oversight

Audit of NRC's Transition Process for Decommissioning Power Reactors

Published by the Nuclear Regulatory Commission, Office of Inspector General on 2019-08-23.

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

Audit of NRC’s Transition
Process for
Decommissioning Power
Reactors
OIG-19-A-16
August 23, 2019




All publicly available OIG reports (including this report)
are accessible through NRC’s Web site at
http://www.nrc.gov/reading-rm/doc-collections/insp-gen
                                    UNITED STATES
                        NUCLEAR REGULATORY COMMISSION
                                 WASHINGTON, D.C. 20555-0001




OFFICE OF THE
INSPECTOR GENERAL


                                     August 23, 2019


MEMORANDUM TO:              Margaret M. Doane
                            Executive Director for Operations


FROM:                       Dr. Brett M. Baker /RA/
                            Assistant Inspector General for Audits


SUBJECT:                    AUDIT OF NRC’S TRANSITION PROCESS FOR
                            DECOMMISSIONING POWER REACTORS
                            (OIG-19-A-16)


Attached is the Office of the Inspector General’s (OIG) audit report titled Audit of NRC’s
Transition Process for Decommissioning Power Reactors.

The report presents the results of the subject audit. Following the August 13, 2019, exit
conference, agency staff indicated that they had no formal comments for inclusion in this
report.

Please provide information on actions taken or planned on each of the recommendation(s)
within 30 days of the date of this memorandum. Actions taken or planned are subject to OIG
follow-up as stated in Management Directive 6.1.

We appreciate the cooperation extended to us by members of your staff during the audit. If
you have any questions or comments about our report, please contact me at (301) 415-5915
or Jacki Storch, Team Leader, at (301) 415-2877.

Attachment: As stated
                                     Office of the Inspector General
                                     U.S. Nuclear Regulatory Commission
                                     Defense Nuclear Facilities Safety Board                       OIG-19-A-16
                                                                                                   August 23, 2019
                                     Results in Brief

                                           Audit of NRC’s Transition Process for Decommissioning
Why We Did This Review
Decommissioning is the process
                                           Power Reactors
used to safely remove a nuclear
                                           What We Found
power plant from service and
reduce residual radioactivity to a
                                           OIG found that NRC’s transfer of oversight responsibilities is
level that permits release of the
property and termination of its            effective; however, the efficiency could be improved. Specifically,
NRC operating license.                     NRC should update decommissioning guidance and implement a
                                           formal project manager knowledge transfer process.
The Office of Nuclear Reactor
Regulation (NRR) maintains
oversight of all operating                 Agency guidance states NRC should run its programs effectively
nuclear power plants. The Office           and efficiently; however, NRC has not implemented certain
of Nuclear Material Safety and             knowledge management principles into the reactor
Safeguards (NMSS) maintains
                                           decommissioning process. Consequently, there may be
oversight of all decommissioning
activities. Once a licensee                unnecessary delays in the processing and management of reactor
announces its intention to shut            decommissioning projects which may incur additional costs to
down its reactor, NRR and NMSS             licensees, NRC, and taxpayers.
closely coordinate during this
“operating to decommissioning”             What We Recommend
transition process.
                                           This report makes two recommendations to improve the
The audit objective was to                 effectiveness and efficiency of the transition from operating to
determine whether NRC’s
                                           decommissioning power reactors.
transfer of oversight
responsibilities, used when
operating power reactors                   Agency Management stated their general agreement with the
undergo decommissioning, is                finding and recommendations of this report.
efficient and effective.
                                        Audit of NRC’s Transition Process for Decommissioning Power Reactors




TABLE OF CONTENTS


   ABBREVIATIONS AND ACRONYMS .......................................................... i

      I. BACKGROUND ................................................................................ 1
      II. OBJECTIVE ...................................................................................... 5
      III. FINDING ........................................................................................... 5
              Efficiency of NRC Decommissioning Practices Could be
              Improved ..................................................................................... 5
              Recommendations .................................................................... 15
      IV. AGENCY COMMENTS ................................................................... 17


   APPENDIXES

      A. OBJECTIVE, SCOPE, AND METHODOLOGY ............................... 18
      B. Total Hours for Decommissioning Activities Charged
         Since Shutdown Fiscal Year 2012 – Fiscal Year 2018……………..20
      C. Nuclear Power Plants with Announced Planned
         Shutdowns from 2019 to 2025……………………………………..….21


   TO REPORT FRAUD, WASTE, OR ABUSE ............................................. 22

   COMMENTS AND SUGGESTIONS .......................................................... 22
                      Audit of NRC’s Transition Process for Decommissioning Power Reactors




ABBREVIATIONS AND ACRONYMS


   NRC       Nuclear Regulatory Commission

   PSDAR     Post-Shutdown Decommissioning Activities Report

   NRR       Office of Nuclear Reactor Regulation

   NMSS      Office of Nuclear Material Safety and Safeguards

   PM        Project Manager




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                                       Audit of NRC’s Transition Process for Decommissioning Power Reactors




    I. BACKGROUND



               The U.S. Nuclear Regulatory Commission (NRC) regulates the
               decommissioning of commercial nuclear power plants. Decommissioning
               is the process used to safely remove a nuclear power plant from service
               and reduce residual radioactivity to a level that permits release of the
               property and termination of its NRC operating license. NRC has rules
               governing commercial nuclear power plant decommissioning involving the
               cleanup of radioactively contaminated plant systems and structures and
               removal of the radioactive fuel. These rules protect workers and the
               public during the entire decommissioning process and protect the public
               after the license is terminated.

               As of June 2019, there are 20 nuclear power reactors undergoing
               decommissioning regulated by NRC (see Figure 1). Licensees in the U.S.
               have utilized two1 primary methods of decommissioning: “DECON” and
               “SAFSTOR.” Under the “DECON” method, soon after the plant closes,
               equipment, structures, and portions of the plant are immediately removed
               or decontaminated. Under the “SAFSTOR” method, a nuclear power plant
               is maintained and monitored to allow radioactivity to decay; afterward, the
               plant is dismantled and the property is decontaminated. The entire
               decommissioning process may take up to 60 years. For a map of sites
               that have completed decommissioning or are undergoing
               decommissioning, see Figure 1.




1
 A third method of decommissioning available to licensees called “entomb” involves the permanent
encasement of radioactive contaminants in structurally sound material such as concrete. To date, no
NRC-licensed facilities have implemented this option.

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                                      Audit of NRC’s Transition Process for Decommissioning Power Reactors

               Figure 1: Decommissioned Plants & Plants Undergoing
               Decommissioning as of June 2019.2

               Decommissioning Process


               When a nuclear power plant
               licensee has determined to
               shut down a plant
               permanently, it must submit a
               written certification of this
               decision to NRC within 30
               days. When all nuclear fuel
               is permanently removed from
               the reactor vessel, the
               licensee must also submit a                                         Source: NRC
               written certification of
               permanent fuel removal to
               NRC. Upon NRC’s receipt of both certifications, the licensee is no longer
               authorized to operate the reactor or load fuel into the reactor vessel. Prior
               to or within 2 years after the licensee permanently ceases operations, the
               licensee must submit a post-shutdown decommissioning activities report
               (PSDAR) to NRC. This report provides a description of the planned
               decommissioning activities, a schedule for accomplishing them, and an
               estimate of the expected costs.

               NRC’s goal is to make the report available for public review and comment
               and hold a public meeting near the reactor within 90 days of receiving the
               PSDAR. The licensee may begin major decommissioning activities 90
               days after it has submitted the PSDAR and both required certifications.
               Major decommissioning activities can include permanent removal of major
               components like the reactor vessel, steam generators, and large piping
               systems, pumps, and valves. At least 2 years before the expected license
               termination, the licensee is required to submit a license termination plan
               for NRC’s approval. This plan addresses site characterization and site
               remediation, final radiation surveys, and site release, among others.


2
 There are 10 decommissioned reactors as indicated by the “Independent Spent Fuel Storage
Installation” and “License Terminated” sites. The map displays an additional 20 reactors currently
undergoing the decommissioning process. San Onofre Nuclear Generating Station, Units 2 and 3, and
Zion Nuclear Power Station, Units 1 and 2, are currently in active decommissioning.

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                                             Audit of NRC’s Transition Process for Decommissioning Power Reactors

                   Handoff of Oversight Responsibilities


                   The Office of Nuclear Reactor Regulation (NRR) maintains oversight of all
                   operating nuclear power plants. The Office of Nuclear Material Safety and
                   Safeguards (NMSS) maintains oversight of all decommissioning activities.
                   Once a licensee announces its intention to shut down its reactor, NRR and
                   NMSS closely coordinate during this “operating to decommissioning”
                   transition process.3 This process begins when the licensee announces its
                   plans to permanently shut down the plant. This transition process
                   includes the two certifications licensees must submit to NRC, as well as
                   the PSDAR submission, and any license amendments and exemptions
                   that must be approved by NRR and/or NMSS staff. Once these items
                   have been completed and the updated defueled technical specifications4
                   are approved by NRR, the official handoff to NMSS occurs. This
                   completes the NRC’s transition of its oversight of the plant from an
                   operating reactor to a decommissioning facility, and NMSS now has full
                   responsibility of the power reactor and oversees the remainder of the
                   decommissioning.

                   License Amendments & Exemptions


                   One of NRC’s primary responsibilities during the operating to
                   decommissioning transition process is the review of licensee amendment
                   and exemption requests. Currently, most of NRC’s regulations do not
                   specifically address reactor decommissioning. Specifically, many of
                   NRC’s regulations and some conditions of the license hold
                   decommissioning reactors to the same standard, and the same
                   requirements, as operating reactors. This includes employing the same
                   number of emergency response staff, or maintaining the same physical
                   security requirements, even after the site has shut down and there is no
                   longer fuel in the reactor core. Consequently, after licensees announce
                   their intent to decommission, they will submit several requests for NRC’s



3   NRR still has primary oversight responsibilities during this point in the transition process.

4 Technical specifications are part of an NRC license authorizing the operation of a power plant. They
establish requirements for items such as safety limits, surveillance requirements, design features, and
administrative controls. When a licensee begins the decommissioning process, its standard technical
specifications are updated to defueled technical specifications to reflect the decommissioning status of
the power reactor.

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                    Audit of NRC’s Transition Process for Decommissioning Power Reactors

review to exempt them from regulations that primarily apply to operating
reactors and amend their licenses to
                                           Pictured: Connecticut Yankee during the
align with planned decommissioning         decommissioning process.
activities rather than reactor operations.
NRC has approved such requests
based on the much lower risk with
decommissioning reactors, as
compared to operating reactors, due to
the nuclear fuel being removed.
Nevertheless, the process for preparing
and reviewing these exemption and
amendment requests requires a
commitment of resources by both the
licensee and NRC staff.


Decommissioning Reactor Rulemaking


Beginning in the late 1990s, it became        Source: NRC
apparent to NRC that it should consider
rulemaking to improve the efficiency and effectiveness of the power
reactor decommissioning process. A decommissioning rulemaking effort
was initiated to address the transition issues, but it was subsequently
suspended because of a shift in agency priorities following the terrorist
attacks on September 11, 2001. However, in 2014, the Commission
directed NRC staff to proceed with rulemaking on reactor
decommissioning. Major provisions of the proposed rule include changes
in areas such as emergency preparedness, physical security, cyber
security, drug and alcohol testing, certified fuel handler training, and
foreign ownership, among others. If the proposed rule’s current iteration is
approved, it would streamline the decommissioning process and eliminate
approximately 13 licensing actions (e.g., exemptions and amendments)
per decommissioning that NRC staff must process. NRC staff submitted
the draft proposed rule to the Commission for review in May 2018.




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                               Audit of NRC’s Transition Process for Decommissioning Power Reactors




II. OBJECTIVE



         To determine whether NRC’s transfer of oversight responsibilities, used
         when operating power reactors undergo decommissioning, is efficient and
         effective. Appendix A contains information on the audit scope and
         methodology.



III. FINDING



         NRC’s transfer of oversight responsibilities is effective; however, the
         efficiency could be improved. Specifically, NRC should


               •   Update decommissioning guidance, and
               •   Implement a formal project manager knowledge transfer process.



    A. Efficiency of NRC Decommissioning Practices Could be
    Improved

         Though effective, NRC’s decommissioning process could be more
         efficient. Agency guidance states NRC should run its programs effectively
         and efficiently; however, NRC has not implemented certain knowledge
         management principles into the reactor decommissioning process.
         Consequently, there may be unnecessary delays in the processing and
         management of reactor decommissioning projects which may incur
         additional costs to licensees, NRC, and taxpayers.




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                       Audit of NRC’s Transition Process for Decommissioning Power Reactors


What Is Required



   Agency guidance states NRC should run its programs effectively and
   efficiently.


   Project Aim seeks to enhance the culture of NRC to increase efficiency,
   effectiveness, agility, and flexibility of NRC work processes. NRC’s goal is
   to improve agency processes by streamlining, standardizing, and clarifying
   roles and responsibilities so that resources are used more wisely.


What We Found



   Though effective, NRC’s decommissioning process could be more
   efficient.


   Currently, there is no standard method to decommission power reactors
   as the process is dynamic and there are many variables involved. NRC is
   still adjusting to the changes occurring in reactor decommissioning space,
   and this is further exacerbated by the lack of updated agency guidance
   and the absence of a reactor decommissioning knowledge transfer
   process for NRC staff.


   Recent History


   Starting in early 2013 and through the end of 2014, five power reactors
   permanently ceased operations. These were the first reactors to transition
   to decommissioning since 1998. Out of the five power reactor shutdowns,
   four were unexpected and involved little pre-planning by licensees and
   NRC. Because it had been 15 years since any reactor had entered
   decommissioning, licensees and NRC staff initially had limited experience
   in processing decommissioning licensing actions. Furthermore, NRC’s
   regulations were generally not written to address reactor
   decommissioning.




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                                     Audit of NRC’s Transition Process for Decommissioning Power Reactors

               From 2013 through 2015, NRC had to process over 70 decommissioning-
               related licensing actions and other regulatory activities for the five
               decommissioning reactors. Since the last round of decommissionings,
               process changes occurred including the need to review and process
               multiple concurrent licensing action applications (from multiple licensees).
               From a knowledge management perspective, licensees and NRC staff
               were both working on steep learning curves.


               NRC formed a decommissioning working group to study and document
               these recent decommissionings, as well as to develop a lessons learned
               report5 to assist in future power reactor decommissionings.


               New Business Model


               In October 2018, NRC staff issued an order approving the permanent
               license transfer of the Vermont Yankee operating license from the original
               owner (Entergy) to a new decommissioning company (NorthStar). The
               idea behind this new business model is decommissioning companies
               possess the required expertise and can complete the decommissioning
               process more quickly and efficiently than the company that operated the
               reactor. These transactions typically include switching the licensee’s
               decommissioning plan from SAFSTOR to DECON, thereby potentially
               reducing the decommissioning timeline from 60 years down to possibly 10
               years. According to NRC staff, this business model appears to be the
               “wave of the future” and NRC is currently reviewing several other license
               transfer requests of this kind. Because this new business model presents
               a compressed decommissioning time frame, and each power reactor is
               different and presents its own unique challenges, NRC is still learning how
               to work with these types of license transfer requests.

               NRC Billing Practices During the Transition Period


               The audit team analyzed NRC’s billing practices; specifically, to identify if
               there may have been incorrect licensee billing during the transition period
               when both NRR and NMSS were involved in the reactor decommissioning


5Power Reactor Transition from Operations to Decommissioning, Lessons Learned Report, October
2016. Henceforth, this report shall be referred to as the Lessons Learned Report.


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                                        Audit of NRC’s Transition Process for Decommissioning Power Reactors

                process. The audit team reviewed raw cost activity code data provided by
                the Office of the Chief Financial Officer to evaluate whether there may
                have been overlap in licensee fee billing during the transition period
                between NRR and NMSS. The audit team also reviewed the agency’s
                forecasted number of full-time equivalents to be used for decommissioning
                activities and compared it with the number expended to identify any
                possible large discrepancies. The data analysis did not indicate any
                evidence of unjustified billing charges or unreasonable fluctuations in full-
                time equivalents during reactor decommissioning. In fact, the data
                analysis displayed strong coordination between the two program offices,
                and this was further supported by interviews with licensees. See
                Appendix B for NRR and NMSS billing hours data analyses.


         Why This Occurred



                NRC has not incorporated certain knowledge management principles
                for reactor decommissioning.


                Two basic knowledge management6 principles, guidance and knowledge
                transfer, have not been effectively implemented into NRC’s power reactor
                decommissioning processes.


                Guidance


                Both NRR and NMSS’ office guidance documents related to power reactor
                decommissioning are outdated. NRR’s guidance document, Office
                Instruction-COM 101, was last updated in 2002. NMSS’ guidance
                document, Policy & Procedure 5-1, was last updated in 2016. However,
                this update simply addressed an office name change due to an internal
                reorganization, and this document has seen little substantive revision
                since it was originally written in 2007.7 Additionally, Regulatory Guide

6Knowledge management is a practical, process-orientated approach to how agencies and departments
capture institutional knowledge and learn from it. Knowledge management ensures that all necessary
elements (accountabilities, processes, technologies, and governance) are in place and interconnected.
This ensures that there are no gaps in the system, and that knowledge flows freely through the
organization.
7 Policy & Procedure 5-1 was revised in 2010, but the revision clarified NRC’s financial assurance review
responsibilities which is outside the scope of this audit.

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                    Audit of NRC’s Transition Process for Decommissioning Power Reactors

1.184, which provides guidance to licensees on the actions required to
decommission power reactors, was last updated in 2013.


Despite the evolution of the decommissioning process, these primary
guidance documents remained largely unchanged since their initial
inception. Not surprisingly, some staff stated that the guidance
documents are unclear or lacking in detail. For example, one staff
member said the guidance does not meet reality as there is no orderly
flow of licensing actions as depicted in guidance. Rather, licensing
actions can occur in an ad hoc manner. A staff member from one of
NRC’s regional offices opined that NRC’s guidance documents do not
clearly state how the handoff from NRR to NMSS is to occur. This person
said the guidance should capture examples, people's experiences, etc.,
because regional staff do not have that knowledge.


Some other examples where the guidance is unclear include


   •   NMSS involvement – How and when should NMSS staff be
       involved with the power reactor decommissioning process? It is
       clear to most that NMSS has oversight responsibility after NRR has
       approved the defueled technical specifications, but some NMSS
       staff opined that they were not involved early enough in the process
       prior to the approval of the new technical specifications. This leads
       them to be less informed when their responsibilities eventually
       increase. This could differ for each reactor and depends on the
       project managers (PMs) involved, but it likely occurs because there
       is no set standard for NMSS involvement provided in guidance. For
       example, staff raised questions as to when the operating to
       decommissioning transition process technically begins since there
       is no precise order of decommissioning activities; what incomplete
       reviews NRR can pass on to NMSS; and which office has the lead
       in stakeholder activities.




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                 Audit of NRC’s Transition Process for Decommissioning Power Reactors


                                     Pictured: NRC public meeting.
•   PSDAR public meetings –
    Who should run these
    meetings? Since NMSS
    staff are the
    decommissioning experts,
    they are expected to run the
    public PSDAR meetings.
    However, at times this
    meeting occurs prior to the   Source: NRC
    handoff of decommissioning
    responsibilities from NRR to NMSS. Furthermore, funding for these
    meetings comes from NRR’s budget. Consequently, there have
    been instances of confusion over which office oversees this
    meeting. There have also been occasions when NRR and NMSS
    did not always agree on certain aspects of how and when NRC
    should run the meeting.

•   New business model (decommissioning license transfers) – How
    should NRC address these requests? Since decommissioning
    license transfers are new (2018), NRC’s guidance does not
    address them. For example, staff mentioned a recent license
    transfer request has posed some logistical problems. A licensee
    recently submitted its PSDAR simultaneously with a license transfer
    request, the PSDAR of the proposed decommissioning company,
    and related exemptions for both entities. The licensee also asked
    for it to be completed on an expedited basis. This strained NRC
    resources since staff had to review everything at once, to include
    the review of the PSDAR and exemption requests from an entity
    that was not yet the licensee.

    This poses a challenge as staff is reviewing the PSDAR of a
    proposed decommissioning company prior to NRC’s approval of the
    license transfer; thus, NRC could potentially be expending
    resources on a license transfer that may not be approved. On the
    other hand, licensees and decommissioning companies may prefer
    to submit both PSDARs upfront because PSDARs contain
    company financial information necessary to approve any license
    transfers. Nevertheless, PSDARs from current licensees and from
    decommissioning companies are usually much different, with
    licensees typically choosing SAFSTOR and decommissioning
                            10
                                     Audit of NRC’s Transition Process for Decommissioning Power Reactors

                      companies choosing DECON. Currently, NRC regulations permit
                      licensees and decommissioning companies to submit their requests
                      concurrently.

               Lessons Learned Report


               Both NRC staff and licensees state the Lessons Learned Report is an
               excellent resource and has the most up-to-date information on power
               reactor decommissioning. The report provides lessons learned on several
               decommissioning experiences and provides several recommendations.
               For example, the report encourages licensees to submit planned, early
               decommissioning transition licensing actions to increase the efficiency of
               the operating to decommissioning transition process. It noted that
               decommissioning guidance is outdated, especially in areas of document
               processing and office structure. It also stated the experience gained in
               recent decommissioning transitions should be used to improve Regulatory
               Guide 1.184. The report recommended NRC staff proceduralize
               numerous different activities, including planning discussions with licensees
               related to the sequencing of PSDAR submittals and encouraging
               licensees to submit a decommissioning physical security plan amendment
               1 year prior to shutting down the plant. To date, none of the report’s
               recommendations have been incorporated into NRC-issued guidance.8


               Knowledge Transfer


               In addition to guidance, another important basic knowledge management
               principle centers around knowledge transfer. Presently, NRR and NMSS
               do not have a formal knowledge transfer process for decommissioning
               power reactors.

               One NRR staff member said there is one experienced PM in NRR and the
               lack of a knowledge transfer process is a weak area. An NRR PM opined
               there should be a system for new PMs to shadow the experienced PM, but
               this does not typically occur. An NMSS PM said knowledge transfer could
               be a major issue moving forward, given several senior staff involved with
               decommissionings are close to retirement. Another NMSS PM stated

8NRC staff has made proposed changes to several guidance documents to address the proposed rule
changes and lessons learned.

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                        Audit of NRC’s Transition Process for Decommissioning Power Reactors

    NMSS’ training focuses on the “end of the decommissioning” process and
    not on power reactor licensing or operations in general, thereby leaving
    out the operating to decommissioning transition process.

    The audit team reviewed the turnover of primary PMs for the six power
    reactor sites currently undergoing decommissioning activities. Of these
    six sites that began their operating to decommissioning activities in 2012
    or later, there have been at least 29 different PMs assigned to those sites.

    Though NRC does not have a formal knowledge transfer process, NRR
    has recognized a need for increased training and is in the process of
    adding a “transition to decommissioning” qualification card to its
    qualification program for NRR PMs. NMSS has facility decommissioning
    training as well as a qualification program for its PMs.


Why This Is Important



    There may be unnecessary delays in the processing and
    management of reactor decommissioning projects.

    The lack of certain knowledge management principles could create
    unnecessary delays in
    decommissioning power            Pictured: Maine Yankee before and after
    reactors. One example of an      decommissioning.
    issue with employee turnover
    and the lack of proper
    knowledge transfer was provided
    by a licensee. The licensee
    stated that in October of 2018,
    NRC had said it would consult
    with another Federal agency
    regarding a requirement that the
    licensee felt should no longer
                                     Source: NRC
    apply. This consultation was
    supposed to be completed by June 2019. When the licensee contacted
    NRC in March 2019 for an update, NRC told the licensee that the original
    PM was no longer with NRC, and the new PM was unaware of the


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                                          Audit of NRC’s Transition Process for Decommissioning Power Reactors

                 situation. The new PM began working on the issue, but the work on this
                 item has now been delayed 6 months.

                 As noted in the Lessons Learned Report, the decommissioning working
                 group asserted that the current exemption and amendment processes for
                 transitioning plants are sufficient to ensure adequate protection of public
                 health and safety and of the environment and are consistent with the
                 common defense and security. However, the process is inefficient and
                 additional delays could incur more costs to licensees, NRC, and
                 taxpayers, and could further delay releasing reactor sites to the public for
                 unrestricted use.9


                 Rulemaking


                 As noted earlier, a draft decommissioning rule is under review by the
                 Commission, which would streamline the power reactor decommissioning
                 process and potentially save millions of dollars by removing approximately
                 13 of the typical exemption requests and licensing actions. NRC
                 estimates the new rule would save licensees, NRC, and taxpayers
                 approximately $19 million per decommissioning power reactor. An
                 industry representative stated that there is a real cost to decommissioning
                 delays, to the tune of approximately $1 million per month per every 100
                 staff employed.

                 The audit team conducted a data review of the exemptions and licensing
                 actions from 2017 to 2019 that would be eliminated by the new
                 decommissioning rule. The audit team found that there was a total of 14
                 licensing actions over the past 2 years that averaged just over 7 months
                 each to complete, and a total of approximately 2,125 hours expended by
                 NRC staff for the 14 licensing actions. Furthermore, NRC estimates a
                 savings of approximately 1.25 full-time equivalents per power reactor
                 under the new rulemaking.


                 The vast majority of NRC staff, as well as industry representatives,
                 interviewed by the audit team agreed that the new rule would make the

9 In addition to releasing former nuclear power plants for the general public’s use, licensees may also
release the site for other purposes such as industrial uses (e.g., leaving buildings and installing a gas-,
coal-, or oil-powered generating plant).


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                                     Audit of NRC’s Transition Process for Decommissioning Power Reactors

               reactor decommissioning process much more efficient. Moreover, in a
               2017 congressional hearing,10 the Commission asserted that a new rule
               would promote more transparency and accountability than NRC’s current
               system of granting exemptions to licensees. An industry representative
               stated that the decommissioning process is very inefficient right now,
               noting it is hard to believe just how many exemptions and license change
               requests licensees must submit. An NRC senior staff member opined that
               a majority of the work NRR must do is to exempt licensees from provisions
               that “are unnecessary.” This person noted that NRR spends a lot of time
               doing extraneous work on regulatory requirements not necessary for
               safety, but just to meet “the letter of the law.” The employee stated if the
               rulemaking goes through, NRR could focus on things that are more
               significant.

               NRC has developed guidance and established agencywide principles that
               appear to support the new rulemaking. In its Lessons Learned Report, the
               decommissioning working group stated that “most of the licensee
               exemption and amendment requests do not involve safety issues and are
               based instead on efficiencies gained and the associated reduction of
               licensee resources required for a plant that is no longer operating.” It
               continued, “NRC staff recognizes that the continued need for exemptions
               by licensees transitioning to decommissioning reflects a gap in the
               regulatory structure.” It also noted, “Use of regulatory exemptions has
               several drawbacks when compared to having explicit regulations
               applicable to decommissioning plants, such as not being as efficient or
               predictable and not providing for public comment.” Furthermore, NRC’s
               Principles of Good Regulation state that regulatory activities which
               minimize the use of resources should be adopted, and regulatory
               decisions should be made without undue delay.


               The draft rule has been with the Commission for over a year, and there is
               no indication as to when the Commission may vote on it. One
               commissioner publicly expressed concerns with the proposed rule in May
               2019, while another implied to the audit team that the rulemaking was not
               a top priority.




10
 Oversight of the Nuclear Regulatory Commission, Hearing before the Committee on Environment and
Public Works; December 13, 2017.

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                                         Audit of NRC’s Transition Process for Decommissioning Power Reactors



        Conclusion


                Seven reactor facilities have recently begun the decommissioning
                process,11 and nine more have announced plans to start decommissioning
                from 2019 to 2025. See Appendix C for nuclear power plants with
                announced planned shutdowns from 2019 to 2025. The number of power
                reactors planning to decommission is sharply increasing, while the length
                of time to complete the decommissionings is sharply decreasing due to
                the current trend of the new license transfer business model.


                Since more decommissionings are imminent, NRC must be properly
                equipped to handle these activities. This includes ensuring guidance is
                clear and updated, as well as establishing a formal staff knowledge
                transfer process. According to an NRC Office Director, there is a “talent
                crisis” within NRC as much of the agency’s staff is ready to retire.12 NRC
                must be prepared for impending staff retirements and turnover to
                effectively handle the influx of expected reactor decommissionings.

                The audit team has found that NRC has done an effective job in working
                with licensees during the decommissioning process. While efficiencies
                could certainly be gained through improved guidance and a focus on
                knowledge transfer, perhaps the most significant improvement to the
                effectiveness and efficiency of the reactor decommissioning process
                would be the implementation of the proposed decommissioning rule.

        Recommendations


                OIG recommends that the Executive Director for Operations


                1.       Update NRR and NMSS decommissioning guidance to include the
                         license transfer business model, the applicable


11
 These facilities are Crystal River, Kewaunee, Oyster Creek, Vermont Yankee, Fort Calhoun, and San
Onofre, Units 2 and 3.

12 At a Commission briefing on June 18, 2019, NRC’s Chief Human Capital Officer said the rate of
retirement eligibility is increasing, with 26 per cent of NRC’s population eligible to retire by the end of
fiscal year 2019. Moreover, approximately 40 per cent of the agency’s workforce will be eligible to retire
by 2022.

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                  Audit of NRC’s Transition Process for Decommissioning Power Reactors

     items/recommendations of the Lessons Learned Report, and to
     further clarify the operating to decommissioning transition process.


2.   Create and implement a formal project manager knowledge transfer
     process on decommissioning power reactors.




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                             Audit of NRC’s Transition Process for Decommissioning Power Reactors




IV. AGENCY COMMENTS



   An exit conference was held with the agency on August 13, 2019. Prior to this
   meeting, after reviewing a discussion draft, agency management provided
   comments that have been incorporated into this report, as appropriate. As a
   result, agency management stated their general agreement with the finding and
   recommendations in this report and opted not to provide formal comments for
   inclusion in this report.




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                               Audit of NRC’s Transition Process for Decommissioning Power Reactors

                                                                                     Appendix A


OBJECTIVE, SCOPE, AND METHODOLOGY



   Objective


         To determine whether NRC’s transfer of oversight responsibilities, used
         when operating power reactors undergo decommissioning, is efficient and
         effective.


   Scope


         This audit focused on NRC’s transition process for decommissioning
         power reactors. The Office of the Inspector General (OIG) conducted this
         performance audit from January 2019 to July 2019 at the NRC
         headquarters (Rockville, MD). Internal controls related to the audit
         objective were reviewed and analyzed.


   Methodology


         To accomplish the audit objective, OIG reviewed relevant Federal laws,
         regulations, and guidance including


         •     Office Instruction (OI) No.: COM-101, “NRR Interfaces with NMSS.”


         •     NMSS Policy and Procedures 5-1, Revision 3, “Reactor
               Decommissioning Program Procedures for Interfacing with the Office
               of Nuclear Reactor Regulation.”


         •     Inspection Manual Chapter 2561, “Decommissioning Power Reactor
               Inspection Program.”

         •     Title 10, Code of Federal Regulations, Section 50.82, “Termination of
               license.”


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                    Audit of NRC’s Transition Process for Decommissioning Power Reactors

•   Title 10, Code of Federal Regulations, Section 1.42, “Office of Nuclear
    Material Safety and Safeguards.”

•   Title 10, Code of Federal Regulations, Section 1.43, “Office of Nuclear
    Reactor Regulation.”


•   Lessons Learned Report, Power Reactor Transition from Operations to
    Decommissioning.

OIG conducted approximately 40 interviews of NRC staff and
management to gain an understanding of the roles and responsibilities
related to licensees undergoing the decommissioning process and the
coordination among offices that have the responsibility of leading the
regulatory review and oversight aspects of the decommissioning efforts.
Auditors interviewed staff from the Office of Nuclear Reactor Regulation,
the Office of Nuclear Material Safety and Safeguards, and the Office of
Nuclear Security and Incident Response, as well as the regional offices.
OIG also conducted approximately 10 interviews of industry
representatives to get their perspectives on the decommissioning process
as it relates to the handoff from NRR to NMSS.


We conducted this performance audit in accordance with generally
accepted government auditing standards. Those standards require that
we plan and perform the audit to obtain sufficient, appropriate evidence to
provide a reasonable basis for our findings and conclusions based on our
audit objectives. We believe that the evidence obtained provides a
reasonable basis for our finding and conclusions based on our audit
objectives.

Throughout the audit, auditors considered the possibility of fraud, waste,
and abuse in the program.


The audit was conducted by Jacki Storch, Team Leader; Mike Blair, Audit
Manager; Roxana Hartsock, Senior Auditor; Janelle Wiggs, Senior
Auditor, and Connor McCune, Management Analyst.




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                                Audit of NRC’s Transition Process for Decommissioning Power Reactors

                                                                                      Appendix B


Total Hours for Decommissioning Activities Charged Since Shutdown Fiscal Year
                           2012 – Fiscal Year 2018




           Source: OIG generated using agency provided raw data




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                            Audit of NRC’s Transition Process for Decommissioning Power Reactors

                                                                                 Appendix C

  Nuclear Power Plants with Announced Planned Shutdowns from 2019 to 2025

 Plant Name                                 Planned Shutdown



Three Mile Island Unit 1                    September 30, 2019

Indian Point Unit 2                         April 30, 2020

Duane Arnold                                End of 2020

Indian Point Unit 3                         April 30, 2021

Beaver Valley Unit 1                        May 31, 2021

Beaver Valley Unit 2                        October 31, 2021

Palisades                                   Spring 2022

Diablo Canyon Unit 1                        November 2, 2024

Diablo Canyon Unit 2                        August 26, 2025



Source: NRC




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                                  Audit of NRC’s Transition Process for Decommissioning Power Reactors




 TO REPORT FRAUD, WASTE, OR ABUSE



Please Contact:

Email:              Online Form

Telephone:          1-800-233-3497

TTY/TDD:            7-1-1, or 1-800-201-7165

Address:            U.S. Nuclear Regulatory Commission
                    Office of the Inspector General
                    Hotline Program
                    Mail Stop O5-E13
                    11555 Rockville Pike
                    Rockville, MD 20852




 COMMENTS AND SUGGESTIONS



If you wish to provide comments on this report, please email OIG using this link.

In addition, if you have suggestions for future OIG audits, please provide them using
this link.




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