STATEMENT SUBMITTED
TO THE SUBCOMMITTEE ON CLEAN AIR, WETLANDS, PRIVATE PROPERTY, AND NUCLEAR SAFETY
COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS
UNITED STATES SENATE
CONCERNING UNITED STATES NUCLEAR REGULATORY COMMISSION PROGRAMS AND NUCLEAR SAFETY REGULATORY ISSUES
PRESENTED BY NILS J. DIAZ, COMMISSIONER
SUBMITTED: July 30, 1998

Mr. Chairman, members of the Subcommittee, I appreciate the opportunity to appear before you with Chairman Jackson and my colleague, Commissioner McGaffigan, to add my individual statement, which I request be included as part of the record of the Commission testimony at this hearing. It is my understanding that the hearing will focus on how efficiently NRC is conducting its operations.

The United States Senate has asked for solutions to several issues facing the NRC; budgetary constraints have been proposed, yet requisite health and safety performance must be maintained. The Commission's testimony reflects many new and ongoing initiatives, as well as recent actions of the Commission, that I fully support. There is little doubt that the Commission is acting on many fronts to become more efficient, more focused on risk, and less burdensome. In the coming fiscal year, the Commission, and I hope it is a full Commission, must and will take many steps in this direction.

There is no doubt that much good has been done using a solid core of precepts that center around a deterministic adequate-protection base. Yet, there are areas in which I wish to express my particular perspective on recent and current agency performance and our future course because I believe fundamental changes are needed, can occur and must occur to keep our regulatory processes in step with advancements in technology, safety assessment methodologies, and the new competitive environment.

To embody solutions within resource availability, the NRC has to systematically establish a state-of-the-art regulatory structure that is consistent with the NRC's mission, the policies of the U.S. Government, and the needs of its people: a regulatory fabric that clearly reflects, defines and implements Adequate protection of health and safety" without unbending fear of change and its associated impacts.

The NRC's mission is carried out by a mandate to license and regulate nuclear activities. From my vantage point, the key elements of this mission have been achieved, when final results are used as the performance measuring stick. In the area of achieved nuclear reactor safety, the country has done exceedingly well, especially in the last 10 years. But adequacy of results is only one measure, albeit the key one, of the overall performance of health and safety regulatory agencies in the United States of America. In this context, it is worth recalling that one of the declared purposes of the Atomic Energy Act is "to make the maximum contribution to the general welfare, subject at all times to the paramount objective of making the maximum contribution to the common defense and security;" the NRC, as an instrument of this policy, has the duty to foster attainment of these objectives in a balanced fashion, within our established mandate.

The NRC needs to assure that the uses of nuclear energy and radiation are conducted within the envelope of "adequate protection of health and safety" so the nation benefits from each and every one of the regulated activities. Many present questions and criticisms of this agency's performance stem from the fact that this envelope and its margins of safety have not been well defined, or are rigidly applied, especially when viewed in light of the 1998 state-of-the art. The existing regulatory envelope, old and very conservative with many archaic requirements that flow from it, limits the ability of the agency to optimize its performance. The NRC needs to use today's best available knowledge so as to govern and direct activities in proportion to the health and safety risks they impose, and to do so with only necessary burden. The cost of regulatory burden is paid by the people of this country, and it is widely accepted that excessive burden undermines general welfare. Regulatory requirements without enhancement of safety need to be eliminated in a timely fashion, and those with little significance have to be placed in the appropriate resource and enforcement focus. Much needs to be done to accelerate the advancement of rules and regulations and their implementation and enforcement using present know-how, with due consideration of risks, and balance between costs and benefits. Therefore, the agency needs to fix:

the compendium of rules and regulations, based on old scientific, technological and legal bases, that do not adequately meet the needs of 1998; and the delivery system that ranges from sound, structured regulation, to a not-so~ objective "good guy" or "bad guy" framework, to attempts to control or manage regulated entities.

I would interject that the NRC's activities have been and are well-intentioned, and the majority produce good results. Notwithstanding the intention, the resulting enhancement of safety is sometimes questionable, and the costs are frequently large. In my view, the Commission took important steps to correct its course in the past year when it assumed responsibility for the acceptability of the results of the Senior Management Meeting and the NRC Watch List, and when it decided not to directly assess licensee management performance and licensee corporate culture.

In the context of implementation of our regulations, it is probably good to learn from TMI and Millstone, from 1979 and 1996. The NRC was not prepared for TMI. TMI was a significant safety event. Our lessons-learned provided good safety fixes, but there was also costly overreaction. Indeed, the NRC tried for years afterward to control and manage beyond the level of adequate protection. Maybe that was inevitable because it was a big event, albeit devoid of public health and safety consequences. The NRC was not prepared for Millstone, and it should have been. There was no significant safety event 7E in fact there were a limited number of issues with safety significance -- but there was a pervasive lack of sound corrective actions and failures to address employee concerns. Also, these issues arose against a backdrop of the Commission having not clearly defined what constituted safety. It was the concern, probably correct, that the Millstone units were poorly managed, and that we, the NRC, had not previously done our job to correct the regulatory deficiencies that drove the Millstone actions. I believe the NRC overreacted, specifically in response to design bases issues, because it has not developed a regulatory structure in which requisite performance is proportional to risk.

Risk assessment is very much a part of the nuclear business and the use of risk information is much talked about. Yet, after over 20 years, it is more a promise than a fait accompli. The NRC staff is ambivalent about it, the industry is ambivalent about it, and the Commission has been ambivalent about it. I believe it is no longer sensible to conduct our regulatory responsibilities without risk-informed assessment and decision-making. And if being risk-informed means systematically relinquishing the status quo or the comfortable design basis framework, I propose we do it sooner, rather than later. However, the industry has to buy into it and be convinced of the benefits.

I believe the proposed Senate authorization is sufficient to maintain NRC's functions and to generate change. Profound changes might eventually be costly up-front, but the efficiencies eventually realized will be multiplied in their effects on a safe operating nuclear power industry.

In the context of the above statement, the following key areas of disagreement with the agency testimony were not resolved within the time frame for submittal to the Subcommittee:

1. The testimony states (p. 11, last paragraph, last sentence):

"The present reduction, if carried out, will require the NRC to reduce its planned FY99 programs by at least $17.8 million. As a result, the NRC will cut back on its reactor inspection and reactor oversight programs, curtail selected safety research, eliminate studies of nuclear materials operating experience, and substantially reduce many of its support activities."

I proposed to replace that sentence with the following:

"If these reductions are effected, the NRC shall improve its processes to ensure that no reduction in adequate protection of public health and safety will result."

I believe that the overall message of the paragraph is that we will not have adequate resources, with the contemplated reductions, to modify the agency regulatory approaches along the lines discussed in the testimony, and the planned reduction will seriously and adversely affect important health and safety programs. The case for that message has not been made to me. Indeed, it is my informed view that planned programmatic changes and improved processes can assure adequate protection within the contemplated reduction, and that this important message needs to be conveyed.

2. The testimony states (p. 6, 2nd full paragraph, 1st line):

"While the NRC believes that the basic focus and emphases of its inspection and enforcement programs are sound, we agree that improvements are needed in both areas."

I proposed deleting the first clause because nearly everyone, including the Commission itself, seems to be in agreement that highlighted problems and issues warrant further major reviews and fundamental changes in both areas. Therefore, I believe the basic focus and emphases of inspection and, more so, enforcement, are not "sound"; in fact, accelerating changes in these areas support this last proposition.

3. The Appendix includes the following statement (p.A-5, 2nd full paragraph):

"In addition, in reviewing the criticisms that have been directed at the NRC regulatory processes, it is important both for the NRC and for our stakeholders to keep in mind that the basic processes under criticism are the same processes that have resulted in the licensing and operation of 110 safe nuclear power plants. Today, 104 plants are operating to produce 20% of our nation's electricity, with an enviable record in terms of protecting the health and safety of the American people. That should not be taken to imply, by any means, that NRC processes are or should be above criticism--far from it. It does, however, suggest that caution should be exercised in making sweeping changes to ensure that seemingly desirable improvements, made in the interest of increased efficiency or diminished regulatory burdens, do not turn out to have unforeseen adverse effects on the overall objective of ensuring nuclear safety."

I objected to this paragraph because it appears to imply that robust changes could have adverse effects on nuclear safety. It is difficult to conceive of changes to NRC requirements that would not be rigorously safety- scrutinized; changes need to be made to enhance regulatory efficiency without raising thresholds or decreasing overall requisite safety. Furthermore, the point that the same basic processes were used to license and operate nuclear power plants -- for 30, 25 or 20 years -~ is supportive of the need to change them for responsiveness to present scenarios: many are no longer current or consistent with each other.

4. The Appendix includes the following statement (p. A-20, 2nd paragraph, 5th line):

"A recently identified example was the decline in attention that had occurred, across the industry, on maintaining the facility design basis."

I proposed deletion of this sentence. I do not believe the case has been made that there was an across-the-industry decline in attention to, or maintenance of, the facility design basis. The completeness and the availability of design basis information are not necessarily equivalent to design safety issues.

5. The Appendix includes the following statement (p. A-36, first partial paragraph, beginning in 7th line):

"These inspections resulted in significant findings, which included, among other things: (1) plant modifications or evaluations that had resulted in operation outside the design basis; (2) modifications or evaluations resulting in safety systems not being able to perform their intended safety functions; and (3) inadequate testing of safety related components. Some of these findings resulted in declaring equipment or systems inoperable, requiring plant modifications and resulting in voluntary or technical-specification-required plant shutdown. These findings were detailed to the nuclear power industry in Information Notice 98-22, issued June 17, 1998. Although licensees expended significant resources to document their design bases, significant safety issues were found and corrected that otherwise might have gone undetected."

I recommended that this portion of the paragraph be replaced by the following:

"These inspections showed that the rest of the industry, overall, did not have safety problems as a result of design basis issues. While the inspections did identify the need for additional definition, documentation, and compliance, it should be emphasized that safety was not compromised. This result underscores the mismatch that exists between the NRC's current regulation/regulatory processes and protection of public health and safety. This mismatch can be eliminated through the use of risk-informed, and where

appropriate, performance-based inspections."

My essential point was that the testimony suggests that there were industry-wide, significant safety problems and widespread compromises of overall safety. However, I believe the results of NRC inspections do not support that conclusion and that significant deficiencies were only found in a few plants. The Architect/Engineer (AK) inspection effort referred to in this passage was terminated because the resource expenditure was not justified by the safety findings. This further supports my conclusion on item 4 above. Our own Inspector General concluded (OIG/97A-01 at 8):

"We believe that while recent regulatory actions and requirements may have enhanced NRC's confidence in Licensees' design control practices, they may not necessarily produce a safety benefit commensurate with their cost to the industry to implement and the agency to enforce."

* * *

"While compliance with regulatory requirements is important, in a time of diminishing resources NRC needs to focus on those areas which provide the greater safety benefit. Emphasizing strict adherence to all NRC requirements, some of which may not be safety significant, may result in an ineffective use of resources."

I have tried to provide the Subcommittee with my perspective and understanding on some important areas of the Commission's testimony. I would like to take the opportunity to pledge that I will work for change, not for change's sake, but for safety's sake and for the well-being of the country.

I appreciate the opportunity to present my views and would be pleased to answer any questions that you may have.