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EA-96-439 - Millstone 1, 2, 3 (Northeast Nuclear Energy Company)

October 24, 1996

Mr. Bruce D. Kenyon
President and Chief Executive Officer
Northeast Nuclear Energy Company
P.O. Box 128
Waterford, CT 06385-0128

SUBJECT: ORDER REQUIRING INDEPENDENT THIRD-PARTY OVERSIGHT OF NORTHEAST NUCLEAR ENERGY COMPANY'S IMPLEMENTATION OF RESOLUTION OF THE MILLSTONE STATION EMPLOYEES' SAFETY CONCERNS ISSUES

Dear Mr. Kenyon:

Over the past several years, Northeast Nuclear Energy Company (licensee) has failed to assure compliance with regulatory requirements at the Millstone Station. The NRC's Order of August 14, 1996 establishes independent, third-party oversight of corrective actions for design and plant operation deficiencies. That Order establishing an Independent Corrective Action Verification Program (ICAVP) for Millstone facilities summarizes the licensee's failure to meet Criterion XVI of Appendix B to 10 CFR Part 50 and other NRC requirements.

As discussed below, the NRC is also concerned about the failure of past licensee management processes and procedures to effectively handle safety issues raised by its employees and the manner in which the licensee treated employees who brought safety and other concerns to the attention of management. As evidenced by the large number of safety issues recently being identified at all three Millstone plants, it appears that some employees were reluctant to identify safety issues to the licensee. Failure to identify safety concerns is of significant concern to the NRC.

Over the past several years, numerous licensee assessments, audits, and internal task group studies have been conducted to assess employee safety concerns programs at the Millstone Station.

In a January 29, 1996 study, the licensee completed its review of the effectiveness of its Nuclear Safety Concerns Program (NSCP). The licensee concluded that the NSCP had been, and continued to be, ineffective. The findings of the January 1996 report were similar to those of previous licensee assessments and studies performed since 1991.

In its July 12, 1996 report, "Report of the Fundamental Cause Assessment Team," the licensee concluded that its top-level management did not consistently exercise effective leadership or articulate and implement appropriate vision and direction. Its nuclear organization did not establish and maintain high standards and expectations. Also, its nuclear organization's leadership, management, and interpersonal skills were found to be weak.

In its September 1996 report, "Millstone Independent Review Group Regarding Millstone Station and NRC Handling of Employee Concerns and Allegations," the NRC staff determined that in general an unhealthy work environment, which did not tolerate dissenting views, and did not welcome or promote a questioning attitude, has existed at Millstone plants for the past several years. This poor environment has resulted in repeated instances of discrimination and ineffective handling of employee concerns and contributed to the Millstone plants being placed on the NRC's "watch list" as facilities having significant weaknesses.

Also, in its past studies, the NRC staff have noted similar problems. As a result, the NRC has conducted numerous inspections and investigations that have substantiated many of the employee concerns and allegations for which the licensee's corrective actions have proven ineffective. The NRC has cited the licensee for violations and taken escalated enforcement actions. Notwithstanding these actions, the licensee's handling of employee safety concerns and implementation of corrective actions for problems identified by employees remain ineffective.

Therefore, the NRC is issuing the enclosed Order (Enclosure 1) directing that prior to restart of any Millstone units, the licensee is to develop and submit to the NRC a comprehensive plan for reviewing and dispositioning safety issues raised by its employees and ensuring that employees who raise safety concerns can do so without fear of retaliation. The comprehensive plan shall address the past performance failures including those identified in the enclosed Millstone Independent Review Group report (Enclosure 2). The Order also directs the licensee to retain an independent third-party to oversee implementation of its comprehensive plan.

The NRC anticipates that it will take some period of time to show sufficient improvement; therefore, the NRC will consider your performance with regard to safety issue resolution and employee treatment as well as the continuing need for the third party oversight within 12 to 24 months following implementation of the plan.

Sincerely, Frank J. Miraglia, Acting Director Office of Nuclear Reactor Regulation

Docket Nos. 50-245, 336, and 423

Enclosure: Order

UNITED STATES
NUCLEAR REGULATORY COMMISSION
In the Matter of ) ) Docket Nos. 50-245, 50-336, and 50-423 NORTHEAST NUCLEAR ENERGY ) License Nos. DPR-21, DPR-65, & NPF-49 COMPANY ) EA 96-439 (Millstone Nuclear Power Station ) Units 1, 2 and 3) )
ORDER REQUIRING INDEPENDENT, THIRD-PARTY
IMPLEMENTATION OF RESOLUTION OF MILLSTONE STATION
EMPLOYEES' SAFETY CONCERNS

I

Northeast Nuclear Energy Company (Licensee) is the holder of Facility Operating License Nos. DPR-21, DPR-65, and NPF-49 issued by the Nuclear Regulatory Commission (NRC or Commission) pursuant to Title 10 of the Code of Federal Regulations (10 CFR) Part 50 on October 31, 1986,1 September 26, 1975, and January 31, 1986, respectively. The licenses authorize the operation of Millstone Units 1, 2 and 3 in accordance with conditions specified therein. All three facilities are located on the Licensee's site in Waterford, Connecticut.

II

Over the past several years, the Licensee's management has failed to ensure compliance with regulatory requirements. In an attempt to address this compliance problem, the NRC issued an Order on August 14, 1996 establishing independent, third-party oversight of corrective actions for design and plant operation deficiencies. The August 14, 1996 Order, directing the implementation of an Independent Corrective Action Verification Program (ICAVP) for the Millstone facilities, summarizes the Licensee's failures to meet Criterion XVI of Appendix B to 10 CFR Part 50 and other NRC requirements. The August 14, 1996 Order also outlines what the NRC found to be ineffective implementation of the Licensee's oversight programs, including its NRC-approved quality assurance (QA) program. The purpose of the ICAVP is to provide independent verification, for selected systems, that the Licensee's own Configuration Management Plan (CMP) has identified and resolved existing problems, documented and utilized licensing and design bases, and established programs, processes, and procedures for effective configuration management in the future.

This Order addresses past failures in management processes and procedures for handling safety issues raised by employees, and in ensuring that the employees who raise safety concerns are not discriminated against. As discussed below, the Commission is concerned about the manner in which the Licensee has treated employees who brought safety and other concerns to the attention of the Licensee's management. As evidenced by the large number of deficiencies currently being identified at all three Millstone plants, it appears that some employees have been reluctant to identify safety issues. Both the NRC and the Licensee rely on a defense-in-depth approach to ensuring safety. The persistence of an environment where employees are reluctant to raise safety concerns can erode the safety-consciousness of the work-place and, thereby, can affect safety. As the Commission has stated, it expects that licensees will establish and maintain a safety-conscious work environment in which employees feel free to raise concerns both to their own management and the NRC without fear of retaliation, and in which such concerns are promptly reviewed, given the proper priority based on their potential safety significance, and appropriately resolved with timely feedback to employees. Such an environment is critical to a licensee's ability to safely carry out licensed activities 2 in the work-place; thus it can affect safety.

Over the past several years, numerous Licensee assessments, audits, and internal task group studies have been conducted to assess employee safety concerns programs at the Millstone Station.

In January 1996, the Licensee completed a review 3 of the effectiveness of its Nuclear Safety Concerns Program (NSCP) in taking corrective actions related to employee concerns and ensuring that the employees who raise concerns are treated appropriately. The findings of the Licensee's 1996 review were similar to those of previous Licensee assessments, studies, and audits performed since 1991. Some of the common findings were that management (1) lacked accountability, (2) inadequately resolved identified problems, and (3) tended to punish rather than reward employees who raised safety concerns. The Licensee's 1996 study team found that many of these problems still exist, because the Licensee had not implemented past recommendations in a coordinated and effective manner. The review also found that a concurrent lack of commitment to and accountability in implementing corrective actions had resulted in a continuing failure to proactively resolve emerging issues. It commented that this situation was compounded by the general inability on the part of individual Licensee managers to admit when they are in error. All of these factors have contributed to a strained and ineffective relationship between management and some employees. Finally, the study team concluded that the effectiveness of the NSCP has been historically undermined by a lack of executive management support.

In May 1996, the Nuclear Committee of the Licensee's Board of Trustees established a Nuclear Committee Advisory Team (NCAT) to evaluate the performance of the Licensee's nuclear program. A Fundamental Cause Assessment Team (FCAT) was also formed to evaluate whether management actions are effectively addressing the causes of declining performance.

The FCAT identified 4 the following fundamental causes of the decline in performance:

  • the top level of the Licensee's management did not consistently exercise effective leadership and articulate and implement appropriate vision and direction;
  • the nuclear organization did not establish and maintain high standards and expectations; and
  • the nuclear organization's leadership, management, and interpersonal skills were weak.

The NRC has also performed several assessments of the way that the Licensee has dealt with technical and safety concerns raised at the Millstone facilities and the manner in which the Licensee has treated those employees who have raised safety concerns. On December 12, 1995, the NRC staff initiated an historical review of both the Licensee's and the NRC's handling of Millstone employee concerns and allegations, covering the past 10 years.5 The staff's review included indepth case studies of selected employees' concerns and allegations to identify root causes, common patterns between cases, and lessons learned. The Millstone Independent Review Group reported:6

  1. A large number of allegations (an average of 42 per year) were being raised to the NRC, which indicated that the Licensee's own programs were not effective in resolving its employee concerns.
  2. The Licensee's employees believed that the managers responsible for discrimination were not appropriately disciplined.
  3. The Licensee's management frequently identified problems but was ineffective in implementing corrective actions.
  4. The Licensee's management was reluctant to admit mistakes.
  5. The Licensee's managers lacked skill in handling concerns and were generally not supportive of their employees raising concerns. There was a lack of communication along the chain of command and across parallel organizational lines.

The Millstone Independent Review Group and the Licensee's recent internal reviews have produced consistent findings for which corrective actions have not yet been effectively implemented. It is clear that the licensee has not established a safety-conscious environment.

III

In light of the foregoing, I have concluded that the Licensee must take action to correct and improve its handling of safety concerns raised by its employees so that the NRC can have confidence that concerns will be acted on promptly and adequately, and that employees who bring forth such concerns can do so without fear of retaliation or retribution.

In this Order, the NRC directs that, prior to resumption of power operations, the Licensee shall develop, submit to the NRC, and implement a comprehensive plan for reviewing and dispositioning safety issues raised by the Licensee's employees and ensuring that employees who raise safety concerns are not subject to discrimination. Additionally, the Licensee shall retain an independent third-party, subject to the approval of the NRC, to oversee its implementation of its comprehensive plan. The employees of the third-party organization shall have unfettered site access after meeting the NRC's access authorization requirements.

The independent third-party is to develop and submit for NRC approval an oversight plan. The independent third-party shall monitor and oversee the Licensee's efforts to correct and prevent repetition of its past failures in its treatment of employee concerns and of those employees who raised such concerns. The oversight plan shall include observation and monitoring of the Licensee's activities, performance of technical and audit reviews, investigation of concerns, and assessment of changes in the Licensee's treatment of employee concerns as compared to past practices. This oversight must be comprehensive in scope and cover all NRC-regulated activities at the Millstone facilities. Recommendations are to be made to address the handling of specific concerns as well as the Licensee's programs and processes for handling concerns.

The qualifications of the independent third-party must include the expertise necessary to audit technical reviews of employee concerns, monitor corrective actions, recognize technical weaknesses in approaches to concerns taken by the Licensee, audit and determine the adequacy of the Licensee's investigations into harassment, intimidation, and discrimination complaints, and conduct employee surveys to determine the views of the Licensee's employees on the success and completeness of these activities. The factors to be examined by the independent organization include actions taken or to be taken by the Licensee to create an environment in which employees of both the Licensee and onsite contractors are encouraged to raise concerns and the timeliness and thoroughness with which such concerns are reviewed and resolved, including how employees are informed of results. The third-party organization chosen to oversee the conduct of the Licensee's comprehensive plan must be independent of the Licensee, such that none of its members has had any direct, previous involvement with the activities at the Millstone Station that the organization will be overseeing.

The independent third-party is to report concurrently to the NRC and Licensee, on at least a quarterly basis, the results of its oversight activities, including all findings and recommendations.

After the NRC receives the Licensee's comprehensive plan and the independent third-party oversight plan, a notice of availability of the plans will be published in the Federal Register and one or more public meetings will be held to allow members of the public to comment on the plans. The results of the NRC review and public comments on the third-party oversight plan will be forwarded to the Licensee and the independent third-party for evaluation and implementation as appropriate.

IV

Accordingly, pursuant to Sections 103, 161b, 161i, 161o, 182 and 186 of the Atomic Energy Act of 1954, as amended, and the Commission's regulations in 10 CFR 2.202 and 10 CFR Part 50, IT IS HEREBY ORDERED THAT, prior to restart of any Millstone units:

  1. Within 60 days from the date of this Order, the Licensee shall develop, submit for NRC review, and begin to implement a comprehensive plan for (a) reviewing and dispositioning safety issues raised by its employees and (b) ensuring that employees who raise safety concerns are not subject to discrimination. The comprehensive plan shall address the root causes of past performance failures as described in the Licensee's July 12, 1996 report of the Fundamental Cause Assessment Team and the NRC's September 1996 report of the Millstone Independent Review Group, with the objective of meeting a goal of achieving a safety-conscious environment.
  2. Within 30 days from the date of this Order, the Licensee shall submit, for NRC approval, a proposed independent, third- party organization to oversee implementation of the above comprehensive plan. The independent third-party shall be approved by the NRC and its activities, under this Order, are subject to continuing NRC oversight. The independent third- party shall oversee plan implementation by (a) observing and monitoring the Licensee's activities; (b) performing technical reviews; (c) auditing and investigating, when necessary, cases of alleged harassment, intimidation, and discrimination; (d) auditing and reviewing the Licensee's handling of employee safety concerns; and (e) assessing and monitoring the Licensee's performance. Within 30 days of the NRC's approval of the third-party, an oversight plan for conduct of this third-party oversight shall be developed by the third-party and forwarded for NRC review. NRC approval of the oversight plan is required prior to its implementation. Reports on oversight activities, findings, and recommendations shall be provided to both the licensee and the NRC at least quarterly following NRC approval of the oversight plan. The plan shall specify procedures for concurrent reporting of oversight activities, findings, and recommendations to the NRC and the Licensee. The Licensee will provide a response to each recommendation. The Licensee's comprehensive plan shall allow for revisions based upon the Licensee's experience in implementation of its plan and comments and recommendations of the independent third-party and/or the NRC.
  3. If the independent third-party receives allegations of safety concerns, it is to encourage the alleger to bring those concerns to the attention of the Licensee. If the alleger elects not to do so, the independent third-party is to encourage the alleger to report the concerns to the NRC. If the alleger does not elect to report the safety concerns to either the Licensee or the NRC, the independent third-party is to accept the allegation and forward it directly to the NRC. The independent third-party is to develop procedures for protecting the identity of any such allegers and limiting the disclosure of the allegers' identity to those with a need to know.7
  4. The plan for independent, third-party oversight will continue to be implemented until the Licensee demonstrates, by its performance, that the conditions which led to the requirement of that oversight have been corrected to the satisfaction of the NRC.

V

The Director, Office of Nuclear Reactor Regulation, may, in writing, relax or rescind this Order upon demonstration by the Licensee of good cause.

VI

In accordance with 10 CFR 2.202, the Licensee must, and any other person adversely affected by this Order may, submit an answer to this Order, and may request a hearing on this Order, within 20 days of the date of this Order. Where good cause is shown, consideration will be given to extending the time to request a hearing. A request for extension of time must be made in writing to the Director, Office of Nuclear Reactor Regulation, U.S. Nuclear Regulatory Commission, Washington, D.C. 20555, and include a statement of good cause for the extension.

The Licensee's answer may consent to this Order. Unless the answer consents to this Order, the answer shall, in writing and under oath or affirmation, specifically admit or deny each allegation or charge made in this Order and set forth the matters of fact or law on which the Licensee or any other person adversely affected relies and the reasons as to why the Order should not have been issued. Any answer or request for a hearing shall be submitted to the Director, Office of Nuclear Reactor Regulation, U.S. Nuclear Regulatory Commission, Washington, D.C. 20555, with a copy to the Commission's Document Control Desk, Washington, D.C. 20555. Copies shall also be sent to the Assistant General Counsel for Hearings and Enforcement at the same address, to the Regional Administrator, NRC Region I, 475 Allendale Road, King of Prussia, PA 19406-1415; and to the Licensee if the answer or hearing request is by a person other than the Licensee. If such a person requests a hearing, that person shall set forth with particularity the manner in which his or her interest is adversely affected by this Order and shall address the criteria set forth in 10 CFR 2.714(d).

If a hearing is requested by the Licensee or a person whose interest is adversely affected, the Commission will issue an Order designating the time and place of any hearing. If a hearing is held, the issue to be considered at such hearing shall be whether this Order shall be sustained.

In the absence of any request for a hearing, or written approval of an extension of time in which to request a hearing, the provisions specified in Section IV above shall be effective and final 20 days from the date of this Order without further Order or proceedings. If an extension of time for requesting a hearing has been approved, the provisions specified in Section IV shall be final when the extension expires if a hearing request has not been received.

FOR THE NUCLEAR REGULATORY COMMISSION Frank J. Miraglia, Acting Director Office of Nuclear Reactor Regulation

Dated at Rockville, Maryland,
this 24th day of October 1996

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1 Millstone Unit 1 was issued its provisional operating license on October 7, 1970, and commenced operation on March 1, 1971. This unit received a full term operating license on October 31, 1986.

2 Freedom of Employees in the Nuclear Industry to Raise Safety Concerns Without Fear of Retaliation; Policy Statement, 61 FR 24336(May 14, 1996). The attributes of a safety-conscious environment are described in the Policy Statement.

3 Millstone Employee Concerns Assessment Team Report, dated January 29, 1996.

4 Report of the Fundamental Cause Assessment Team, dated July 12, 1996.

5 Millstone Independent Review Group—Handling of Employee Concerns and Allegations at Millstone Nuclear Power Station, Units 1, 2, and 3. Prior NRC studies are discussed in this report.

6 Transcribed public meetings to report the review group findings, held on August 7 and 8, 1996 in the vicinity of the plant.

7 Such procedures may not withhold the identity of any alleger or any information related to allegations from the NRC.

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