other actions. Being on the Watch List also brings significant public
                            attention to the plant. NRC also prepares a list of plants that are discussed
                            during its SMM meetings but not placed on the Watch List. NRC informs the
                            senior management of affected licensees that their plants were discussed.

                            The Watch List has not produced a consistent inventory of plants with
                            performance problems. As noted earlier, Millstone and Salem exhibited
                            clear performance declines long before NRC placed them on the Watch List
                            in 1996 and 1997, respectively. Salem was placed on the Watch List after
                            they were forced to shut down for safety problems. Millstone was shut
                            down several times before they were placed on the Watch List. The Watch


                            12
                             Recommendations to Improve the Senior Management Meeting Process, Arthur Andersen (Dec. 30,
                            1996).



                            Page 18                          GAO/RCED-97-145 NRC’s Oversight of Nuclear Power Plants
              B-276754




              List actions were far too late to achieve the objective of “early
              identification of declining performance.” Other plants that were shut
              down, such as Cooper and Haddam Neck, were never on the Watch List.
              Still other plants, such as Washington Nuclear Power II, had performance
              indicators that were consistently worse than some plants on the Watch
              List. In fact, Arthur Andersen identified 10 plants that were not placed on
              the Watch List but whose performance indicators are similar to those on
              the Watch List.

              Recognizing the weaknesses in its SMM process, NRC is making
              improvements. For example, NRC asked Arthur Andersen to examine how
              the Commission can improve the timeliness and thoroughness of its
              plant-safety assessments through the SMM decision-making process.
              Andersen reported findings that parallel our observations, noting that
              many procedural problems prevent the process from working as intended.
              These problems include a lack of rigor and discipline in the process;
              unclear criteria for placing plants on the Watch List; and the confusion
              among some NRC managers about their role in the process. Also noted was
              the highly subjective nature of the process. NRC is currently examining
              Arthur Andersen’s recommendations.

              NRC   is making other changes to its oversight program to aid early
              intervention. For example, future inspections will determine if plants are
              still operating within their design basis. Also, NRC is attempting to improve
              its knowledge base on the plants’ conditions by better integrating its many
              sources of information on performance information into a more consistent
              data format. NRC also reports that it is piloting a program that identifies,
              tracks, and verifies licensee commitments. Moreover, NRC is conducting an
              internal strategic reassessment, in which all current programs and
              activities are being re-examined. These are useful efforts that illustrate a
              commitment by the current Chairman and Commission to improve how
              NRC operates.



              There are a number of instances in which NRC has neither taken aggressive
Conclusions   enforcement action nor held nuclear plant licensees accountable for
              correcting their problems on a timely basis. NRC’s practice of giving
              licensees extensive time to fix their problems allows nuclear plants to
              continue to operate and the problems to grow worse. Fines levied against
              licensees for violations of regulations often occur long after problems are
              first identified. In the plants we examined, NRC forced the licensees to
              correct their problems only after they had voluntarily shut down their



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                      B-276754




                      plants. In addition, by not evaluating the competency of the licensees’
                      plant managers as part of the on-going plant inspection process, NRC is
                      missing an opportunity to act on the plants’ safety performance problems
                      at an early stage, when problems are easier and cheaper to address.
                      Finally, NRC’s process to focus attention on those plants with declining
                      safety performance—the Senior Management Meeting—needs substantial
                      revisions to achieve its goal of an early warning tool.

                      By intervening early and taking aggressive enforcement action when
                      warranted, NRC can prevent declines in nuclear plants’ long-term
                      performance and better assure itself that the plants are meeting high
                      safety standards. With concern growing that some licensees are pursuing
                      aggressive cost-cutting strategies at the risk of reducing safety margins,
                      now is the time to take steps to make sure that NRC’s regulatory program is
                      working as effectively as it can. The changes that the Commission has
                      under way provide a basic framework for making its regulatory strategy
                      work, but additional measures are needed if NRC’s culture of tolerating
                      problems is to change. Ensuring that licensees fix their safety deficiencies
                      promptly and have high-quality management in place is the key for NRC to
                      fulfill its mission of adequately protecting the public’s health and safety
                      from the dangers inherent in nuclear power plants.


                      To enhance licensees’ accountability, we recommend that the
Recommendations       Commissioners of NRC direct NRC staff to develop strategies to more
                      aggressively act on safety deficiencies when they are discovered. To
                      achieve this goal, NRC should take the following steps:

                  •   Require inspection reports to fully document for all plants the status of the
                      licensees’ actions to address identified problems under NRC’s corrective
                      action requirements, including timetables for the completion of corrective
                      actions and how NRC will respond to nonconformance with planned
                      actions.
                  •   Make licensees’ responsiveness to identified problems a major feature of
                      the information provided to the participants of the Senior Management
                      Meetings, including how NRC will respond if problems go uncorrected. For
                      example, NRC should describe the range of sanctions that it will impose on
                      the licensees on the basis of the potential seriousness of their failure to
                      resolve problems within a predetermined time. These sanctions should
                      range from assessing fines to involuntary shutdown of the plant.
                  •   Require that the assessment of management’s competency and
                      performance be a mandatory component of NRC’s inspection process.



                      Page 20                    GAO/RCED-97-145 NRC’s Oversight of Nuclear Power Plants
                  B-276754




                  In commenting on a draft of this report (see app. V for NRC’s letter), NRC
Agency Comments   acknowledged that safety margins fell in the plants we examined. NRC also
                  stated that their defense-in-depth regulatory approach provides an
                  adequate safety margin even in plants with safety deficiencies. Our
                  concern is that NRC cannot ensure that all plants have adequate
                  documentation to support that they are still operating in accordance with
                  their plant designs. Operating within approved plant design is critical to
                  the defense-in-depth philosophy. This deficiency in NRC’s knowledge base,
                  especially in light of substantial design deficiencies discovered at
                  Millstone and in other plants, erodes NRC’s confidence that its licensees are
                  operating their plants in accordance with their plant design and, thereby,
                  within adequate safety margins.

                  Further, NRC stated that the safety deficiencies at plants we examined were
                  not serious enough to warrant shutting down the plants while they were
                  operating. Once the plants shut themselves down, however, NRC then
                  required them to address their backlog of safety deficiencies before
                  allowing them to restart. For example, Millstone must address a long list of
                  technical and programmatic issues including weaknesses in correcting
                  identified safety problems and responding to employees’ safety concerns.
                  Salem must also correct many long-standing safety problems prior to
                  restarting their plants, including ineffective corrective actions, weak
                  management oversight, and numerous equipment failures. Most of the
                  problems keeping these plants shut down are longstanding deficiencies
                  known by NRC. Forcing licensees to fix their problems before they
                  accumulated would have helped prevent these plants from reaching
                  conditions where safety margins were reduced.

                  NRC  agreed with the “basic thrust” of our recommendations, and described
                  a number of actions underway that they believe address some of the issues
                  raised in this report. For example, NRC cited improvements in their
                  inspection program and a pilot program to track and verify licensee
                  commitments. We agree that the actions NRC have underway are
                  worthwhile steps, but they do not address the fundamental issues raised in
                  our report. NRC needs to be stronger in holding licensees accountable for
                  fixing their safety problems. This can be accomplished by fully
                  documenting licensee progress in addressing their problems, and then
                  outlining sanctions NRC will impose for noncompliance. We agree with NRC
                  that evaluating management competency and performance is difficult.
                  However, evaluating this influence on plant safety performance, which NRC
                  admits is important, would allow NRC to be a more proactive and effective
                  regulator.



                  Page 21                    GAO/RCED-97-145 NRC’s Oversight of Nuclear Power Plants
B-276754




In response to NRC’s detailed comments, we have made changes to our
report where appropriate. NRC’s letter and our response to their specific
comments are provided in appendix V.


As arranged with your offices, unless you publicly announce its contents
earlier, we plan no further distribution of this report until 30 days after the
date of this letter. At that time, we will send copies to the Commissioners,
Nuclear Regulatory Commission, and the Director, Office of Management
and Budget. We will make copies available to other interested parties on
request.

Our review was performed from March 1996 through April 1997 in
accordance with generally accepted government auditing standards. See
appendix VI for a description of our scope and methodology.

If you or your staff have any questions about this report, please call me on
(202) 512-3841. Major contributors to this report are listed in appendix VII.




Victor S. Rezendes
Director, Energy, Resources,
  and Science Issues




Page 22                     GAO/RCED-97-145 NRC’s Oversight of Nuclear Power Plants
Page 23   GAO/RCED-97-145 NRC’s Oversight of Nuclear Power Plants
Contents



Letter                                                                                               1


Appendix I                                                                                          26
                        NRC’s Safety Responsibility                                                 26
NRC’s Regulatory        NRC’s Inspection Program                                                    27
Framework               NRC’s Process for Evaluating Nuclear Power Reactors’                        28
                          Performance
                        Performance Indicators                                                      30

Appendix II                                                                                         34
                        Summary                                                                     34
Salem Nuclear           Performance History                                                         37
Generating Station,     Chronology                                                                  42
Units 1 and 2
Appendix III                                                                                        45
                        Summary                                                                     45
Millstone Nuclear       Performance History                                                         48
Power Station, Unit 2   Chronology                                                                  53

Appendix IV                                                                                         56
                        Summary                                                                     56
Cooper Nuclear          Performance History                                                         59
Station                 Chronology                                                                  61

Appendix V                                                                                          64
                        GAO’s Comments                                                              72
Comments From the
Nuclear Regulatory
Commission
Appendix VI                                                                                         75

Objectives, Scope,
and Methodology




                        Page 24                 GAO/RCED-97-145 NRC’s Oversight of Nuclear Power Plants
                        Contents




Appendix VII                                                                                          77

Major Contributors to
This Report
Figures                 Figure 1: The History of NRC’s Watch List                                      8
                        Figure 2: The Nuclear Plants on NRC’s Watch List                               9
                        Figure 3: Fines That NRC Levied Against Three Nuclear Plants                  15
                        Figure I.1: NRC’s Performance Indicators Showing the Industry                 29
                          Average for All Nuclear Reactors, 1989-96
                        Figure II.1: Salem’s Performance History Against the Industry                 36
                          Average
                        Figure III.1: Millstone Unit 2’s Performance History Against the              47
                          Industry Average
                        Figure IV.1: Cooper’s Performance History Against the Industry                58
                          Average




                        Abbreviations

                        AIT        Augmented Inspection Team
                        GAO        General Accounting Office
                        OIG        Office of Inspector General
                        NRC        Nuclear Regulatory Commission
                        NU         Northeast Utilities
                        PSE&G      Public Service Electric and Gas Company
                        RAP        Restart Action Plan
                        SMM        Senior Management Meeting
                        SALP       Systematic Assessment of Licensee Performance


                        Page 25                   GAO/RCED-97-145 NRC’s Oversight of Nuclear Power Plants
Appendix I

NRC’s Regulatory Framework


                 The Atomic Energy Act of 1954, as amended, authorizes the Nuclear
                 Regulatory Commission (NRC) to license, regulate, and inspect the design,
                 construction, and operation of commercial nuclear power plants. NRC’s
                 regulations are intended to ensure the safe operation of the 110 nuclear
                 reactors operating in the United States. For example, NRC requires nuclear
                 reactors to have multiple safety systems to control and contain the
                 radioactive materials used in each reactor’s operation. NRC also requires
                 the owner of the reactor (the licensee) to test and maintain safety
                 equipment to help ensure that the equipment, such as a reactor’s
                 emergency safety systems, will operate when needed. The requirements
                 are intended to protect workers and the public from the harmful effects of
                 radiation.

                 Reactors have specific operating requirements (technical specifications),
                 depending on their design. These requirements are intended to provide a
                 high margin of safety under all operating scenarios. NRC evaluates a
                 reactor’s design and related technical specifications when it licenses the
                 reactor’s operation. Once approved, these specifications become the
                 requirements for the operation of the reactor. If certain requirements
                 cannot be met, NRC requires the licensee to promptly shut down the
                 reactor.


                 The act requires NRC to provide assurance that the public health and safety
NRC’s Safety     is adequately protected from the consequence of the operation of any
Responsibility   commercial nuclear power reactor in the United States. NRC does not
                 precisely define nuclear plant safety. Instead plants are assumed to be safe
                 if they operate within their approved designs (plant design) and in
                 accordance with all regulatory requirements. Also, NRC has promulgated
                 regulations that provide a framework for how the regulatory process is to
                 work.

                 NRC’s basic measure for determining if a reactor is operating safely is
                 whether it is operating as specified by its license. The license incorporates
                 requirements derived from the plant’s required Safety Analysis Report and
                 the technical specifications. The Safety Analysis Report contains the
                 documentation of bases upon which the plant and its safety systems are
                 designed (the plant’s design basis). The technical specifications state the
                 conditions under which the plant must operate and what action is required
                 if these operating conditions cannot be met. If a plant is found to be
                 operating outside of its design basis, or technical specifications, the plant
                 can be required to shut down. For example, if a reactor’s design or



                 Page 26                    GAO/RCED-97-145 NRC’s Oversight of Nuclear Power Plants
                   Appendix I
                   NRC’s Regulatory Framework




                   technical specification requires a pump in standby status as a backup to
                   another pump used to cool the reactor’s core in an emergency, and it does
                   not work when tested, the reactor may have to be shut down. There are
                   numerous similar requirements for reactor operations.


                   In its implementing regulations, NRC established that licensees are
NRC’s Inspection   primarily responsible for ensuring that their reactors are operated safely.
Program            NRC relies heavily on the licensees to identify and report problems at their
                   facilities. Thus, a licensee’s corrective action efforts (part of the required
                   Quality Assurance program) are a critical part of its safety responsibility.
                   At each operating nuclear reactor site, daily inspections are generally
                   conducted by at least two resident NRC inspectors. These inspectors are
                   assigned to a reactor site for up to five years on a rotational basis to
                   provide independent assurance that the licensees are operating their
                   facilities safely. If a reactor’s performance declines, NRC may assign
                   additional resident inspectors to it. The resident inspectors observe a
                   variety of activities, including the licensee’s (1) operation of the reactor’s
                   control room and (2) testing and maintenance of selected equipment. NRC
                   inspects only a small percentage of a reactor’s myriad activities.

                   NRC’s inspection program is intended to identify the underlying safety
                   problems at a reactor and, by doing so, to anticipate and prevent
                   significant events—events that could damage a reactor’s core and that
                   could result in a release of radioactive materials. NRC also uses its
                   inspection results to (1) assess each licensee’s performance, (2) provide
                   feedback to the licensees about their performance, and (3) allocate its
                   inspection resources among facilities.

                   NRC’s regional and headquarters inspection staff supplement the resident
                   inspectors’ efforts, conducting more-detailed reviews of selected areas. In
                   addition to routine daily inspections by resident inspectors, NRC conducts
                   special inspections and, depending on the severity of NRC’s concerns,
                   escalates the reporting levels to NRC regional and headquarters officials.
                   For example, an Augmented Inspection Team (AIT), which reports to the
                   Regional Administrator, will conduct an investigation when certain
                   incidents occur at a reactor. The AIT members are technical experts from
                   the region in which the incident took place, augmented by personnel from
                   headquarters or other regions. For more serious concerns, an Incident
                   Investigation Team, which reports to the NRC Executive Director for
                   Operations and is independent of the regional and headquarters office
                   management, conducts the investigation. The members of this team are



                   Page 27                      GAO/RCED-97-145 NRC’s Oversight of Nuclear Power Plants
                     Appendix I
                     NRC’s Regulatory Framework




                     technical experts who, to the extent practicable, do not have previous
                     significant involvement with the target reactor.

                     If NRC finds that a licensee has violated the requirements for safe
                     operation, it can take enforcement actions against the licensee. NRC
                     categorizes violations according to four levels of severity—level I
                     violations are the most serious.1 Once NRC finds a violation and determines
                     its severity, it can issue a notice of violation and impose a civil penalty
                     (fine) or require the reactor to stop operations.2


                     NRC has established formal management processes that it uses to review
NRC’s Process for    and analyze the information its gathers, through its inspection program, to
Evaluating Nuclear   evaluate the licensee’s performance. These include two key processes: the
Power Reactors’      Systematic Assessment of Licensee Performance (SALP) and the Senior
                     Management Meeting (SMM).
Performance
                     SALPs evaluate each licensee’s long-term performance and provide for
                     discussions of performance between the licensees and NRC. Regional
                     managers use the SALP for long-term resource allocation and to identify
                     areas for inspection emphasis. These assessments are performed on a
                     reactor-specific schedule every 12 to 24 months by regional and
                     headquarters staff and three-member SALP boards composed of two
                     regional managers and a headquarters manager. The boards evaluate the
                     information reviewed and summarized by the staff from inspections,
                     enforcement actions, performance indicators of the safety condition of
                     reactors (fig. I.1 illustrates some of NRC’s performance indicators),
                     licensees’ self-assessments, third-party assessments, site visits by the
                     board members, and management meetings and discussions with the
                     licensees. The SALP board reviews the information available to it and gives
                     its recommendations to the Regional Administrator.




                     1
                      NRC considers severity-level I, II, and III violations “escalated enforcement actions.”
                     2
                      While NRC is authorized to shut down nuclear power facilities, it has done so only once. NRC ordered
                     the Peach Bottom Plant in Pennsylvania to shut down in 1987 after finding that personnel in the
                     control room were sleeping on the job.



                     Page 28                              GAO/RCED-97-145 NRC’s Oversight of Nuclear Power Plants
                                                                                         Appendix I
                                                                                         NRC’s Regulatory Framework




Figure I.1: NRC’s Performance Indicators Showing the Industry Average for All Nuclear Reactors, 1989-96

                  Automatic Scrams                                                           Collective Radiation Exposure                                 Equipment-Forced Outage
                    While Critical                                                                  (in person REM)                                        Rate-per 100 Critical Hours
 2                                                                                     400                                                             1
      1.8
                                                                                              332    336
            1.6
                   1.5
1.5                            1.4
                                                                                       300                                                       0.75
                                                                                                                 267
                                                                                                           255
                                                                                                                       243
                                           1.1
                                                       1         1                                                           203   199                       0.5
 1                                                                                     200                                                         0.5
                                                                           0.8                                                                                       0.4     0.4
                                                                                                                                          129
                                                                                                                                                                                    0.3               0.3   0.3
0.5                                                                                    100                                                       0.25                                     0.2   0.2




 0                                                                                      0                                                              0
      1989 1990 1991 1992 1993 1994 1995 1996                                                 1989 1990 1991 1992 1993 1994 1995 1996                       1989 1990 1991 1992 1993 1994 1995 1996

                                                  Significant Events                                                          Safety System Actuations
                          1                                                                                             2


                                     0.8
                    0.75                                                                                               1.5
                                                                                                                             1.3


                                                 0.5                                                                                1       1
                         0.5                                                                                            1
                                                                                                                                                 0.8       0.8

                                                           0.3       0.3         0.3
                                                                                                                                                                   0.5     0.5
                    0.25                                                                0.2
                                                                                                                       0.5                                                         0.4

                                                                                               0.1   0.1


                          0                                                                                             0
                                 1989 1990 1991 1992 1993 1994 1995 1996                                                     1989 1990 1991 1992 1993 1994 1995 1996

                                            Forced Outage Rate %                                                                    Safety System Failures
                         11
                                                                                                                        4
                                     9.9                                                                                            3.7
                         10
                                                                                        9.2                                  3.5                 3.5
                                                           8.9                                       8.9                                   3.4
                          9                                                      8.6                                                                       3.3

                          8                                          7.6                                                3                                                          2.9
                                                 7.2
                          7
                          6                                                                    5.9
                                                                                                                                                                   2.1
                          5                                                                                             2                                                  1.9

                          4
                          3
                                                                                                                        1
                          2
                          1
                          0                                                                                             0
                                 1989 1990 1991 1992 1993 1994 1995 1996
                                                                                                                             1989 1990 1991 1992 1993 1994 1995 1996



                                                                                         Source: NRC’s data.



                                                                                         Page 29                                   GAO/RCED-97-145 NRC’s Oversight of Nuclear Power Plants
              Appendix I
              NRC’s Regulatory Framework




              The SMM is held about every 6 months to review the individual licensee’s
              performances on a national basis and bring to the attention of the highest
              levels of NRC management those reactors whose operational safety
              performance is of the most concern. The participants include the
              Executive Director for Operations, regional administrators, and NRC
              headquarters office directors. The SMM review includes information that
              was used by the SALP board for its evaluations. Prior to the SMM, screening
              meetings are held in which the regional administrators and the Director of
              Nuclear Reactor Regulation review every reactor’s data to determine if the
              reactor should be discussed at the SMM. Generally, if the trend of a
              reactor’s performance appears to be declining significantly or there are
              significant concerns about its performance, the reactor should be targeted
              for discussion at the SMM. Senior headquarters and regional staff together
              prepare an SMM notebook that is reviewed by the SMM participants. The
              information in the notebook includes inspection results, enforcement data,
              performance indicators, plant specific risk insights, and other information
              that characterizes a licensee’s performance.

              Senior NRC mangers plan actions for those reactors whose performance is
              of most concern. Those actions include sending a “trending letter” to the
              licensees whose reactors’ performance is significantly declining and
              putting the reactor on the Watch List.


              Following a series of events, including the Three Mile Island nuclear
Performance   accident and the loss of reactor feedwater at the Davis-Besse, Ohio, plant,
Indicators    NRC developed eight indicators for monitoring the safety performance of
              licensees. According to NRC, the indicators were intended to augment
              existing safety evaluations and to provide a timely indication of reactors’
              safety trends. Developing the indicators was mainly completed in the first
              3 years. However, the overall process stretched from the Commission’s
              recommendation in 1986 to 1993. The current performance indicators,
              which consist of eight measures of safety performance at all 110 U.S.
              commercial reactors, are largely self-reported by licensees. NRC publishes
              average trend data on seven of the eight performance indicators.
              According to NRC officials involved with the Performance Indicator and the
              inspection programs, there has been no concerted effort to verify the data
              for completeness and accuracy.

              NRC is currently considering additions to the set of performance indicators
              to provide senior managers with a more objective basis for monitoring the
              safety condition of reactors.



              Page 30                      GAO/RCED-97-145 NRC’s Oversight of Nuclear Power Plants
                                Appendix I
                                NRC’s Regulatory Framework




Development of the              In an August 1986 memorandum, the NRC Executive Director for
Present Set of Indicators       Operations stated that NRC needed performance indicators because it has
                                not always been effective in promptly recognizing the symptoms of a
                                reactor’s declining performance and taking appropriate action. NRC set up
                                an inter-office task group in 1986 to develop a set of indicators to be
                                monitored and evaluated by NRC for making timely regulatory decisions
                                about the performance of nuclear power reactors. The task force used the
                                following criteria for the initial set of indicators used during the trial
                                program:

                            •   The performance indicators should be related to nuclear safety and
                                regulatory performance, be worthy goals for licensees, reflect a range of
                                performance, be independent of each other, correlate with SALP
                                evaluations, and finally, be predictive of licensees’ future performance.
                            •   The data used should be readily available to NRC in a timely manner, not
                                subject to manipulation, and comparable among licensees.

                                The logic behind the development of the indicators, according to NRC’s
                                plans, was to focus on the key components of reactor safety. NRC believed
                                that nuclear reactor safety requires a low number of unexpected,
                                abnormal occurrences and the high reliability of key systems that are
                                important to the safe operation of a reactor.

                                In 1986, the task force identified eight indicators, after a trial period with
                                50 nuclear reactor facilities in which 17 indicators were considered. Two
                                of the original selected indicators, an enforcement measure and a
                                maintenance indicator, have been dropped. The indicator on enforcement
                                actions was dropped, according to NRC staff involved in the indicators’
                                development, because it would have nearly duplicated information that
                                was available from the SALP process. The indicator to measure the backlog
                                of unresolved reactor maintenance items was dropped, according to NRC
                                documents, because of objections from the industry.3 The Commissioners,
                                in approving the plan to develop and implement the indicator effort,
                                expressed the need to continue the development of the performance
                                indicators for such factors as reactor maintenance and reactor staff
                                training.




                                3
                                 The industry’s support for the indicator program was not strong. For example, in a November 5, 1986,
                                letter from the Institute of Nuclear Power Operations, an industry trade group, to the Chairman of the
                                NRC, the Institute urged the Commission “not to adopt a separate set of performance indicators for
                                use in a formal regulatory sense.” Instead, they requested that the NRC use industry-developed data
                                and not use the performance indicators as part of its regulatory efforts.



                                Page 31                             GAO/RCED-97-145 NRC’s Oversight of Nuclear Power Plants
                      Appendix I
                      NRC’s Regulatory Framework




                      Ultimately, the number of indicators increased to eight. NRC added
                      collective radiation exposures, a measure of worker radiation exposure. It
                      also added cause codes, but NRC does not compute an average trend for
                      them. They are used to provide more detailed information on specific
                      incidents or events. The cause codes explain deficiencies in six
                      programmatic categories, which include licensed operator errors,
                      maintenance problems, and other deficiencies.


Current Performance   The following describes the seven performance indicators for which NRC
Indicators            publishes annual trend data.

                      Automatic Scrams While Critical. The number of unplanned automatic
                      scrams that occurred while the affected reactor was operating. (An
                      automatic scram is a condition under which the reactor shuts down
                      automatically as a result of being programmed to do so under certain
                      conditions.)

                      Safety System Actuations. The number of certain Emergency Core Cooling
                      Systems or the Emergency AC Power System equipment actuations, either
                      manual or automatic.

                      Significant Events. The number of events that involved an actual or
                      potential threat to the health and safety of the public.

                      Safety System Failure. The number of events or conditions that could have
                      prevented the fulfillment of the safety functions of a structure or system.

                      Forced Outage Rates. The fraction of time that a power plant could have
                      been generating electricity if it were not forced to be shut down due to an
                      off-normal condition.

                      Equipment Forced Outages per 1,000 Critical Hours. The number of forced
                      outages caused by equipment failures per each 1,000 hours of operation.

                      Collective Radiation Exposure. The total radiation dose accumulated by
                      the employees operating the reactor.

                      According to NRC, the performance indicators are generally positively
                      correlated with NRC’s other reactor safety performance measures, such as
                      the SALPs and NRC’s Watch List for problematic reactors. For example,
                      during the trial period for indicators, NRC compared SALP scores from



                      Page 32                      GAO/RCED-97-145 NRC’s Oversight of Nuclear Power Plants
Appendix I
NRC’s Regulatory Framework




reactors with performance indicator data being considered then. NRC
generally found that there was a positive correlation between the
performance levels as indicated by the indicators and the NRC evaluations
of the reactors.

A more recent NRC review comparing reactors on the Watch List and good
performing reactors concluded that, generally, the reactors on the Watch
List exhibited poorer performance as measured by their performance
indicators than good performing reactors. Moreover, the study commented
that, in many cases, the performance indicators for reactors on the Watch
List had shown a significant decline 1 to 2 years before the reactors were
placed on the list. However, the study cautions that the performance
indicators are only one of many tools that NRC uses to measure
performance. For example, the study points out that two reactors had
similar levels of performance indicators, but one had been on the good
performer list for almost 4 years while the other had been on the Watch
List. The NRC official who conducted the study said that the similarities
between the two reactors’ performance indicators are the result of the
managers of the reactor on the good performer list taking a conservative
approach to reporting on the indicators by, in effect, overreporting in
contrast to other plants.




Page 33                      GAO/RCED-97-145 NRC’s Oversight of Nuclear Power Plants
Appendix II

Salem Nuclear Generating Station, Units 1
and 2

               The Salem nuclear power Units 1 and 2 are located on the Salem
               Generating Station, 18 miles south of Wilmington, Delaware, in Salem,
               New Jersey. The Public Service Electric and Gas Company (PSE&G) is the
               owner and licensed operator of the plant. Each unit is a four-loop
               pressurized light-water reactor that can produce 1,115 megawatts of
               electricity. The units were designed by Westinghouse and were built by the
               United Engineers & Constructors, Inc. NRC approved operating licenses for
               Salem’s Units 1 and 2 on December 1, 1976, and May 20, 1981, respectively;
               Units 1 and 2 began operating on June 30, 1977, and October 13, 1981,
               respectively.


               NRC  has been concerned with Salem’s regulatory performance since
Summary        January 1990 when Salem was first discussed at its Senior Management
               Meeting. NRC discussed the plant seven additional times before it listed
               Salem on its Watch List in January 1997. NRC’s records document
               numerous conditions that demonstrated poor management of the plant,
               including the operation of the plant outside of its design bases for
               extended periods of time. The units are currently under an NRC Restart
               Action Plan (RAP) that requires the licensee to correct a long list of
               technical and programmatic issues to bring about long-term performance
               improvement prior to receiving NRC’s approval to restart. The plan was
               developed after PSE&G shut down the units in mid-1995. Salem’s main
               problems include long-standing problems in performance and equipment
               failures, units that are operated outside of their design bases, and weak
               management by the licensee. NRC’s lack of more aggressive action on these
               problems when they were first reported, compounded the worsening
               condition of the Salem units.

               Salem’s performance history compares unfavorably to the industry’s
               average. For example, NRC heavily fined Salem on seven occasions; the
               fines ranged from none for several years to a high of $680,000. The
               industry average annual fines assessed each plant during this period
               ranged from $17,000 to $37,000. As the number of NRC’s hours of inspection
               of the Salem plant increased—an indication of NRC’s growing
               concern—Salem’s Systematic Assessment of Licensee Performance (SALP)
               scores worsened in 1993. Salem’s performance indicators also worsened
               during this period, and NRC discussed Salem’s performance every year
               except 1992 and 1993 at its SMMs. In addition, from 1989 through 1996
               Salem units reported an average of about five safety system failures per
               year compared to an industry average of about three per year. Since 1989,
               SALP scores, performance indicators, and the number of safety system




               Page 34                   GAO/RCED-97-145 NRC’s Oversight of Nuclear Power Plants
Appendix II
Salem Nuclear Generating Station, Units 1
and 2




failures, on average for the industry, have shown overall improvement,
while the number of inspection hours devoted to a plant have decreased.
Figure II.1 compares the performance of the Salem plant with the nuclear
industry as a whole.




Page 35                        GAO/RCED-97-145 NRC’s Oversight of Nuclear Power Plants
                                                                                        Appendix II
                                                                                        Salem Nuclear Generating Station, Units 1
                                                                                        and 2




Figure II.1: Salem’s Performance History Against the Industry Average

 Enforcement - Fines Paid (in thousands of dollars)                                                                                                         Inspection Hours
700                                                                                                                   4,500

                        Salem fines
600                                                                                                                   4,000
                        Industry
                                                                                                                                                                                                                       Salem
                        average
500                                                                                                                   3,500


400                                                                                                                   3,000


300                                                                                                                   2,500
                                                                                                                                                                                     Industry average
200                                                                                                                   2,000


100                                                                                                                   1,500


   0                                                                                                                  1,000
              1989      1990          1991          1992          1993          1994          1995      1996                  1989            1990         1991         1992         1993           1994           1995            1996


                               Performance Indicators                                                                                         Senior Management Meeting Decisions
5.5                                                                                                                      1.2
          Bad
  5
                                                                                                                              1                Discussed
4.5                                                                                                                                            Trending letter
                                                                                               Salem
                                                                                                                         0.8                   Watch-listed
  4                                                                                                                                      w

3.5                                                                                                                      0.6

  3
                                                                                                                                                                                                                                     w
                                                                                                                         0.4
2.5                                                                        Industry average
                                                                                                                         0.2
  2
          Good
1.5                                                                                                                           0
       1989          1990        1991           1992              1993           1994            1995          1996               1989 1990   1990 1991   1991    1992 1992   1993 1993   1994   1994    1995   1995 1996   1996   1997
                                                                                                                                  May Jan June Jan June Jan June Jan June Jan June Jan June Jan June Jan

                                        SALP Scores                                                                                                              Safety System Failures
  3

              Adequate                                                                                                   10                                                                                                 Salem
 2.5
                                                                                   Salem
                                                                                                                          8
  2


                                                                                                                          6
 1.5

                                                                                        Industry average
  1                                                                                                                       4



 0.5                                                                                                                      2

          Excellent                                                                                                                                                                                             Industry average
  0                                                                                                                       0
       1989      1990          1991          1992          1993          1993          1994          1995      1996               1989         1990        1991          1992         1993              1994        1995            1996



                                                                                        Source: GAO’s analysis of NRC’s data.




                                                                                        Page 36                                                GAO/RCED-97-145 NRC’s Oversight of Nuclear Power Plants
                          Appendix II
                          Salem Nuclear Generating Station, Units 1
                          and 2




Performance History

Design Basis Issues       The licensee operated the Salem units outside of their design bases and, in
                          some instances, NRC was not aware of the degraded conditions until
                          months later when the licensee reported the conditions.

                      •   On April 7, 1994, the licensee experienced a significant condition adverse
                          to quality4 when an equipment failure occurred during a reactor trip. (A
                          reactor trip is an action in which a reactor automatically shuts down
                          because it has been programmed to do so under certain conditions that
                          could challenge the reactor’s safety if the unit continued to operate). Prior
                          to this event, the licensee did not promptly identify and correct the cause
                          of previous similar equipment failures during prior reactor trips in June
                          1989, July 11, 1993, and February 10, 1994. This was a recurring problem
                          that the licensee and NRC failed to ensure was corrected. NRC fined the
                          licensee $150,000 for this incident.
                      •   On December 12, 1994, a ventilation fan failed, creating a significant
                          condition adverse to quality at the Salem Unit 1. Unit 1’s design basis
                          requires that the facility have two fans capable of operating automatically
                          and one other fan in a standby condition. The utility did not report this
                          incident to NRC at the time nor did it determine the cause of the problem as
                          required by NRC’s regulations. On May 12, 1995, another supply fan became
                          inoperable before the first fan that had failed was fixed. These fans are
                          crucial to keep important safety equipment from overheating. The
                          licensee’s records show that there had been two prior similar occurrences,
                          in April 1990 at Unit 2 and in December 1994 at Unit 1. NRC fined the
                          licensee $100,000 for these numerous fan violations.
                      •   On January 26, 1995, workers at Unit 2 discovered that a flow valve would
                          not open automatically as required, thus requiring a shutdown within 12
                          hours by its technical specifications. According to the technical
                          specifications, the unit’s problems should have been fixed within 3 days or
                          the unit should have been shut down within 12 hours. However, the
                          licensee did not correct the problem and did not shut down the Unit 2
                          reactor until June 7, 1995—128 days later. The licensee’s staff incorrectly
                          determined that the valve was operating as required because they could
                          manually operate it. This situation also should have been reported to the


                          4
                           This is important terminology used by NRC in its regulations and its inspection program. NRC defines
                          the term by example. It lists failures, malfunctions, deficiencies, deviations, defective material and
                          equipment, and nonconformances as examples of conditions adverse to quality. NRC requires that as
                          part of ensuring adequate protection of the public’s health and safety, these conditions be promptly
                          identified and corrected.



                          Page 37                             GAO/RCED-97-145 NRC’s Oversight of Nuclear Power Plants
                               Appendix II
                               Salem Nuclear Generating Station, Units 1
                               and 2




                               NRC  within 1 hour because the plant violated its technical specifications.
                               However, it was not reported.
                           •   On February 9, 1995, another valve failed to open automatically as
                               required. As in the previous case, this valve did not operate as required but
                               could be manually operated. At this point, two valves were not operating
                               as required. The plant’s technical specifications require at least one of the
                               valves to be operating as required within 1 hour or the plant must be shut
                               down. Eventually, the plant was forced to shut down in June 1995 because
                               of these and other events. NRC fined the licensee $100,000 for failing to
                               handle the valve situations properly.


Corrective Action Issues       NRC’s records cite a long history of the licensee not addressing recurring
                               reliability and operability issues at Salem. On June 9, 1995, after the two
                               units shut down, NRC sent the utility a Confirmatory Action Letter citing
                               the need to organize a special team to review the problem of long-standing
                               equipment and operability issues. The utility identified approximately
                               31,000 work items that it felt it should complete before restarting the units.
                               In February 1996, NRC developed a RAP citing numerous problems that NRC
                               would require to be fixed before it would approve a restart of the units.
                               Those items included weak management oversight, ineffective corrective
                               actions, and numerous technical-specification-related items. The RAP cited
                               examples of the long-standing decline of Salem’s plant performance in
                               justifying the need for the units to remain in a shutdown status until NRC
                               would approve start-up. For example:

                           •   NRC’s SALP report for Salem for the period from June 20, 1993, through
                               November 5, 1994, which preceded the mid-1995 shutdown, was
                               particularly critical of the licensee’s performance. The report stated that
                               overall performance had declined and that NRC was particularly concerned
                               with the challenges to the plants’ systems and operators caused by
                               repetitive equipment problems and personnel errors that had the potential
                               to, or actually did, adversely affect the safety of the plant or its personnel.
                               The report recognized that the licensee had, within the last year, initiated
                               several comprehensive actions that had the potential to improve the
                               plant’s overall performance but that the efforts had not resulted in any
                               noticeable change in overall performance.
                           •   The NRC’s report said that in arriving at its assessment, NRC determined that
                               the following factors contributed to Salem’s condition: (1) the tendency of
                               the licensee’s operations staff to accept and accommodate system
                               performance that was not in accordance with design; (2) the tendency of
                               the licensee to not aggressively question the validity of assumed causes of



                               Page 38                        GAO/RCED-97-145 NRC’s Oversight of Nuclear Power Plants
    Appendix II
    Salem Nuclear Generating Station, Units 1
    and 2




    degraded conditions or unexpected system performance and dismiss or
    not adequately consider other possible contributors or factors without a
    substantial technical basis or rationale; (3) the general reticence of the
    licensee’s maintenance and operations organizations to solicit technical
    support from the engineering organization to resolve system or equipment
    issues at the plant, and the engineering organization’s apparent reservation
    to engage in the diagnosis or resolution of the plant’s technical problems
    without requirement or request; (4) the lack of value attributed to, or
    expected from, nuclear safety review and quality assurance activities and
    the consequent ineffectiveness of these functions; (5) insufficient critical
    self-assessment initiatives to evaluate the adequacy and performance of
    personnel, procedures, and hardware; and (6) insufficient supervisory
    oversight and poor communication of senior plant management’s
    expectations relative to the performance of activities.

    The performance report was particularly critical of the utility’s
    maintenance programs and activities. According to the report, the utility’s
    management oversight of corrective action program activities had been
    weak, as evidenced by the high number of recurrent equipment failure
    rates. Inconsistencies in troubleshooting activities and a breakdown in the
    licensee’s analysis of root causes also contributed to the delay in
    correcting recurring problems. Other examples of the utility’s ineffective
    correction of long-standing problems include the following:

•   Salem’s units were heavily fined during 1994 and 1995. Annual fines
    assessed on the Salem plant ranged from none for the earlier years to
    $680,000 at the same time the industry average for fines was about $30,000.
    One enforcement action in October 1994 involved six violations that NRC
    identified during several inspections conducted at the facility. Five of the
    violations were associated with the utility’s failure to promptly respond to
    and correct conditions involving numerous systems over extended periods
    of time. In one case, the utility failed to take action for 5 years.
•   NRC’s RAP for Salem contained 43 technical restart issues (issues having to
    do primarily with equipment and procedures as compared to management
    and human resource issues), of which all but 5 were known by NRC before
    the units shut down. According to Salem’s current NRC Senior Resident
    Inspector, recurring problems had been prevalent at Salem for years. Two
    of the issues had been continuing problems for 6 to 7 years—the control
    air system and the circulating water traveling screen motor. One of the
    issues had been on NRC’s information followup system since 1989 and was
    addressed in three separate inspection reports.




    Page 39                        GAO/RCED-97-145 NRC’s Oversight of Nuclear Power Plants
                            Appendix II
                            Salem Nuclear Generating Station, Units 1
                            and 2




                        •   An NRC report entitled Engineering Evaluation Report Analysis of
                            Allegation Data, dated June 1996, showed that Salem experienced a
                            disproportionate number of employee allegations in 1995 about the
                            licensee’s potential failure to follow safety procedures and potential
                            violations of the employees’ rights. The report concluded that the utility
                            was a potential organization for further NRC evaluation because it was in
                            the top 10 percent of NRC’s groups with respect to increases in the number
                            of total allegations, including harassment and intimidation allegations
                            from 1994 to 1995.


Management Weaknesses       NRC   records show numerous examples of management weaknesses:
Issues
                        •   In NRC’s October 1995 Notice of Violation and Proposed Imposition of Civil
                            Penalties to Salem, NRC noted that Salem’s management appeared to have
                            tolerated an atmosphere that accepted degraded conditions rather than
                            establish the atmosphere of a high-quality operating environment. NRC also
                            recognized that even after it became more imperative to address these
                            component issues, Salem’s management delayed making decisions on
                            whether or not equipment was operating as required until it was apparent
                            that a rationale could not be established to justify the continued operation
                            of the equipment in its existing condition.
                        •   The licensee’s Licensee Event Reports cited management as the cause of
                            the adverse quality events. According to the reports, the apparent cause of
                            the valve incident discussed earlier was attributed to inadequate
                            management oversight. The inadequate management oversight led to
                            operators and engineers not having sufficient knowledge of the design
                            basis of structures, systems, and components to recognize problems and
                            take timely corrective actions. NRC cited these and numerous other
                            examples, including failures to perform adequate testing of modifications
                            and evaluation of changes as indicative of an attitude on the part of both
                            management and staff that was not conducive to the safe operation of a
                            nuclear power plant.
                        •   The utility industry’s Institute of Nuclear Power Operations also faulted
                            management for the April 7, 1994, situation when marsh grass clogged
                            water intake screens, resulting in automatic trips of circulating water
                            pumps. These pumps are used to circulate water to portions of the
                            reactor’s operations. The pumps’ failures caused significant safety
                            concerns and ultimately resulted in the shutdown of the reactor.
                        •   NRC’s recent inspection reports were critical of the utility’s lack of effective
                            management to correct the various long-standing problems at Salem. NRC’s




                            Page 40                        GAO/RCED-97-145 NRC’s Oversight of Nuclear Power Plants
                    Appendix II
                    Salem Nuclear Generating Station, Units 1
                    and 2




                    first inspection report (July 14, 1995), issued right after the two plants shut
                    down, contained the following:

                    “During this period [May 7-June 23, 1995] Salem management and staff continued to
                    demonstrate significant weakness in performing operability determinations . . . [making a
                    determination as to whether a component of the plant is operating as required to operate
                    according to NRC’s rules and regulations] for degraded safety-related equipment, and
                    implementing prompt and effective corrective actions . . . . In these cases, your
                    organization accommodated the conditions without effective root cause assessment or
                    understanding of the nature of the problems since 1992.”




Watch List Issues   The Salem plant—Units 1 & 2—were first placed on NRC’s Watch List in
                    January 1997. There is substantial evidence, however, that the Salem plant
                    should have been placed on the Watch List before the utility shut down the
                    units on May 16 and June 7, 1995. NRC’s SMMs show that NRC knew about the
                    ineffectiveness of the licensee’s Quality Assurance program, which is
                    designed to provide reasonable assurance that the risk to the public from
                    the utility’s operation is acceptably low.

                    In placing the Salem plant on the Watch List in January 1997, NRC
                    recognized that it had erred in not putting the plant on the Watch List
                    sooner. The SMM stated that NRC put the plant on the Watch List for its past
                    performance history and that it should have put the plant on the Watch
                    List much earlier. In January 1990, for example, materials prepared for the
                    SMM revealed NRC staff’s concerns about the plant’s management and
                    operational performance. Staff noted the declining performance of Salem
                    as demonstrated by an increasing number of personnel errors, inadequate
                    management oversight and involvement, inadequate procedures, and weak
                    root cause analyses. They also noted that Salem’s corrective action
                    programs had frequently been ineffective. Salem’s problems continued to
                    reflect declining performance. In briefing materials prepared for senior
                    managers in 1994, NRC noted:

                    “stagnant, and sometimes declining performance relative to the licensee’s . . . initiative and
                    ability to successfully perform comprehensive and thorough root cause analysis of
                    abnormal conditions or situations affecting the operation of the facility, or to recognize
                    trends indicative of programmatic weaknesses.”


                    NRC concluded that corrective actions had not always been effective, as
                    evidenced by recurring deficiencies of a similar nature or continuing
                    performance weaknesses. NRC noted that while the licensee stated that




                    Page 41                          GAO/RCED-97-145 NRC’s Oversight of Nuclear Power Plants
             Appendix II
             Salem Nuclear Generating Station, Units 1
             and 2




             corrective actions appeared to have addressed the causal factors, given
             past performance, there was no assurance that a similar event would not
             recur. Also noted was that Salem continued to experience recurring
             operational, design, and maintenance-related problems with no indication
             that previously applied corrective measures had been effective in resolving
             or causing a reduction in the frequency or severity of the apparent
             problems.

             Even after the Salem licensees shut down the units for violating technical
             specifications and after NRC had placed the units under a Confirmatory
             Action Letter (that documented the licensee’s agreement not to restart the
             units without NRC’s concurrence) NRC did not list Salem on its Watch List
             until January 1997, when NRC officials acknowledged that they had made a
             mistake and that the plant should have been listed on the Watch List
             sooner because of poor performance.


             1989
Chronology
             NRC’s inspection reports cited the poor material condition of the Salem
             plant.

             1990

             Salem was first discussed in the SMM.

             1991

             NRC  initiated an Augmented Inspection Team (AIT) review on Salem. An AIT
             is an intensive special investigation of an event that NRC requires, in
             addition to routine audit activities, when it determines it needs more
             information to evaluate a situation.

             NRC issued a violation as a result of the licensee’s failure to follow
             procedures and for insufficient preventative maintenance.

             1992

             A second AIT was performed that found that the licensee failed to follow
             procedures.




             Page 42                        GAO/RCED-97-145 NRC’s Oversight of Nuclear Power Plants
Appendix II
Salem Nuclear Generating Station, Units 1
and 2




1993

A third AIT was performed at Salem after the licensee aborted several
start-up attempts.

SALP   ratings started to decline for the first time.

NRC met with PSE&G’s management to discuss the licensee’s weak root
cause analysis and ineffective corrective action history.

1994

PSE&G concurred that it had significant deficiencies in root cause
determination and established a Strategic Improvement Plan.

Marsh grass clogged the water intake screens and blocked the flow of
cooling water to part of the plant, leading to a shutdown of Unit 1. In
response to this event, NRC ordered a fourth AIT review at Salem, in just
four years, an unprecedented action. NRC fined Salem $500,000 for its
handling of the incident.

An NRC special performance assessment found weaknesses in maintenance
and management oversight activities.

1995

On January 3, 1995, Salem was notified that its SALP rating for the period
from June 20, 1993, through November 5, 1994, declined and dropped to its
lowest level. NRC senior officials met with PSE&G’s management to discuss
the low SALP ratings and questioned management’s overall direction and
performance.

NRC senior management met with the licensee’s Board of Directors to
discuss serious concerns with lingering performance problems.

The licensee shut down Unit 1 because of technical specification
violations.

An NRC special inspection team concluded that the licensee’s management
had been deficient in several keys areas and should have taken strong
action sooner.




Page 43                        GAO/RCED-97-145 NRC’s Oversight of Nuclear Power Plants
Appendix II
Salem Nuclear Generating Station, Units 1
and 2




The licensee shut down Unit 2 because of technical specification
violations.

NRC issued a Confirmatory Action Letter requiring its authorization prior to
restarting either unit.

1996

NRC issued its Restart Action Plan for both units citing 43 technical and 21
programmatic items that had to be corrected before the units could
restart.

NRC   cited fundamental design problems at Salem.

1997

After years of declining performance, NRC placed the Salem units on the
Watch List and acknowledged that Salem should have been on the Watch
List much sooner.




Page 44                        GAO/RCED-97-145 NRC’s Oversight of Nuclear Power Plants
Appendix III

Millstone Nuclear Power Station, Unit 2


               The Millstone Unit 2 nuclear power reactor is located at the Millstone
               Nuclear Power Station on Long Island Sound, about three miles from New
               London, Connecticut. The Northeast Nuclear Energy Company (NU) is the
               owner and licensed operator of the plant that has two other
               units—Millstone Units 1 and 3. Millstone 2 is a two-loop pressurized
               light-water reactor that can produce 895 megawatts of electricity. The unit
               was designed and built by the Bechtel Corporation. NRC approved
               Millstone Unit 2’s license to operate on September 26, 1975, and the unit
               began commercial operations on December 26, 1975.


               The NRC has been concerned with Millstone Unit 2’s regulatory
Summary        performance since the late 1980s. In NRC’s June 1991 Senior Management
               Meeting, NRC observed that all three units’ performance had been declining
               over the last 2 years. NRC discussed Unit 2 seven additional times at its
               SMMs before placing it on the Watch List in January 1996. After several
               start-ups and shutdowns, the unit has been under a NRC Restart Action
               Plan since June 1995. The RAP requires the licensee to correct a long list of
               technical and programmatic issues to bring about long-term performance
               improvement before NRC will grant approval to restart the unit. To gain
               NRC’s approval to restart, the licensee needs to show NRC that it has
               established and implemented adequate programs to ensure substantial
               improvement. Millstone Unit 2 has had long-standing problems with its
               performance. It has operated outside of its NRC-approved design basis, has
               had an unusually high number of allegations from employees about the
               potentially unsafe operation of the unit, and management has been cited
               as the major cause of its performance weaknesses.

               Millstone’s performance history shows that its performance since 1989 has
               been significantly worse than the industry average. NRC fined Millstone
               heavily during the period from 1989 through 1996. The fines ranged from
               none to $325,000 annually. For this same period, the industry average
               ranged from $17,000 to $37,000. Millstone’s scores on NRC’s periodic
               Systematic Assessment of Licensee Performance (SALP) generally
               worsened during the period. Millstone’s performance indicators also
               worsened in 1992, and NRC discussed Millstone at every SMM, except for
               one, starting in June 1991. In 1993, the number of NRC’s inspection hours at
               Millstone increased—an indication of NRC’s growing concern. In addition,
               since 1989, Millstone has reported an average of about seven failures per
               year of key safety systems compared with an industry average of about
               three failures per year. Since 1989, the nuclear power industry’s average
               SALP scores, performance indicators, and the number of safety system




               Page 45                    GAO/RCED-97-145 NRC’s Oversight of Nuclear Power Plants
Appendix III
Millstone Nuclear Power Station, Unit 2




failures have shown an overall improvement, while the number of
inspection hours devoted to a plant have decreased. NRC’s reluctance to act
aggressively on problems when first reported likely compounded the
worsening condition of Millstone. Figure III.1 compares the performance
of the Millstone 2 plant and the nuclear industry as a whole.




Page 46                        GAO/RCED-97-145 NRC’s Oversight of Nuclear Power Plants
                                                                                   Appendix III
                                                                                   Millstone Nuclear Power Station, Unit 2




Figure III.1: Millstone Unit 2’s Performance History Against the Industry Average
Enforcement - Fines Paid (in thousands of dollars)                                                                                                           Inspection Hours
700                                                                                                                 5,500
                                                                                                                                                                                                                    Millstone 2
                         Millstone 2 fines
                                                                                                                    5,000
600                      Industry
                         average                                                                                    4,500
500

                                                                                                                    4,000
400
                                                                                                                    3,500
300
                                                                                                                    3,000

200
                                                                                                                    2,500
                                                                                                                                                                                                   Industry average
100                                                                                                                 2,000


  0                                                                                                                 1,500
              1989       1990      1991       1992          1993          1994          1995          1996                  1989              1990        1991             1992         1993         1994          1995           1996

                                Performance Indicators                                                                                        Senior Management Meeting Decisions
4.5                                                                                                                    1.2
         Bad                                          Millstone 2
  4
                                                                                                                            1                 Discussed
3.5                                                                                                                                           Trending letter
                                                                                                                       0.8                    Watchlisted
  3                                                                                                                                     w

2.5                                                                                                                    0.6

  2                                                                                                                                                                                                                    w      w     w
                                                                                                                       0.4
                                                              Industry average
1.5

                                                                                                                       0.2
  1

         Good
0.5                                                                                                                         0
      1989           1990       1991          1992          1993            1994           1995              1996               1989   1990   1990 1991   1991     1992   1992   1993 1993   1994 1994   1995   1995 1996   1996 1997

                                                                                                                                May Jan June Jan June Jan June Jan June Jan June Jan June Jan June Jan


                                       SALP Scores                                                                                                        Safety System Failures
 3
              Adequate                                                           Millstone 2                            15                                                                                      Millstone 2
2.5



 2
                                                                                                                        10

1.5
                                                                             Industry average

 1
                                                                                                                            5
                                                                                                                                                                                                         Industry average
0.5
             Excellent
 0
      1989       1990       1991       1992          1993          1993          1994          1995          1996           0
                                                                                                                                1989           1990         1991            1992         1993        1994           1995          1996



                                                                                   Source: GAO’s analysis of NRC’s data.




                                                                                   Page 47                                                     GAO/RCED-97-145 NRC’s Oversight of Nuclear Power Plants
                               Appendix III
                               Millstone Nuclear Power Station, Unit 2




Performance History

Design Basis Issues            The licensee operated Millstone Unit 2 outside of its design basis, and in
                               some instances, NRC was not aware that degraded conditions had existed
                               for years (in one instance, as far back as 1975) until the licensee brought
                               the matters to NRC’s attention. For example:

                           •   In November 1990, the owner failed to control the position of a certain
                               valve while starting up the unit. This error resulted in the plant’s operating
                               outside of its design basis, and NRC fined the utility $37,500.
                           •   On December 17, 1995, the licensee exceeded a technical specification for
                               the unit that required the temperature in one of its components to heat up
                               not more than 100 degrees F. The same technical specification was also
                               exceeded on July 28, 1995, and December 17, 1995.
                           •   On May 22, 1996, an NRC special inspection team identified a number of
                               significant problems and concluded that Millstone had not consistently
                               maintained conformance with its license and regulatory requirements.
                           •   On January 8, 1996, two sources of water for the plant’s safety systems
                               could not be used because ice had jammed in a pipe. When the condition
                               was discovered by the licensee, the licensee failed to declare that the
                               service water system was not operating as required by procedures.
                           •   NRC’s January 1997 SMM pointed out that Millstone 2’s licensing and design
                               basis was not maintained. NRC said that Millstone had failed to ensure the
                               accuracy of the documentation that specifies the required operating
                               conditions for the unit and did not maintain the as-built configuration of
                               the plant. The licensee also failed to ensure that information on the design
                               basis of the unit was translated into programs, procedures, practices, and
                               hardware. Furthermore, NRC said the licensee was weak in conducting
                               design modifications because it did not provide sufficient rigor,
                               thoroughness, and attention to detail. This inattention ultimately resulted
                               in the unit’s progressive loss of design basis.


Corrective Action Issues       NRC’s records cite a long history of the licensee’s not addressing recurring
                               reliability and operability issues at Millstone 2. Millstone 2 has been of
                               concern to NRC for at least the last 6 years. NRC has had 11 Senior
                               Management Meetings since June 1991 at which Millstone 2 was discussed.
                               Three of the 11 times senior mangers discussed Millstone 2, they decided it
                               should be on NRC’s Watch List. In early 1992, in response to an overall
                               decline in Millstone’s performance, the licensee set up a Performance




                               Page 48                        GAO/RCED-97-145 NRC’s Oversight of Nuclear Power Plants
    Appendix III
    Millstone Nuclear Power Station, Unit 2




    Enhancement Program. This action was taken as a long-term effort to
    ensure the effective use of resources and implement the recommendations
    of four internal performance assessment task forces. The program had
    only a limited impact on improving Millstone’s performance. As a result of
    NRC’s January 1995 SMM, NRC met on March 17, 1995, with the licensee’s
    Board of Trustees to express NRC’s concern about Millstone 2’s continued
    poor performance.

    Because of the licensee’s failure to achieve a sustained level of
    performance improvements and the continuing concerns about the
    licensee’s effectiveness in resolving safety concerns, NRC placed Millstone
    2 on its Watch List in January 1996. In June 1996, NRC designated Millstone
    Unit 2 as a Category 3 facility. This classification connotes a significant
    weakness that warrants maintaining the plant in a shutdown condition
    until the licensee can demonstrate to NRC that adequate programs have
    been established and implemented to ensure substantial improvement.
    Prior to making this designation, NRC advised the licensee that it had seen
    limited success in resolving significant performance concerns about
    procedural adherence, work control and tagging, ineffective
    communications and teamwork between organizations, continued
    weaknesses in correcting identified problems, poor self-assessment and
    quality verification, and inappropriate response to the employees’ safety
    concerns.

    Other pertinent examples of poor corrective actions included the
    following problems:

•   The licensee acknowledged that weaknesses existed before 1991 in its
    programs to report and resolve its deficiencies in a timely manner.
•   NRC informed the licensee on June 21, 1996, that previous Millstone
    performance concerns remained to be resolved and that recent inspection
    findings disclosed significant problems with the licensee’s compliance
    with the requirements of its licenses. At that time, NRC required all three
    Millstone units, which were shut down, to receive NRC’s approval prior to
    restart.
•   In August 1996, NRC issued a confirmatory order to the licensee requiring it
    to complete an Independent Corrective Action Verification Program that
    was acceptable to NRC before the Millstone units could return to operation.
    This unusual step occurred after several years of NRC’s notifications to the
    licensee that its corrective action program was not doing a good job. The
    confirmatory order was issued after Millstone 2 voluntarily shut down in
    February 1996. According to a senior NRC official, Millstone 2 was



    Page 49                        GAO/RCED-97-145 NRC’s Oversight of Nuclear Power Plants
                            Appendix III
                            Millstone Nuclear Power Station, Unit 2




                            operating safely before it was shut down. However, once the plant was
                            shut down, NRC became more aggressive in keeping it shut down, bringing
                            pressure to improve the units’ corrective action program.
                        •   On September 20, 1996, a special NRC inspection of the engineering and
                            licensing activities at Millstone 2 reported that the most significant issue at
                            Millstone was the ineffective corrective action process. The special
                            inspection team identified degraded and nonconforming conditions that
                            had not been promptly corrected. It also found that line management did
                            not respond to the findings of the unit’s quality assurance organization and
                            that the root causes of problems and the programmatic implications of
                            identified issues had not been addressed in a timely fashion. In addition,
                            the team found that the licensee did not establish an effective corrective
                            action program for Millstone as a whole. The review revealed weaknesses
                            in the ability to identify the unit’s problems; delayed or inadequate
                            corrective actions for known deficiencies; problems in tracking corrective
                            actions; weaknesses in tracking nonconformances; and a generally
                            inadequate management response to quality assurance audits and
                            third-party assessments.


Management Weaknesses       NRC’s records show numerous examples of management weaknesses such
Issues                      as the following:

                        •   An NRC Plant Status Report, dated March 21, 1996, stated that in
                            September 1994 the licensee recognized the performance weaknesses
                            delineated in the most recent SALP report and generally concluded that the
                            inability to correct long-standing performance issues is rooted in cultural
                            weaknesses in the Millstone management and staff.
                        •   NRC’s May 1996 special inspection found that while quality assurance
                            audits and third-party reviews were generally effective in identifying
                            programmatic weaknesses, the Millstone management’s responses to these
                            findings and recommendations were often slow and incomplete.
                        •   The Citizens Awareness Network, a nonprofit interest group concerned
                            with nuclear waste issues, reported in November 1996 that the licensee
                            had decade-long, serious, chronic, systemic mismanagement problems at
                            Millstone. It also reported that NRC’s inspection program staff and
                            management had failed over the past decade to detect and deal with this
                            problem.
                        •   A December 1996 Connecticut State report said that the licensee’s
                            management was not sufficiently aggressive in identifying and correcting
                            deficiencies before problems occurred. It noted that weaknesses in




                            Page 50                        GAO/RCED-97-145 NRC’s Oversight of Nuclear Power Plants
                        Appendix III
                        Millstone Nuclear Power Station, Unit 2




                        programs and procedures continued to contribute to the degradation of
                        safety-related equipment.
                    •   At January 1997 hearings at NRC, a nuclear industry veteran, hired by the
                        licensee after NRC required Commission approval for restart, to manage
                        Millstone and bring it into compliance with NRC’s requirements for
                        restarting the units, testified about the condition of Millstone upon his
                        arrival. He said that when he assumed his duties, Millstone was as close to
                        a dysfunctional organization as he had ever encountered. He said that the
                        fundamental problem was leadership.
                    •   The licensee’s self-assessment cited the licensee’s overemphasis on cost
                        containment as one primary root cause of poor performance during 1990
                        and 1991. A December 1996 consultant’s report also concluded that the
                        licensee’s incentive compensation plans for both management and staff
                        placed undue emphasis on cost and production issues and that the
                        emphasis on safety in the incentive and bonus plans was inadequate. The
                        report also concluded that the licensee’s nuclear organization had been
                        mismanaged for the past 10 years. In addition, it concluded that NRC had
                        been too permissive and trusting in its dealings with the licensee.


Watch List Issues       NRC  first placed Millstone 2 on the Watch List in January 1996. It was
                        discussed at every bi-annual SMM, except one, starting in June 1991. There
                        is substantial evidence that Millstone 2 should have been put on the Watch
                        List before the licensee shut down the unit in February 1996 because of
                        the failure of a key safety system to operate as required.

                        Starting in 1991, NRC’s SMMs show that NRC had long-standing performance
                        concerns about Millstone, citing numerous events demonstrating a pattern
                        of the licensee’s continued failure to correct the root causes of
                        programmatic problems. These events included examples of significant
                        long-term breakdown in the utility’s corrective action program, failure to
                        determine and report when certain components of the reactor were not
                        operating as required by NRC, and failure to implement appropriate
                        procedures. Compounding these concerns was a continuing high volume
                        of employees’ allegations of safety issues that were not being
                        appropriately resolved by the licensee.

                        Documentation in NRC’s files shows that the licensee was aware of
                        significant weaknesses in its oversight functions as early as 1991 but took
                        no effective actions to correct the weaknesses. NRC’s routine on-site
                        inspections identified a number of configuration control, personnel error,
                        work control, and procedure compliance issues that contributed to five



                        Page 51                        GAO/RCED-97-145 NRC’s Oversight of Nuclear Power Plants
Appendix III
Millstone Nuclear Power Station, Unit 2




reactor trips and two forced shutdowns experienced at Millstone 2 during
1993. (A reactor trip is an action when the reactor automatically shuts
down because it has been programmed to do so under certain conditions
that could challenge the reactor’s safety if the unit continued to operate. A
forced shutdown is a condition in which the reactor is shut down because
certain conditions have occurred that are not normal to the reactor’s
operation.). The failures of Millstone 2’s key safety systems increased in
the fourth quarter of 1990 and were well above the industry average from
1993 through the second quarter of 1996. Of more recent concern are
examples of the licensee’s failure to comply with safety-related
requirements to ensure that the Millstone units were operating as
designed.

Despite the increasing volume of information over the years that the
licensee was not managing Millstone well, NRC did not take timely and
decisive action. For example, between May 24 and August 5, 1993,
Millstone’s licensee made over 30 attempts to repair a leaking valve at
Millstone Unit 2. The numerous attempts to repair the valve over a period
of time versus shutting down the reactor when it was clear the valve could
not be successfully fixed in a timely manner, violated a number of NRC’s
rules and regulations. These unsuccessful attempts to fix the valve
ultimately resulted in sufficient damage to the valve to require Millstone 2
to be shut down. Had the valve failed catastrophically during the repeated
attempted repairs, there could have been serious safety consequences,
such as the loss of coolant, which would have challenged the safety
systems of the plant. As a result of this event, NRC issued a Notice of
Violation to the owner and proposed a fine of $237,500. In assessing the
fine, NRC said that the fine was so high because of the egregious nature of
management’s failure to recognize the increased probability of valve
failure due to the repeated repair attempts. NRC cited other factors in its
decision, such as the necessity for NRC to prod the licensee to get it to fully
appreciate the implications of the incident and to ensure that broad-based
corrective actions were undertaken. NRC also noted that overall
performance at Millstone 2 had declined, including continuing procedure
adherence problems, a continuing inability to identify and correct
problems, and nine violations it issued to Millstone in 1993.

According to some of Millstone’s resident inspectors, NRC should have
ordered a shutdown in 1993 when the valve incident occurred. The senior
resident inspector had recommended that NRC shut down Unit 2, but
regional management disagreed because it said it could not cite a
regulatory basis to order a shutdown. Another resident inspector said that



Page 52                        GAO/RCED-97-145 NRC’s Oversight of Nuclear Power Plants
             Appendix III
             Millstone Nuclear Power Station, Unit 2




             although NRC had increased the number and severity of fines on Millstone,
             increased the number of inspection hours, given Millstone a low SALP
             score, and talked to Millstone management about the plant’s problems,
             Millstone’s safety performance did not improve. According to him, a
             trending letter, which is used to advise a licensee that NRC is concerned
             because it has noted a decline in a plant’s performance, and/or the Watch
             List were the next regulatory enforcement steps, but NRC’s management
             hesitated to use these tools because it did not think it had sufficient
             evidence to take stronger action. A number of other NRC officials
             expressed the opinion that, in retrospect, NRC should have added Millstone
             to its Watch List in the aftermath of the incident.


             1991
Chronology
             Millstone 2 was first discussed in the SMM.

             NRC   initiated an Augmented Inspection Team review on Millstone 2.

             1992

             Millstone’s performance indicators began a significant downward trend.

             1993

             The licensee reported to NRC that Millstone 2 may have operated outside
             its design basis.

             1994

             The SALP covering the period from April 4, 1994, through July 9, 1994, noted
             that performance at Millstone 2 indicated significant weaknesses in the
             plant’s operations and maintenance and stated that despite attempts to
             achieve consistent improvements, lasting performance improvements
             were not achieved.

             Millstone 2 is shut down for a routine refueling and maintenance outage
             and the owner agrees not to restart Millstone 2 before meeting with NRC to
             discuss readiness.

             NRC increased its inspection hours at the plant by approximately
             50 percent.



             Page 53                        GAO/RCED-97-145 NRC’s Oversight of Nuclear Power Plants
Appendix III
Millstone Nuclear Power Station, Unit 2




1995

NRC  senior managers met with the licensee’s Board of Trustees to express
its concerns about Millstone 2’s continued poor performance. After this
meeting, the licensee replaced many senior managers and began
expending resources to fix items on the Restart Action List. However, the
changes and corrections that NRC sought did not occur.

NRC issued its Restart Action Plan for Millstone 2, citing items that had to
be reviewed by NRC before the unit could be restarted.

NRCagreed to permit restart after confirming that Millstone could be
operated safely.

Millstone 2 restarted with NRC’s approval, although many of NRC’s
long-term RAP items had not yet been resolved.

The licensee shut down Millstone 2 to repair a pipe that ruptured because
of significant erosion/corrosion of the pipe’s wall.

Millstone Unit 2 was returned to full power operation.

Millstone Unit 2 was shut down to repair a leaking valve.

Millstone Unit 2 was returned to full power.

1996

NRC   placed all the Millstone units on the Watch List.

Millstone Unit 2 was shut down by the licensee to investigate a suspected
design deficiency in a key safety system.

Time magazine’s cover story, “Blowing the Whistle on Nuclear Safety,”
drew public attention to long-standing problems at Millstone.

NRC sent the licensee a letter requesting it to certify that it was operating
Millstone in compliance with its licensing basis.

After an SMM, NRC informed the licensee that Millstone remains on the
Watch List.




Page 54                        GAO/RCED-97-145 NRC’s Oversight of Nuclear Power Plants
Appendix III
Millstone Nuclear Power Station, Unit 2




NRC required the approval of the Commission before Millstone could
restart any units.

NRC’s Special Inspection found that a significant issue at Millstone 2 was its
ineffective corrective action process.

NRC staff met with the licensee’s staff and expressed concern about
programmatic weaknesses since 1991 at Millstone Units 1, 2, and 3. These
weaknesses were cited in design basis and control, corrective actions,
quality assurance, and NRC’s own oversight of Millstone.

NRC issued an order requiring the Commission’s approval for the restart of
any Millstone unit until the completion, to NRC’s satisfaction, of an
Independent Corrective Action Verification Program and verification that
Millstone’s physical and functional characteristics are in conformance
with the licensing conditions and NRC-approved design bases of the units.

1997

Millstone Units 1, 2, and 3 remain closed and on the Watch List; they
require the Commission’s approval for restart.




Page 55                        GAO/RCED-97-145 NRC’s Oversight of Nuclear Power Plants
Appendix IV

Cooper Nuclear Station


              The Cooper Nuclear Station is located in southeast Nebraska on the west
              bank of the Missouri River, near the town of Brownville. Nebraska Public
              Power District is the owner and licensed operator. Cooper consists of one
              nuclear reactor, which is a boiling-water reactor with a net generating
              capacity of 778 megawatts. Designed by General Electric, Cooper was
              constructed by Burns and Roe. NRC issued Cooper’s license to operate on
              January 18, 1974, and commercial operation began on May 10, 1974.


              NRC  has been concerned about Cooper’s regulatory performance since the
Summary       early 1990s. NRC discussed Cooper at every Senior Management Meeting
              from June 1993 through January 1997, but NRC has never put the plant on
              its Watch List. However, Cooper is one of two nuclear power reactor sites
              to receive three successive trending letters (letters reflecting declining
              performance) from NRC. These letters were sent in January and June 1994
              and January 1995. NRC’s records document the licensee’s serious
              management problems, including that the licensee allowed the plant to
              operate out of its NRC-approved design basis for many years. The licensee
              shut down Cooper in 1994 because of three serious safety system failures
              that violated the requirements under which it must operate. After Cooper
              shut down, and as a result of these failures and their serious safety
              significance, as well as a long list of other safety deficiencies, NRC issued a
              lengthy NRC Restart Action Plan. NRC required that the items cited on the
              RAP be resolved and that NRC’s approval be received prior to restarting the
              unit.

              Cooper’s main problems were long-standing. They included equipment and
              performance failures, operating outside of its design basis, and a history of
              a lack of commitment to excellent operations on the part of the licensee’s
              management. NRC’s ineffectiveness in achieving change compounded the
              effects of the licensee’s poor performance.

              Cooper’s performance history shows that its performance since 1989 has
              been significantly worse than the industry average. NRC fined Cooper
              heavily—a total of about $750,000—during the period from 1993 through
              1996. This was an average of $94,000 per year from 1989 through 1996. For
              the same period, the industry average annual fines paid by each unit
              ranged from $17,000 to $37,000. As the number of NRC’s hours of inspection
              of Cooper increased dramatically in 1993—an indication of NRC’s growing
              concern—Cooper’s scores on NRC’s Systematic Assessment of Licensee
              Performance also worsened. Cooper’s performance indicators were
              significantly worse than the industry average for 4 of the 8 years from 1989



              Page 56                     GAO/RCED-97-145 NRC’s Oversight of Nuclear Power Plants
Appendix IV
Cooper Nuclear Station




through 1996. Furthermore, NRC discussed Cooper’s performance at every
SMM from June 1993 through January 1997. Also, from 1989 through 1996,
Cooper had an average of about six safety system failures per year
compared to an industry average of about three per year. Since 1989, the
nuclear power industry’s average SALP scores, performance indicators, and
the number of safety system failures have shown an overall improvement,
while the number of inspection hours devoted to a plant have decreased.
Figure IV.1 compares the performance of Cooper to the nuclear industry
as a whole.




Page 57                  GAO/RCED-97-145 NRC’s Oversight of Nuclear Power Plants
                                                                               Appendix IV
                                                                               Cooper Nuclear Station




Figure IV.1: Cooper’s Performance History Against the Industry Average

Enforcement - Fines Paid (in thousands of dollars)                                                                                                         Inspection Hours
700                                                                                                               6,000

                            Cooper fines
600                                                                                                               5,500
                            Industry average
                                                                                                                  5,000
500                                                                                                                                                                                                             Cooper
                                                                                                                  4,500
400
                                                                                                                  4,000
300
                                                                                                                  3,500

200
                                                                                                                  3,000
                                                                                                                                                                                                Industry average
100                                                                                                               2,500


 0                                                                                                                2,000
              1989      1990      1991      1992      1993              1994          1995          1996                  1989             1990           1991           1992         1993         1994             1995         1996


                                Performance Indicators                                                                                    Senior Management Meeting Decisions
  6                                                                                                                  1.2
         Bad
  5                                                                              Cooper                               1                    Discussed
                                                                                                                                           Trending letter
  4                                                                                                                  0.8                   Watchlisted
                                                                                                                                      w

  3                                                                                                                  0.6


  2                                                                                                                  0.4
                                                                    Industry average
  1                                                                                                                  0.2

         Good
  0                                                                                                                   0
      1989           1990        1991       1992          1993            1994           1995              1996               1989   1990 1990    1991   1991    1992   1992 1993   1993 1994   1994    1995 1995    1996 1996   1997
                                                                                                                              May Jan June Jan June Jan June Jan June Jan June Jan June Jan June Jan

                                        SALP Scores                                                                                                       Safety System Failures
  3                                                                                                                   12
               Adequate
                                                                                         Cooper
 2.5                                                                                                                  10



  2                                                                                                                       8



 1.5                                                                                                                      6                                                                                    Cooper
                                                                          Industry average
  1                                                                                                                       4



 0.5                                                                                                                      2

             Excellent                                                                                                                                                                                    Industry average
  0                                                                                                                       0
       1989          1990      1991      1992      1993          1993          1994          1995          1996               1989         1990           1991            1992         1993            1994         1995         1996




                                                                               Source: GAO’s analysis of NRC’s data.



                                                                               Page 58                                                     GAO/RCED-97-145 NRC’s Oversight of Nuclear Power Plants
                                Appendix IV
                                Cooper Nuclear Station




Performance History

Design Basis Issues             The following illustrates how Cooper operated outside of its design basis
                                for many years:

                            •   NRC  found that for 20 years, from January 18, 1974, until May 27, 1994,
                                Cooper did not ensure that its system to prevent leaks of radioactivity was
                                maintained at all times according to NRC’s requirements. NRC also found
                                that NRC-required leak testing of the system was not conducted. When the
                                testing was done in 1994, the leak rate was three times NRC’s allowable
                                limit.
                            •   From January 18, 1974, until May 25, 1994, Cooper conducted tests of its
                                emergency power system to ensure that the system would operate as
                                intended in the event of a loss of electrical power. This testing is required
                                by NRC to ensure that the unit operates within its design basis and can be
                                permitted to operate. When tested in May 1994, neither of the emergency
                                generators operated as required.
                            •   Cooper’s control room emergency filter system did not operate at all
                                times, as required by NRC, during the period from June 1989 through
                                April 28, 1994. On April 11, 1994, Cooper identified numerous hardware
                                deficiencies that resulted in the failure of the control room to pressurize to
                                NRC-required levels. When Cooper ran a test to determine if the control
                                room would pressurize as required, it determined that it would not. NRC
                                found that in previous tests, Cooper had inappropriately manipulated the
                                air pressures in adjoining buildings in order to obtain satisfactory test
                                results. Cooper also masked the hardware deficiencies that caused or
                                contributed to this inability to achieve the control pressures required by
                                NRC.
                            •   The current NRC senior resident inspector advised us that Cooper’s major
                                safety systems were not operating as designed and that, therefore, the unit
                                was operating outside of its design basis prior to shutdown.


Corrective Actions Issues       NRC’s inspections show that one of the most significant deficiencies found
                                at Cooper were untimely and ineffective corrective actions taken on
                                identified problems. Inspectors found instances in which safety problems
                                had existed at Cooper for up to 20 years while Cooper took no effective
                                corrective actions. An NRC special investigation cited Cooper’s weak
                                corrective action program. On the basis of their findings at that time, the




                                Page 59                    GAO/RCED-97-145 NRC’s Oversight of Nuclear Power Plants
                            Appendix IV
                            Cooper Nuclear Station




                            inspection team reported that there may still be a significant number of
                            undiscovered problems.

                            NRC’s Regional Administrator expressed concern with Cooper’s
                            performance since restart, and the Deputy Administrator told Cooper
                            executives that the overriding problem was Cooper’s “inability to
                            effectively implement corrective actions.”

                            NRC believes, in hindsight, that the safety violations discovered at Cooper
                            in 1994 had existed for years, some as far back as the plant’s first start-up
                            in 1974, and should have been discovered and corrected by Cooper’s
                            management long ago. But because Cooper’s management had a poor
                            safety culture and a weak quality assurance program, the safety violations
                            remained hidden, according to NRC.

                            NRC officials also believe that its resident inspectors could have discovered
                            these safety violations. But because NRC officials assumed that Cooper was
                            an above-average performer throughout the 1970s and 1980s, it rarely
                            conducted special inspections targeted to uncover safety deficiencies. In
                            1992, on the basis of its findings during routine on-site inspections, NRC
                            began to lose confidence in the ability of Cooper’s management to operate
                            the plant safely. However, NRC did not significantly increase its inspections
                            until 1993. As a result of these inspections, Cooper was pressured by NRC
                            to shut down in 1994 on the basis that safety systems were not being
                            operated as required by NRC.


Management Weaknesses       NRC’s investigation into the root causes of Cooper’s problems revealed
Issues                      substantial management weaknesses, especially management’s inability to
                            ensure corrective actions. In NRC’s opinion, the problems associated with
                            Cooper’s significant safety system violations in 1994 were the result of
                            weak management. NRC stated that chronic and fundamental weaknesses
                            have negatively affected the safety performance of Cooper for an
                            unacceptably long period of time. NRC also said that Cooper’s
                            long-standing violations were indicative of long-term failures by senior
                            managers to

                        •   implement effective safety processes and procedures;
                        •   institute a positive, stationwide attitude toward identifying and correcting
                            problems;
                        •   provide effective oversight and monitoring of Cooper’s staff and programs
                            in order to ensure a high level of safety performance; and



                            Page 60                    GAO/RCED-97-145 NRC’s Oversight of Nuclear Power Plants
                        Appendix IV
                        Cooper Nuclear Station




                    •   instill and maintain an attitude among plant staff that emphasizes plant
                        safety.

                        While NRC issued favorable reports on improved safety programs and
                        management practices in the first half of 1995, coinciding with Cooper’s
                        restart, within months NRC reported serious weaknesses in management’s
                        safety performance that could have been corrected prior to the restart. NRC
                        reported that management

                    •   failed to follow procedures,
                    •   lacked awareness of the plant’s status, and
                    •   provided weak oversight of the engineering programs.


Watch List Issues       Cooper was discussed at every SMM from June 1993 through January 1997,
                        but it has never been put on NRC’s Watch List. NRC also sent Cooper three
                        successive trending letters in January and June of 1994 and in
                        January 1995. Cooper’s owner is one of two nuclear plant licensees to
                        receive three letters in consecutive SMM periods. The next level of action in
                        severity above the trending letter would be to place Cooper on the Watch
                        List.


                        1989
Chronology
                        NRC’sinspection hours for Cooper were about 1,500 hours above the
                        average inspection hours for other units; about 51 percent above the
                        average.

                        1992

                        An NRC inspection report cited growing evidence that management was not
                        proactively identifying the plant’s problems and the licensee was simply
                        focusing its efforts on whatever NRC identified.

                        The number of key safety system failures took a dramatic turn for the
                        worse.




                        Page 61                    GAO/RCED-97-145 NRC’s Oversight of Nuclear Power Plants
Appendix IV
Cooper Nuclear Station




1993

Cooper is discussed for the first time at NRC’s SMM. Its SALP scores, numbers
of NRC inspection hours devoted, and fines paid all took a turn for the
worse.

NRC fined the licensee twice for a total of $400,000 because it provided
inaccurate information, took inadequate corrective actions, and had
serious violations in its reactor safety program.

1994

The licensee shut down the unit, which remained closed for 9 months.

NRC issued a RAP requiring Cooper to obtain NRC’s approval before
restarting the unit. The plan required an extensive list of corrective actions
and a special inspection to review Cooper’s long-standing equipment,
operations, and management problems.

NRC issued two of the three trending letters to Cooper and cited the unit’s
performance as marginally adequate.

An NRC special investigation team reported that Cooper’s management was
the root cause of its problems, citing deficiencies such as low standards,
poor leadership skills, and improper corporate vision.

1995

The licensee hired a new management team to bring Cooper up to
standards in order to obtain NRC’s approval for restarting the plant.

NRC   approved restart and the licensee restarted the unit.

After the restart, an NRC inspection report stated that challenges still
remained. A refueling outage that had been scheduled for 54 days lasted 77
days because of problems with work on a turbine and an emergency diesel
generator.

NRC issued a third trending letter to Cooper covering a third consecutive
SMM period.


NRCfined Cooper a total of $300,000 for three violations, including not
keeping the emergency power generators, the control room air filtration


Page 62                     GAO/RCED-97-145 NRC’s Oversight of Nuclear Power Plants
Appendix IV
Cooper Nuclear Station




system, and the reactor containment systems in operating condition as
required. In issuing the violations, NRC noted that unsafe conditions had
existed at Cooper for up to 20 years and that Cooper had been operating
outside of its design basis for years.

1996

NRC and Cooper continued to find problems that existed prior to the 1994
shutdown. NRC reported that significant issues in all functional areas did
not appear to be indicative of further decline in performance, but rather
were attributable to preexisting problems.

In April, NRC fined Cooper $50,000 for operating with an unresolved safety
issue for about 10 years. NRC said that the material condition of the plant
continued to improve, but slowly.

1997

Cooper’s performance ratings began to show some improvement, although
they are still below the industry average.

In January, Cooper was discussed for the eighth consecutive time at NRC’s
SMM.




Page 63                   GAO/RCED-97-145 NRC’s Oversight of Nuclear Power Plants
Appendix V

Comments From the Nuclear Regulatory
Commission

Note: GAO comments
supplementing those in the
report text appear at the
end of this appendix.




See comment 1.




                             Page 64   GAO/RCED-97-145 NRC’s Oversight of Nuclear Power Plants
                 Appendix V
                 Comments From the Nuclear Regulatory
                 Commission




See comment 2.




See comment 3.




                 Page 65                      GAO/RCED-97-145 NRC’s Oversight of Nuclear Power Plants
                 Appendix V
                 Comments From the Nuclear Regulatory
                 Commission




See comment 4.




                 Page 66                      GAO/RCED-97-145 NRC’s Oversight of Nuclear Power Plants
                 Appendix V
                 Comments From the Nuclear Regulatory
                 Commission




Now on p. 1.

See comment 4.




Now on p. 2.

See comment 4.




Now on p. 3.

See comment 5.




Now on p. 5.

See comment 6.



Now on p. 5.

See comment 4.




                 Page 67                      GAO/RCED-97-145 NRC’s Oversight of Nuclear Power Plants
                  Appendix V
                  Comments From the Nuclear Regulatory
                  Commission




Now on pp. 6-7.

See comment 4.



Now on p. 6.

See comment 4.


Now on p. 10.

See comment 4.




Now on p. 9.

See comment 4.




Now on p. 10.

See comment 4.




                  Page 68                      GAO/RCED-97-145 NRC’s Oversight of Nuclear Power Plants
                    Appendix V
                    Comments From the Nuclear Regulatory
                    Commission




Now on p. 14.

See comment 4.


Now on p. 18.

See comment 4.




Now on p. 30.

See comment 4.



Now on p. 30.

See comment 4.




Now on p. 30.

See comment 7.




Now on pp. 32-33.

See comment 4.




                    Page 69                      GAO/RCED-97-145 NRC’s Oversight of Nuclear Power Plants
                 Appendix V
                 Comments From the Nuclear Regulatory
                 Commission




Now on p. 34.

See comment 4.

Now on p. 41.

See comment 4.




Now on p. 42.

See comment 4.




Now on p. 43.

See comment 4.




Now on p. 54.

See comment 4.




                 Page 70                      GAO/RCED-97-145 NRC’s Oversight of Nuclear Power Plants
                  Appendix V
                  Comments From the Nuclear Regulatory
                  Commission




Now on p. 54.
See comment 4.

Now on p. 58.

See comment 8.

Now on p. 59.

See comment 9.




Now on p. 60.

See comment 4.




Now on p. 61.

See comment 10.




                  Page 71                      GAO/RCED-97-145 NRC’s Oversight of Nuclear Power Plants
                 Appendix V
                 Comments From the Nuclear Regulatory
                 Commission




                 The following are GAO’s comments on NRC’s letter dated May 23, 1997.
GAO’s Comments
                 1. We agree with NRC’s discussion on the safety margins afforded by NRC’s
                 regulatory approach, and our report describes NRC’s defense-in-depth
                 philosophy as the basic framework for ensuring the adequate safety of
                 nuclear plants. Our concern remains that NRC cannot ensure that all plants
                 have adequate documentation to support that they are still operating in
                 accordance with their plant designs. Operating within approved plant
                 design is at the heart of the defense-in-depth philosophy. This deficiency in
                 NRC’s knowledge base, especially in the light of substantial design
                 deficiencies discovered at Millstone and in other plants, erodes NRC’s
                 confidence that its licensees are operating their plants in accordance with
                 their plant design.

                 Furthermore, NRC stated that the safety deficiencies at the plants we
                 examined were not serious enough to warrant shutting down the plant
                 while they were operating. Once the plants shut themselves down,
                 however, NRC then required the licensees to address their backlog of
                 problems before allowing them to restart the plants. For example,
                 Millstone must address a long list of technical and programmatic issues,
                 including weaknesses in correcting identified problems and inappropriate
                 response to employees’ safety concerns. Salem must also correct many
                 long-standing safety problems prior to restarting its plants, including
                 ineffective corrective actions, weak management oversight, and numerous
                 equipment failures. Most of the problems keeping these plants shut down
                 are long-standing deficiencies known to NRC. Forcing licensees to fix their
                 problems before they accumulated would have helped prevent these
                 plants from reaching conditions where safety margins were reduced.

                 2. We agree that these initiatives are worthwhile steps, but taken together
                 they do not address the fundamental issues raised in our report. We
                 continue to believe that NRC needs to take more aggressive action to hold
                 licensees accountable for fixing their safety problems. For example, we
                 recommend that NRC not only fully document licensees’ progress in
                 addressing their problems, but also show what sanctions NRC will impose
                 for noncompliance. This information should also be an important
                 discussion area during the Senior Management Meeting. In connection
                 with the need to evaluate management competency and performance as
                 part of the inspection process, we agree that this is a difficult area to
                 quantify and assess. We also believe that given the importance of
                 management to safety performance, ignoring this important factor during
                 the inspection process prevents NRC from being a more proactive and



                 Page 72                      GAO/RCED-97-145 NRC’s Oversight of Nuclear Power Plants
Appendix V
Comments From the Nuclear Regulatory
Commission




therefore effective regulator. In connection with NRC’s efforts to improve
its Senior Management Meeting Process, we support NRC’s current
initiatives, as we stated in our report.

3. NRC’s Enclosure 3 is not included in this appendix. These were changes
that parallel NRC’s comments in Enclosure 2.

4. We have made appropriate changes to the report in response to NRC’s
suggestions.

5. We agree that NRC does make attempts to have licensees fix problems as
they become known. However, as we document in our report, NRC’s
actions were clearly not effective in the three facilities we studied. The
record shows that, for these problem plants, deficiencies persisted over
long periods of time, in some instances, without being corrected by the
licensee. NRC’s sanctions in the form of fines often came late, as did
placing plants on the Watch List, which is a tool used to force a change in
behavior. Only after plants were shut down did NRC use a restart order or
plan to force licensees to address deficiencies.

6. As we said in our report, in only one instance has NRC issued an order to
shut down an operating nuclear power plant—Peach Bottom in 1987. The
five plants referred to by NRC were already shut down by their licensees
before NRC issued its order to shut down these plants.

7. Our audit work clearly supports that there has not been a concerted
effort by NRC to verify the performance indicator data for completeness or
accuracy. We changed our report to show that more than one official told
us that in the Performance Indicator program, there has been no
concerted effort to verify the data for completeness and accuracy.

8. Subsequent discussion with NRC disclosed that the information on the
number of inspection hours for the industry was 2,503 and for Cooper was
4,013.

9. Although we modified our report to reflect the senior resident
inspector’s new position, the staff who interviewed the inspector clearly
remember her stating that, in her opinion, the Cooper plant was in an
unsafe condition prior to its May 1994 shutdown because several safety
systems would not operate. The staff rechecked their personal notes to
verify these facts.




Page 73                      GAO/RCED-97-145 NRC’s Oversight of Nuclear Power Plants
Appendix V
Comments From the Nuclear Regulatory
Commission




10. NRC misread our draft report to mean that Cooper’s inspection hours
for 1989 were 1,500 hours. We changed our report to more clearly read
that Cooper’s inspection hours for 1989 were about 1,500 above the
industry average for that year. Also, subsequent discussion with NRC
disclosed that the information on the number of hours for the industry
average of approximately 3,900 hours, stated in their comment, was fiscal
year data. Our report uses calendar year data.




Page 74                      GAO/RCED-97-145 NRC’s Oversight of Nuclear Power Plants
Appendix VI

Objectives, Scope, and Methodology


                  Our objectives in this review were to determine how NRC (1) defines
                  nuclear safety, (2) measures and monitors the safety condition of nuclear
                  plants, and (3) uses its knowledge of safety conditions to ensure the safety
                  of nuclear plants.

                  To respond to the first objective, we reviewed the Atomic Energy Act,
                  which governs NRC activities, and pertinent regulations, promulgated by
                  NRC, that relate to safety. We also reviewed other written source
                  documents to gain insight into how NRC defines its safety role. These
                  documents included speeches by the Commission Chairman, transcripts
                  from hearings and meetings held by the Commissioners, and other public
                  documents, such as NRC’s annual reports, accountability report, and
                  special publications. We supplemented these materials with interviews of
                  officials at different levels of the organization.

                  To respond to objective two, we asked senior NRC officials and program
                  managers what sources they used to measure and monitor the safety of
                  individual plants. These answers led us to examine aspects of

              •   NRC’s plant inspection program, which includes on-site inspection reports,
                  plant performance reviews, and special inspections, and
              •   NRC’s performance indicator program, which includes the collecting and
                  reporting on eight indicators of the safety performance of nuclear reactor
                  licensees.

                  To respond to objective three, we interviewed nuclear plant officials in
                  three separate locations: the Salem Generating Station in Salem, New
                  Jersey; the Millstone Nuclear Power Station in Connecticut; and the
                  Cooper Nuclear Station in Nebraska. We chose these locations because
                  they represent sites that have had significant performance problems and
                  had been placed under an NRC restart order or plan. The Cooper plant was
                  chosen because it is in a different region from Salem and Millstone. We
                  chose plants under a restart order or plan because these represent the
                  most serious cases of performance decline, and we wanted to measure the
                  extent to which current problems represent long-standing performance
                  issues.

                  At these facilities, we interviewed NRC plant inspectors and utility
                  managers. We examined inspection reports and other documents
                  pertaining to restart document orders, including headquarters, regional,
                  and licensee correspondence. We also interviewed regional staff in NRC’s




                  Page 75                   GAO/RCED-97-145 NRC’s Oversight of Nuclear Power Plants
Appendix VI
Objectives, Scope, and Methodology




Region I in King of Prussia, Pennsylvania, and Region IV in Arlington,
Texas.

We also consulted experts in the field of commercial nuclear power, which
included representatives from trade associations, former NRC
commissioners and officials, and public interest groups.




Page 76                       GAO/RCED-97-145 NRC’s Oversight of Nuclear Power Plants
Appendix VII

Major Contributors to This Report


               Gary Boss, Project Leader
               Michael Gilbert, Deputy Project Leader
               Phil Olson, Team Leader
               Robin Reid, Professional Staff
               John Cass, Professional Staff
               Duane Fitzgerald, Technical Advisor
               William Swick, Senior Advisor
               Jackie Goff, Senior Attorney




(170270)       Page 77                  GAO/RCED-97-145 NRC’s Oversight of Nuclear Power Plants
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