By Roman Kilisek and Jared Anderson
The Indian Point nuclear power plant is seen March 18, 2011 in Buchanan, New York. (Photo by Mario Tama/Getty Images)
Well, it depends on who you ask, of course. But some suggest the existing US nuclear regulatory framework contains flaws – that in some cases – allow cost to trump safety. There has always been tension between the nuclear industry and the regulators that oversee it. The strongly-held views that permeate discussions around safety, economic viability and nuclear policy have never been more pronounced than they are in the current post-Fukushima, low natural gas price, carbon-constrained world.
This is a follow-up article to “Nuclear Safety in a Post-Fukushima World: Is the US Falling Behind?” which is part of the “Breaking Energy US Nuclear Investigation,” a series of articles based on information obtained through a Freedom of Information Act request.
This article sheds light on the domestic nuclear front by focusing on the regulatory framework that governs US nuclear power plants – specifically, on the operating reactor licensing and re-licensing process – as well as regulations with regard to the implementation of “Post-Fukushima” requirements.
The Nuclear Regulatory Commission is the lead agency in operating reactor licensing as it regulates the civilian uses of nuclear materials. Given the wave of license renewal applications before the NRC, mandatory upgrades to older reactors, in particular, should take center stage as those reactors will dominate the US nuclear landscape for decades to come.
The Energy Information Administration (EIA) cites NRC data showing that “license renewals providing a 20-year extension [have been granted] to a total of 74 of the 100 operating reactors in the United States.” (There are currently 99 operating reactors, as the Vermont Yankee plant shut down last year due to economic considerations).
Nancy Slater-Thompson of the EIA gives a brief overview of the NRC’s licensing process:
“NRC has the authority to issue initial operating licenses for commercial nuclear power plants for a period of 40 years. The decision to apply for an operating license renewal is made by nuclear power plant owners, and it is typically based on economics and the ability to meet NRC regulations. Operating licenses are renewed by NRC for a period of 20 years.”
According to trade group World Nuclear Association, five reactors are currently under construction in the US, four of them new AP1000 designs. The WNA echoes the view put forth by the industry, some US politicians and some nuclear experts who say that US nuclear safety measures and regulations are adequate in their current form:
“One of the reasons for the hiatus in new build in the USA to date has been the extremely successful evolution in maintenance strategies. Over the last 15 years, changes have increased utilization of US nuclear power plants, with the increased output corresponding to 19 new 1000 MW plants being built.”
Industry lobby group Nuclear Energy Institute points to the considerable investment made by US plant owners and operators in recent years to illustrate their strong safety commitment. The industry has invested approximately $90bn in new equipment, preventive measures and safety enhancements in recent years. “This is not a static process,” NEI’s Steven Kerekes told Breaking Energy.
“We are further strengthening the ability of nuclear power plants to deal with extreme events, we are extremely well prepared from a safety and security standpoint as reflected in the US nuclear safety record and reliability,” [of US nuclear power plants] stressed Kerekes.
For its part, the NRC says they have taken appropriate measures – without consideration of costs – to ensure US nuclear power plants operate safely while incorporating safety enhancement recommendations based on lessons learned from Fukushima.
“The NRC concluded, based on the July 2011 report from a task force of senior managers, that U.S. nuclear power plants can continue to operate safely while the agency appropriately implements recommended enhancements. The NRC’s process set aside cost considerations in announcing firm new requirements for those enhancements within a year of the Fukushima accident,” NRC Public Affairs Officer Scott Burnell told Breaking Energy in an email.
“The NRC process has appropriately incorporated new information since then [2011 Fukushima accident]. U.S. plants have already made great strides in enhancing their ability to maintain safety functions in the unlikely event they lose all a/c power,” Burnell added.
On the other hand, some think the regulatory system is set up in a way that sometimes allows cost issues to trump safety. “It’s a factor. I don’t think it’s the only litmus test that the NRC applies. But I would agree that more often than it should the NRC factors the economic burden on the licensees,” David Lochbaum, Director of the Nuclear Safety Project at the Union of Concerned Scientists told Breaking Energy.
“They [NRC] have a process for when it’s proper to consider economics but they all-to-often make decisions outside of that process. And when they go outside that process that’s when they give more consideration to economic consequences than they should,” Lochbaum said.
In terms of specific lessons learned from Fukushima, the NRC approved a three-tiered prioritization of recommendations provided by the task force in July 2011 Burnell referenced, with the objective to enhance US reactor safety. Even though the NRC required US nuclear power plants to “be designed and built to safely withstand a set of unlikely but harmful events such as equipment failure, pipe breaks, and severe weather” (so-called “design-basis requirements”) before the events in Fukushima unfolded, the task force recognized that “the NRC’s design-basis requirements needed to be enhanced to deal with events that are very unlikely but beyond the current design-basis requirements.”
In short, the prevailing underlying risk assessment also had to change to properly “deal with events beyond the current NRC design basis.” The Commission states on its website that the above labeled as “Recommendation 1” – suggesting elevated importance – is being addressed outside of the three tiers.
Among the tiers, Tier 1 activities are deemed to be of the highest priority and include inter alia:
- Mitigation Strategies in order to enhance the capability to maintain plant safety during a prolonged loss of electrical power. NRC addressed this by order.
- Containment Venting System in order to provide a reliable hardened containment vent system for boiling water reactors (BWRs) with Mark I or Mark II containment designs. NRC addressed this by order.
- Seismic Reevaluations in order to reanalyze potential seismic effects using present-day information to determine if safety upgrades are needed. NRC is still in the ‘request for information’ phase.
Source: Nuclear Energy Institute
Meanwhile, the fourth anniversary of the Fukushima nuclear plant accident just passed but Democratic Senator Edward J. Markey’s assessment from 2014 regarding the lack of progress on key improvements to America’s nuclear fleet in the wake of the 2011 disaster remains relevant. Senator Markey said in a 2014 statement:
“America’s nuclear reactors are no more protected than they were three years ago. (…) While the NRC’s technical expert report called for swift mandatory adoption of all of its recommendations, the Commission voted to extend implementation deadlines, add cost-benefit analysis barriers to moving forward and delay consideration of some of the recommendations altogether.”
New Reactor Construction and Post-Fukushima Safety
In 2012, the NRC made the contentious decision not to slow down the Vogtle project in Georgia – where two of the five new reactors are being built – in order to allow for “Post-Fukushima” safety enhancements to be taken into account on the front end. It was widely argued at the time that building reactors “that might need to be significantly modified later and extensively backfitted in light of new post-Fukushima regulatory requirements risks wasting ratepayer dollars, causing unnecessary pollution, and even possible abandonment of the project.”
Lochbaum further explained the intricacies of license conditions. “If the license condition says you’ll go out and do X,Y,Z [to improve safety] then you have to do it. The burden is on the owner to prove that not doing X,Y,Z is still okay. Without the license condition that burden flips. If down the road the NRC says they want you to do X,Y,Z then they have to do that regulatory analysis showing the cost of doing X,Y,Z is less than the benefits it will derive. So the burden is on the NRC.”
Notably, correspondence – dated June 28, 2012 – between the then-Chairman of the NRC, Gregory B. Jaczko, and the Chairman of the US House of Representatives Committee on Energy and Commerce, Fred Upton, further illuminates the NRC licensing process with its regulatory intricacies, such as the difference between “orders” and “license conditions” as well as implications of the “backfit rule” – all in connection with the Vogtle project playing out before the NRC.
Chairman Jaczko responded to a letter requesting information regarding his views on the NRC’s combined license approvals for the Vogtle Electric Generating Plant in Georgia and V.C. Summer Nuclear Station in South Carolina, the first new nuclear reactors constructed in the US in decades. In his letter, Jaczko provides the context within which the above licenses were issued; namely, that despite his own belief that “higher safety measures should apply to both applications”, the majority of his fellow Commissioners decided to go ahead and issue the licenses based on the existing regulatory framework.
It’s important to note that former Chairman Jaczko was one of the most controversial NRC members in recent history. His management style reportedly clashed with other NRC members and his stance on safety issues often diverged from those held by other NRC representatives, politicians and industry stakeholders. Described as an “outspoken critic of nuclear safety in this country,” Jaczko resigned in 2012 amid controversy and has since kept a low profile.
Greg Jaczko, chairman of the Nuclear Regulatory Commission, and acting Assistant Energy Secretary for Nuclear Energy Pete Lyons (R), testify on Capitol Hill on March 30, 2011 in Washington, DC. The hearing focused on nuclear power plant safety in light of the earthquake and nuclear plant troubles in Japan. (Photo by Brendan Hoffman/Getty Images)
Jaczko is alternatively viewed as a crusader for increased US nuclear power safety who stood up for his views against dissent, or a political appointee who had no business playing the top leadership role at such a critical regulatory body. Nevertheless, some of the former Chairman’s views and rationale are contained below to help illustrate important issues currently unfolding with regard to existing nuclear plant relicensing and license conditions for the new plants currently under construction.
Here Jaczko elaborates on the difference between “Orders v. License Conditions”:
“New requirements may be imposed on a licensee either through a license condition or through an order. A license condition is formulated and incorporated in the license as part of the licensing process, while an order generally mandates a new requirement after a license is issued. From an inspection and enforcement standpoint, there is no material difference between the two options. (…) However, the consequences of non-compliance may vary greatly. Non-compliance with an order will not generally stop a licensee from continuing plant operations, but a license condition could be written to prevent initial fuel loading and therefore, operations until it is satisfied.”
Importantly, by not incorporating certain license conditions – as so happened in the Vogtle case – some believe the NRC deprived itself unnecessarily of maximum flexibility in the case of new nuclear power plants with license applications pending before the NRC at a time when operations had not yet commenced. This is in contrast to the commission’s more limited flexibility in the case of older nuclear reactors where the respective licenses were issued a long time ago based on information at that time.
The former Chairman explains this as follows: “The primary difference between incorporating a license condition in the initial license and issuing an order after a license has been issued is the considerations which the agency must make before imposing that new requirement. Before a license is issued, the NRC has the flexibility to require safety enhancements based upon its own technical judgment in the form of a license condition. However, once a license is issued, any subsequent order for new safety requirements is subject to (…) the backfit rule.”
The NRC did include a license condition at Vogtle regarding the “squib valves” that would play a key role in responding to an event that could challenge the plant’s ability to safely shut down, Burnell explained. But chairman Jaczko sought additional license conditions that were not included.
The Commission’s discussion regarding the new Vogtle reactor licenses is available here.
The Backfit Rule
The ‘backfit rule’ is important to comprehend because this rule would generally have to be invoked in a vast majority of the cases to upgrade older US nuclear power plants in the name of public safety. Chairman Jaczko details the process:
“The backfit rule requires NRC staff to conduct a cost-benefit analysis prior to imposing new regulations and requirements on existing facilities after the issuance of a license. In most situations, the backfit rule requires the Commission to conduct a ‘systemic and documented analysis’ [(10. CFR 50.109)] and can only impose a backfit when it determines … that there is substantial increase in the overall protection of the public health and safety or the common defense and security to be derived from the backfit and that the direct and indirect costs of implementation for that facility are justified in view of this increased protection.”
Summing up his overall stance in the matter and pointing to “flaws” in the regulatory framework, Chairman Jaczko continues: “For a plant still under construction, there often remains ample opportunity to make changes during construction that might not be appropriate for an operating reactor, and therefore the backfit rule would appear to be misapplied in these instances. Under our existing regulatory framework, however, any future safety enhancements under consideration must still pass the backfit rule even for a pre-operational site once a license has been issued. I believe all new reactors should be held to a higher safety standard than those designed and constructed decades ago, and that licensees should be required to satisfy these standards prior to commencing operations.”
Note, the latest Georgia Power semiannual report to state regulators on the Vogtle project revealed – according to Matthew Bandyk’s reporting – that “its share of a project to build two new nuclear reactors at the Vogtle plant will cost over $1 billion more than it previously expected, reflecting a potential 18-month delay driven by problems in the construction of the first new nuclear power plant in the country in decades.”
Here is where the cost issue comes into focus as a source of tension in the interaction between regulators, policymakers and industry stakeholders. It’s clear, based on the views of several industry members put forth during a recent panel discussion at the Future of Energy Summit organized by Bloomberg New Energy Finance – that the US nuclear industry feels over-regulated. This is also a view reiterated by several people Breaking Energy spoke with while writing this story.
“The process needs to be fixed where the regulator is focused really on compliance and not so much on just being able to chase at will issues that have already been resolved in the past,” Gary Migmogna, President and CEO of Areva North America told the audience.
President and CEO of Westinghouse Americas Mark Marano agreed, explaining “this process [new-build licensing] is so long the regulatory staff turns over. So guess what? You start all over again…answering the same questions a different way…This costs tens of millions of dollars. At the end of the day you may end up exactly where you were but two years later. You are in a regulatory loop.”
The friction between business and regulation is nothing new, but it’s more pronounced in the US nuclear power sector than in other industries. Businesses with fiduciary interests to shareholders that are valued on a quarterly basis want to move fast, while regulators need to move at a pace that ensures compliance, and above all, safety. And while this situation creates challenges, it’s not necessarily a bad thing.
“There should be healthy tension in the system,” Gilbert J. Brown, Nuclear Engineering Professor at UMASS Lowell told Breaking Energy. Regulatory policy and enforcement that involves societal risk is a process that inherently includes tension. “Striking a balance between the costs and benefits of nuclear safety measures is a system in which that healthy tension should – and in my view does exist – at the NRC,” he said.
And the license renewal system is evolving. “On the good side and to the NRC’s credit the license renewal guidance or the regulation it will accept before it will issue a 20-year extension for an operating license has been changed twice since the rules came out around 2010,” said Lochbaum. “As time went by they learned more and saw a better way of doing it.”
What Role does SAMA Play?
The downside, in Lochbaum’s view, involves treatment of the severe accident mitigating alternative – SAMA – requirement. License renewal applicants must complete a safety review and a SAMA analysis. The SAMA analysis involves finding ways to improve plant safety if it’s going to operate for 20 more years. The owners do a multistage cost-benefit analysis that starts with about 250 possibilities.
“Of that list of 250 many of them are not applicable to your plant. If you have a boiling water reactor and there is an upgrade to a different design obviously that doesn’t apply so you just scratch that off the list,” Lochbaum said.
Additional screening whittles down the potential safety upgrades to about two dozen for a typical plant. Plant owners then do a deeper analysis on those to better estimate the costs and benefits to make an ultimate determination of what measures are beneficial and which are not. That then gets submitted to the NRC with a license renewal application.
The SAMA component of license renewal has become controversial. “SAMAs are part of a license renewal application’s environmental report, and the main requirement regarding SAMAs is that their submittal and subsequent NRC review meet the ‘hard look’ provision of the National Environmental Policy Act [NEPA], according to Burnell at the NRC.
Disagreement has arisen between the NRC and several nuclear energy watchdog groups, including RiverKeeper and the Union of Concerned Scientists, over the SAMA analysis process.
“The bad part is that even the upgrades the owner determines to be cost beneficial don’t have to be implemented,” Lochbaum said. “The NRC’s interpretation of the rule was that it only requires you to do the analysis it doesn’t require you to follow up on it and make the safety upgrades.” So he asserts there are many plants where owners have identified measures that would improve the safety of their plants and would be worth the safety investment, but the measures haven’t been implemented.
“I’d hate to be in the owner’s shoes or the NRC’s shoes if an accident were to occur but no fix was implemented. How do you tell survivors we did everything we could to protect you except for this? But we did do the math so that’s all we had to do.” – Lochbaum
The NRC describes the final phase of the SAMA process in its website as follows: “Determine whether implementation of any of the cost-beneficial SAMAs is required to support license renewal (related to adequately managing the effects of aging during the period of extended operation).”
What’s Going on Here?
Part of the problem is that NEPA has not traditionally been a regulatory enforcement mechanism, so it has not been a tool used to compel plant owners to implement safety measures identified as cost beneficial as determined by SAMA. RiverKeeper and the UCS, along with the State of New York, have contested the SAMA issue within NRC’s legal process and the UCS has contested the SAMA practice in NRC license renewal workshops and in at least one presentation to the NRC’s Commissioners.
One such case involved the Pilgrim Nuclear Power Station located in Plymouth Massachusetts and owned by Entergy. “The Pilgrim license renewal process included a hearing before the Atomic Safety and Licensing Board regarding Pilgrim’s SAMA analyses. This process is summarized in a 2012 Commission Order related to the case, which was ultimately resolved such that the NRC issued Pilgrim a renewed license,” the NRC told Breaking Energy.
SAMA analysis is also being contested as part of the Indian Point Energy Center’s relicensing proceedings. Indian Point is located 35 miles north of New York City and is also owned by Entergy. The State of New York challenged the Indian Point SAMA analysis, contesting particular decontamination times and decontamination cost assumptions. On February 18, 2015, the Atomic Safety and Licensing Board granted the State two petitions that allow further SAMA contention review.
So the battle continues, with numerous organizations, politicians and activists contending the US nuclear power industry places issues of cost above safety in some instances. The NRC is caught in the middle. Although often accused of being too cozy with the industry, the NRC is tasked with ensuring the country’s 19 percent of electricity generated from nuclear power plants is done so safely. At the same time, the NRC faces pressure from the industry and some political forces to streamline regulatory processes and do their job faster.
The regulatory framework should reflect an honest assessment of risk first and cost second in the interest of public safety, which the NRC believes it does. However, many interests on the other side of the debate believe the current legal structure sets up in reverse, which creates the impression that the regulations in place are distinctly tilted towards the interests of the nuclear industry.
However, as with any large bureaucratic regulatory system, room for improvement inevitably exists. Nuclear power is an important asset in the US electricity generation system. Energy analyst and author Robert Bryce has said that if you are pro climate action and anti-nuclear then you are pro darkness. Indeed, nuclear produced 19 percent of US electricity in 2013, but accounted for 63 percent of the country’s carbon-free production that year, according to Nuclear Matters, a policy initiative.
In the short term, shutting down all US nuclear power is not an option for numerous reasons, including reliability, environmental and cost concerns. The role this power source plays in the US over the longer term is being decided now, as the country’s first new reactors in many years are constructed. But for the time being, relicensing the older plants will continue and the public needs to trust the industry and NRC that the fleet can continue operating safely for at least another 20 years. Luckily, there are countless organizations and individuals scrutinizing all aspects of this process to ensure that issues of safety are never subordinate to cost saving.
For some the US nuclear safety glass will never be full enough, while for others the level of safety contained within the current regulatory structure is sufficient. Either way, in another 20-something years these plants will need to be relicensed again or finally shut. Perhaps the most interesting longer-term question is what energy sources will replace all those gigawatts when the time comes.
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