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Testimony: 

Before the Subcommittee on Clean Air, Climate Change, and Nuclear 
Safety, Committee on Environment and Public Works, United States 
Senate: 

United States Government Accountability Office: 

GAO: 

Not to Be Released Before 9:30 a.m. EDT: 

Thursday, June 22, 2006: 

Nuclear Regulatory Commission: 

Preliminary Observations on Its Oversight to Ensure the Safe Operation 
of Nuclear Power Plants: 

Statement for the Record by Jim Wells, Director: 
Natural Resources and Environment: 

GAO-06-886T: 

GAO Highlights: 

Highlights of GAO-06-886T, a statement for the record for the 
Subcommittee on Clean Air, Climate Change, and Nuclear Safety, 
Committee on Environment and Public Works, United States Senate. 

Why GAO Did This Study: 

The Nuclear Regulatory Commission (NRC) has the responsibility to 
provide oversight to ensure that the nation’s 103 commercial nuclear 
power plants are operated safely. While the safety of these plants has 
always been important, since radioactive release could harm the public 
and the environment, NRC’s oversight has become even more critical as 
the Congress and the nation consider the potential resurgence of 
nuclear power in helping to meet the nation’s growing energy needs. 

Prior to 2000, NRC was criticized for having a safety oversight process 
that was not always focused on the most important safety issues and in 
some cases, was overly subjective. To address these and other concerns, 
NRC implemented a new oversight process—the Reactor Oversight Process 
(ROP). NRC continues to modify the ROP to incorporate feedback from 
stakeholders and in response to other external events. 

This statement summarizes information on (1) how NRC oversees nuclear 
power plants, (2) the results of the ROP over the past several years, 
and (3) the aspects of the ROP that need improvement and the status of 
NRC’s efforts to improve them. This statement discusses preliminary 
results of GAO’s work. GAO will report in full at a later date. GAO 
analyzed program-wide information, inspection results covering 5 years 
of ROP operations, and detailed findings from a sample of 11 plants. 

What GAO Found: 

NRC uses various tools to oversee the safe operation of nuclear power 
plants, including physical plant inspections and quantitative measures 
or indicators of plant performance. To apply these tools, NRC uses a 
risk-informed and graded approach—that is, one considering safety 
significance in deciding on the equipment and operating procedures to 
be inspected and employing increasing levels of regulatory attention to 
plants based on the severity of identified performance problems. The 
tools include three types of inspections—baseline, supplemental, and 
special. All plants receive baseline inspections of plant operations 
almost continuously by NRC inspectors. When NRC becomes aware of a 
performance problem at a plant, it conducts supplemental inspections, 
which expand the scope of baseline inspections. NRC conducts special 
inspections to investigate specific safety incidents or events that are 
of particular interest to NRC because of their potential significance 
to safety. The plants also self-report on their safety performance 
using performance indicators for plant operations related to safety, 
such as the number of unplanned reactor shutdowns. 

Since 2001, NRC’s ROP has resulted in more than 4,000 inspection 
findings concerning nuclear power plant licensees’ failure to comply 
with regulations or other safe operating procedures. About 97 percent 
of these findings were for actions or failures NRC considered important 
to correct but of low significance to overall safe operation of the 
plants. In contrast, 12 of the inspection findings, or less than 1 
percent, were of the highest levels of significance to safety. On the 
basis of its findings and the performance indicators, NRC has subjected 
more than three-quarters of the 103 operating plants to oversight 
beyond the baseline inspections for varying amounts of time. 

NRC has improved several key areas of the ROP, largely in response to 
independent reviews and feedback from stakeholders. These improvements 
include better focusing its inspections on those areas most important 
to safety, reducing the time needed to determine the risk significance 
of inspection findings, and modifying the way that some performance 
indicators are measured. NRC also recently undertook a major initiative 
to improve its ability to address plants’ safety culture—that is, the 
organizational characteristics that ensure that issues affecting 
nuclear plant safety receive the attention their significance warrants. 
GAO and others have found this to be a significant shortcoming in the 
ROP. Although some industry officials have expressed concern that its 
changes could introduce undue subjectivity to NRC’s oversight, given 
the difficulty in measuring these often intangible and complex 
concepts, other stakeholders believe its approach will provide NRC 
better tools to address safety culture issues at plants. NRC officials 
acknowledge that its effort is only a step in an incremental approach 
and that continual monitoring, improvements, and oversight will be 
needed to fully detect deteriorating safety conditions before an event 
occurs. 

[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-06-886T]. 

To view the full product, including the scope and methodology, click on 
the link above.
For more information, contact Jim Wells (202) 512-3841 or 
wellsj@gao.gov. 

[End of Section] 

Mr. Chairman and Members of the Subcommittee: 

I am pleased to have the opportunity to comment on our ongoing review 
of how the Nuclear Regulatory Commission (NRC) oversees the safe 
operation of the nation's 103 operating commercial nuclear power 
plants, which provide about 20 percent of U.S. electricity. The safety 
of these plants, which are located at 65 sites in 31 states, has always 
been important, as an accident could result in the release of 
radioactive material and potentially harm public health and the 
environment. NRC is responsible for issuing regulations, licensing and 
overseeing plants, and requiring necessary actions to protect public 
health and safety, while plant operators are responsible for safely 
operating their plants in accordance with their licenses. NRC's 
oversight has become even more critical as the Congress and the nation 
consider the potential resurgence of nuclear power in helping to meet 
the nation's growing energy needs. No new orders for a plant have been 
placed since the 1979 accident at the Three Mile Island plant, but in 
the face of concerns about aging plants, energy security, global 
warming, and the ever increasing need for energy to fuel the nation's 
economy, nuclear power is resurfacing as a principal option. An 
accident could threaten public confidence in nuclear power just as it 
begins to emerge from the shadows of the Three Mile Island accident. It 
is critical that NRC be able to ensure that nuclear power plants are 
operated safely and that public confidence about their safety is high. 

Prior to 2000, NRC was criticized for having a safety oversight process 
that was not always focused on the most important safety issues and in 
some cases, regulatory activities were redundant, inefficient, and 
overly subjective. While its new process--which NRC refers to as the 
Reactor Oversight Process (ROP)--is similar to its prior process in 
that the oversight activities largely consist of physical plant 
inspections, the inspections now focus on more important safety issues 
and the goal is to make assessments of plants' safety performance more 
objective, predictable, and understandable. The unexpected discovery, 
in March 2002, of extensive corrosion and a pineapple-size hole in the 
reactor vessel head--a vital barrier preventing a radioactive release-
-at the Davis-Besse nuclear power plant in Ohio led NRC to re-examine 
its safety oversight and other regulatory processes to determine how 
such corrosion could be missed. Based on the lessons learned from the 
event, NRC made several changes to the ROP. NRC continues to annually 
assess the ROP by obtaining feedback from the industry and other 
stakeholders such as public interest groups, and incorporates this 
feedback and other information into specific performance metrics to 
assess its effectiveness. 

We are preparing a report to you and other Members of the Congress 
later this year on (1) how NRC oversees nuclear power plants to ensure 
that they are operated safely, (2) the results of the ROP over the past 
several years in terms of the number and types of inspection findings, 
and (3) the aspects of the ROP that need improvement and the status of 
NRC's efforts to improve them.[Footnote 1] To examine how NRC oversees 
plants, we reviewed NRC's regulations, inspection manuals, and other 
guidance documents; interviewed NRC headquarters and regional officials 
and regional and on-site inspectors; visited the Salem and Hope Creek 
nuclear power plants; and attended several public meetings covering 
various nuclear power plant oversight topics. To examine the results of 
the ROP over the past several years, we analyzed NRC data on nuclear 
plant safety for 2001 through 2005, the years since implementation of 
the ROP for which data were available for the full year, and discussed 
our analysis with NRC officials. We assessed the reliability of this 
data and determined that the data were sufficiently reliable for the 
purposes of our report. To examine areas of the ROP that need 
improvement and the status of NRC's efforts to improve them, we 
reviewed NRC documents, including annual self-assessment reports; 
interviewed officials from NRC and outside stakeholder groups; and 
attended several key public meetings covering proposed changes to 
oversight procedures. We also reviewed various external evaluations of 
the ROP, including our prior reports and those of the NRC Inspector 
General. Additionally, we selected a nonprobability sample of 6 nuclear 
power sites (totaling 11 plants) that provided coverage of each of 
NRC's four regional offices and varying levels of plant performance and 
NRC oversight since 2000. We reviewed relevant inspection reports and 
assessment documents and interviewed NRC and industry officials at each 
site to examine how NRC applies the ROP to identify and correct safety 
problems. We are conducting this work in accordance with generally 
accepted government auditing standards. We performed the work reflected 
in this statement from July 2005 to June 2006. 

To date, our work indicates the following: 

* NRC uses various tools to oversee the safe operation of nuclear power 
plants, including physical plant inspections of equipment and records 
and quantitative measures or indicators of plant performance such as 
the number of unplanned shutdowns. NRC uses a graded and risk-informed 
approach--that is, one considering safety significance in deciding on 
the equipment or operating procedures to be inspected and employing 
increasing levels of regulatory attention to plants based on the 
severity of identified performance problems--to apply these tools. All 
plants receive baseline inspections, which are inspections of plant 
operations that are conducted almost continuously by NRC inspectors 
usually located at each nuclear power plant site. When NRC becomes 
aware of a performance problem at a plant, it conducts supplemental 
inspections, which expand the scope of baseline inspections. NRC 
conducts special inspections to investigate specific safety incidents 
or events that are of particular interest to NRC because of their 
potential significance to safety. The plants also self-report on their 
safety performance using performance measures or indicators in 
quarterly reports submitted to NRC. Plants' quarterly reports of 
performance indicators are verified by NRC's on-site inspectors. NRC 
analyzes each of its inspection findings to determine the finding's 
significance in terms of safety, and applies increasing levels of 
oversight based on the number and level of risk of the findings 
identified. 

* Since 2001, NRC's ROP has resulted in more than 4,000 inspection 
findings concerning nuclear power plant licensees' failure to comply 
with regulations or other safe operating procedures. About 97 percent 
of these findings were for actions or failures NRC considered important 
to correct but of very low significance to overall safe operation of 
the plants. For example, a finding of very low risk significance was 
issued at one plant after a worker failed to wear the proper radiation 
detector and at another plant because the operator failed to properly 
evaluate and approve the storage of flammable materials in the vicinity 
of safety-related equipment. In contrast, 12 of the inspection 
findings, or less than 1 percent, were of the highest levels of 
significance to safety. For example, NRC issued a finding of the 
highest risk significance at one plant after a steam generator tube 
failed, causing an increased risk of the release of radioactive 
material. Similarly, there were 156 instances, or less than 1 percent, 
in which data reported for individual performance indicators were 
outside NRC's acceptable category of performance. On the basis of its 
findings and the performance indicators, NRC has subjected more than 
three-quarters of the 103 operating plants to oversight beyond the 
baseline inspections for varying amounts of time. Over the past 5 
years, 5 plants have been subject to the highest level of NRC oversight 
that still allows continued operations. According to NRC officials, the 
results of its oversight process at an industry or summary level serve 
as an indicator of overall industry performance, which to date 
indicates good safety performance. 

* NRC has improved several key areas of the ROP, largely in response to 
independent reviews and feedback from stakeholders, including its 
regional and on-site inspectors, usually obtained during NRC's annual 
self-assessment of the oversight process. These improvements include 
better focusing its inspections on those areas most important to 
safety, reducing the time needed to determine the risk significance of 
inspection findings, and modifying the way that some performance 
indicators are measured. For the most part, NRC considers these efforts 
to be refinements rather than significant changes. One significant 
shortcoming in the ROP that we and others have found is that it is not 
as effective as it could be in identifying and addressing early 
indications of deteriorating safety at nuclear power plants before 
problems develop. In response to this concern, NRC recently undertook a 
major initiative to improve its ability to address plants' safety 
culture--that is, the organizational characteristics that ensure that 
issues affecting nuclear plant safety receive the attention their 
significance warrants. NRC and others have long recognized that safety 
culture attributes, such as attention to detail, adherence to 
procedures, and effective corrective and preventative action, have a 
significant impact on a plant's safety performance. NRC is taking 
action to improve how it incorporates safety culture into the ROP by 
redefining and increasing its focus on more qualitative and cross- 
cutting issues or aspects of plant performance--including a safety 
conscious work environment, human performance, and problem 
identification and resolution--and developing new requirements to more 
directly assess safety culture at poorer performing plants. Some of its 
actions have been controversial. Although some industry officials have 
expressed concern that these changes could introduce undue subjectivity 
to NRC's oversight, given the difficulty in measuring these often 
intangible and complex concepts, other stakeholders believe this 
approach will provide NRC better tools to address safety culture issues 
at plants. NRC officials acknowledge that this effort is only a step in 
an incremental approach and that continual monitoring, improvements, 
and oversight will be needed to fully detect deteriorating safety 
conditions before an event occurs. 

NRC is devoting considerable effort to overseeing the safe operation of 
the nation's commercial nuclear power plants, and its process for doing 
so appears logical and well-structured. This does not mean that NRC's 
oversight is perfect. However, NRC is also demonstrating that it is 
aware of this fact and is willing to make changes to improve. Its 
efforts to continuously obtain feedback and consider the need for 
improvement to the ROP are important as nuclear power plants age and 
the nation considers building new plants. In this regard, its safety 
culture initiative may be its most important improvement to the ROP. As 
we complete our work, we will be examining whether NRC needs a more 
formal mechanism to assess the effectiveness of this initiative, 
including incorporating stakeholder feedback and developing specific 
measures to assess its performance. It has been more than 4 years since 
Davis-Besse, and it appears that NRC is now taking concrete actions to 
begin incorporating safety culture into the ROP. 

I would also like to point out that the ROP is a very open process in 
that NRC provides the public and its other stakeholders with 
considerable specific and detailed information on its activities and 
findings with regard to safety at individual plants. However, to ensure 
or foster even greater public confidence in safety oversight, as we 
complete our work, we will be examining whether NRC can make this 
information more meaningful by providing industry-wide or summary data 
for key components of its oversight process. This information may 
provide a useful measure of overall industry performance and allow for 
comparisons between the safety performance of a specific plant to that 
of the industry as a whole. 

Background: 

NRC is an independent agency of over 3,200 employees established by the 
Energy Reorganization Act of 1974 to regulate civilian--that is, 
commercial, industrial, academic, and medical--use of nuclear 
materials. NRC is headed by a five-member Commission. The President 
appoints the Commission members, who are confirmed by the Senate, and 
designates one of them to serve as Chairman and official spokesperson. 
The Commission as a whole formulates policies and regulations governing 
nuclear reactor and materials safety, issues orders to licensees, and 
adjudicates legal matters brought before it. 

NRC and the licensees of nuclear power plants share the responsibility 
for ensuring that commercial nuclear power reactors are operated 
safely. NRC is responsible for issuing regulations, licensing and 
inspecting plants, and requiring action, as necessary, to protect 
public health and safety. Plant licensees have the primary 
responsibility for safely operating their plants in accordance with 
their licenses and NRC regulations. NRC has the authority to take 
actions, up to and including shutting down a plant, if licensing 
conditions are not being met and the plant poses an undue risk to 
public health and safety. 

Nuclear power plants have many physical structures, systems, and 
components, and licensees have numerous activities under way, 24-hours 
a day, to ensure that plants operate safely. NRC relies on, among other 
things, its on-site resident inspectors to assess plant conditions and 
the licensees' quality assurance programs such as those required for 
maintenance and problem identification and resolution. With its current 
resources, NRC can inspect only a relatively small sample of the 
numerous activities going on during complex plant operations. According 
to NRC, its focus on the more safety significant activities is made 
possible by the fact that safety performance at plants has improved as 
a result of more than 25 years of operating experience. 

Commercial nuclear power plants are designed according to a "defense in 
depth" philosophy revolving around redundant, diverse, and reliable 
safety systems. For example, two or more key components are put in 
place so that if one fails, there is another to back it up. Plants have 
numerous built-in sensors to monitor important indicators such as water 
temperature and pressure. Plants also have physical barriers to contain 
the radiation and provide emergency protection. For example, the 
nuclear fuel is contained in a ceramic pellet to lock in the 
radioactive byproducts and then the fuel pellets are sealed inside rods 
made of special material designed to contain fission products, and the 
fuel rods are placed in reactors housed in containment buildings made 
of several feet of concrete and steel. 

Furthermore, the nuclear power industry formed an organization, the 
Institute of Nuclear Power Operations (INPO) with the mission to 
"promote the highest levels of safety and reliability-to promote 
excellence-in the operation of nuclear electric generating plants." 
INPO provides a system of personnel training and qualification for all 
key positions at nuclear power plants and workers undergo both periodic 
training and assessment. INPO also conducts periodic evaluations of 
operating nuclear plants, focusing on plant safety and reliability, in 
the areas of operations, maintenance, engineering, radiological 
protection, chemistry, and training. Licensees make these evaluations 
available to the NRC for review, and the NRC staff uses the evaluations 
as a means to determine whether its oversight process has missed any 
performance issues. 

NRC Uses Various Tools and Takes a Graded and Risk-Informed Approach to 
Ensuring the Safety of Nuclear Power Plants: 

NRC uses various tools to oversee the safe operation of nuclear power 
plants, generally consisting of physical plant inspections of equipment 
and records and objective indicators of plant performance. These tools 
are risk-informed in that they are focused on the issues considered 
most important to plant safety. Based on the results of the information 
it collects through these efforts, NRC takes a graded approach to its 
oversight, increasing the level of regulatory attention to plants based 
on the severity of identified performance issues. NRC bases its 
regulatory oversight process on the principle and requirement that 
plant licensees routinely identify and address performance issues 
without NRC's direct involvement. An important aspect of NRC's 
inspections is ensuring the effectiveness of licensee quality assurance 
programs. NRC assesses overall plant performance and communicates these 
results to licensees on a semi-annual basis. 

During fiscal year 2005, NRC inspectors spent a total of 411,490 hours 
on plant inspection activities (an average of 77 hours per week at each 
plant). The majority of these inspection efforts were spent on baseline 
inspections, which all plants receive on an almost continuous basis. 
Baseline inspections, which are mostly conducted by the two to three 
NRC inspectors located at each nuclear power plant site, evaluate the 
safety performance of plant operations and review plant effectiveness 
at identifying and resolving its safety problems.[Footnote 2] There are 
more than 30 baseline inspection procedures, conducted at varying 
intervals, ranging from quarterly to triennially, and involving both 
physical observation of plant activities and reviews of plant reports 
and data. The inspection procedures are risk-informed to focus 
inspectors' efforts on the most important areas of plant safety in four 
ways: 1) areas of inspection are included in the set of baseline 
procedures based on, in part, their risk importance, 2) risk 
information is used to help determine the frequency and scope of 
inspections, 3) the selection of activities to inspect within each 
procedure is informed with plant-specific risk information, and 4) the 
inspectors are trained in the use of risk information in planning their 
inspections. 

For inspection findings found to be more than minor,[Footnote 3] NRC 
uses its significance determination process (SDP) to assign each 
finding one of four colors to reflect its risk significance.[Footnote 
4] Green findings equate to very low risk significance, while white, 
yellow, and red colors represent increasing levels of risk, 
respectively. Throughout its application of the SDP, NRC incorporates 
information from the licensee, and the licensee has the opportunity to 
formally appeal the final determination that is made. 

In addition to assigning each finding a color based on its risk 
significance, all findings are evaluated to determine if certain 
aspects of plant performance, referred to as cross-cutting issues, were 
a contributing cause to the performance problem. The cross-cutting 
issues are comprised of (1) problem identification and resolution, (2) 
human performance, and (3) safety consciousness in the work 
environment. To illustrate, in analyzing the failure of a valve to 
operate properly, NRC inspectors determined that the plant licensee had 
not followed the correct procedures when performing maintenance on the 
valve, and thus NRC concluded the finding was associated with the human 
performance cross-cutting area. If NRC determines that there are 
multiple findings during the 12-month assessment period with documented 
cross-cutting aspects, more than three findings with the same causal 
theme, and NRC has a concern about the licensee's progress in 
addressing these areas, it may determine that the licensee has a 
"substantive" cross-cutting issue. Opening a substantive cross-cutting 
issue serves as a way for NRC to notify the plant licensee that 
problems have been identified in one of the areas and that NRC will 
focus its inspection efforts in the cross-cutting area of concern. 

When NRC becomes aware of one or more performance problems at a plant 
that are assigned a risk color greater-than-green (white, yellow, or 
red), it conducts supplemental inspections. Supplemental inspections, 
which are performed by regional staff, expand the scope beyond baseline 
inspection procedures and are designed to focus on diagnosing the cause 
of the specific performance deficiency. NRC increases the scope of its 
supplemental inspection procedures based on the number of greater-than- 
green findings identified, the area where the performance problem was 
identified, and the risk color assigned. For example, if one white 
finding is identified, NRC conducts a follow-up inspection directed at 
assessing the licensee's corrective actions to ensure they were 
sufficient in both correcting the specific problem identified and 
identifying and addressing the root and contributing causes to prevent 
recurrence of a similar problem. If multiple yellow findings or a 
single red finding is identified, NRC conducts a much more 
comprehensive inspection which includes obtaining information to 
determine whether continued operation of the plant is acceptable and 
whether additional regulatory actions are necessary to address 
declining plant performance. This type of more extensive inspection is 
usually conducted by a multi-disciplinary team of NRC inspectors and 
may take place over a period of several months. NRC inspectors assess 
the adequacy of the licensee's programs and processes such as those for 
identifying, evaluating, and correcting performance issues and the 
overall root and contributing causes of identified performance 
deficiencies. 

NRC conducts special inspections when specific events occur at plants 
that are of particular interest to NRC because of their potential 
safety significance. Special inspections are conducted to determine the 
cause of the event and assess the licensee's response. For special 
inspections, a team of experts is formed and an inspection charter 
issued that describes the scope of the inspection efforts. At one plant 
we reviewed, for example, a special inspection was conducted to 
investigate the circumstances surrounding the discovery of leakage from 
a spent fuel storage pool. Among the objectives of this inspection were 
to assess the adequacy of the plant licensee's determination of the 
source and cause of the leak, the risk significance of the leakage, and 
the proposed strategies to mitigate leakage that had already occurred 
and repair the problem to prevent further leakage. 

In addition to its various inspections, NRC also collects plant 
performance information through a performance indicator program, which 
it maintains in cooperation with the nuclear power industry. On a 
quarterly basis, each plant submits data for 15 separate performance 
indicators. These objective numeric measures of plant operations are 
designed to measure plant performance related to safety in various 
aspects of plant operations. For example, one indicator measures the 
number of unplanned reactor shutdowns during the previous four quarters 
while another measures the capability of alert and notification system 
sirens, which notify residents living near the plant in the event of an 
accident. Working with the nuclear power industry, NRC established 
specific criteria for acceptable performance with thresholds set and 
assigned colors to reflect increasing risk according to established 
safety margins for each of the indicators. Green indicators reflect 
performance within the acceptable range while white, yellow, and red 
colors represent decreasing plant performance, respectively. NRC 
inspectors review and verify the data submitted for each performance 
indicator annually through the baseline inspection process. If 
questions arise about how to calculate a particular indicator or what 
the correct value should be, there is a formal feedback process in 
place to resolve the issue. When performance indicator thresholds are 
exceeded, NRC responds in a graded fashion by performing supplemental 
inspections that range in scope depending on the significance of the 
performance issue. 

Under the ROP, NRC places each plant into a performance category on the 
agency's action matrix, which corresponds to increasing levels of 
oversight based on the number and risk significance of inspection 
findings and performance indicators. The action matrix is NRC's formal 
method of determining what additional oversight procedures--mostly 
supplemental inspections--are required.[Footnote 5] Greater-than-green 
inspection findings are included in the action matrix for a minimum of 
four quarters to allow sufficient time for additional findings to 
accumulate that may indicate more pervasive performance problems 
requiring additional NRC oversight. If a licensee fails to correct the 
performance problems within the initial four quarters, the finding may 
be held open and considered for additional oversight for more than the 
minimum four quarters. 

At the end of each 6-month period, NRC issues an assessment letter to 
each plant licensee. This letter describes what level of oversight the 
plant will receive according to its placement in the action matrix 
performance categories, what actions NRC is expecting the plant 
licensee to take as a result of the performance issues identified, and 
any documented substantive cross-cutting issues. NRC also holds an 
annual public meeting at or near each plant site to review performance 
and address questions about the plant's performance from members of the 
public and other interested stakeholders. Most inspection reports, 
assessment letters and other materials related to NRC's oversight 
processes are made publicly available through a NRC website devoted to 
the ROP. The website also includes plant-specific quarterly summaries 
of green or greater inspection findings and all the performance 
indicators. 

NRC Has Continually Identified Problems at Nuclear Power Plants but Few 
Have Been Considered Significant to Safe Operation of the Plants: 

The ROP has identified numerous performance deficiencies as inspection 
findings at nuclear power plants since it was first implemented, but 
most of these were considered to be of very low risk to safe plant 
operations. Similarly, there have been very few instances in which 
performance indicator data exceeded acceptable standards. As a result, 
few plants have been subjected to high levels of oversight. 

Of more than 4,000 inspection findings identified between 2001 and 
2005, 97 percent were green. While green findings are considered to be 
of "very low" safety significance, they represent a performance 
deficiency on the part of the plant licensee and thus are important to 
correct. Green findings consist of such things as finding that a worker 
failed to wear the proper radiation detector or finding that a licensee 
did not properly evaluate and approve the storage of flammable 
materials in the vicinity of safety-related equipment. NRC does not 
follow-up on the corrective action taken for every green finding 
identified; rather, it relies on the licensee to address and track 
their resolution through the plant's corrective action program. NRC 
does, however, periodically follow-up on some of the actions taken by 
the licensee to address green findings through an inspection 
specifically designed to evaluate the effectiveness of the licensee's 
corrective action program. NRC officials stated that green findings 
provide useful information on plant performance and NRC inspectors use 
the findings to identify performance trends in certain areas and help 
inform their selection of areas to focus on during future inspections. 
In contrast to the many green findings, NRC has identified 12 findings 
of the highest risk significance (7 yellow and 5 red), accounting for 
less than 1 percent of the findings since 2001. For example, one plant 
was issued a red finding--the highest risk significance--after a steam 
generator tube failed, causing an increased risk in the release of 
radioactive material. 

Similar to the inspection findings, most performance indicator reports 
have shown the indicators to be within the acceptable levels of 
performance. Only 156, or less than one percent of over 30,000 
indicator reports from 2001 to 2005, exceeded the acceptable 
performance threshold. Four of the 15 performance indicators have 
always been reported to be within acceptable performance levels. In 
addition, 46 plants have never had a performance indicator fall outside 
of the acceptable level and only three plants reported having a yellow 
indicator for one performance measure; no red indicators have ever been 
reported. 

On the basis of its inspection findings and performance indicators, NRC 
has subjected more than three quarters of the 103 operating plants to 
at least some level of increased oversight (beyond the baseline 
inspections) for varying amounts of time. Most of these plants received 
the lowest level of increased oversight, consisting of a supplemental 
inspection, to follow-up on the identification of one or two white 
inspection findings or performance indicators. Five plants have 
received the highest level of plant oversight for which NRC allows 
plants to continue operations, due to the identification of multiple 
white or yellow findings and/or the identification of a red 
finding.[Footnote 6] One plant received this level of oversight because 
NRC determined that the licensee failed to address the common causes of 
two white findings and held them open for more than four quarters. One 
of these findings involved the recurrent failure of a service water 
pump because the licensee failed to take adequate corrective action 
after the first failure. 

NRC inspectors at the plants we reviewed indicated that, when plant 
performance declines, it is often the result of ineffective corrective 
action programs, problems related to human performance, or complacent 
management, which often results in deficiencies in one or more of the 
cross-cutting areas. In assessing the results of the ROP data, we found 
that all plants subjected to NRC's highest level of oversight also had 
a substantive cross-cutting issue open either prior to or during the 
time that it was subjected to increased oversight inspections. 

Overall, NRC's oversight process shows mostly consistent results from 
2001 to 2005. For example, the total number of green findings at all 
plants ranged from 657 to 889 per year and the total number of other 
findings ranged from 10 to 30 per year with no strong trend (see fig. 
1). 

Figure 1: ROP Inspection Findings by Year: 

[See PDF for image] 

[End of figure] 

Only in the area of cross-cutting issues--or inspection findings for 
which one or more cross-cutting issues was associated--is an increasing 
trend evident (see fig. 2). According to NRC, the reason for this 
increase is due in part to the development of guidance on the 
identification and documentation of cross-cutting issues and its 
increased emphasis in more recent years. 

Figure 2: Trend of ROP Findings with Cross-Cutting Issues: 

[See PDF for image] 

[End of figure] 

According to NRC officials, the results of its oversight process at an 
industry or summary level serve as an indicator of industry 
performance, which to date indicates good safety performance. On an 
annual basis, NRC analyzes the overall results of its inspection and 
performance indicator programs and compares them with industry level 
performance metrics to ensure all metrics are consistent and takes 
action if adverse trends are identified. While NRC communicates the 
results of its oversight process on a plant-specific basis to plant 
managers, members of the public, and other government agencies through 
annual public meetings held at or near each site and an internet Web 
site, it does not publicly summarize the overall results of its 
oversight process, such as the total number and types of inspection 
findings and performance indicators falling outside of acceptable 
performance categories, on a regular basis. 

NRC Continues to Make Improvements to its Reactor Oversight Process in 
Key Areas: 

NRC has taken a proactive approach to improving its reactor oversight 
process. It has several mechanisms in place to incorporate feedback 
from both external and internal stakeholders and is currently working 
on improvements in key areas of the process, including better focusing 
inspections on areas most important to safety, improving its timeliness 
in determining the risk significance of its inspection findings, and 
modifying the way that it measures some performance indicators. NRC is 
also working to address what we believe is a significant shortcoming in 
its oversight process by improving its ability to address plants' 
safety culture, allowing it to better identify and address early 
indications of deteriorating safety at plants before performance 
problems develop. 

According to NRC officials, the ROP was implemented with the 
understanding that it would be an evolving process and improvements 
would be made as lessons-learned were identified. Each fall NRC 
solicits feedback from external stakeholders, including industry 
organizations, public interest groups, and state and local officials, 
through a survey published in the Federal Register. NRC also conducts 
an internal survey of its site, regional, and headquarters program and 
management staff every other year to obtain their opinions on the 
effectiveness of the ROP. Additionally, NRC has in place a formal 
feedback mechanism whereby NRC staff can submit recommendations for 
improving various oversight components and NRC staff meet with industry 
officials on a monthly basis--in addition to various meetings, 
workshops, and conferences--to discuss oversight implementation issues 
and concerns. NRC staff also incorporates direction provided by the NRC 
Commissioners and recommendations from independent evaluations such as 
from GAO and the NRC Inspector General. The results of these efforts 
are pulled together in the form of an annual self-assessment report, 
which outlines the overall results of its outreach and the changes it 
intends to make in the year ahead. 

According to NRC officials, the changes made to the ROP since its 
implementation in 2000--including those made in response to the Davis- 
Besse incident--have generally been refinements to the existing process 
rather than significant changes to how it conducts its oversight. In 
the case of Davis-Besse, NRC formed a task force to review the agency's 
regulatory processes. The task force's report, issued in September 
2002, contained more than 50 recommendations, many associated with the 
ROP. Among the more significant ROP-related recommendations were those 
to enhance the performance indicator that monitors unidentified leakage 
to be more accurate, develop specific guidance to inspect boric acid 
control programs and vessel head penetration nozzles, modify the 
inspection program to provide for better follow-up of longstanding 
issues, and enhance the guidance for managing plants that are in an 
extended shutdown condition as a result of significant performance 
problems. NRC program officials told us that the task force's most 
significant recommendations were in areas outside of the ROP, such as 
improving the agency's operating experience program. According to NRC, 
it has implemented almost all of the task force's recommendations. 

Other modifications that NRC has recently made or is in the process of 
making include the following: 

* NRC recently revised seven of its baseline inspection procedures to 
better focus the level and scope of its inspection efforts on those 
areas most important to safety. These revisions resulted from a 
detailed analysis in 2005 of its more than 30 baseline inspection 
procedures. The effort involved analyzing the number of findings 
resulting from each of its inspection procedures and the time spent 
directly observing plant activities or reviewing licensee paperwork, 
among other things. 

* NRC has efforts underway to improve what it refers to as its 
significance determination process (SDP). An audit by the NRC Inspector 
General, a review by a special task group formed by NRC, and feedback 
from other stakeholders have pointed to several significant weaknesses 
with the SDP. For example, internal and external stakeholders raised 
concerns about the amount of time, level of effort, and knowledge and 
resources required to determine the risk significance of some findings. 
Industry officials commented that because most inspection findings are 
green, one white finding at a plant can place it in the "bottom 
quartile" of plants from a performance perspective. Therefore, industry 
officials explained, licensees try to avoid this placement and will 
expend a great deal of effort and resources to provide additional data 
to NRC to ensure the risk level of a finding is appropriately 
characterized. This can add significant time to the process because 
different technical tools may be used that then must be incorporated 
with NRC's tools and processes. The delay in assigning a color to a 
finding while the new information is being considered could also affect 
a plant's placement on NRC's action matrix, essentially delaying the 
increased oversight called for if the finding is determined to be 
greater-than-green. NRC developed a SDP Improvement Plan in order to 
address these and other concerns and track its progress in implementing 
key changes. For example, NRC introduced a new process aimed at 
improving timeliness by engaging decision-makers earlier in the process 
to more quickly identify the scope of the evaluation, the resources 
needed, and the schedule to complete the evaluation. 

* NRC is also taking actions to improve its performance indicators. 
These actions are partly to address concerns that the indicators have 
not contributed to the early identification of poorly performing plants 
to the degree originally envisioned as they are almost always within 
acceptable performance levels (green). There have been several cases 
where plants reported an acceptable performance indicator and 
performance problems were subsequently identified. For example, NRC 
inspectors at one plant noted that while performance indicator data 
related to its alert and notification system in place for emergency 
preparedness had always been reported green, the system had not always 
been verified to be functioning properly. On the other hand, industry 
officials believe that the high percentage of indicators that are green 
is indicative of plants' good performance. Several plant managers told 
us that they closely monitor and manage to the acceptable performance 
thresholds established for each indicator, and will often take action 
to address performance issues well before the indicator crosses the 
acceptable performance threshold. Because NRC inspectors verify 
indicator data once a year, a potential disagreement over the data 
might not surface for up to a year after it is reported, and it may 
take even longer to resolve the disagreement with the licensee. Similar 
to delays with the SDP, a delay in assigning a color while the 
disagreement is resolved could affect a plant's placement on NRC's 
action matrix, and delay the increased oversight called for if the 
indicator is determined to be greater-than-green. NRC plans to work 
with the industry to review selected indicator definitions to make 
interpretation more concise and reduce the number of discrepancies. To 
date, NRC has focused significant effort on developing a key indicator 
to address known problems with the performance indicators measuring the 
unavailability of safety systems. NRC is also in the process of 
changing the definition for several other indicators, in addition to 
considering the feasibility of new indicators. 

I would now like to discuss what we believe is one of NRC's most 
important efforts to improve its oversight process by increasing its 
ability to identify and address deteriorating safety culture at plants. 
NRC and others have long recognized that safety culture and the 
attributes that make up safety culture, such as attention to detail, 
adherence to procedures, and effective corrective and preventative 
action, have a significant impact on a plant's performance. Despite 
this recognition and several external groups' recommendations to better 
incorporate safety culture aspects into its oversight process, it did 
not include specific measures to explicitly address plant safety 
culture when it developed the ROP in 2000. The 2002 Davis-Besse reactor 
vessel head incident highlighted that this was a significant weakness 
in the ROP. In investigating this event, we and others found that NRC 
did not have an effective means to identify and address early 
indications of deteriorating safety at plants before performance 
problems develop.[Footnote 7] Largely as a result of this event, in 
August 2004, the NRC Commission directed the NRC staff to enhance the 
ROP by more fully addressing safety culture. 

In response to the Commission's directive, the NRC staff formed a 
safety culture working group in early 2005. The working group 
incorporated the input of its stakeholders through a series of public 
meetings held in late 2005 and early 2006. In February 2006, NRC issued 
its proposed approach to better incorporate safety culture into the 
ROP. NRC officials expect to fully implement all changes effective in 
July 2006. 

NRC's proposed safety culture changes largely consist of two main 
approaches: first, clarifying the identification and treatment of cross-
cutting issues in its inspection processes and second, developing a 
structured way for NRC to determine the need for a safety culture 
evaluation of plants. NRC has developed new definitions for each of its 
cross-cutting issues to more fully address safety culture aspects and 
additional guidance on their treatment once they are identified. For 
example, the problem identification and resolution cross-cutting area 
is now comprised of several components--corrective action program, self 
and independent assessments, and operating experience. NRC inspectors 
are to assess every inspection finding to determine if it is associated 
with one or more of the components that make up each of the cross- 
cutting areas. Inspectors then determine, on a semi-annual basis, if a 
substantive cross-cutting issue exists on the basis of the number and 
areas of cross-cutting components identified. If the same substantive 
cross-cutting issue is identified in three consecutive assessment 
periods, NRC may request that the licensee perform an assessment of its 
safety culture. The intent is to provide an opportunity to diagnose a 
potentially declining safety culture before significant safety 
performance problems occur. 

Under its approach, NRC would expect the licensees of plants with more 
than one white color finding or one yellow finding to evaluate whether 
the performance issues were in any way caused by any safety culture 
components, and NRC might request the licensee to complete an 
independent assessment of its safety culture, if the licensee did not 
identify an important safety culture component. For plants where more 
significant or multiple findings have been identified, the NRC would 
not only independently evaluate the adequacy of the independent 
assessment of the licensee's safety culture, but it might also conduct 
its own independent assessment of the licensee's safety culture. 

Some of NRC's proposed actions regarding safety culture have been 
controversial, and not all stakeholders completely agree with the 
agency's approach. For example, the nuclear power industry has 
expressed concern that the changes could introduce undue subjectivity 
to NRC's oversight, given the difficulty in measuring these often 
intangible and complex concepts. Several of the nuclear power plant 
managers at the sites we reviewed said that it is not always clear why 
a cross-cutting issue was associated with finding, or what it will take 
to clear themselves once they've been identified as having a 
substantive cross-cutting issue open. Some industry officials worry 
that this initiative will further increase the number of findings that 
have cross-cutting elements associated with them and if all of the 
findings have them they will lose their value. Industry officials also 
warn that if it is not implemented carefully, it could divert resources 
away from other important safety issues. Other external stakeholders, 
on the other hand, suggest that this effort is an important step in 
improving NRC's ability to identify performance issues at plants before 
they result in performance problems. Importantly, there will be 
additional tools in place for NRC to use when it identifies potential 
safety culture concerns. NRC officials view this effort as the 
beginning step in an incremental approach and acknowledge that 
continual monitoring, improvements, and oversight will be needed in 
order to better allow inspectors to detect deteriorating safety 
conditions at plants before events occur. NRC plans to evaluate 
stakeholder feedback and make changes based on lessons learned from its 
initial implementation of its changes as part of its annual self- 
assessment process for calendar year 2007. 

GAO Contact and Staff Acknowledgments: 

For further information about this statement for the record, please 
contact me at (202) 512-3841 (or at wellsj@gao.gov). Contact points for 
our Offices of Congressional Relations and Public Affairs may be found 
on the last page of this statement. Raymond H. Smith, Jr. (Assistant 
Director), Alyssa M. Hundrup, Alison O'Neill, and Dave Stikkers made 
key contributions to this statement. 

FOOTNOTES 

[1] Physical security, which is also covered by the ROP, is not 
included in this review. For information on NRC's physical security, 
see GAO, Nuclear Power Plants: Efforts Made to Upgrade Security, but 
the Nuclear Regulatory Commission's Design Basis Threat Process Should 
Be Improved, GAO-06-388 (Washington, D.C.: Mar. 14, 2006). 

[2] Certain baseline inspections may also be done by regional staff 
because of their expertise in particular aspects of plant operations. 

[3] Minor issues are defined by NRC as those that have little actual 
safety consequences, little or no potential to impact safety, little 
impact on the regulatory process, and no willfulness. 

[4] The SDP essentially evaluates how an inspection finding impacts the 
margin of safety of a plant. The impact is largely evaluated through 
the use of information on operating experience and risk estimates 
calculated using probabilistic risk assessment (PRA). 

[5] NRC officials can also increase or decrease oversight in ways not 
in accordance with those specified by the action matrix by requesting a 
deviation. This provision is intended for rare instances when the 
oversight levels dictated by the action matrix are not appropriate to 
address a particular performance problem and a more tailored approach 
is required. 

[6] NRC has one additional oversight category for plants with 
unacceptable performance. Plants placed into this category are not 
permitted to operate. 

[7] GAO, Nuclear Regulation: NRC Needs to More Aggressively and 
Comprehensively Resolve Issues Related to the Davis-Besse Nuclear Power 
Plant's Shutdown, GAO-04-415 (Washington, D.C.: May 17, 2004). 

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