COMMISSION BRIEFING SLIDES/EXHIBITS

PERIODIC BRIEFING ON NEW REACTOR ISSUES

OCTOBER 24, 2007

StAtus of Construction InspectionProgram Activities

N'-,

Industry Briefing of NRC Commission

Kevin Richards, Group Vice President

STP Nuclear Operating Company

October 24, 2007 " N

H U C L E A R

E N E R G YI N S T IT U T I

Industry Participants

S"Kevin Richards, Group Vice President,

STP Nuclear Operating Company

* Ed Cummins, Vice President of Regulatory

Affairs, Westinghouse

* Sherry Grier, Procurement Quality Manager,

Duke Energy and Chairman of NUPIC.

NIE I .2

Construction Quality & Assessment

" Project Quality- Utilize modern construction practices

- Establish high standards

- Open communications at all levels

" Corrective Action Program

" Construction Assessment- Centered on the corrective action program

- Focused on

" Programmatic issues" Willful misreporting

" Major defects in significant equipment accepted for service

I3

Workforce & Access Authorization

* Skilled Work Force

- Being addressed by industry through partnerships with

educational institutions

- Training & knowledge transfer important

* Access During Construction

- Drug and alcohol screening

- Identify terrorists, illegal aliens and outstanding felony

warrants

- DHS and law enforcement checks are sufficient

rqJE4

NRC Commission-

Meeti'ng

- Ed Cummins

Westinghouse Electric Company

October 24, 2007

4 E: I

N UC L E A R

EI N E R G Y

I N S T I T U T I -•

Design Lessons Learned" Utility Requirements Document (URD)

" Accumulated lessons learned from 30 years of operating

experiences

" Detailed, strict conformance reviews were an integral part of the

plant design process

" European Utility Requirements (EUR)

* Similar to the URD but based on operating experience in Europe

" INPO - Operating experience to apply to advanced light water

designs

" COL applicants are very active participants in the details of the

designs that they have selected

" NRC generic issues

•I• 2

Design Maturity

" Standardization permits design completion for plants afterthe first unit

" IOCFR52 licensing process demands more designcompletion than the IOCFR50 two-step requirements forPSAR

" Lessons learned validate the importance of designmaturity

" Design maturity is a recognized goal by all stakeholders innew nuclear projects

III 3

Construction Lessons, Learned

* Lessons learned from overseas construction andfrom corrective action plans

* Key areas for continued attention include:- Design completion- Early regulatory approval- Supervision of suppliers- Attention to details, and- Effective corrective action programs

. ... • . . . •4

Benefits of Modularization

" Quality is improved by the use of a controlledenvironment and a stable, permanent work force

" Demand for critical skills at the site are reduced" Preliminary testing such as flushing and hydrostatic

testing can be accomplished in the shopm Simplifies construction management challenges" Successfully implemented by all of the nuclear plant

suppliers in Japan" Successfully applied in other industries

Impact of Modularization onProject Delivery

" Modularization demands early design details" Engineered components must be delivered to the modular

fabricator much earlier" Develop detailed module design

* Evaluation of module suppliers" Involvement in design for manufacturability" Capability" Nuclear experience

* Regulatory impacts of module supplye Manufacture may start 18-24 months before COL is issuede Large modules assembled on the site• Inspection plan should recognize location and schedule for

module manufacture

6

I

~Dulce r'Energ)(.

Nuclear Procurement Issues Committee (NUPIC)

and New Plant Issues

October 24, 2007

Sherry Grier Procurement Quality Mgr., Duke Energy

NUPIC Chairman

NUPIC Background

* Formed in 1989M Membership-32 US members

- 13 International members (Brazil,Canada, Korea, Mexico, Taiwan,Slovenia, South Africa, Spain andSweden)

2

NUPIC Objectives

Cooperative program for performingand sharing joint supplier audits

* Audits are evaluated by each memberand serve as basis for maintainingsuppliers on Approved Suppl ers List

* Forum for sharing procurement andsupplier quality issues

3

NUPIC Objectives

" Secure website with informationon 800 suppliers with 400supported by joint audits

" Electronic distribution ofaudit/survey reports

* Perform approximately 150 jointaudits -annually

4

NUPIC Key Benefits

* Industry-wide standardized approachto conducting performance basedsupplier audits

• Diverse audit teams from differentutilities

* Technical specialist participationrequired

* Peer reviews of audits and supplierfeedback

5

NUPIC Interfaces with NRC

* NRC Inspectors observe selectedNUPIC audits

• NRC Vendor Branch personnelattend NUPIC meetings

* Vendor Branches providefeedback on inspections

6

New Plant Benefits

* Standardized designs

* Existing infrastructure forinformation and resource sharingcan be expanded

* Foundation in place for new plantsupplier audits

7

Challenges

* Complex regulations, standardsand guidance for procurement

* Increased use of new andinternational suppliers

* Increased manufacturing pressurefor existing suppliers

8

Fraudulent Materials

- Not a new issue

- Industry addressed in early 90'sthrough Comprehensive ProcurementInitiative

-Heightened industry awareness ofpotential for fraudulent items

-Industry information exchange priorto audit

9

Effective Actions to IdentifyFraudulent Items

" Increased engineeringinvolvement

" Emphasis on technical verificationof product quality

* Developed commercial gradededication process

" Enhanced tests and inspections* Performance based vendor audits

instead of programmatic audits

10

NUPIC Preparations for NewPlants

" Established standing committeeto identify and address new plantneeds

" Interacting with NEI New Plant QATask Force

- Lessons learned reviews- Review recent DOE experience

11

NUPIC Preparations for NewPlants

" Evaluating the results of the"lessons learned"

• Checklists being enhanced

* Auditor training

" Developing strategies forconducting oversight of commonsuppliers

12

The NRC Process &Nuclear Energy:Calvert County, Maryland

October 24, 2007

Wilson H. ParranPresident, Calvert County, Maryland Board

of County Commissioners

Nuclear Energy &Calvert County, Maryland

Calvert County is home to,Calvert Cliffs Nuclear PowerPlant, Lusby, Maryland- In March 2000, Calvert Cliffs was the

first nuclear power plant in the UnitedStates to achieve re-licensing

- Calvert Cliffs has 30+ years ofoperating history with an outstandingsafety record, remains an outstandingcorporate citizen and maintains asignificant environmental commitment

- Calvert Cliffs is a major economicengine, contributing $16.2M (FY07),has been a stable revenue sourcesince FY1 973, and currently has over800+ jobs on site

2

NRC Regulatory Process:Calvert County, Maryland

Historical- Calvert County's relationship with the NRC began after Calvert

Cliffs Nuclear Power Plant came on line; licensing occurred priorto NRC creation

- However, NRC oversaw the relicensing of Calvert Cliffs• NRC process was outstanding• NRC ensured significant public participation0 NRC addressed all regulatory questions and constituent concerns

* CurrentCalvert Cliffs Nuclear Power Plant currently under considerationfor 3rd reactor. NRC involvement has been proactive and positive:

* NRC approached the County, requesting to publically present theNRC's role and process for new reactor construction

* NRC conducted public outreach session in the County; 300+individuals attended

0 Because of the historical and current approach, Calvert Countyremains confident in the NRC process 3

NRC Process New Reactors

* Calvert County understands, and iscomfortable with, the fact that theNRC is:

An independent and technically orientedgovernment agency that only evaluates the safety of-the proposed plant and its potential impact on theenvironment and the surrounding communityNot an advocate for nuclear power or for theproposed expansion

This provides an unbiased, independent reviewprocess

4

NRC Process New Reactors

* NRC's Role in Calvert County:-Calvert County is appreciative of. the NRC's

efforts and trusts the regulatory process andoversight

-Calvert County encourages the NRC tocontinue to:

9 Provide outstanding public information

o Be accessible

9 Be responsible to constituent concerns

• Be open and responsive to citizen input5

Calvert County & PotentialCalvert Cliffs Expansion

Calvert County supports thepotential expansion

Calvert County already granted a 50% tax credit for,new construction

- Calvert County stands ready to share in our nation'sresponsibility to provide resources that produce energyto minimize the impact to -our global environment andreduce foreign energy supply reliance

- Calvert County looks to the NRC to continue toaddress constituent questions and concernsthroughout the process /

6

Calvert County, Maryland

Contact information:

IkOW Vilson H. ParranPresident

Calvert County, MarylandBoard of County Commissioners

www.ecalvert.com

410.535.1600

7

EnvironmentalJustice Requires

Public Participation

October 24, 2007

Louis A. ZellerBlue Ridge Environmental Defense League

www.BREDL.orgPO Box 88 Glendale Springs, NC 28629

BREDLc@skybest.com (336) 982-2691

1

CAA Section 112

In 1989, EPA established its risk policy by decidingthat the life-time excess risk of cancer, ormaximum individual risk (MIR), to any giventoxic should-not be greater than one in 10,000(1'x 10-4). In the same year, EPA promulgatedits final rule for radionuclides, that protects thepublic from a MIR risk of Tx 10-4 but alsoregulates to protect 90% of the people withineighty kilometers of a source to risk levels of1 x 10-6 using the two-step approach requiredby the NRDC v. EPA case. (138)

2

MACTs: Technology BasedStandards

For new sources, MACT must be at least as stringent asthe average emissions achieved by the best controlledsources in the same category. For existing sources,MACT may not be less stringent than the averageemission limitation of the best performing 12% of existingunits. Where there are few sources, the average of thebest performing five sources is to be used. Hazardouspollutants are to be controlled by the reduction inemissions through process changes, substitution ofmaterials or other modifications, as well as through theuse of traditional pollution control devices and workpractices. (254)

3

titip.NPPs and COL Application Sites

4

NRC INFORMATION NOTICE 2007-04

February 5, 2007NRC INFORMATION NOTICE 2007-04: CONSTRUCTION EXPERIENCE RELATED TO THE

ASSURANCE OF QUALITY IN. THE CONSTRUCTION OF NUCLEAR FACILITIES

In both Finland and the United States, interest in newreactor and fuel cycle facility construction is resumingafter many years. However, the problems currently beingidentified in Finland are very similar to those thatoccurred in the ,United States more than 20 years ago.Regardless of the licensing process and the type ofconstruction, a commitment to quality, instilled early in anuclear construction project, is important to ensure thatthe facility is constructed and will operate inconformance with its license and the NRC's regulations.

UNITED STATES NRC OFFICE OF NUCLEAR REACTOR REGULATION

5

Insufficient guidance of subcontractors' work inOlkiluoto 3 nuclear power plant project

This past March, the Finnish Radiation and Nuclear Safety.Authority(STUK) appointed an investigation team to assess compliance withsafety requirements in the construction of Olkiluoto 3 nuclear powerplant unit. In its report published today, the investigation team statesthat the major problems involve project management, in particularwith regard to construction work, but not nuclear safety. The powerplant vendor has selected subcontractors with no prior experience innuclear power plant construction to implement the project. Thesesubcontractors have not received sufficient guidance andsupervision to ensure smooth progress of their work. Theinvestigation team provides recommendations both to the buyer andthe vendor company. Furthermore, there is also room forimprovement in the practices of the regulatory body.

December 7, 2006-

http ://www. stu k.fi/stu k/tiedotteet/en_GB/news_419/

6

Environmental Justice07 LC 25 4926ERSenate Resolution 598Senator Thomas of the 2 nd

" WHEREAS, four counties within 40 miles of Plant Vogtle have areas that arepersistently distressed and suffer from unemployment or poverty; and.

* WHEREAS, radiological monitoring programs reveal that Savannah River fish,particularly resident game fish species, are contaminated with cesium 137. Largemouth bass are contaminated with cesium 137 and are a target species ofsubsistence fishermen on the Savannah River. Recreationally important fish speciesin the vicinity of Plant Vogtle routinely have been found to have detectable levels of.cesium 137 in the edible flesh of collected samples; and

" WHEREAS, African American and low-income individuals are at specific heightenedrisk from hazardous materials in the Savannah River, and although individuals fromall socioeconomic backgrounds engage in fishing in the area, African Americans inparticular commonly engage in subsistence fishing along the Savannah River andhave a higher than average consumption of fish, frequently surpassing allowablecontaminated fish consumption levels.

7

ýU

UNITED STATES NUCLEAR REGULATORY COMMISSION

Protecting People and the Environment

New Reactor InspectionProgram

Luis ReyesExecutive Director for Operations

October 24, 2007

Recent Accomplishments

" Rules published: Part 52, LimitedWork Authorization Rule, AircraftImpact Assessments (proposed)•

" COL applications submitted* Safeguards protection orders

issued" Public outreach meetings held" Technical support contracts

awarded

2

Staffing

* 386 on board, 40 anticipatedgains by January 2008. FY08 goalis 485

* Status of office consolidation:

- 256 staff in TWFN 6th/7 th floors- 113 staff on OWFN 7th floor- 12 staff OWFN 4th floor- Of these, 47 in conference rooms

3

New Reactor Licensing Applications (Site and Technology Selected)An estimated schedule by Fiscal Year

2005 2006 2007I 2008 2009 1 2010 1 2011 2012 2013 2014 1

APIOOO Fýrogram Roview I 3D Amenmen

I Design

Hearini~"6W*EU OZAK*J

Due

l _i ýU•I•!iI i iI

* Schedules depicted forfuture activities representnominal assumed reviewdurations based on submittaltime frames in letters of intentfrom prospective applicants.Actual schedules will bedetermined when applicationsare docketed.

I-earinan::

il -,• ES.P Hearinai>Hi '.arin~

Heanna>4 4 i

Legend:ESBWR FIrogram Ri Mvew

M. Hear-fiaio - In

N1-oino -Not Ana(V)(1 0TT7141

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- ZH~~EZHHeariioccurand eNumIindici

ig (other heariduring ESPICivironmentaler in ( ) next t4te number of

lost SER/EISng activitiesDL safetyeviews)COL name

,nits/site.EPR Program Review

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HAkrinn7>

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ABWR PtLogram ReviewKI I ý -. L _, M _ - in

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USAPWR Program ReviewDC~~ - isbsiUAW 4

Objectives

" Ensure that plants are constructedin accordance with approveddesigns and safety regulations

" Determine operational readiness* Communicate results to all

stakeholders" Ensure effective transition to

Reactor Oversight Program

5

Earlycomponent

procurement

Constructionstart

per LWA

CombinedLicenseIssuance

Fuelload

Pre-Combined License I Construction under Combined License I Start-UD

Oversight of Vendor Activities - IMC 2507

Completed Milestones

* Pre-COL/DC audit programdeveloped and six auditscompleted

" Enhanced vendor inspectionprogram established and sixinspections conducted

* ITAAC sampling methodologyendorsed by ACRS

7

Completed Milestones(continued)

* Key international relationshipsestablished

* Construction experience programdeveloped

8

Current Areas of Focus

• Quality Assurance

* Vendor Oversight

* Program Development

9

Pre-Application Audits

Support agency's acceptancereview by:

-Verifying acceptability of anapplicant's QA program used inthe development of a, COL/DCapplication

-Assessing the completeness ofa proposed COL/DC application

10

Oversight of First-of-a-KindEngineering

o NRC review necessary to finalizedesign and develop procurementand construction documents

* Inspection results will:-Inform the ITAAC closure

verification process-Verify that design acceptance

criteria have been appropriatelyimplemented in the design

11

O

Vendor Inspection ProgramEnhancements

* Built upon existing vendorinspection program and coordinatedwith NRR

* Increase inspection frequency andscope

-Verify QA program implementation

-Detect -possible fraudulent parts ormaterials

12

Vendor Inspection ProgramEnhancements

(continued)

* Support ITAAC closureverification

* Expand international cooperationin vendor oversight

* Clarify oversight and improveinterface with third party industryaudits

13

Ongoing ITAAC Activities

* ITAAC closure letter templatesand verification process

SITAAC inspection and closureresource requirements

* New Reactor Inspection ProgramIT Infrastructure

14

8

Construction AssessmentProcess Guiding Principles

* Well defined" Designed for a construction

environment* Timely communication and

resolution of identified issues* Transparency, predictability,

scrutability" Public availability of inspection

information

15

Construction AssessmentProcess Future Work

* Define criteria and process forassessing the effectiveness oflicensee's corrective actionprogram

* Define thresholds for agencyresponse

* Define periodicity and content ofagency assessments

16

Construction AssessmentProcess Future Work

(continued)

* Clarify- aspects of the allegationprogram, including applicability ofNRC process and scope ofemployee protection

* Integrate enforcement policy withassessment process

17

Construction and OperationalExperience Program

* Program Goals:.

- Use construction experiencegained from both internationaland domestic projects for NRCreviews and inspections

- Provide insights to stakeholders

18

I 1 -1

Construction and OperationalExperience Program

(continued)

• Element of existing agency OpEprogram

* Near-term activities includeguidance development, training,and agreements sharingconstruction experience

19

. I I eb

External Stakeholder Interaction

* Numerous public meetings andworkshops held in FY07

" New reactor inspection programbriefings at all NRO publicoutreach activities

" Visits to proposed new reactorsites and module fabricators

" Current information on public website

20

C .1

International Bilateral Cooperation

* Interaction with counterparts inseveral areas, including.- Multi-national vendor

inspections with Korean andFrench regulators

-Sharing information with UnitedKingdom regarding ESBWR andAPIO00

21

International Bilateral Cooperation(continued)

- Discussions with Japanregarding foreign vendoroversight

-Sharing construction andvendor experience with Finland(STUK)

-NRC inspector rotation at STUKand Olkiluoto 3

22

Conclusions

* The staff is effectively conductingpre-application audit activitiesand vendor inspections,supporting application reviews,.coordinating with internationalpartners, and carrying outconstruction inspection programdevelopment activities

23

Conclusions(continued)

* Project plans for the developmentof key program areas, such asassessment and ITAAC closureinclude opportunity forstakeholder involvement

• Timely stakeholder support forand involvement in programdevelopment is necessary forsuccess

24

AcronymsACRS: Advisory Committee on

Reactor SafeguardsCOL: Combined LicenseDC: Design CertificationDOE: US Department of EnergyESBWR: Economic Simplified

Boiling Water. ReactorESP: Early Site Permit.IMC: Inspection Manual ChapterIT: Information Technology

25

Acronyms (continued)

ITAAC: Inspections, Tests,Analyses, and AcceptanceCriteria

LWA: Limited Work AuthorizationNRO: Office of New ReactorsNRR: Office of Nuclear Reactor

RegulationOpE: Operating ExperienceQA: Quality AssuranceSTUK: Radiation and Nuclear

Safety Authority (Finland)

26