On December 20, the NRC’s Office of the General Counsel (OGC) issued a memorandum to the Committee to Review Generic Requirements (CRGR) summarizing key policy recommendations contained in COMSECY-16-0020 (“Recommendation on Revision of Guidance Concerning Consideration of Cost and Applicability of Compliance Exception to Backfit Rule”).

The OGC’s summary is one of several actions taken by the NRC linked to a licensee’s successful challenge this past summer (with support from the Nuclear Energy Institute (NEI)) to an NRC-proposed backfit, which invoked the “compliance exception” to the Backfit Rule.

Previous NRC positions issued this past year that clarify the use of the compliance exception to the Backfit Rule include the following:

  • On June 9, the Executive Director for Operations (EDO) issued a tasking memorandum directing the CRGR to address the adequacy of NUREG-1409 as well as associated Management Directive 8.4. The CRGR was directed to assess the training and management related to backfitting generally and to coordinate its response with, among others, the OGC.
  • In June, the OGC recommended to the Commission in COMSECY-16-0020 that existing guidance concerning the consideration of costs, use, and scope of the compliance exception be revised.
  • On November 29, the Commission instructed NRC staff to be “familiar with and operate in a manner consistent with” OGC’s conclusions and to maintain consistency with OGC’s analysis in completing the tasking memorandum issued to the CRGR.

The OGC notes in its December 20 memorandum that the CRGR and NRC staff may separately adopt the contents of its recommendations for meetings and discussions with the public regarding planned updates and revisions to backfit guidance. Differences in CRGR and NRC staff interpretations of the OGC summary could cause confusion, but guidance in this area is certainly a step in the right direction to facilitate a more consistent and reasonable application of the compliance exception.

The OGC reiterated in its memorandum that the compliance exception to the Backfit Rule may be used by NRC staff only when there has been an “omission” or “mistake of fact” as defined by the rule. Consistent with its granting of a licensee’s backfit appeal this past summer regarding the use of the compliance exception, OGC again stated that the exception should be limited to those situations in which

  • the [s]taff, whether by its own error or by licensee or third-party error or omission, at or before the time of its determination that a known and established standard of the Commission was satisfied, incorrectly perceived facts, performed or failed to recognize flawed analyses, or failed to properly draw direct inferences from those facts or analyses, as judged by standards and practices that were prevailing among professionals or experts in the relevant area at the time of the determination in question; and
  • those facts, analyses, or inferences have now been properly perceived, performed, or drawn.

The compliance exception should not be applied to

  • failures of the [s]taff to extrapolate conclusions from facts, analyses, and direct inferences in ways that were not commonly recognized under such prevailing professional standards and practices at the time of the NRC determination; or
  • recharacterizations of whether a particular set of otherwise understood circumstances satisfies the standard at issue based upon professional standards and practices developed or accepted after the time of the determination.

The OGC memorandum also discusses when the NRC should consider cost when utilizing an exception to the Backfit Rule. The OGC memorandum states that if the NRC staff is invoking the compliance exception to the Backfit Rule, it need not provide a demonstration (as would otherwise be required by 10 C.F.R. § 50.109(a)(3)) of a substantial increase in overall protection of public health and safety or the common defense and security, or that the direct and indirect costs of implementation are justified in view of this increased protection. However, the OGC also states that the NRC must still include some consideration of cost.

It has not been a past practice by the NRC to consider cost in any manner when applying the compliance exception, and it remains unclear what “some consideration of cost” will mean going forward.

General Design Criteria Applicability

The OGC also commented on an ongoing issue of debate regarding the longevity of NRC’s ability to use the General Design Criteria (GDCs) (10 C.F.R. Part 50, Appendix A) or equivalent during its backfit deliberations. In the summary, the OGC concludes that there are circumstances where GDCs survive as a continuing requirement for NRC compliance evaluations if the GDC provides more than just a performance standard and provides a level of detail that has not been superseded through NRC approval of Principal Design Criteria (PDCs) and requirements derived from those PDCs.