On September 16, 2016, the NRC’s Executive Director for Operations reversed an earlier NRC staff decision to impose a backfit related to pressurizer valves at Braidwood and Byron stations. The licensee had previously appealed the NRC staff decision to the Director of the NRC’s Office of Reactor Regulation, who rejected the appeal and upheld the earlier staff determination in May 2016. The EDO’s reversal represents a significant win for the nuclear industry, which has long complained about the NRC’s inadequate application of the agency’s regulations on backfits.
The NRC’s backfit rule provides for formal, systematic, and disciplined review of new or changed NRC positions before imposing them on licensees. The backfit rule specifically imposes limits on new requirements and enhances regulatory stability by ensuring that changes in NRC staff positions—unless excepted from the rule—are suitably defined and justified. Backfitting is defined as “the modification of or addition to systems, structures, components, or design of a facility ... [that] result[s] from a new or amended provision in the Commission’s regulations or the imposition of a regulatory staff position interpreting the Commission’s regulations that is either new or different from a previously applicable staff position.” Unless a backfit meets one of the exceptions to the rule, a backfit analysis is required and the NRC must determine, based on that analysis, whether the backfit will provide a substantial increase in overall protection of the public health and safety and that the direct and indirect costs borne by licensees are justified in view of the increased protection.
The Byron and Braidwood issue involved application of the so-called “compliance exception” from the backfit rule, which authorizes the agency to impose a backfit without a cost-benefit evaluation when the action is “necessary to bring a facility into compliance with a license or the rules or orders of the Commission, or into conformance with written commitments by the licensee.” The Commission had previously explained that the compliance exception aims “to address situations in which the licensee has failed to meet known and established standards of the Commission because of omission or mistake of fact.” The NRC Staff had originally determined that earlier safety evaluations at Byron and Braidwood were inadequate owing, in part, to a mistake on the part of the NRC Staff. The plants’ operator, however, argued that the NRC Staff had simply changed its position since the initial approvals. In reversing the backfit, the EDO concluded that the NRC Staff had in fact changed its views on pressurizer safety valve performance. This conclusion is consistent with Commission direction that “new or modified interpretations of what constitutes compliance would not fall within the [compliance] exception.”
The result in this case is obviously a good outcome for Byron and Braidwood. But, more importantly for industry, it represents an all-too-rare example of a successful backfit appeal. Liberal application of the compliance exception to the rule had threatened to render the rule’s protections meaningless. Licensees, it had seemed, could not rely on the regulator’s word when resolving an issue and risked the regulator re-opening a disputed matter anytime it sought an NRC approval. The EDO’s decision therefore restores a measure of regulatory stability to the NRC’s processes—just as the Backfit Rule had initially intended. It should give other licensees some level of assurance that they can successfully use the existing regulatory process in appropriate circumstances to challenge new NRC Staff interpretations that impose new requirements that are not justified by safety considerations.