1                      UNITED STATES OF AMERICA
          2                    NUCLEAR REGULATORY COMMISSION
          3                       OFFICE OF THE SECRETARY
          4                                 ***
          6                                 ***
          7                           PUBLIC MEETING
          9                             Nuclear Regulatory Commission
         10                             Commission Meeting Room
         11                             11555 Rockville Pike
         12                             Rockville, MD
         14                             Wednesday, May 5, 1999
         16              The Commission met, pursuant to notice, at 10:10
         17    a.m., the Honorable Shirley Jackson, Chairman of the
         18    Commission, presiding.
         21              SHIRLEY JACKSON, Chairman
         22              GRETA DICUS, Commissioner
         23              NILS DIAZ, Commissioner
         24              EDWARD MCGAFFIGAN, Commissioner
         25              JEFFREY MERRIFIELD, Commissioner
          2    PANEL 1
          3              WILLIAM TRAVERS, EDO
          4              SAM COLLINS, NRR
          5              WILLIAM KANE, NRR
          6              RICHARD ROSANO, NRR
          7              DAVID ORRIK, NRR
          9    PANEL 2
         10              RALPH BEEDLE, NEI
         11              JOHN R. McGAHA, ENTERGY
         12              WILLIAM A. JOSIGER, NYPA
         13              PAUL LEVENTHAL, NCI
         14              ELDON V.C. GREENBERG, NCI
          1                        P R O C E E D I N G S
          2                                                    [10:10 a.m.]
          3              CHAIRMAN JACKSON:  Good morning.
          4              On behalf of the Commission, I would like to
          5    welcome all of you to this briefing on the NRC safeguards
          6    and performance assessment program.
          7              I would like to remind all participants at the
          8    outset that this is a public meeting, and given that our
          9    topic today involves security and safeguards issue, we
         10    should be careful not to discuss -- not to discuss or to
         11    disclose information that is considered sensitive or
         12    classified.
         13              Let me repeat.  This is a public meeting, and
         14    given that our topic today involves security and safeguards
         15    issues, we should be careful not to discuss or to disclose
         16    information that is considered sensitive or classified,
         17    including references to specific details of the design basis
         18    threat or vulnerabilities at any particular facility.
         19              As you may know, NRC regulations require nuclear
         20    reactor licensees to establish a physical protection system
         21    and a security organization to protect against the design
         22    basis threat of radiological sabotage.
         23              Licensees also are required to establish physical
         24    security plans to ensure that specific physical protection
         25    capabilities are met.
          1              NRC security inspections at power reactors are
          2    designed to evaluate licensee compliance with plan
          3    commitments and to assess the capabilities of licensee
          4    security programs.
          5              For the past seven years, the NRC staff also has
          6    conducted operational safeguards response evaluations, known
          7    as OSREs, an acronym, as a supplemental performance
          8    evaluation of licensee response capabilities.
          9              In the fall of 1998, a series of events brought
         10    the OSRE program into the spotlight, including, first, the
         11    cancellation of the program by NRC management; second,
         12    differing professional views submitted by various members of
         13    the NRC staff; third, subsequent reinstatement of the
         14    program at my direction; and fourth, the formation of the
         15    Safeguards Performance Assessment task for to review the
         16    OSRE program and to develop recommendations for improvement.
         17              In recent months, the OSRE program has undergone a
         18    great deal of scrutiny by the task force, by the Commission,
         19    and by external stakeholders, including members of the
         20    Congress.
         21              This scrutiny, I believe, has been beneficial in
         22    all respects and should result in a much improved program. 
         23    The Commission currently is considering recommendations by
         24    the NRC task force for improvements in assessing safeguards
         25    performance.
          1              Today, the Commission will be briefed by two
          2    panels on this topic of safeguards performance assessment.
          3              The first panel will be comprised of those at the
          4    table, the NRC EDO, Dr. Bill Travers, and several
          5    contributors from our Office of Nuclear Reactor Regulation,
          6    Mr. Bill Kane, who's associate director of inspections and
          7    programs, Mr. Dick Rosano, who's chief of the reactor
          8    safeguards section, and Mr. David Orrik, a security
          9    specialist in the reactor safeguards section.
         10              The second panel will include various individuals
         11    from NEI, led by Mr. Ralph Beedle.  It will also include Mr.
         12    Paul Leventhal, I believe is here, from -- who's president
         13    of the Nuclear Control Institute, and is there a Mr. John
         14    McGaha, who is executive vice president and chief operating
         15    officer of Entergy Operations, Inc.
         16              I'm told there may be others, and if so, they can
         17    identify themselves when they come to the table.
         18              Let me thank each of you for your participation in
         19    this meeting at the outset, and without further
         20    introduction, unless my colleagues have additional comments,
         21    let me invite panel one.
         22              Yes.
         23              COMMISSIONER MERRIFIELD:  I was just going to ask
         24    -- I was just wondering whether it was your intention to
         25    have -- we've got two presentations, one by sort of the
          1    staff and then a separate one by Mr. Orrik.  Does it make
          2    sense to wait until both have had an opportunity to speak
          3    and then ask questions?
          4              CHAIRMAN JACKSON:  I think if there are clarifying
          5    questions after the staff presentation, you know, one should
          6    ask those questions.
          7              Again, we'll try to let them get as far as they
          8    can, but I think if there are clarifying questions that
          9    people feel they want to ask, we should ask.  I think we've
         10    allotted enough time to allow for that, but we'll try to
         11    have a structured presentation and let you go through, and
         12    then -- recognizing that if -- there may be questions after
         13    the second panel that may relate to what we've heard from
         14    the NRC staff.
         15              And so, Dr. Travers, why don't you begin?
         16              MR. TRAVERS:  Thank you, Chairman, and good
         17    morning.
         18              As you've indicated, we are here in this first
         19    part of the meeting as the staff to discuss with you the
         20    status of the safeguards performance assessment program with
         21    a particular focus on the operational safeguards response
         22    evaluation, or OSRE program.
         23              I think you've already introduced the staff
         24    members.
         25              I would just point out just one additional piece
          1    of information for people who might be interested.
          2              The details of the Safeguards Performance
          3    Assessment task force are contained in SECY 99-024, and with
          4    that, I'd just like to turn the meeting over to Bill Kane,
          5    who's going to begin the presentation.
          6              MR. KANE:  Good morning.
          7              CHAIRMAN JACKSON:  Good morning.
          8              MR. KANE:  The centerpiece of our discussion today
          9    will be the recommendations of the Safeguards Performance
         10    Assessment task force.
         11              We'll try to compare the recommendations going
         12    forward with the past OSREs and also the ones that we are
         13    currently conducting and will be conducting until April of
         14    next year.
         15              I would point out that these remaining 10, at this
         16    point, OSREs -- we do expect to pilot many of the things
         17    that we can from the new process, the new recommendations,
         18    and to attempt to learn from each of these going forward
         19    some of the lessons that we can then adjust and apply to
         20    subsequent OSREs.
         21              So, at this point, I would like to turn it over to
         22    Richard Rosano, who is chief of our safeguards section.
         23              MR. ROSANO:  Good morning.
         24              CHAIRMAN JACKSON:  Good morning.
         25              MR. ROSANO:  We have a number of slides that have
          1    to do with background, and in the interests of time, I will
          2    cover them only briefly, unless you have questions about
          3    them.
          4              The first slide is on the chronology of the
          5    operational safeguards response evaluation program, and it
          6    tracks the history from 1992, when it was formed, through
          7    some recent events, going through last year, when there was
          8    a planned elimination of the program and its reinstatement.
          9              Again, I don't plan to spend very much time on
         10    that, unless you have questions on it.
         11              The next slide refers to 10 plants remaining in
         12    the first cycle.
         13              As Mr. Kane pointed out, when the OSRE was
         14    reinstated last fall, there were 11 plants remaining.  We
         15    had made some changes for the modified program and restarted
         16    it as of last week.  There was an OSRE conducted at Watts
         17    Bar last week, and so, the 11 is now down to 10.
         18              This is the proposed schedule.  It may be subject
         19    to some changes, obviously, but this is what we're expecting
         20    at this point.
         21              Unless we have any questions on the schedule, I'd
         22    like to go on to the recommendations.
         23              The next two slides, the recommendations,
         24    safeguards performance --
         25              CHAIRMAN JACKSON:  Are you going to talk to us
          1    about any kind of general conclusions that come out of the
          2    Watts Bar OSRE?
          3              MR. ROSANO:  I would be happy to do that.  In
          4    fact, this might be the best time.
          5              There were some changes implemented in the
          6    program, and now that I've said it's the best time, I'm
          7    going to have to talk about this later, because some of the
          8    changes are reflected in later slides.
          9              CHAIRMAN JACKSON:  Why don't you circle back?
         10              MR. ROSANO:  You want to circle back to Watts Bar
         11    later on?  That's fine.
         12              Okay.
         13              The recommendations of the task force set as its
         14    goal to study the lessons learned from the OSRE program to
         15    make recommendations as to the alternative means of testing
         16    the response capability in the future.
         17              CHAIRMAN JACKSON:  It's not focused.
         18              MR. ROSANO:  I hope you meant the slide, Madam
         19    Chairman.
         20              CHAIRMAN JACKSON:  Beg your pardon?
         21              MR. ROSANO:  I hope you meant the slide and not my
         23              [Laughter.]
         24              CHAIRMAN JACKSON:  Well, let me think about that.
         25              MR. ROSANO:  Okay.  Well, I'll wait while he
          1    focuses it, but I'm going to continue.
          2              Our goal was to learn something from the past but
          3    to keep in place our performance assessment program and look
          4    for new ways to do in the future, so that we can instill new
          5    realism in the scenarios as well as to ensure that we
          6    maintain a higher level of capability of the licensees'
          7    response over time.
          8              On the next slide, as to the exact
          9    recommendations, the SECY paper outlines four
         10    recommendations by the staff.
         11              SECY paper 99-024, which were the recommendations
         12    of the Safeguards Performance Assessment task force,
         13    suggested that there would be a regulation required that
         14    would require periodic drills and exercises of the
         15    licensees, the specifics on that I'll get into on the next
         16    slide, but that the drills and exercises would be designed
         17    to test the licensee's response capability but also train
         18    them through regular testing to maintain a higher level of
         19    response capability through time rather than the more
         20    infrequent tests that they were subject to under OSRE.
         21              The OSRE cycle, because of time involved, was an
         22    eight-year cycle, and so, plants only got a visit about
         23    every eight years.  The drills and exercises are designed to
         24    occur quarterly, small scale, and biennially on the large
         25    scale.
          1              This regulation would also require that the
          2    licensees upgrade security when vulnerabilities are
          3    identified in these tests and that it wouldn't leave it
          4    simply as testing but that they'd be required under
          5    regulation to make some improvements, to upgrade.
          6              The second recommendation is that guidance be
          7    given to the industry.  The guidance would reach into areas
          8    like designing the target sets, which are the sets of
          9    equipment thought to be necessary to defeat before a
         10    successful sabotage event could occur.
         11              So, they would receive guidance on designing
         12    target sets.  They would receive guidance on designing their
         13    tactical response capability, and the guidance would also
         14    include how to run the drills, how to run the exercises.  It
         15    would go into the details that the regulation couldn't reach
         16    in terms of how to conduct these exercises, and also, the
         17    periodicity of the exercise would be in the regulation
         18    itself, though.
         19              The third recommendation of the task force was
         20    that there be an inspection procedure, either a revised --
         21    the revision of an existing procedure or a new procedure,
         22    and quite frankly, it would likely be a new procedure, to
         23    guide the inspectors in overseeing and observing, inspecting
         24    these exercises, and the inspection procedure would be
         25    geared to both the quarterly drills and the biennial
          1    exercises, although it's as yet undecided what level of
          2    involvement the NRC would have in quarterly drills.
          3              That's a matter of resources, a matter of the
          4    performance of the licensee.  All of this would be key to
          5    the baseline inspection program, and so, our involvement in
          6    quarterly drills might be less necessary where licensees
          7    appear to maintain a high level of performance.
          8              The fourth recommendation has to do with training
          9    of NRC regional inspectors.
         10              The OSRE team and its contractors bring to bear a
         11    lot of expertise that is unique and it is specialized
         12    experience.  The inspectors are well trained in physical
         13    security.  Not necessarily all of them are well trained in
         14    tactical response.
         15              Clearly, we would have to raise the level of
         16    training for these inspectors as they become more involved
         17    in an oversight function for drills and exercises.
         18              In the next slide, we begin to examine the former
         19    program and the staff's recommendations for the new program. 
         20    There have been some questions about the adequacy of the new
         21    recommendations versus the old program, and so, this was set
         22    out to try to demonstrate how we expect the new program to
         23    cover all of the aspects of the old program and add some
         24    more.
         25              You'll notice there are four columns.  In the
          1    first -- well, actually the second column, it's current OSRE
          2    has run from 1992 to 1998.  We are currently functioning in
          3    the third column, is the modified OSRE.  This is modified to
          4    include several improvements.
          5              One of the things in the modified program is that
          6    licensees will no longer be allowed to run their drills with 
          7    more than -- more guards than they are committed to in their
          8    security plan.
          9              There have -- to clarify that, licensees often
         10    have what's called a running force -- that is, a number of
         11    guards that -- in excess of their commitments, and many
         12    licensees have committed to themselves that they will always
         13    carry that guard force, for a variety of reasons, including
         14    to back up for sick call-ins or whatever, just to have more
         15    guards on force, and the OSREs have been conducted allowing
         16    them to use this running force.
         17              That is not, however, what they're committed to in
         18    their security plan, and so, under the modified program --
         19    and by that, I mean the licensees that are necessary to
         20    complete the first cycle, that being 11 more -- they -- all
         21    the licensees will be required to stick to what they've
         22    committed to in their plan.
         23              Using hypothetical figures, if they commit to five
         24    immediate responders and five back-up responders, they are
         25    tested now so that they may only use the five immediate
          1    responders, and if they commit to five back-up responders,
          2    when the drill begins, there is a radio contact made with
          3    those back-up responders to find out where they're placed.
          4              They may be randomly placed based on other duties
          5    or other assignments at that time, and as the drill begins,
          6    they would be, in a sense, locked in at that place, so that
          7    the drill could run as if they're reporting from the
          8    cafeteria or the coffee shop or wherever they happen to have
          9    drifted during that period, and they'll be tested
         10    accordingly.
         11              They won't be allowed to be poised ready to
         12    respond.
         13              We are also in the modified program piloting some
         14    important new concepts that will become part of the
         15    recommendations for the future, the most important of which
         16    is the incorporation of operational solutions to the
         17    judgement of the success of the licensee.
         18              Operational solutions have been considered in the
         19    past an OSRE, and there have been -- it's certainly been a
         20    big part of the development of target sets, because a target
         21    set can only be defined based on what ops can or cannot do.
         22              However, in the future, what we're going to be
         23    doing -- in this modified program, what we're going to be
         24    doing is testing how these operational concepts inter-link
         25    with the security response, and so, for the next 10 -- and
          1    we began this last week with Watts Bar -- we will be
          2    requiring licensees to participate with ops individuals to
          3    play in the table-top drills and the exercises to describe
          4    what they would be doing during the running of the drill,
          5    what actions would they be taking and what are the likely
          6    effects on the plan if they take those actions.
          7              The fourth column -- and I know I dwelled quite
          8    long on the third column, but the fourth column would be
          9    what the staff recommends for the future, and it
         10    incorporates things that we've learned from the past as well
         11    as some of the piloted concepts in the modified program and
         12    then some.
         13              I'm going to get ahead and step through the 10
         14    points now and would be happy to take questions at the time
         15    I bring up each of the issues, because they are somewhat
         16    specific, as you like.
         17              The first one is on frequency of tests.  As I
         18    mentioned before, the OSRE cycle was an eight-year cycle. 
         19    We believe that we could achieve more by having more
         20    frequent tests at the sites, and our goal with the
         21    recommendation was to achieve that.
         22              In the modified OSRE, we're simply going to
         23    complete the first cycle, but the SPA task force recommends
         24    that there be quarterly drills, drills being defined as
         25    single-shift exercises, relatively simple, perhaps not with
          1    a lot of NRC involvement.
          2              Regional inspectors may attend on occasion to see
          3    how they're performing.
          4              The results of these quarterly drills will become
          5    part of the performance indicator program and feed into the
          6    risk-informed baseline inspection program.
          7              We also recommend biennial exercises of a larger
          8    scaler involving more than a single shift, single scenarios,
          9    and those would be more frequently looked at by NRC
         10    inspectors and headquarters individuals, as necessary.
         11              In item number two --
         12              MR. COLLINS:  Excuse me, Dick.
         13              MR. ROSANO:  Yes, sir.
         14              MR. COLLINS:  Philosophically, this is a part of
         15    shifting -- I'm going to call it a burden, but really, it's
         16    an obligation with an up-front clarification of what is
         17    required as far as expectations, with some clarity in the
         18    requirements, and shifting that role from a response to the
         19    NRC periodically once every eight years with an OSRE to
         20    ingraining it into the processes that licensees would
         21    utilize to surveil any process or program that they may have
         22    that meets a regulatory requirement, very similar to the way
         23    that we handle other attributes of defense-in-depth, if you
         24    will.
         25              MR. ROSANO:  Okay.
          1              Item number two has to do with the size of the NRC
          2    team at exercises.  Currently, the OSRE team has one or two
          3    regional inspectors, three headquarters individuals, and
          4    three contractors who attend, and during the modified
          5    program, we intend to continue that.
          6              In the SPA task force recommendations, we believe
          7    that we can get more visits, perhaps, out of that same
          8    number of people, and in fact, increasing the number of
          9    visits without increasing resources is one of the goals of
         10    the task force, and by doing so, what we would recommend is
         11    that these -- the attendants at biennial exercises be by,
         12    again, one or two regional inspectors, likely no more than
         13    one often, and one to two headquarters staffers and one to
         14    two contractors.
         15              COMMISSIONER MERRIFIELD:  Madam Chairman?
         16              CHAIRMAN JACKSON:  Please.
         17              COMMISSIONER MERRIFIELD:  I had a question about
         18    resource requirements, because we're going from a cycle
         19    where we visit the plants once every eight years to, in
         20    essence, as a result of the exercises, visiting them once
         21    every two years, and I'm wondering what the -- if you've
         22    done an analysis of the resource implications, and I'll just
         23    layer on top of that, we're also going to have resource
         24    implications as it relates to all of the training we're
         25    going to have to do of our resident inspectors to be
          1    available to do the quarterly drills.
          2              CHAIRMAN JACKSON:  Are they resident or
          3    region-based?
          4              MR. ROSANO:  Region-based, likely.
          5              COMMISSIONER MERRIFIELD:  I'm sorry.  Thank you
          6    for the clarification.
          7              MR. ROSANO:  Yes.
          8              COMMISSIONER MERRIFIELD:  But nonetheless, there
          9    will be additional training requirements for them, as well.
         10              MR. ROSANO:  Yes.  We have given that some
         11    thought, and I will begin by saying that the arrangement of
         12    resources as they're shown in item number two would double
         13    the number of visits that we can make, and so, instead of an
         14    eight-year cycle, we could reduce it to a four-year cycle. 
         15    That's the first cut.
         16              The second cut on this issue is that, if we use
         17    the baseline inspection program and use input from the
         18    quarterly drills and performance indicators in this area, we
         19    will be able to decide which licensees need more frequent
         20    oversight by the NRC during this process and which need
         21    perhaps less, and it could be that we could achieve visits
         22    at the right frequency, depending on the performance of the
         23    licensee, without increasing resources.
         24              MR. COLLINS:  And I think it's fair to say that
         25    we'd look at the rest of the program, as well, to see if
          1    other adjustments needed to be made.
          2              MR. ROSANO:  Okay.  And Dr. Travers just pointed
          3    out -- I don't mean to suggest that we would attend every
          4    biennial exercise, and even with my first math, it would
          5    double the resources.  What I mean to say is we won't to go
          6    to everyone, and if we do, it may be that NRC -- or I'm
          7    sorry -- regional inspectors go to every one but that a full
          8    force, including headquarters and contractors, will go when
          9    it's selected, that that licensee has either performed at
         10    the level that indicates the need for it or that we
         11    determine some larger cycle to make sure that every plant
         12    gets the full force, but those are the kinds of
         13    considerations.
         14              COMMISSIONER MERRIFIELD:  Okay.  Now I understand,
         15    because you have here -- in number one, you refer to
         16    biennial exercises by NRC inspectors.  That wasn't clear to
         17    me.
         18              MR. ROSANO:  I'm sorry.  That is meant that -- we
         19    would expect the regions to send someone to all the biennial
         20    exercises, but it might not have attendance by the full OSRE
         21    team.
         22              COMMISSIONER MERRIFIELD:  Okay.
         23              MR. COLLINS:  Again, the intent is not to have the
         24    NRC to be the cornerstone or the hinge-pin for these
         25    programs to be successful, for us to be in more of an
          1    oversight role, and that oversight role is graded based on
          2    performance and periocity rather than a commitment for
          3    everyone.
          4              COMMISSIONER MERRIFIELD:  But it would still be
          5    the expectation we would double the number of visits we'd be
          6    able to make.
          7              MR. ROSANO:  If we changed the resource allocation
          8    the way I've suggested here, we could double the visits
          9    immediately.
         10              COMMISSIONER MERRIFIELD:  Okay.  Thank you.
         11              MR. ROSANO:  Item number three refers to target
         12    sets, and a cornerstone of the performance assessment
         13    process is target sets -- that is, to determine the sets of
         14    equipment that, taken as a set, would have to be defeated
         15    before a Part 100 release would be realized, and it used to
         16    be in the past that the requirement was that they protect
         17    all vital equipment, and it was determined over time that
         18    that's not necessary, that, in fact, certain pieces of vital
         19    equipment could be defeated without reaching a state of
         20    emergency at the site.
         21              So, these target sets began to be developed
         22    site-specifically.  These target sets undergo a lot of
         23    scrutiny by the NRC in our office, as well as by the site,
         24    because the sites are expected to develop their own target
         25    sets in order to figure out what their response strategy
          1    would be.
          2              In the OSRE program over time, the target sets
          3    were defined by the licensee and coordinated with the NRC
          4    team.  That is still the way we're doing business.
          5              We expect that, by the end of the first cycle,
          6    though, a lot of the target sets, essentially all of the
          7    target sets would have been defined, and that there may be
          8    some changes over time, but the amount of effort necessary
          9    to deal with target sets after the first full cycle will
         10    reduce considerably and that, in the future, the -- another
         11    item is that, in the future, the target sets will be
         12    oriented to Part 100 release limits rather than core damage,
         13    which has been the goal so far, because we want to take the
         14    next step.
         15              More than core damage, there has to be evidence of
         16    Part 100 release.  That will be the design of the target
         17    set.
         18              The last item is we would incorporate operational
         19    solutions, but again, that is part of taking the next step
         20    into Part 100 and not simply achieving core damage.
         21              Do you have any questions there?
         22              Item number four is, thankfully, shorter.  The
         23    number of target sets during each test -- it has been four,
         24    it's continuing to be four, but again, we've changed that
         25    slightly for the new program, because the quarterly drills
          1    will be smaller scale, and the biennial exercises will be
          2    larger, and we just intend to have more target sets worked
          3    into the drills in biennial exercises.
          4              Number five is the make-up of the mock adversary
          5    force.  I want to make it clear that we do not attack the
          6    plants.  We rely on licensees to staff a mock adversary
          7    force.  That has been true, it is true, and unless we're
          8    given other direction, that will continue to be true.
          9              MR. COLLINS:  Dick, just to be clear, though,
         10    there is some demonstration, potentially, that takes place
         11    with use of the contractors.
         12              MR. ROSANO:  The contractors work with the
         13    licensees through the table-top drills, and the contractors,
         14    who have excellent talents in this area, deal with the
         15    licensee security organization to define how the attack
         16    ought to take place, but the actual carrying out of the
         17    attack is done by the licensee or, in some cases, for
         18    example, Watts Bar, they brought in an adversary force from
         19    another plant.
         20              In fact, there was an interesting combative
         21    camaraderie going there.  So, it was interesting to observe
         22    that.
         23              Commissioner Dicus had the benefit of being there. 
         24    I'm sure she would have some comments on it.
         25              Item number six, the make-up of the guard force
          1    during the test -- this is what I mentioned earlier, and I
          2    went, perhaps, into too great detail earlier, but it's
          3    restated here.
          4              Tests have been carried out with more guards and
          5    committed to in the security plan because it reflected the
          6    running level, the running force at the site.
          7              In the modified OSRE and in the SPA task force
          8    recommendations, we're going to stick to the security plan. 
          9    It's whatever they commit to and it's how they commit to it.
         10              So, for example, if they have back-up guards,
         11    they're only allowed to be located somewhere that they might
         12    be in wandering around the plant.  They're not allowed to be
         13    poised and ready to respond.
         14              COMMISSIONER MERRIFIELD:  Madam Chairman?
         15              CHAIRMAN JACKSON:  Please.
         16              COMMISSIONER MERRIFIELD:  Do you anticipate any
         17    modification of licensees' existing makeup of those?  Do you
         18    expect them to add additional responders as a result of this
         19    change in the OSRE testing?
         20              MR. ROSANO:  I've heard some licensees say that
         21    they will want to.
         22              I've heard other licensees say they will have to,
         23    that licensees -- in fact, one comment I received in the
         24    meeting with NEI a couple of months ago was that they've
         25    used these guards and they've committed to themselves that
          1    they would have these guards there.
          2              They hadn't put that in the plan, but now that
          3    they know it's the rules of engagement, they're going to put
          4    it in the plan, and it doesn't seem to bother them, because
          5    they're already paying the guards anyway.
          6              MR. ORRIK:  I'd like to add to that, in all of the
          7    57 OSREs, 58 OSREs that we've had so far, typically the
          8    response -- or the guard force on duty at any time is a much
          9    larger number than the number of responders that they commit
         10    to.
         11              It is also larger than the number of responders
         12    that they actually use.
         13              So, I have known of no site that has had to
         14    actually increase the number of officers they have on duty
         15    at any one time, although they have gone, as we've noted, to
         16    a larger response force than they have committed to, but I
         17    know of no plant that has actually had to add forces before
         18    the OSRE.
         19              MR. COLLINS:  That's a different issue, I think. 
         20    Let me try to clarify the issue for you, if I can.
         21              The intent of the pilots is to answer just that
         22    question.  Watts Bar, perhaps, was the first plant wherein
         23    the manning requirements of the security, training, and
         24    contingency plans were adhered to in response to the
         25    modified OSRE.
          1              As we go through the rest of the pilots, we'll
          2    learn more, on a site-by-site basis, which is, I think,
          3    contingent on the target set robustness, the equipment
          4    that's at the plant, the number of people that's committed
          5    to individually their training.  There's a lot of variables
          6    in this formula.
          7              The intent of the pilot is to provide a process by
          8    which, after the modified OSRE is complete, there is an
          9    evaluation period.  That evaluation allows for an assessment
         10    of the results of the OSRE against the requirements of the
         11    security plan, the equipment, and an operational component.
         12              Those three evaluations will result in a
         13    reconciliation of the performance of the OSRE, which may end
         14    up with the guard force number being modified.  It's a
         15    double-edged sword, could be up or down.
         16              Commitment to additional security equipment which
         17    is necessary to pass or is not necessary to pass and
         18    therefore can be removed or a confirmation that the
         19    operational safeguards, which is redundancy, diversity of
         20    engineered safeguards, as well as operator response, is
         21    adequate or additional commitments need to be adhered to
         22    there.
         23              So, that's a long answer, but it will come out of
         24    the pilots and it will be a reconciliation of performance. 
         25    It may be either way.  It may up.  In some cases, it may be
          1    down.
          2              COMMISSIONER MERRIFIELD:  I think when we went
          3    through the earlier effort before the chairman required the
          4    OSRE program to be continued, there was, I think, some
          5    confusion about the activities being undertaken by licensees
          6    relating to their guard force.
          7              We talk about the number of responders and how
          8    that may be modified in these exercises.  Mr. Orrik brought
          9    up the issue of the -- and to repeat again, to your
         10    knowledge, no licensee has reduced the number of total
         11    security guards at a plant as a result -- after an OSRE?  Is
         12    that what you said?
         13              MR. ORRIK:  No, sir.  Actually, some licensees
         14    have reduced the number of responders.
         15              COMMISSIONER MERRIFIELD:  No, total number of
         16    security guards employed at the facility.
         17              MR. ORRIK:  No, sir, I would not know that.  I
         18    would believe that would be a logical outcome of reducing
         19    the number of responders, but I tend to doubt that.  I don't
         20    know that answer.
         21              CHAIRMAN JACKSON:  Is the confusion due to the
         22    fact that -- each plant has a security force.  Within that
         23    security force are the responders.
         24              COMMISSIONER MERRIFIELD:  Individuals who are
         25    designated as people who would respond if they were
          1    attacked.
          2              CHAIRMAN JACKSON:  That's right.
          3              MR. COLLINS:  That is correct.
          4              CHAIRMAN JACKSON:  And that's the number that one
          5    is talking about going up or down on and not the overall
          6    envelope of the number of security personnel that they have.
          7              MR. KANE:  And I believe Mr. Orrik's response was
          8    that adding additional responders did not increase the
          9    overall size of the security force.
         10              COMMISSIONER MERRIFIELD:  I'm sorry.  That is
         11    correct.
         12              MR. COLLINS:  It can be moved but still not
         13    increase the total number.
         14              COMMISSIONER DICUS:  For an exercise or drill,
         15    right?  Or in general?
         16              CHAIRMAN JACKSON:  Well, it's the number committed
         17    to in their security plan.
         18              MR. ROSANO:  That's right.
         19              COMMISSIONER DICUS:  But if they increase the
         20    number -- happen to increase the number of responders in
         21    their security plan, that implies increasing the guard force
         22    or extending into longer overtime.
         23              MR. ROSANO:  The guard force is made up of armed
         24    responders and unarmed individuals in the security
         25    organization.  The security force is actually considerably
          1    larger than just the armed responders, and they could add
          2    armed responders for tactical response without increasing
          3    the total size just by converting some people to the unarmed
          4    status who were responsible for other duties and moving them
          5    basically out from behind a desk, if you'll use police
          6    terms.
          7              COMMISSIONER MERRIFIELD:  I just wanted to get
          8    that clarification, because I think there was some
          9    misunderstanding that there was widespread hiring or firing
         10    of the total number of security guards at the plant as a
         11    result of the OSREs, and that was not the impression you
         12    intended to leave.
         13              MR. ROSANO:  That's not the indication that we get
         14    from the sites.
         15              COMMISSIONER DICUS:  But it does increase cost
         16    because of increased training and equipment.
         17              MR. ORRIK:  Yes.
         18              CHAIRMAN JACKSON:  And I guess the real
         19    terminology should be security personnel, because some are
         20    armed and some are unarmed.
         21              MR. ROSANO:  Yes, that's true.
         22              MR. COLLINS:  That's correct.
         23              MR. ROSANO:  Okay.  If I may, item number seven,
         24    the NRC role during the tests -- throughout the first eight
         25    years, seven years, of the OSRE, we were evaluating the
          1    overall adequacy of licensee performance, and that was
          2    designed specifically having to do with tactical response.
          3              In the modified OSRE, we want to show the nexus
          4    between their performance and their commitments.  This is
          5    what we've been discussing.  During the modified OSRE, we
          6    are examining their performance but also the level of their
          7    commitments and whether it's adequate to carry out the
          8    function.
          9              Under the SPA task force recommendations, that
         10    would be carried on.
         11              We want to make sure that there is a clear nexus
         12    to commitments, that performance must be linked to
         13    commitments, and that's what we're judging and that's what
         14    we're trying to examine during these visits.
         15              That has to do with the commitments in the
         16    security plan as far as guard force, as well as their
         17    commitments, procedural commitments in terms of tactical
         18    response and how they would deal with an attack and as far
         19    as what they would do in terms of equipment modifications,
         20    defensive positions, and so on.
         21              Number eight is the use of the operational
         22    solutions to sabotage scenarios, not that this is the first
         23    time we've discussed it this morning, but operational
         24    solutions were considered as part of the target sets in the
         25    former OSRE, but it did not -- the OSRE itself, the drill,
          1    did not assess their actions as mitigating factors.
          2              As the drill would run, the operators weren't
          3    there advising what steps they would take and what actions
          4    they would use to mitigate the consequences.
          5              In the pilot -- in the modified OSRE, we're going
          6    to pilot the program using that.  We're going to get more
          7    and more involvement.
          8              Just a reflection of what happened last week at
          9    Watt's Bar, the operations people were in the room as we ran
         10    table-tops and were at least peripheral observers during the
         11    drills themselves, and they did take notes, and they
         12    informed us later of how they intended to participate and
         13    what they would have done.
         14              What I want to do is to -- what we want to do is
         15    to encourage more of that and not just have them in the room
         16    and peripheral observers but to actually make them part of
         17    the play of the table-tops in that -- so that we can run
         18    time-lines that mesh both the actions of the security force
         19    and the actions of operations, and the same time-line will
         20    run through both, and we would be able to examine afterwards
         21    -- as Mr. Collins says, we would do an operational
         22    post-analysis after the visit to examine what would have
         23    been the real effect of the operator's actions and how would
         24    it have changed the result of the drill, and we can only do
         25    that as we get more and more involvement by operations
          1    people.
          2              As a corollary to this, the NRC will be using more
          3    operational expertise and individuals to examine this. 
          4    There will be more work between my group and the project
          5    staff.
          6              The resident inspectors have been asked to attend
          7    these OSRE drills because they intimately know the
          8    operations of the plant.  They provide a very good source of
          9    feedback when we try to develop target sets and table-top
         10    drills.
         11              The residents -- both of the residents of Watts
         12    Bar were in attendance last week and provided a valuable
         13    resource as far as that goes.  So, we want to try to
         14    incorporate more of our own talents in, as well as having
         15    the licensee raise their level of involvement in ops.
         16              MR. KANE:  I would just like to reinforce that
         17    this is the difference in this program that -- a major
         18    difference in this program, that an evaluation of the
         19    operational response, together with the security response,
         20    may, as Mr. Collins indicated, be the basis for reducing
         21    some of the commitments that are in the current plan.  We
         22    understand that and --
         23              CHAIRMAN JACKSON:  But you're going to let it play
         24    out.
         25              MR. KANE:  But it needs to be played out.  But I
          1    mean that is one of the benefits I see of running it this
          2    way, because you can see what you need to do in both
          3    directions, not simply as a --
          4              MR. COLLINS:  Again, we're going to confirm we
          5    maintain safety in this arena and we go into the other
          6    output measures, including reducing unnecessary burden.
          7              CHAIRMAN JACKSON:  In looking at that, you're not
          8    going to have -- you know, you have to obviously, then, look
          9    at whether the operator's ability to take certain actions is
         10    or is not compromised in a certain scenario for that plant. 
         11    Is that correct?
         12              MR. KANE:  That's correct.
         13              CHAIRMAN JACKSON:  Or the likelihood of it.  You
         14    did not talk about the SPA task force recommendation in that
         15    area.
         16              MR. ROSANO:  Okay.
         17              COMMISSIONER McGAFFIGAN:  Madam Chairman, just a
         18    clarification on that last point.
         19              Have you gone back and looked -- since you didn't
         20    involve operator action in the past, Mr. Orrik, in his
         21    comments and in his DPO, has used statistics about the
         22    number of failures to demonstrate they could protect against
         23    radiological sabotage.
         24              In the past, you assumed, if you got some plastic
         25    explosive to position X, you'd have a problem.  Is there any
          1    attempt to look backward and see whether that 53 percent is
          2    an accurate number?
          3              I don't want you to do everything, because that
          4    would be a waste of time, but looking at a few of them and
          5    see whether, if operator action had been taken into account,
          6    there wouldn't have been a problem?
          7              MR. ROSANO:  One of the tasks that the task force
          8    is taking on is to look at the reports that have been
          9    generated by past OSREs and to try to develop some analysis
         10    -- operational analysis.  The reports are fairly descriptive
         11    and do provide a lot of detail and might allow us to do
         12    that.
         13              There is not a plan currently to revisit the sites
         14    and do it by way of that, but the task force does plan to
         15    look at the sites, especially those that had some findings,
         16    whether significant or less than significant, and to use
         17    those as a baseline to figure out whether there are some
         18    issues that were not considered during the past OSREs that
         19    we could look at and infuse in a backward-looking sense.
         20              The task force will do that.  That will also be
         21    part of the task force's report at the end of this process.
         22              COMMISSIONER MERRIFIELD:  Madam Chairman, I had a
         23    --
         24              CHAIRMAN JACKSON:  Yes, please.
         25              COMMISSIONER MERRIFIELD:  -- further clarifying
          1    question on that same issue.
          2              Commissioner McGaffigan mentioned that the
          3    53-percent demonstration that could protect against
          4    radiological sabotage -- I'm quoting from Mr. Orrik's draft
          5    here, and then 47 percent demonstrated significant -- and
          6    that's my emphasis -- significant security weaknesses in
          7    their protection capability.
          8              Mr. Rosano, is that analysis?  Would you agree
          9    with that characterization, 47 percent significant security
         10    weaknesses?
         11              MR. ROSANO:  I do not, and the staff does not. 
         12    I've looked at the reports, and I've read the reports, and
         13    as the findings are characterized in the reports, I've also
         14    asked some of our regional inspectors to look at the
         15    reports, and my findings were that there were significant
         16    vulnerabilities and far fewer -- something in the 6 to 7
         17    percent range.
         18              I might point out that, in any case, all of the
         19    vulnerabilities have been fixed, but the characterization of
         20    significant findings, I disagree with, and I find it to be
         21    much lower.
         22              MR. ORRIK:  May I define the -- the
         23    characterization of significant was under the guidelines
         24    that we were provided that, if an adversary force
         25    realistically reached and sabotaged, simulating sabotaging a
          1    critical target set, that was the criterion, and by that, we
          2    had something like, in 27 plants, something like 40 total
          3    times that occurred.
          4              We did not look at operational impact.  That was
          5    not my charter.  We looked at the security impact only, and
          6    if the target set was reached, destroyed, that was it.
          7              Now, some of the target sets -- and I can't go
          8    further -- would inevitably have gone to a Part 100 release. 
          9    Some very likely would not have given operational,
         10    mitigation, and prevention measures.
         11              But as we indicated to the Commissioner, we did
         12    not go back and look at that.  It was not within our
         13    charter.
         14              Now, things change.
         15              MR. COLLINS:  Again, I certainly don't want to
         16    speak for anyone on the staff.
         17              We're evolving -- we're using terms that are
         18    historical to characterize findings in a program to give it
         19    significance that I believe the majority of the staff has
         20    moved beyond, acknowledging that there are some shortcomings
         21    in the way that we have conducted these exercises in the
         22    past, on both sides.
         23              I mean they didn't demonstrate some parts of the
         24    capability; they didn't take credit for other parts of plant
         25    systems and components.
          1              The numbers are debateable.  I'm not sure it's
          2    appropriate to use these numbers as an indicator of where we
          3    were as much as use them as an example of that program at
          4    that point in time, and we're moving forward now to have
          5    more realistic insights.
          6              COMMISSIONER MERRIFIELD:  The reason I point that
          7    out, however, is from a public perception standpoint, the
          8    use of a number of 47 percent having significant security
          9    weaknesses leaves the public with an impression of a great
         10    degree of seriousness, and so I want to -- Mr. Rosano,
         11    you're saying, at least in your belief, taking an
         12    independent analysis from staff's standpoint, that while Mr.
         13    Orrik is using the definition that was required to be used,
         14    that that 47-percent significant weaknesses isn't an
         15    accurate reflection of the true seriousness?
         16              MR. ROSANO:  That is my conclusion and the
         17    conclusion of some of the regional inspectors who helped me
         18    with this review.
         19              It was said in one of the public statements that
         20    was signed out back in November, and that was, that the
         21    figure, 47 percent, is perhaps misleading, because it
         22    doesn't take into account factors like operational solutions
         23    that were not considered in the old program and engineered
         24    safety systems that were part of target analysis but not
         25    part of the post analysis, and so, it's not a -- my opinion
          1    is it does not have to do with Mr. Orrik's work, but it has
          2    to do with the clarity of what we're saying to the public
          3    and the fact that there are certain things in there that --
          4    about those figures that are misleading, because it doesn't
          5    account for other factors that we are currently engaged in
          6    dealing with.
          7              CHAIRMAN JACKSON:  How are you all going to
          8    integrate these pieces, the operator actions, the engineered
          9    safety system?  I don't get a sense of kind of a systematic
         10    walk-through that's like the kind of accident sequence
         11    precursor or, you know, core damage sequence that one runs
         12    through if one is postulating accidents.
         13              MR. KANE:  I think the process would be one in
         14    which we would continue to run the exercises as they have
         15    been run, as we've described the recent exercises.  You get
         16    a measure of the security response.
         17              You also have to run a post exercise table-top,
         18    understanding the time-lines that exist with the security
         19    response, also understand the time-lines that exist with an
         20    operational response.
         21              Understanding those two, then you can understand
         22    the significance of the target sets, were they necessarily
         23    the right ones?  If they were breached in any way, did it
         24    affect the outcome?
         25              So, that's the process we would use to arrive at
          1    an overall answer, one, measuring security performance, and
          2    then, two, integrating the operational response to measure
          3    overall performance of the exercise.
          4              So, that would be, as I would envision it, as
          5    we're planning to do a post-exercise table-top.
          6              CHAIRMAN JACKSON:  How do you fold engineered
          7    safety systems into that?
          8              MR. KANE:  Well, being able to understand -- and
          9    that's part of the operational response, be able to use
         10    other systems that are available to mitigate the
         11    consequences of whatever's taking place in front of them. 
         12    The operators are trained to respond to symptoms.
         13              CHAIRMAN JACKSON:  So, you're folding in a PRA
         14    analysis?
         15              MR. COLLINS:  You're folding in in a couple of
         16    arenas.  One is in the target set, acknowledgement of
         17    risk-informing the target set for the plant, and then -- I'm
         18    not sure we've quite thought through the PRA in the back
         19    end.
         20              Bill, maybe you're advanced than I am, but if we
         21    are, we can elaborate on that.
         22              MR. KANE:  Not at this point.  I think that would
         23    be principally used in understanding the target sets, also
         24    understanding what equipment was available to be used to
         25    mitigate the event.
          1              CHAIRMAN JACKSON:  Well, but in point of face, if
          2    you really do a complete PRA analysis, it actually has in
          3    it, you know, likely operator actions.  It has in it, you
          4    know, sequences or -- you know, accident sequences that can
          5    go one way or another depending upon whether certain
          6    equipment is compromised or not.
          7              It starts out a certain way, depending upon the
          8    initiating event, if some pipe is broken or whatever it is,
          9    and it strikes me -- I don't understand how you can, you
         10    know, fold in engineered safety systems unless you have some
         11    ability to overlay that kind of analysis, whether it's post
         12    or pre.
         13              I mean you could do it in the post-sense of, you
         14    know, what were the attack points and, you know, what did
         15    you see happening, and then that actually informs your
         16    accident sequence analysis, and so -- because you can't do
         17    it in an ad hoc way, and so, I would just kind of admonish
         18    you in that way, that you really need to take advantage of
         19    the fact, if you're going to do this, that you do know how
         20    to discuss, you know, what happens if in, you know, a
         21    structured way.
         22              I mean PRA is not just useful because of some
         23    probabilities that you come out with but because of the
         24    logic of thinking through what can actually happen if, and
         25    so, it strikes me that -- I mean you need to get started,
          1    but it strikes me that, if you're really going to have
          2    something that works, that says this offsets this, you
          3    really have to do it in a more sophisticated way --
          4              MR. KANE:  You're point's well taken.
          5              CHAIRMAN JACKSON:  -- than has been done
          6    heretofore.
          7              COMMISSIONER McGAFFIGAN:  Madam Chairman?
          8              CHAIRMAN JACKSON:  Please.
          9              COMMISSIONER McGAFFIGAN:  I'm not trying to
         10    complicated everybody's life, but --
         11              CHAIRMAN JACKSON:  I just did.
         12              COMMISSIONER McGAFFIGAN:  You did.  Maybe I will,
         13    too.  But an obvious way to involve the operators would be
         14    to stick operators, an operating crew in the simulator and
         15    pretend the simulator is running the plant and have whatever
         16    communication exists between the guard force and the
         17    operations room, and you would know how that crew, at least,
         18    would handle the specific emergency that's happening, but
         19    that may be expensive.
         20              Has any thought been given to just having the
         21    simulator manned?
         22              MR. KANE:  Yes, we have given thought to that, and
         23    at least in the OSREs that are -- that we're conducting here
         24    between now and April, we certainly -- if somebody wanted to
         25    do that, we could certainly evaluate it, but I think, at
          1    this point, I think we want to understand through
          2    post-exercise table-tops.
          3              As I said, we're going to use these future OSREs
          4    to learn, and perhaps, if someone wants to do that,
          5    volunteers to do that, we would certainly be prepared to
          6    accommodate it in our inspections, but I think we'd want to
          7    -- we want to move slowly toward that.
          8              CHAIRMAN JACKSON:  Well, let me just reinforce,
          9    because it isn't totally disconnected, and I'm not
         10    necessarily pushing the use of the simulator, but you know,
         11    if something -- X happens at a certain point in the plant,
         12    then one could ask, you know, is that a kind of an initiator
         13    that flips you over into some potential accident sequence?
         14              If Y happens in a plant, does that affect, you
         15    know, some mitigation capability, and there are
         16    methodologies that we're using and that licensees are using
         17    to be able to do this kind of structured analysis, and to
         18    me, in order to have a system that makes sense, you really
         19    have to fold the two together.
         20              MR. COLLINS:  I think it's inevitable, Chairman,
         21    as you have discussed, that these exercises, should they
         22    mature and have Commission support, will go in the direction
         23    similarly to emergency preparedness exercises, which have
         24    the attributes that you have mentioned and gain a type of
         25    sophistication which involves the simulator, integrated
          1    views, use of PRA for mitigating events.  We just -- we have
          2    to get to that point.
          3              CHAIRMAN JACKSON:  Okay.
          4              COMMISSIONER McGAFFIGAN:  Can I ask just a general
          5    question about procedures at plants?
          6              As I understand these exercises, they are, you
          7    know, short, bloody, and violent, at least -- not much blood
          8    gets spilled yet, but they would -- mock blood.
          9              MR. COLLINS:  They're rated R.
         10              COMMISSIONER McGAFFIGAN:  Maybe even X for the
         11    gore.
         12              But the -- is the standard operating procedure at
         13    a plant -- it's never occurred -- mortal shells are going
         14    off, small arms fire is being heard around the plant.  Do
         15    they scream it at that point?  Is that in the standard
         16    operating procedure at plants, to take that precaution if
         17    they know they're under attack, there's a verified attack?
         18              MR. COLLINS:  That varies.  I think perhaps that's
         19    a good question for the licensees to answer.  My experience
         20    -- my direct experience would be as a result of the Three
         21    Mile Island intrusion and the IIT that was conducted after
         22    that.
         23              GPU at that time chose to maintain the plant at
         24    steady-state power.
         25              They felt, given the potential location of the
          1    intruder, the ability to affect the plant in those locations
          2    could be detected by variables, process variables that could
          3    be monitored in the control room, and we reviewed that as a
          4    part of the IIT, and we determined that that was the
          5    appropriate action under those circumstances, since a plant
          6    could be shut down but it could be shut down in a more
          7    controlled manner with people out into the plant, and they
          8    did not want people out into the plant.
          9              COMMISSIONER McGAFFIGAN:  My question was, if one
         10    of these simulated attacks is underway, with bullets flying
         11    and God knows what else going off, at that point -- that
         12    wasn't Three Mile Island.  Three Mile Island was a guy
         13    driving into the -- onto the island, which I guess might
         14    have had a bomb on the truck or whatever, but my
         15    understanding of these exercises is that you know you're
         16    under attack, and so, if bullets are flying -- I'll ask the
         17    next panel.
         18              COMMISSIONER MERRIFIELD:  Chairman, we need to be
         19    very careful about the language we use here, and I'm not
         20    going to admonish anyone, but -- because that's the
         21    Chairman's purview.
         22              [Laughter.]
         23              COMMISSIONER MERRIFIELD:  There was no bomb at
         24    Three Mile Island.
         25              COMMISSIONER McGAFFIGAN:  I agree.
          1              COMMISSIONER MERRIFIELD:  Right.  Just so that no
          2    one in the audience is left with the idea --
          3              CHAIRMAN JACKSON:  This is a simulation.
          4              COMMISSIONER McGAFFIGAN:  It was a truck.
          5              COMMISSIONER MERRIFIELD:  Right.  I don't know if
          6    we want to get into that level of detail.
          7              CHAIRMAN JACKSON:  I don't think so.
          8              COMMISSIONER MERRIFIELD:  But there was no --
          9              COMMISSIONER McGAFFIGAN:  Right.  I agree.
         10              COMMISSIONER MERRIFIELD:  Can you assure us that
         11    there wasn't?
         12              MR. KANE:  Yes, I can confirm that there wasn't. 
         13    i was also involved with the front end of that, and it
         14    wasn't really known until there was a sweep of the area just
         15    who and how many people were involved.  The decision was, as
         16    I understand it, at the time, was that they had -- were
         17    satisfied that all their vital areas were protected, and
         18    that was the decision.
         19              There was good communication between -- and that's
         20    one of the things that has to happen.  There has to be very
         21    good communication between security and the control room. 
         22    In fact, it took place there, and that's another thing that
         23    we test when we do these exercises, to make sure that the
         24    communications are sound, so that operations, when it makes
         25    a decision whether to scram the plant or not, understands
          1    what's going on outside the control room.  So, that's a very
          2    important aspect.
          3              MR. ROSANO:  Okay.
          4              Item number nine -- and I know, Chairman, you
          5    asked that I had not completed task force recommendations on
          6    eight, but I think we just discussed it.  Is it enough? 
          7    Okay.
          8              Number nine, then, the baseline inspection --
          9    risk-informed baseline inspection program -- obviously, that
         10    hasn't been part of the old OSRE and is now coming into
         11    form, but -- because the program itself didn't exist, but
         12    the SPA task force recommendations would be that the drills
         13    and exercises to be conducted under the proposed new rule
         14    will provide performance indicators, and they will be used
         15    in informing the baseline inspection program.
         16              They will be tied together and certainly be part
         17    of that.
         18              Item number 10 has to do with findings.  The
         19    results of OSREs before did not deal specifically with
         20    compliance, they dealt with performance, and there were no
         21    enforcement actions taken in former OSREs.
         22              Under the guidance from the Office of the General
         23    Counsel, in the new program, however, we will consider
         24    whether actions are necessary by licensees to upgrade their
         25    security based on findings of an OSRE, including
          1    vulnerabilities, and this will be more formal in the new --
          2    in the task force recommendations, that the findings would
          3    be handled consistent with the new reactor oversight process
          4    and the licensees will be required to take actions to
          5    upgrade security.
          6              CHAIRMAN JACKSON:  So, does this mean there could
          7    be enforcement or there could not be enforcement?
          8              MR. ROSANO:  Enforcement in terms of orders, if
          9    orders are necessary, to require upgrades and that notices
         10    of violation would still be issued if there was a compliance
         11    issue involving what their commitments are.
         12              CHAIRMAN JACKSON:  So, it's a structured approach.
         13              COMMISSIONER McGAFFIGAN:  Madam Chairman, could
         14    you explain, given what Mr. Orrik talks about, these
         15    significant security weaknesses, why there was no
         16    enforcement?
         17              As I understand it from reading his DPO, it comes
         18    down to whether 73.55(a) is enforceable in and of itself or
         19    just (b) through (h) or whatever the other sections are, but
         20    we -- as I understand it, under the current rule, it has
         21    been our position that we're into this identifying
         22    weaknesses and vulnerabilities which they then -- the
         23    licensees correct, and to the public, there would be a
         24    disconnect here.
         25              MR. ROSANO:  Going into this, I would like to say
          1    that the licensees have corrected the vulnerabilities, even
          2    though there haven't been enforcement actions taken, but to
          3    answer your question, there -- for several years, for a
          4    number of years, the staff acted on guidance from the Office
          5    of General Counsel that, when a licensee submits a security
          6    plan for approval, that security plan is submitted to comply
          7    with sections (b) through (h) of 73.55, and when that plan
          8    is approved, it -- basically, it follows a statement in
          9    73.55(a) that says that the Commission may approve measures
         10    other than those specified in this rule if they demonstrate
         11    that they have the same high assurance that the overall
         12    level of system performance provides protection against
         13    sabotage, and so, the interpretation has been since the
         14    early '80s that, when a licensee has an approved security
         15    plan -- that is, that it was approved by the NRC -- then we,
         16    in effect, said that you are doing all that we would expect
         17    you to do to protect against the design basis threat, and if
         18    a licensee complies with that security plan, then there is
         19    not a compliance issue, and when the OSRE goes out to test
         20    performances, to test it against the underpinnings of 73.55,
         21    that is the design basis threat, and so, we have not taken
         22    enforcement action in the past because it was not a
         23    compliance issue.
         24              MS. CYR:  It's not a compliance issue with respect
         25    to compliance with the security plan.
          1              MR. ROSANO:  Right.
          2              MS. CYR:  There's still the underlying performance
          3    objective of 73.55(a).  That's still in there, basically,
          4    and that's really what the OSRE was testing against, but the
          5    focus from an enforcement stand would have been on the plan,
          6    not really on compliance with the overall performance
          7    objective.
          8              I mean our view is you can, you have been able to,
          9    you could have been able to, you are able now to take action
         10    to ensure conformance with the performance objective, but
         11    the enforcement focus in the past has been on the plan, that
         12    if they -- if the staff had approved a plan that met (b)
         13    through (h), either following (b) through (h) or some
         14    equivalent level of protection with respect to those
         15    requirements, that that meant that the plant itself had been
         16    approved, and I think this is what the staff has talked
         17    about before.
         18              We've not always gone back and, in a sense,
         19    reconfirmed the connection between the plan and the overall
         20    performance objective.
         21              CHAIRMAN JACKSON:  Right.  It says, to achieve
         22    this general performance objective, the on-site physical
         23    protection system and security organization must include but
         24    not necessarily be limited to the capabilities to meet the
         25    specific requirements contained in paragraph (b) through (h)
          1    of this section, and so, the -- and so on and so on.
          2              Okay.  Why don't you go on?
          3              MR. COLLINS:  Again, Chairman, you know, we're
          4    looking at those words carefully as a result of the
          5    longer-range plans to be sure that they're clear, and they
          6    put the onus and the obligation for the linkage between
          7    demonstration and the commitment in the plan in the right
          8    place, and we believe that's in the licensee's purview,
          9    similar to other programs, and then there's a demonstration
         10    and we monitor that.
         11              CHAIRMAN JACKSON:  That's performance-based.
         12              MR. COLLINS:  Right.
         13              CHAIRMAN JACKSON:  Uh-huh.
         14              MR. ROSANO:  Okay.
         15              The last slide is something of a summary of what
         16    we've been discussing, and you notice it refers to the
         17    modified program for the last 11 OSREs.  There are only 10
         18    remaining, but we're using this modified program for all of
         19    the 11, including last week's visit to Watts Bar.
         20              We're going to continue to establish target sets,
         21    and in fact, I might point out that, by the end of the first
         22    full cycle of OSRE, we will have target sets in the book, so
         23    to speak, on all of the sites, a useful resource for future
         24    conduct of performance assessment in any case.
         25              We're going to run exercises in accordance with
          1    the security plan plus new commitments.  The licensees may
          2    commit -- may change their commitments, raising the number
          3    of responders or perhaps by, after an operational analysis,
          4    lowering them, but the new program will be run according to
          5    the new commitments.
          6              We'll assess for security performance --
          7              CHAIRMAN JACKSON:  I guess the real thing is it's
          8    according to the commitments that exist.
          9              MR. ROSANO:  That's true, yes, ma'am.
         10              CHAIRMAN JACKSON:  Whether they have been additive
         11    or whether it's what's existed heretofore if there has been
         12    no change.
         13              MR. ROSANO:  We will hold them to the security
         14    plan, whatever it is at the time we arrive at the site.
         15              Assess the security performance and conduct an
         16    on-site preliminary exist and summarize the findings --
         17    without going into painful detail, there will be some
         18    findings that will suggest vulnerabilities that need to be
         19    looked at more carefully afterwards by the licensee and by
         20    the NRC, which leads to the next point, that we're going to
         21    do a post-exercise analysis.
         22              That's precisely why we want the site exist to be
         23    a preliminary exit, so that we have more of an opportunity
         24    to examine what actions might have changed the result if
         25    it's been considered longer, and we will use operational
          1    engineering components in the assessment of damage relative
          2    to the potential for Part 100 release.
          3              Finally, we'll conduct a final exit detailing
          4    findings from post-exercise analysis.
          5              The final exit is proposed to be within two to
          6    four weeks after the site visit, probably perhaps two weeks
          7    for sites where there don't appear to be any significant
          8    findings that require post analysis and four weeks where
          9    there might be more analysis necessary, and that would be to
         10    give the staff as well as the licensee an opportunity to
         11    spend some time examining this.
         12              CHAIRMAN JACKSON:  Is there clarity with respect
         13    to the use of deadly force by security guards?
         14              MR. ROSANO:  The information notice that is on the
         15    books currently was written in 1989, and I believe, at this
         16    point, that that information notice is not clear, and we
         17    intend to revise that information notice.
         18              It will take one of two paths.  We are, as you are
         19    aware, engaged in an issue involving getting deadly force
         20    authority for Part 50 licensees included in the legislative
         21    package that's going forward.
         22              If we do join that legislation for part 50
         23    licensees, we would rewrite the information notice to
         24    properly characterize that in accordance with the new
         25    legislation.
          1              If Part 50 licensees are not included in that
          2    legislation, we would still rewrite the information notice,
          3    but we would write it in a different way, and it would
          4    reflect what is, in fact, the true authority and not as it
          5    is currently stated in that information notice.
          6              COMMISSIONER McGAFFIGAN:  Could you explain what's
          7    currently in the information notice?
          8              MR. ROSANO:  The information notice suggests that
          9    the NRC interprets its regulations to mean that guards can
         10    use deadly force in protection of plant, property, or other
         11    systems.
         12              That is not consistent with state laws to the
         13    contrary, and there is currently no Federal authority on the
         14    books to grant employees of Part 50 licensees to use deadly
         15    force.
         16              CHAIRMAN JACKSON:  That's why it's in the
         17    legislation.
         18              MR. TRAVERS:  I think it's clear they have that
         19    authority as it relates to protecting themselves or people
         20    at the plant, but the question becomes do they have the
         21    authority in connection with protecting plant systems.
         22              MR. ROSANO:  The states traditionally allow the
         23    use of deadly force only to protect persons, not property,
         24    and so, absent interdiction so that you put yourself in the
         25    path of the bullets, guards are not allowed to use deadly
          1    force to protect the plant.
          2              COMMISSIONER MERRIFIELD:  In some states, that's
          3    not the case.
          4              COMMISSIONER McGAFFIGAN:  I know it was in our
          5    legislative package the last Congress.
          6              MS. CYR:  It has not been in our legislative
          7    package with respect to Part 50 licensees, only with respect
          8    to formula quantity, to make it equivalent with DOE
          9    facilities.  That has been our proposal.
         10              COMMISSIONER McGAFFIGAN:  That's been the proposal
         11    in the past?
         12              MS. CYR:  Right.
         13              COMMISSIONER McGAFFIGAN:  And we didn't realize we
         14    had this hole?
         15              MS. CYR:  No.
         16              COMMISSIONER McGAFFIGAN:  I was just going to ask
         17    -- I mean I thought the appropriations committees have taken
         18    care of this issue in the interim for the gaseous diffusion
         19    plants, and I'm sure they would have done it for the Part 50
         20    plants without waiting for authorization legislation if they
         21    knew that this was an issue.
         22              CHAIRMAN JACKSON:  Mr. Orrik, would you care to
         23    make a few comments?
         24              MR. ORRIK:  Yes.
         25              CHAIRMAN JACKSON:  Could you try to limit it to
          1    about five minutes?
          2              MR. ORRIK:  We're here for three reasons,
          3    essentially.
          4              Terrorism exists.  Second point, OSRE is the only
          5    performance testing of the anti-terrorist capability of
          6    nuclear power plants and that the industry record, even with
          7    six to 10 months advanced notice of all of our evaluations
          8    still had a track record of, we could say, 53 percent
          9    passing, with 47 percent of the plants had -- still had
         10    significant security weaknesses in their ability to protect.
         11              As I mentioned, in over 40 exercises, terrorists
         12    -- mock terrorists realistically reached and simulated
         13    sabotaging equipment.
         14              Now, we did not consider operation.  That was not
         15    within our purview.  In fact, it was restricted.  We were
         16    restricted from doing that.
         17              Some plants had to use -- spend an awful lot of
         18    money to get ready for an OSRE.  I would point out that was
         19    their decision.  We have never made recommendations.  All we
         20    did was evaluate what they had.
         21              The criteria, everything we've used has been the
         22    same, and we have not changed the design basis threat.  The
         23    truck bomb does not come within our purview.  That's handled
         24    differently.
         25              We still have terrorists making overt attack
          1    against the plant, and I would point out that we have never
          2    used the entire design basis threat.
          3              CHAIRMAN JACKSON:  Why don't you not discuss any
          4    details of the design basic threat.
          5              MR. ORRIK:  Yes, ma'am.
          6              But I have come to two conclusions as a result of
          7    all of this.
          8              One is that, since nuclear plants are an integral
          9    part of the American infrastructure and radiological
         10    sabotage could cause rather drastic results, that there is a
         11    need for an anti-terrorism capability, physical protection
         12    capability at nuclear power plants.
         13              Secondly, I think, given the increasing pressure
         14    to cut costs, including security costs, and the -- as I
         15    mentioned, the previous track record of the industry, that
         16    there is a need for NRC presence to provide a countervailing
         17    pressure against the pressures to reduce costs and make them
         18    competitive, redo security.  They are, after all, a
         19    business.
         20              I would, however, like to state something that I
         21    think will please the Chairman, the Commissioners.
         22              Last year, I objected to NRC staff's decision with
         23    respect to NRC's role in performance assessment of nuclear
         24    power plants.  This year, I have seen the proposed -- SPA
         25    task force proposals which you have been -- you have just
          1    received, and I have seen the proposed baseline inspection
          2    program.
          3              They are reasonable and responsible.  I am
          4    encourage by what I see NRC now preparing to do in the
          5    future.
          6              I would, however, have this cautionary note.  The
          7    proof of the pudding is in the eating.  NRC's commitment to
          8    anti-terrorism capabilities will be in the approval and
          9    execution of these proposals.
         10              So, the ball essentially is still in NRC's court,
         11    but I must say that I am very encouraged and am on-board
         12    with the efforts being taken by NRC staff.
         13              CHAIRMAN JACKSON:  Thank you.
         14              Commissioner Dicus, any further comments or
         15    questions?
         16              COMMISSIONER DICUS:  A comment and a couple of
         17    questions.
         18              You made the statement that, when you go out prior
         19    to an OSRE and you find vulnerabilities, you call those to
         20    the attention to the licensee, but they don't have to do
         21    anything about it.
         22              But I would caution you, because once we point out
         23    vulnerability, they tend to take that as a requirement and
         24    are going to do something about, even thought it's not
         25    officially transmitted as a requirement.  So, I would
          1    caution that statement.
          2              I would also caution, in light of the perhaps
          3    changes that you made in the OSRE and these that are going
          4    to be done, the 10 remaining ones -- and probably, for most
          5    of these, you may have already gone out and looked at
          6    vulnerabilities, but for any that you haven't and for future
          7    reference, that as we go to risk-informing this activity, if
          8    that's what we wind up doing, really evaluate
          9    vulnerabilities against the Part 100 release and not against
         10    any other criteria, if that's what -- the criteria that
         11    we're going to use.  That may change the vulnerability a
         12    great deal.
         13              Now a couple of questions.
         14              One of them has to do -- since the OSRE started,
         15    what, in 1992 -- and I noticed in your comments you say
         16    toward the end we bring in experts experienced in armed
         17    defense who provide continuity between OSRE evaluations, but
         18    for plants that had OSREs that did theirs in, say, '92 or
         19    '93, '94, to the ones that are doing them now, has there
         20    been creep?  Have we really started requiring more?
         21              MR. ORRIK:  No, ma'am.
         22              COMMISSIONER DICUS:  So, it has been constant.
         23              MR. ORRIK:  Yes, ma'am.
         24              COMMISSIONER DICUS:  You're comfortable with that.
         25              MR. ORRIK:  I've been on 56 of the 58 OSREs, and
          1    there's been no creep.  We've used the same criteria, same
          2    schedule of events.
          3              There has been creep in one sense, in that the
          4    licensees have been much more inventive in defining their --
          5    building their defenses, but again, that's their doing.
          6              COMMISSIONER DICUS:  But maybe -- well, I'm going
          7    to ask that question of the licensees, too.
          8              MR. COLLINS:  Commissioner Dicus, I believe
          9    there's been creep.
         10              COMMISSIONER DICUS:  I think there has been, too.
         11              MR. COLLINS:  I think there's a difference. 
         12    Having been in two regions, being a senior resident, a
         13    resident, supervising inspectors, there's a difference
         14    between saying our regulations haven't changed and how
         15    licensees response to our review initiatives.
         16              Clearly, in these areas, licensees try to get
         17    ahead of the reviews, of the OSRE reviews.  They learn from
         18    past OSREs.  They gather the best attributes of each past
         19    plant.
         20              They hire consultants to provide for
         21    pre-screening, pre-OSRE exercises that bring these
         22    attributes to licensees as a methodology of passing an OSRE.
         23              There is a area here that has to do with public
         24    confidence, and again, I won't profess to speak to
         25    licensees, but there is an impact of licensees not passing
          1    an OSRE, although it may not be a regulatory impact, it's a
          2    public confidence issue.
          3              COMMISSIONER DICUS:  Uh-huh.
          4              MR. COLLINS:  So, for a lot of reasons, licensees
          5    go to extensive means to pass the OSRE.
          6              Now, that's different than saying our requirements
          7    have changed.  So, there's a couple of answers to that
          8    question.
          9              I think the industry can speak better to that.
         10              COMMISSIONER DICUS:  Okay.
         11              One final question.
         12              In order for a licensee to exercise their security
         13    plan, to meet whatever challenge there is, I'd like some
         14    feedback as to whether or not any of you believe it's really
         15    necessary for the licensee to interdict an intruder, or
         16    would it be sufficient if the licensee is simply able to
         17    detect, to deter, and then delay, particularly taking into
         18    account operational responses.
         19              MR. ROSANO:  I believe that the detection and
         20    deterrence -- I'm not sure the delay would be sufficient
         21    unless the delay was long enough to provide back-up forces
         22    to arrive at LLEA or to take over the situation, but I do
         23    think that it would be sufficient for a licensee to
         24    demonstrate that they could protect the target sets from
         25    damage, and that doesn't necessarily mean terminating the
          1    attackers, but it simply means that if a licensee could
          2    demonstrate that they could fall back to positions or they
          3    can ensure protection of the target sets and it wouldn't
          4    matter if the attackers were still able to create industrial
          5    sabotage or other damage, they would have satisfied their
          6    goal.
          7              CHAIRMAN JACKSON:  Actually, don't you have to be
          8    careful in answering her question?
          9              MR. ROSANO:  I was trying to be.
         10              CHAIRMAN JACKSON:  Well, but not careful enough.
         11              MR. ROSANO:  Yes, ma'am.
         12              CHAIRMAN JACKSON:  Because if you're going down
         13    the line of looking at operator actions and operational
         14    safeguards, then you have to say that you do this all in
         15    analysis, and that's what they have to demonstrate.
         16              You talked about the Part 100 limits, etcetera,
         17    etcetera.  So, if you're going to the analysis that includes
         18    operator actions, engineered safeguard systems, and then an
         19    ability to keep you from having an event that would exceed
         20    Part 100 limits, that the real answer to her question.
         21              So, you don't want to ad hoc it when you've
         22    already kind of laid out a structured approach here to the
         23    Commission.
         24              MR. ROSANO:  I agree with your answer to her
         25    question, but --
          1              [Laughter.]
          2              MR. ROSANO:  But I might add that I didn't think
          3    that my answer was inconsistent, because we agree that, if
          4    the licensee can demonstrate through engineered safeguards
          5    or operational response or fall-back positions, that they
          6    can protect the target sets, then they've satisfied it.
          7              CHAIRMAN JACKSON:  And the target sets, by
          8    definition, are those that, if compromised, would lead to a
          9    potential --
         10              MR. ROSANO:  Yes.
         11              CHAIRMAN JACKSON:  It could lead to releases in
         12    excess of --
         13              MR. ROSANO:  Yes, ma'am.
         14              CHAIRMAN JACKSON:  -- Part 100.
         15              It would be very good to kind of talk that way, to
         16    be consistent.
         17              MR. ROSANO:  Yes, ma'am.
         18              CHAIRMAN JACKSON:  There may be media people or
         19    whatever, members of the public -- it would be very nice to
         20    just keep talking --
         21              MR. ROSANO:  Point well taken.  And again, they're
         22    all fixed.  All the weaknesses have been fixed.
         23              CHAIRMAN JACKSON:  I'm sorry.
         24              COMMISSIONER DICUS:  No, that's fine.  That was a
         25    clarification.  I was thinking you've got to add one more
          1    statement to the answer, and I gave you -- when I asked the
          2    question, would it lead to Part 100 release?
          3              Anyway -- and finally, I guess, just a comment. 
          4    I'm still troubled by the amount of fortification that we do
          5    have at our nuclear power plants as compared to what you may
          6    find at a chemical or industrial facility, troublesome to
          7    me.
          8              CHAIRMAN JACKSON:  Commissioner Diaz.
          9              COMMISSIONER DIAZ:  I have no questions.
         10              CHAIRMAN JACKSON:  Commissioner McGaffigan.
         11              COMMISSIONER McGAFFIGAN:  I have several, so let
         12    me get at it.
         13              The rule that you're talking about developing --
         14    and apparently there's agreement on -- what is the
         15    time-frame for developing that rule, the new rule?
         16              MR. ROSANO:  Our goal would be to have the new
         17    rule written in -- as a proposed rule within six months
         18    after getting permission from the Commission to move forward
         19    on it.
         20              COMMISSIONER McGAFFIGAN:  Okay.
         21              Are there back-fit issues, potentially, in this
         22    rule?
         23              MR. ROSANO:  I think the back-fit issues have to
         24    be considered.  We would be issuing a new requirement --
         25    that is, a requirement to conduct drills, and so, it's
          1    clearly a back-fit, because it's a new requirement.
          2              MR. KANE:  And evaluations.
          3              CHAIRMAN JACKSON:  The evaluation is part of
          4    developing the rule.
          5              COMMISSIONER McGAFFIGAN:  Will CRGR look at this
          6    rule before -- we've had some issues in recent months where
          7    CRGR has looked at things late -- operator licensing was an
          8    example -- and had problems at the final rule stage that
          9    probably should have been clear at the proposed rule stage. 
         10    Will part of the process of developing this rule in the next
         11    six months involve CRGR review?
         12              MR. KANE:  Yes.
         13              COMMISSIONER McGAFFIGAN:  Okay.
         14              Have you looked at the issue of graduated
         15    responses?  At the reg info conference, it was pointed out
         16    that we essentially require these folks to be able to
         17    instantaneously deal with the design basis threat 24 hours a
         18    day, 365 days a year, and the military doesn't do that.
         19              They're not -- no other industrial institution
         20    does that, and I don't know quite how to -- you know, I
         21    don't want to get into design basis threat, but the issue of
         22    not having everybody at the highest security level all the
         23    time -- how do you intend to deal with that?
         24              CHAIRMAN JACKSON:  TBD, right?
         25              MR. KANE:  TBD is the correct answer, but I think
          1    it is a good point, and I think that's something we need to
          2    examine to see if there needs to be a graded approach to our
          3    response.  You know, whether it can be done, I don't know,
          4    but I think it needs to be explored.
          5              MR. COLLINS:  I think that question and
          6    Commissioner Dicus' last comment on the comparison has to do
          7    with the arena of the design basis threat, which is out of
          8    the staff's control.
          9              Commissioner McGaffigan, you're dealing
         10    essentially with a probability issue.
         11              COMMISSIONER McGAFFIGAN:  Right.
         12              MR. COLLINS:  Right now, the assumption is a
         13    probability of one.  Therefore, thou shalt always be ready.
         14              COMMISSIONER McGAFFIGAN:  I'm happy to hear Mr.
         15    Orrik's comment.
         16              MR. ORRIK:  Yes, sir.
         17              In 1978, the NRC made an operating assumption,
         18    which was -- that is unclassified -- was that there would be
         19    no warning, advance warning, and every person that I've
         20    spoken to since then, I believe, reaffirms that the
         21    terrorism, almost by definition, there would be no warning,
         22    and that's the basis on which we have been assuming, but of
         23    course, that's within the NMSS purview.
         24              MR. ROSANO:  May I add that Liz Teneyck is here in
         25    the room, the director of safeguards in NMSS, and I know
          1    that she has a lot of background on it.
          2              COMMISSIONER McGAFFIGAN:  If I'm getting into
          3    dangerous space, I'll just leave the comment.  I think it's
          4    out there, and I do think it's -- you know, assuming a
          5    threat all the time is not what -- a significant threat, you
          6    know --
          7              CHAIRMAN JACKSON:  Well, I think the real point is
          8    that, as he said, in 1978, the Commission made a decision
          9    from an operational point of view.  Having discussions with
         10    Liz and her people theoretically could lead the Commission
         11    to make a different operational assumption, and that's
         12    something that the Commission needs to look at if it wants
         13    to do that.
         14              COMMISSIONER McGAFFIGAN:  Let me ask Mr. Orrik --
         15    I take your testimony today or your briefing remarks today
         16    to essentially say your DPO of February has been resolved to
         17    your satisfaction, that -- you know, we had a letter -- I
         18    think we just recently answered it -- from Congressman
         19    Markey about it, but you raised concerns in your DPO with
         20    regard to two of the recommendations and had an alternative,
         21    and should I regard your remarks today to mean that you're
         22    essentially -- you said you're on-board.  Does that mean
         23    your DPO -- maybe it isn't formally resolved, but it is
         24    resolved in your mind?
         25              MR. ORRIK:  Yes, sir.  Actually, of course, I did
          1    put the caveat that it has to be executed.
          2              COMMISSIONER McGAFFIGAN:  Okay.
          3              MR. ORRIK:  But yes.  The answer to your question
          4    is yes.
          5              MR. COLLINS:  Commissioner McGaffigan, if I can
          6    just take the liberty here, because I believe there's a
          7    point that needs to be clarified based on the statement --
          8    and David, you can choose to think about this if you don't
          9    want to answer it at the table.
         10              The message here appears to indicate that there's
         11    a need for NRC direct involvement, if I read your -- NRC to
         12    ensure this capability to provide countervailing pressure.
         13              Our program may not require NRC direct
         14    involvement.  It may set the standards, codify the
         15    regulations, and allow licensees on their own to conduct
         16    drills and exercises and conduct their own reviews that we
         17    may or may not confirm in evaluation.
         18              CHAIRMAN JACKSON:  But you did talk about having
         19    resident inspectors at the quarterly drills.  You talked
         20    about, in the risk-informed baseline inspection program,
         21    having regional inspections based on what you find out
         22    relative to those drills, unless I misunderstood something.
         23              MR. COLLINS:  That is the original approach.
         24              CHAIRMAN JACKSON:  Right.
         25              MR. COLLINS:  But based on lessons learned and on
          1    individual licensee performance, we may not, in the future,
          2    have that direct monitoring of every drill and every
          3    exercise.
          4              CHAIRMAN JACKSON:  I understand that, but there
          5    must be some periodicity that you intend to maintain.
          6              MR. COLLINS:  Yes.
          7              CHAIRMAN JACKSON:  And that could be the
          8    countervailing pressure.  I mean it doesn't mean that you
          9    look at it one time and you don't come back for 20 years.
         10              MR. COLLINS:  True.  Not 20 years.
         11              CHAIRMAN JACKSON:  Well, I mean you have to decide
         12    for the proposed periodicity --
         13              MR. COLLINS:  What the proposed interval is,
         14    that's right.
         15              CHAIRMAN JACKSON:  -- and the Commission has to
         16    agree that it thinks that is, you know, prudent, and then
         17    that is what it is.
         18              MR. COLLINS:  Well, I think the staff -- the staff
         19    may not ask unless the Commission directs on what that exact
         20    interval is as far as NRC oversight.
         21              Certainly, the licensees would have to demonstrate
         22    capability, but like any inspection program, the periocity
         23    of the review of that capability is really a staff
         24    discretion based on licensee performance, resources, and the
         25    Commission reserves the right to --
          1              CHAIRMAN JACKSON:  Well, I think you need to
          2    clarify how you posit it in a risk-informed baseline
          3    inspection.
          4              If you're talking about using performance
          5    indicators and having that inform a risk-informed baseline
          6    inspection program at whatever periodicity, you know, that
          7    may be, then you need to be clear about that, so that you're
          8    not putting the Commission in the position where it,
          9    quote/unquote, is "de facto" saying, well, you look at it
         10    one time and you don't look at for 20 years.
         11              MR. COLLINS:  I understand that point.
         12              COMMISSIONER McGAFFIGAN:  Presumably, there would
         13    be a performance indicator for the quarterly exercise that
         14    you'd develop with -- that would go into the baseline
         15    inspection program that isn't there at the moment if this
         16    rule change goes into effect.
         17              MR. COLLINS:  That's correct.
         18              MR. KANE:  It would be somewhat parallel to what
         19    you see under emergency preparedness.
         20              COMMISSIONER McGAFFIGAN:  Not to totally destroy
         21    your next six months, but you're going to go to CRGR during
         22    this period.
         23              The guidance document strikes me that -- your
         24    recommendation two -- industry is going to be very
         25    interested in what this guidance document looks like,
          1    because there's going to be a lot of stuff in the guidance
          2    document that is not going to be in the rule and will help
          3    people understand the intent of the rule.
          4              When does the guidance document catch up with the
          5    proposed rule?  Is it there with the proposed rule in your
          6    minds, or is it catch up by the final rule, or what is the
          7    current plan?
          8              MR. ROSANO:  My plan is that it would be available
          9    with the proposed rule.
         10              COMMISSIONER McGAFFIGAN:  Good answer.
         11              MR. ROSANO:  The guidance document but not
         12    necessarily the inspection procedure and the training. 
         13    Those would come later.  But I think that the rule and the
         14    reg guide, if it's a reg guide, go hand in hand.
         15              COMMISSIONER McGAFFIGAN:  The last couple comments
         16    -- I'm just going to agree with Commissioner Dicus.
         17              I mean the thing that we hear from some folks and
         18    I resonate with -- our European colleagues point out to us
         19    that our security requirements are far higher than theirs,
         20    and they live in a pretty significant threat environment.
         21              The Brits had to worry about the IRA for -- at
         22    least since 1969, and the IRA had some pretty significant
         23    capabilities.  There's terrorism on the continent.
         24              Our chemical plants -- you can kill an awful lot
         25    of people by blowing up a chemical plant, oftentimes right
          1    next to an interstate -- are very soft targets, and I think
          2    Part 73 itself is a pretty good deterrent.
          3              When you read the list of weaponry that you guys
          4    require these guys to have at the sites, if I'm choosing
          5    between, you know, various places, there's a pretty good
          6    deterrent in just reading the words, hopefully fully
          7    implemented in the security plans.
          8              So, there's this disconnect, and certainly, we
          9    need to protect these plants, but when European regulators
         10    come in and say, wow, I was just at Palo Verde and I asked
         11    them how many guards they had and they had 160 -- you know,
         12    that's their total force or something, and it's three big
         13    reactors, and they're not all on duty.  That's to get a duty
         14    force that's much smaller.  And they say, well, you know, at
         15    our typical plant, we'll have one guard at the gate or
         16    something.
         17              How do we -- you know, without getting into the
         18    design basis threat, how do we justify the enormous
         19    disparity between what we require and what the chemical
         20    industry requires or what our European and Japanese
         21    colleagues require?
         22              MR. COLLINS:  Do you want to get to that without
         23    getting too close to the design basis threat?
         24              MR. ROSANO:  I can do it without getting close to
         25    design basis threat.  I'm afraid of getting close to
          1    something that might be more dangerous.
          2              My response to that would be, actually, twofold.
          3              I, quite frankly -- this is my opinion.  I can't
          4    account for what the European power plants do, and I'm not
          5    responsible for what they do.  I might say that -- having
          6    said that, that I don't necessarily agree that what they
          7    provide in terms of security.
          8              But I would also like to point out that the
          9    Federal Government right now and in a lot of different
         10    arenas is raising its security consciousness, is increasing
         11    security, preparing more for possible terrorist attacks, and
         12    I think that other areas, other industries may be coming up
         13    to our level, rather than us going down to theirs.
         14              COMMISSIONER McGAFFIGAN:  I think that's
         15    impossible.
         16              MR. KANE:  But it's impossible to really answer
         17    your question without going into first principles and
         18    comparing what you're protecting against, and then that gets
         19    into something I'd rather not talk about.
         20              COMMISSIONER McGAFFIGAN:  Again, Mr. Orrik, if you
         21    want to --
         22              MR. ORRIK:  Yes, sir.  We've had numerous
         23    countries observe the OSREs or regional assist
         24    demonstrations that we conduct at United States plants, and
         25    to the best of my knowledge, there are six countries now
          1    that are copying part or all of the OSRE regional assist
          2    program, including Germany, Japan, Russia, Ukraine,
          3    Kosokslov -- I've forgot what the sixth was.
          4              COMMISSIONER McGAFFIGAN:  So, they're copying
          5    parts of what we're doing now.  So, it can't be all bad.
          6              The final issue again goes to a point that
          7    Commissioner Dicus made.
          8              The notion in these plants, as we arm them, as we
          9    weld doors shut in order to, you know, defeat folks and all
         10    that, have additional aim points and additional equipment in
         11    various places, you end up with a trade-off between security
         12    and safety, and I guess it's probably for the next panel,
         13    but do the security forces within the plan rule supreme, and
         14    if they say a door has to be welded shut, it gets welded
         15    shut, or do you guys -- are you guys confident that people
         16    think about the safety implications of potentially going and
         17    adding a new security bell and whistle?
         18              MR. ROSANO:  Not only do the licensees on their --
         19    at their own level talk through -- you know, talk with ops
         20    and security when changes are suggested, but we, when we go
         21    to the plants, in the OSRE visits, have safety safeguards
         22    interviews to get a better understanding of what is the
         23    impact of security measures on employee safety in the plant,
         24    and that's part of the licensee's program, it's also part of
         25    our program.
          1              COMMISSIONER McGAFFIGAN:  As I understand it,
          2    people are concerned about, you know, just getting to places
          3    in the plant.
          4              CHAIRMAN JACKSON:  Well, in point of fact, that is
          5    why this all-in analysis turns out to be important, because
          6    if, in fact, you're looking at operator actions, engineered
          7    safety systems, etcetera, etcetera, etcetera, that forces
          8    you into the land of safety as well as safeguards, and
          9    that's why, moving down that kind of path, because you will
         10    automatically understand some of those trade-offs, and
         11    that's why I was pressing the issue that that kind of
         12    analysis has to be done at a sophisticated enough level to
         13    allow you to be able to look at this kind of thing.
         14              MR. COLLINS:  Commissioner McGaffigan, I think
         15    there's two aspects.  We touched on them both.
         16              One was the actual aspect of being able to
         17    demonstrate to a plant review committee for a modification
         18    that safety isn't impacted, which is one threshold.
         19              There's the other impact of are we working in a
         20    production facility or are we working in an armed camp, and
         21    that's the intangibles, the hygiene issues, if you will,
         22    that impact individuals just because of what you see and
         23    where they are.
         24              The previous question that was answered by Mr.
         25    Orrik -- I think we have to be careful when we use foreign
          1    countries as an example.  Many countries look to the NRC to
          2    set the standard, and they adopt the NRC's criteria, lacking
          3    any other criteria.
          4              Additionally, I believe we have to be careful when
          5    we are dealing with very focused arenas where security, NRC
          6    to security, licensee -- there can be a tendency there to
          7    have coexisting goals, and there needs to be some outside
          8    tension there that screens those initiatives in a wider
          9    picture, and that's where the operations and the engineering
         10    come in to provide for that balance.  In the past we haven't
         11    had that.
         12              CHAIRMAN JACKSON:  And the wider picture, also, is
         13    -- has to do with a sort of stand-by degree of security out
         14    on the streets, per se, in different countries, and they are
         15    different, and they aren't always obvious, but they are
         16    different.
         17              COMMISSIONER McGAFFIGAN:  I think I've run through
         18    my series of questions.
         19              CHAIRMAN JACKSON:  Commissioner Merrifield.
         20              COMMISSIONER MERRIFIELD:  Thank you.
         21              Two brief questions, and then I want to make a
         22    couple of comments.
         23              In Mr. Orrik's written comments, there's a
         24    statement -- I'm directing this to Mr. Rosano -- the OSRE
         25    was -- is the only NRC performance inspection and evaluation
          1    effort of licensees' capability to protect against
          2    terrorism.
          3              Is that correct?  Is this the only element that we
          4    have?
          5              MR. ROSANO:  It's the only element we have for
          6    testing the performance.  I don't find it to be the only
          7    element we have for inspecting -- that's one of the words in
          8    there -- because we have an inspection program that deals
          9    specifically with security plan commitments, but licensees
         10    also have auditing programs, and they have their own
         11    internal inspections.
         12              There are actually a number of components in the
         13    NRC program to look at what the licensees do in terms of
         14    fulfilling their responsibilities in security.  The OSRE or,
         15    in a larger sense, performance assessment, is the way that
         16    we look at their capabilities with respect to responding to
         17    attack, but only that portion of it.
         18              COMMISSIONER MERRIFIELD:  All right.  But it's a
         19    portion of a much larger program that we have.
         20              MR. ROSANO:  Yes, sir.
         21              COMMISSIONER MERRIFIELD:  Okay.
         22              Mr. Orrik, there was -- in addition to your DPO,
         23    there was also a DPV that was provided to us on August 21st
         24    from Mr. Thomas Dexter, Mr. Dennis Schaefer, and Mr. Bruce
         25    Earnest, all of whom are physical security specialists in
          1    Region IV.
          2              Have you had an opportunity to talk to them, and
          3    do they share your view and encouragement by the
          4    recommendations of the task force that they are reasonable
          5    and responsible?
          6              MR. ORRIK:  I can speak for one of them,
          7    certainly, Mr. Dexter, who's participating in this task
          8    force, and he's, in fact, very substantially involved in
          9    running the baseline inspections, and to clarify a previous
         10    comment, yes, I understand that the SPA task force
         11    requirements -- or recommendations, pardon me -- and the
         12    baseline inspection recommendations include a very definite
         13    NRC periodicity of inspection.
         14              It would be regionalized versus the way it is done
         15    by headquarters now, but it does involve an NRC presence,
         16    which I feel strongly is required until such time as the
         17    Commission determines that the industry can do it by
         18    themselves.  But I think we haven't reached that time yet.
         19              COMMISSIONER MERRIFIELD:  That goes to one of the
         20    comments I want to make, and I guess this goes to Sam.  I
         21    think, along the lines of the Chairman, I do believe
         22    probably it would be in all of our benefit to make sure that
         23    the Commission has an opportunity to closely review the
         24    recommendations for periodicity.
         25              The issues of terrorism and threat to these plants
          1    is, from a public perception standpoint, an important one,
          2    and I think the higher degree of Commission involvement in
          3    assisting you in that regard, I think, would probably be in
          4    the benefit of all of us.
          5              I also want to agree with Commissioner Dicus.  I
          6    have visited a number of plants recently.
          7              I have some concerns about whether we perhaps may
          8    be going overboard, but certainly, as we continue to go
          9    through the process of evaluating this program and accepting
         10    the recommendations of Safeguards Performance Assessment
         11    task force, I think we can continue to evaluate that and
         12    move forward.
         13              The last thing I'd want to say is a few
         14    compliments.
         15              One of them -- the Chairman -- her decision to
         16    re-implement the OSRE program based on the information
         17    provided in Mr. Orrik's DPU and for other reasons -- I
         18    supported it at the time.  I think it was the right thing to
         19    do.
         20              I would also compliment Mr. Orrik.  I have to say,
         21    although there are parts of your DPO I disagree with and, I
         22    think, may lead some in the public -- I think left the
         23    public with a far greater concern about where we are at the
         24    NRC, I think the activities you took in the DPO and the
         25    fellow staffers in their DPV to raise this issue to the
          1    Commission was -- you know, is an important part of our
          2    program.
          3              I think it is important for our staff to
          4    understand that we as a Commission do respond to these, and
          5    I think the activities of the Safeguards Performance
          6    Assessment task force have been very positive.  I think all
          7    the staff should be complimented for working together and
          8    working through this and coming up with a program that seems
          9    to have some merit.
         10              We'll get some other views on the next panel, but
         11    I think, you know, we shouldn't leave it -- you know, this
         12    is an important part of our process.  We certainly do want
         13    to hear what our staff has to say, and I certainly
         14    appreciate the fact that you've brought those comments
         15    forward.
         16              CHAIRMAN JACKSON:  Thank you.
         17              Okay.  I think we'll hear from the next panel. 
         18    Thank you very much.
         19              We will first hear from Mr. Beedle and the folks
         20    from NEI, etcetera.
         21              How have you structured your industry
         22    presentation, Mr. Beedle?
         23              MR. BEEDLE:  I would lead off with a few remarks
         24    and then turn to John McGaha, who would talk through most of
         25    the issues and then make a concluding remark.
          1              CHAIRMAN JACKSON:  And how are you proposing to
          2    structure your presentation, Mr. Leventhal?
          3              MR. LEVENTHAL:  I think I can complete our
          4    testimony in about 10 to 15 minutes' time, and I'm going to
          5    ask Mr. Greenberg to deal with the legal question that arose
          6    with regard to --
          7              CHAIRMAN JACKSON:  Okay.  So, you would present
          8    first and then Mr. Greenberg.
          9              MR. LEVENTHAL:  -- with regard to 73.55(b) through
         10    (h).
         11              CHAIRMAN JACKSON:  Okay.
         12              So, Mr. Beedle.
         13              MR. BEEDLE:  Good morning, Chairman,
         14    Commissioners.
         15              With me today is John McGaha, Executive Vice
         16    President with Entergy -- he's the Chief Operating Officer
         17    for that organization -- Bill Josiger, who is a Vice
         18    President with the New York Power Authority, Doug Gipson
         19    back here is the Chief Nuclear Officer, Detroit Edison, and
         20    we have a number of members of the -- NEI's security task
         21    force, and I point out the attendance here today by way of
         22    underscoring the importance that the industry places on this
         23    subject.
         24              It's one that we are certainly committed to. 
         25    Security of our facilities is something that is extremely
          1    serious in our minds and one that is protecting the assets
          2    of the company.  So, it's not something that's undertaken
          3    lightly.
          4              First slide, please.
          5              Our objective is certainly to promote review of
          6    the security fundamentals, and I think that's what the
          7    Commission has been pointing at this morning with the
          8    questions to the staff.
          9              We certainly agree with the need to take advantage
         10    of this opportunity and time to review the program and make
         11    sure that we're focused on the right thing.
         12              I was encouraged to hear the staff talking about
         13    Part 100 release criteria as one of the fundamental
         14    requirements upon which our security forces are predicated,
         15    and then certainly the design basis threat, and neither do I
         16    want to get into the design basis threat at this point, and
         17    again, we believe that the time is ripe to examine these
         18    issues, to make sure that we're doing the right thing.
         19              I can't help but believe that the dollars we spend
         20    in one area detract from dollars available in other areas,
         21    and security is no different than any of the other programs
         22    that we have to deal with on a day-to-day basis in managing
         23    the industry.
         24              So, with that, I'd like to turn to Mr. John
         25    McGaha, who will cover some more detailed remarks.
          1              John?
          2              MR. McGAHA:  Thank you.
          3              Good morning, Chairman and Commissioners.
          4              CHAIRMAN JACKSON:  Good morning.
          5              MR. McGAHA:  It's a pleasure for me to be here
          6    today, mainly because, about seven years ago, I was involved
          7    in another NEI initiative very similar to this.
          8              In fact, I was really pleased to hear the
          9    questions going around the table, because they are all the
         10    same types of things we were asking seven years ago, things
         11    about use of deadly force, what is the design basis threat,
         12    and is that the right thing to do, what are the staffing
         13    requirements, and I could go right down the list, pretty
         14    much, everything that was being discussed today, we were
         15    discussing back then.
         16              I'd like to, before I get into my slides, just
         17    make a couple of points based on the discussions I heard
         18    earlier today.
         19              In my opinion and, I think, in the opinion of my
         20    colleagues that are here today, there has, in fact, been
         21    creep in the industry.  I know, at our Entergy plants, we've
         22    increased the size of our security force as a result of
         23    OSREs and response to the design basis threat.
         24              We have also, in fact, reduced the size of the
         25    force over the past few years, but that is in other areas
          1    where we've managed to improve and streamline the way we do
          2    business.
          3              We are very interested in what the Commission is
          4    trying to do.
          5              I think this is good that we're taking another
          6    look at this area, so much so that some of our people from
          7    Entergy were here this week talking to the Commission staff
          8    about maybe looking at the new regulatory approach, the risk
          9    performance-based approach, and maybe even coming up with
         10    one security plan for all of our Entergy sites that would be
         11    based on the regulations and not have all these variances
         12    that we seem to have evolved to over the years, mostly as a
         13    result of the inspection process and responding to some of
         14    these things.
         15              But I'll tell you this right now.  Just last week,
         16    we had a security inspection at our Arkansas plant, and at
         17    the exit meeting, the inspector asked us if we would commit
         18    to increase the size of our security force and put that in
         19    our security plan.
         20              So, that just gives you one small tidbit of
         21    information that shows that there is some creep taking place
         22    out there as a result of the inspection process, and I'm
         23    hoping this effort we're doing here will help us get our
         24    arms around that.
         25              I was really pleased to hear the discussion today
          1    about the integrated approach using the engineering
          2    safeguards assessment PRA integrated with operations and
          3    looking at the integrated approach rather than just a pure
          4    security defense mechanism to try to demonstrate that we're
          5    protecting our plants.
          6              To get into my slides, one of our objectives is
          7    that we'd like to see the security program clearly defined
          8    based on realistic and measurable regulations, and this gets
          9    into some of the discussion that occurred earlier today, are
         10    we regulating to the Part 100 release, are we regulating to
         11    the target sets, are we regulating to reactor damage, fuel
         12    damage, or are we regulating to theft of nuclear-grade
         13    material.
         14              This is an area we were discussing seven years
         15    ago, and I'm glad to see what we're discussing it again
         16    today.
         17              Our plant management needs to be able to measure
         18    our performance against these requirements, and as we said
         19    earlier, the requirement should be an integrated
         20    defense-in-depth approach, not just reliance on security
         21    measures or on a local security force demonstrating
         22    interactions with intruders.
         23              This means that this approach needs to include
         24    some kind of risk analysis, and it has to include
         25    operations, engineering, and a lot of other features that
          1    were discussed earlier today, and the NRC oversight and
          2    inspection should be to the same standards that the plant is
          3    using, whether it be active NRC involvement or NRC
          4    monitoring these exercises that are being discussed as part
          5    of the new proposed approach.
          6              In the interim, though, what we've had in the past
          7    and what we still have today, I feel, I think even with this
          8    SECY paper and what it recommends, if we continue with the
          9    OSREs, we still have in my opinion and I think in the
         10    opinion of the colleagues representing the industry, a
         11    variable escalating, expert-driven requirements approach,
         12    and if you go from OSRE to OSRE, the requirements end up
         13    being different, and they all talked about it.
         14              Yes, we go learn from what happened at the other
         15    plants, and we make sure that we don't have those same
         16    problems recur at our plants based on the inspection
         17    results.  That's just the nature of the beast.
         18              Next slide.
         19              CHAIRMAN JACKSON:  That's based on the plants to
         20    -- the program has it has been implemented to date.
         21              MR. McGAHA:  Yes.
         22              CHAIRMAN JACKSON:  Not necessarily this modified
         23    approach.
         24              MR. McGAHA:  Even in the modified approach, I
         25    think if you talk to Watts Bar, you'll -- in fact, I think
          1    -- are those pictures we have from Watts Bar?  We're going
          2    to show you a couple of pictures.
          3              CHAIRMAN JACKSON:  That's how Watts Bar prepared
          4    for it.
          5              MR. McGAHA:  Yes.  Watts Bar prepared for it, and
          6    Comanche Peak is preparing for it, and they're -- I think
          7    they're the next one due for an OSRE, and the executives
          8    there would agree that it is not a regulatory requirement
          9    that they're trying to satisfy.
         10              They're trying to satisfy the perceived
         11    requirement of the OSRE examining team so that they were not
         12    put in a disadvantaged position.  So, it's effectively a
         13    requirement.
         14              CHAIRMAN JACKSON:  Right.  But my understanding is
         15    of what the licensee would be tested to relate to existing
         16    commitments, not based on what they put into place.
         17              MR. McGAHA:  That is correct.  The test is their
         18    existing commitments.
         19              CHAIRMAN JACKSON:  Right.
         20              MR. McGAHA:  But it's heavily weighted toward
         21    interpretation of those equipments, and as members of your
         22    staff have told you, that it's the vulnerabilities.  I
         23    perceive a vulnerability, and as a result of that, if I have
         24    a vulnerability, I have to do something to solve it, and
         25    we'll show you some pictures of what we think are solutions
          1    to vulnerabilities.
          2              CHAIRMAN JACKSON:  Are you arguing that it's ad
          3    hoc?
          4              MR. McGAHA:  Beg your pardon?
          5              CHAIRMAN JACKSON:  It's ad hoc in terms of the
          6    discussions of vulnerabilities.
          7              MR. McGAHA:  Well, no.  I think what happens is
          8    they look at past OSREs and they find out what that utility
          9    did to solve their problem, and then they replicate that at
         10    their station.
         11              CHAIRMAN JACKSON:  Uh-huh.
         12              MR. McGAHA:  So, it becomes a de facto requirement
         13    throughout the industry.
         14              CHAIRMAN JACKSON:  Well, I guess what I'm trying
         15    to understand is, you know, we have an historical approach. 
         16    The staff has posited that there is a modified approach, and
         17    then there are the specific recommendations of the task
         18    force which you seem to be endorsing, coupled with, you
         19    know, what the Commission itself has been discussing this
         20    morning, and I'm trying to understand whether you feel that
         21    this high degree of creep and ad hoc-iness is still implicit
         22    in the modified approach, or is it that the licensees do
         23    things and we kind of say okay?
         24              MR. McGAHA:  Let me get to the crux of what I
         25    think our whole message is here.
          1              We think it's premature to do even this modified
          2    approach until we step back and answer some of these
          3    questions that we've been trying to answer for a long time. 
          4    Is the design basis threat the credible thing to be
          5    protecting against?  Do we need to interdict rather than
          6    interpose and delay and rely on other law enforcement
          7    agencies to bring in additional resources?
          8              These types of things, right now, are not yet
          9    defined, and I'm not sure that the -- this modified
         10    inspection approach is going to define those.  At least the
         11    way I read the letter, it doesn't really say it's going to
         12    get into those kinds of things.
         13              MR. BEEDLE:  Well, let me add that where the staff
         14    is going right now on these next 10 OSREs is, I think, an
         15    evolutionary effort to try and figure out how to do the
         16    OSREs better.
         17              CHAIRMAN JACKSON:  That's correct.
         18              MR. BEEDLE:  Okay.  I don't think that those 10
         19    plants are sufficiently familiar with that process that they
         20    would be willing to not make any changes in their plant as
         21    they approach the date of their OSRE.
         22              CHAIRMAN JACKSON:  Well, then you should tell them
         23    not to do that.
         24              MR. BEEDLE:  Well, I can tell them that all day,
         25    but they say, Ralph, your license isn't on the line.
          1              CHAIRMAN JACKSON:  Well, we'll ask Sam to tell
          2    them not to do that.
          3              MR. BEEDLE:  Okay.
          4              CHAIRMAN JACKSON:  Okay.  And then we will come in
          5    and test based on what is there.  Tell them not to do that.
          6              COMMISSIONER McGAFFIGAN:  The discussion about the
          7    OSRE program as it's been conducted over the last 10 years
          8    reminds me of Towers Turn to some degree and the notion that
          9    we have individual inspectors imposing requirements.
         10              Now, is that what you're saying, or you --
         11    back-fitting and whatever -- or are you saying this is sort
         12    of self-imposed, that the creep is just you guys trying to
         13    anticipate us and you're self-imposing requirements that is
         14    the sum total of the best practices of everybody's who's
         15    gone before you, because if there are back-fit issues,
         16    there's -- you know, I'd be interested in them, and I think
         17    you guys should have been raising them, but which is it?  Is
         18    it self-imposed, or are we imposing back-fits through
         19    inspections?
         20              MR. BEEDLE:  I think it's a combination of some
         21    self-imposed requirements, you know, trying to make sure
         22    that my program meets muster.  It's over-laced with the
         23    involvement of contractors that we use that -- saw it happen
         24    at one plant.
         25              We bring them in and we ask them what do we need
          1    to do to be successful?  You need to do this, and so, we do
          2    that, and then we bring the inspection teams in and they add
          3    a few vulnerabilities, and we start ratcheting, and I'll
          4    tell you, the security programs have increased dramatically.
          5              We're seeing plants spend millions of dollars in
          6    preparing for these examinations, and when you look at that
          7    kind of money being spent without a change in the
          8    regulations, you've got to ask why.
          9              CHAIRMAN JACKSON:  Well, we know that.  What I'm
         10    trying to do is understand where we are trying to go on a
         11    go-forward basis, okay?  There's a lot of history here, and
         12    there's a history that we all need to learn from.
         13              The issue becomes -- we have an interim program,
         14    but the issue is where do we want to be on a go-forward
         15    basis, and if we could focus our discussion that way, I
         16    think it would be very helpful to this Commission, because
         17    we can't make up for history, okay?  But what we can do is
         18    deal with what we do on a go-forward basis.
         19              MR. McGAHA:  In that case, we can skip my next
         20    slide, because I think we just covered all of that, and I
         21    think we ought to show the pictures, just two examples.
         22              MR. BEEDLE:  Slide five.
         23              MR. McGAHA:  And the top picture is basically a
         24    gun turret.  I believe five of those were added at the
         25    plant, and I believe they're manned full-time.
          1              MR. BEEDLE:  No, they're not manned full-time, but
          2    they are there so that, if the -- and this is within the
          3    security fence of the plant.  We've got these little
          4    pillboxes established, and then the one down below is a
          5    gate, with a keypad that you have to punch in the right
          6    combination, and then we conveniently post the combination
          7    right there alongside.
          8              I mean anybody looking at that has got to say does
          9    this make sense?
         10              Now, I understand the rationale for it, but you've
         11    got to say does this make sense?
         12              Our operators, our plant staff, have to punch --
         13    if they want to go from point A to point B on the other side
         14    of that fence, they've got to punch in this thing, and we do
         15    this under the guise of 10-second delay.
         16              If my plant security and safety rest on 10-second
         17    delay, then there is something wrong with my design or my
         18    provision for security in that plant.
         19              CHAIRMAN JACKSON:  Again, how long has this been
         20    here?
         21              MR. BEEDLE:  I don't know.  I think this may have
         22    been put up for one of the more recent OSREs.
         23              COMMISSIONER McGAFFIGAN:  So, during the OSREs,
         24    they take the combination down.
         25              MR. BEEDLE:  No, no, they leave it up.
          1              CHAIRMAN JACKSON:  I think there is an issue here
          2    on a go-forward basis that has to do with what we require
          3    vice what licensees do that we acquiesce to, because that's
          4    really what we're talking about.
          5              MR. BEEDLE:  That is the crux of the issue,
          6    Chairman, yes.
          7              CHAIRMAN JACKSON:  And that is something that I
          8    think the acquiescence and what we're going to truly look at
          9    can be addressed even in the interim program.
         10              Now, if somebody's already built their pillboxes,
         11    there's nothing that we can do about that today, okay?  But
         12    what we can do something about is sending a message relative
         13    to beefing up beyond that which you have a committed to. 
         14    But then you're going to come in and examine based on what
         15    that commitment is and try to move to this overall
         16    integrated approach, provided the Commission approves that.
         17              That's where we need to focus.  I understand
         18    people's neuralgia, but you know, it's like anybody who's
         19    been upset or hurt about something.  I can't change the
         20    history.  He can't change it, she can't change it, he can't
         21    change it, and he can't change it.
         22              The issue is where do we want to go, and what do
         23    you feel from your industry point of view, okay, are
         24    important things for us to consider as we go forward, and
         25    that's where we can all be most helpful to each other.
          1              MR. BEEDLE:  Chairman, John's going to take us
          2    there with slide number six.
          3              CHAIRMAN JACKSON:  Good.
          4              COMMISSIONER McGAFFIGAN:  Madam Chairman, if I
          5    could just say one thing, and it might be slightly light,
          6    but -- I may have seen too many Schwarzenegger films, but
          7    I'm not sure that delays Schwarzenegger 10 seconds.
          8              CHAIRMAN JACKSON:  We need levity.
          9              MR. McGAHA:  Okay.
         10              One of the areas that we need to improve on is in
         11    our management oversight, and I'm talking about the industry
         12    itself.
         13              It's been -- I'll just tell you from my
         14    experience, from being in several plants.  Safeguards gets
         15    into, you know, safeguards information, secretive, nobody's
         16    supposed to know what the design basis threat is, and so,
         17    you've got the security folks who are going to do whatever
         18    they have to do to pass the exam and demonstrate that our
         19    security works, and maybe we haven't gotten involved with it
         20    enough.
         21              CHAIRMAN JACKSON:  So, specialist talking to
         22    specialist.
         23              MR. McGAHA:  Yes.
         24              COMMISSIONER McGAFFIGAN:  Madam Chairman, that
         25    went to my point earlier that I asked the staff about.  Who
          1    has the power in the plant to do these trade-offs?  If,
          2    indeed, one group is this secret fraternity with secret
          3    information and a safety operator says, well, god, I guess I
          4    can live with that and I'll find a way around it, as opposed
          5    to really being able to challenge him and say, you know,
          6    tell me what the hell that's doing for you -- you know, it's
          7    buying you 10 seconds?  Why is that important?  Maybe some
          8    of the operators have to be cleared so that they can
          9    challenge and talk about.
         10              CHAIRMAN JACKSON:  Well, I also think there has to
         11    be some discipline in our approach.  I mean I heard some --
         12    admittedly, but since that's what we all use -- anecdotal
         13    feedback, you know, relative to even the most recent one,
         14    you know, an inspector says, well, you have this
         15    vulnerability over here and, you know, you have this
         16    vulnerability over here.
         17              Well, that's not good on two bases.
         18              One, it's not good because obviously it's, you
         19    know, some individual inspector, quote/unquote, potentially
         20    ratcheting somebody up, but it's not good also from my point
         21    of view, because it's ad hoc, and therefore, you know, I
         22    don't know -- there's no overall analysis that says this is
         23    going to give, you know, the greatest improvement in safety
         24    for, you know, what it requires, and so, this issue of
         25    moving to this post, you know, analysis that Mr. Collins and
          1    his folks described and having some kind of coherent
          2    picture, even with whatever elements of analysis we have
          3    available to us today, you know, is a way to go, and that
          4    you don't just kind of, in an ad hoc way, sort of point out
          5    that this is what you need to do or this is okay and that's
          6    not.  That doesn't give me a whole lot of comfort.
          7              COMMISSIONER McGAFFIGAN:  There's two
          8    vulnerabilities and two more pillboxes.
          9              CHAIRMAN JACKSON:  Well, but I'm saying that those
         10    may or may not be the greatest vulnerabilities, right?  And
         11    so, that's kind of, you know, what's the matter with that,
         12    but I think, you know, some of it has to do with some
         13    management, oversight, and discipline here, and some of it,
         14    you know, has to do with -- you know, as you were discussing
         15    Mr. McGaha.
         16              MR. McGAHA:  I think we're on the right track.  I
         17    guess what we're saying today is that there are some things
         18    that we even have to step back and ask a bigger picture,
         19    that as we're doing that, such things as does a several
         20    layers of defense posture make sense based on the overall
         21    protection and armament and everything that we already have
         22    in place?
         23              Is the design basis threat the real threat?  You
         24    heard that we're still going on -- what did he say, a 1979
         25    -- anyway there were some assumptions and decisions made
          1    many years ago I think we as an industry need to revisit,
          2    because in fact, nuclear power plants today are probably the
          3    most protected -- and maybe rightly so, but they are the
          4    most protected industrial facilities in the entire country.
          5              CHAIRMAN JACKSON:  So that you don't -- aren't
          6    confused about this 1978-79 -- just for the record, it does
          7    not have to do with the threat being 20 years old.  It has
          8    to do with an operational assumption, that whatever the
          9    threat is, as it comes out of various analyses, being
         10    assumed as being constantly present for purposes of
         11    regulatory approach, and that was what the gentleman, I
         12    believe, was talking about.
         13              MR. McGAHA:  I understand, and I guess all we're
         14    really saying is maybe we should revisit some of those to
         15    see if that's still -- if we want to continue with those
         16    same assumptions today.  In fact, we did talk about that
         17    some back in the early '90s, when I was on this previous
         18    task force.
         19              So, this overhead sort of gets into detail on what
         20    I was trying to say earlier about our role to provide better
         21    management oversight, and we do need to do that, to put more
         22    operational input, more technical, engineering, PRA, all the
         23    other inputs into the decisions that are being made.
         24              But the fact is people like me aren't really
         25    expert on security things, so -- but we have to get better
          1    at challenging what some of our security people are doing,
          2    because they -- even though they feel it is prudent -- and
          3    this gets back to Commissioner McGaffigan's question earlier
          4    -- they might be doing something they think is fully prudent
          5    that we should be challenging because it just doesn't make
          6    good sense, and what they may be doing is reacting to
          7    something another plant did, who reacted to another plant,
          8    who reacted to another plant.
          9              Put the next slide up.
         10              This one gets into what our recommendations would
         11    be, of what an effective program would be, and along those
         12    lines, I think we're consistent with what the Commission is
         13    doing.
         14              Our thoughts is that there are fundamental changes
         15    that are needed in the security arena and that -- but we
         16    also feel a baseline review of the overall picture is
         17    warranted, as well as just the focus on the OSRE, the
         18    modified OSRE approach, and we feel that this should be done
         19    before we get too far down the road with the modified OSRE
         20    approach, because they're still working on some of the same
         21    assumptions that we may want to, in fact, reconsider as part
         22    of this.
         23              So, we should step back and look at the big
         24    picture, and to be effective, the program should include,
         25    first, regulations with clear requirements and maybe
          1    risk-informed measures consistent with the approach that
          2    we're taking, that the NRC is taking, and the industry is
          3    taking in the regulatory environment today.
          4              The licensee programs should be based on these
          5    requirements.  In there, we should be monitored through
          6    performance criteria that are measured against the
          7    regulations and not by the number of security officers that
          8    some plant committed and put a number in the security plan.
          9              Once again, we would like to see a response
         10    posture appropriate to the threat level so that there are
         11    times when we may have to double our security forces on-site
         12    and there are times when maybe it would be business as
         13    usual, depending on available information, and then, also,
         14    we'd like to see a due process or a system to deal with
         15    inspection issues in a more open process with senior
         16    management -- that was my comment on the previous slide --
         17    to make sure that we're not thinking we're going the right
         18    thing and all we're doing is ratcheting ourselves up to some
         19    requirement that some other plant has committed to, and in a
         20    lot of cases, that doesn't make sense.
         21              CHAIRMAN JACKSON:  Maybe you might want to think
         22    about -- I'm not trying to tell you how to do your business,
         23    but you mentioned this issues of the safeguards mantle, and
         24    so, a question that arises is, to what extent has
         25    management, you know, to whatever degree you think it needs
          1    to be involved, ensured that it has the capability or
          2    clearance or whatever it takes to have equal access to
          3    safeguards information that people who work for you have?
          4              I mean that puts you at a disadvantage.  It's not
          5    that everybody in the plant needs necessarily to have that
          6    information, but presumably, you know, you and some key
          7    people who would work for you would need to be able to have
          8    that, and that puts you in the position, as the management,
          9    to be able to provide that oversight that you talk about in
         10    a more coherent way.
         11              MR. McGAHA:  I agree, and people in my job and in
         12    other jobs, the safety review committees, there are certain
         13    people that are cleared for safeguards, and we expect them
         14    to review and approve and get involved with the site
         15    security plan and that kind of thing, but those people
         16    aren't really experts.
         17              It's hard for them to interpret some things,
         18    because they don't know what the basis is or who came up
         19    with what the design basis threat is and whether or not
         20    that's a credible thing, and if the security organization
         21    comes in and says, look, 15 plants have put gun turrets in
         22    because -- we need to do that, because if we don't, we're
         23    not going to be able to address the design basis threat,
         24    even if we have access to the safeguards, but it's also an
         25    easy excuse for us to present, well, we don't know about the
          1    -- you know, that's secretive stuff that only FBI and the
          2    CIA and others know about, and so, it's an easy --
          3              CHAIRMAN JACKSON:  Well, to some extent that is
          4    true.
          5              MR. McGAHA:  All I'm saying is we need to take our
          6    own excuses away and get -- and we, too, need to get more
          7    involved and proactive and intrusive on some of this stuff.
          8              MR. BEEDLE:  Our task force, Chairman, is going to
          9    make an effort to try and highlight this as an issue and see
         10    what we can do about trying to educate and make people
         11    understand the significance of it.  I mean it's something
         12    that they really need to pay attention to.
         13              CHAIRMAN JACKSON:  Well, if we take an integrated
         14    approach, that allows you to take an integrated approach.
         15              MR. BEEDLE:  I think that's the real reason we're
         16    able to do this and put focus on it, is because the agency's
         17    put focus on it.
         18              As John indicated, there have been efforts in the
         19    past to try and change some of the security programs, and
         20    they had relatively little success, because the agency
         21    wasn't ready to make any changes.
         22              COMMISSIONER McGAFFIGAN:  Madam Chairman, I've
         23    kept burdening this rule-making process --
         24              CHAIRMAN JACKSON:  And there you go again.
         25              COMMISSIONER McGAFFIGAN:  -- and here I go again,
          1    right.
          2              One thing that's been successful -- and I just
          3    would ask these folks -- I think in Part 70 and maybe less
          4    so in Part 35, because there wasn't as much interaction in
          5    the pre-proposed rule stage, but as we head towards this
          6    proposed rule, would it benefit you all if we did stuff like
          7    we have done on Part 70, have frequent meetings, put it on
          8    the web page, whatever they're coming up with, and interact
          9    with the public as well as the industry, so that people see
         10    what -- where we might be headed?  Would that facilitate the
         11    process, you know, once the rule is out there for formal
         12    comment?
         13              MR. BEEDLE:  I think it would do a great deal to
         14    remove some of the mystery associated with the security
         15    program.  I mean it would get it out into the open where we
         16    could talk about it, and I'm not suggesting that we talk
         17    about the design basis threat or the safeguards information
         18    but just how the program --
         19              COMMISSIONER McGAFFIGAN:  The documents that are
         20    eventually going to be made public, the rule, the reg guide
         21    going with the rule, etcetera, if that were relatively open
         22    earlier, it might be better.
         23              MR. McGAHA:  I would sense and feel that, if we
         24    could figure out maybe something similar, a similar path in
         25    this area, as we're doing with the rest of the regulatory
          1    process, where we're, I think, truly reinventing, to some
          2    extent, the way we do business for the better, I think the
          3    same approach needs to be done here, with pilots or whatever
          4    and industry input and, once again, management getting more
          5    interactive and intrusive into the reasonableness of the
          6    decisions that are made.
          7              I think the last slide, we sort of touched on most
          8    of this already, but this relates to where we think we
          9    should go, and these are the four attributes that we feel
         10    describe what we were just talking about, that this process
         11    needs to include something to ensure that we clearly are
         12    understanding the risk, and Chairman Jackson, I think you've
         13    touched on that from about three or four different angles
         14    already today.
         15              We need to evaluate what is a realistic threat. 
         16    At times, maybe the threat goes up.  At times, maybe the
         17    threat goes down.
         18              We need to employ the full capability, and I think
         19    I heard that discussed about four or five times today, not
         20    just -- like you said, Chairman Jackson, we need to overlay
         21    the engineering and the safeguards and the contingencies and
         22    all these things on top of how easy is it to get to and
         23    damage a target set.
         24              And last but not least, we need an appropriate
         25    response posture based on the situation.  I would challenge
          1    the need to have people sitting around posted in the plant
          2    with weapons loaded and cocked, assuming that someone's
          3    going to attack the plant at any second.
          4              I think there might be times when we need to be
          5    that ready, but the general sense I based on history is
          6    that's sort of the direction that the industry was headed,
          7    and we haven't done very well there.
          8              I mean I'll admit that plants have staffed up and
          9    energized themselves and done some things to get ready for
         10    OSREs, especially in the early days, and after the OSRE was
         11    over, they backed off on some of those things.
         12              CHAIRMAN JACKSON:  Would you argue in your view
         13    that the top three bullets drive the fourth one?
         14              MR. BEEDLE:  Yes.
         15              CHAIRMAN JACKSON:  Okay.  So, that's the bottom
         16    line.
         17              MR. BEEDLE:  Yes.
         18              CHAIRMAN JACKSON:  Okay.
         19              MR. BEEDLE:  Chairman, that concludes our remarks. 
         20    I would just like to underscore one thing, that the security
         21    of our facility is not the responsibility of the security
         22    department at the facility.  It's the responsibility of the
         23    entire plant, and we need to get it back into that -- on
         24    that basis.
         25              CHAIRMAN JACKSON:  Okay.
          1              Commissioner Merrifield, you have a comment?
          2              COMMISSIONER MERRIFIELD:  Yes.  I guess there's
          3    sort of two comments.
          4              I agree with the notion -- some of the attributes
          5    you talk about here, clearly understanding the risk,
          6    evaluating realistic threats, and employing full capability. 
          7    I think that's the right direction to go.  I think we need
          8    to -- we as an agency need to clearly articulate what we
          9    require, test on those requirements, and make you live by
         10    those requirements.
         11              But I think the important caveat to keep in mind
         12    is, as we deal with many other things with risk around here,
         13    it's not a one-way street.  We may very well do a risk
         14    analysis and determine that, in some areas, we need to think
         15    about having you have more capabilities.
         16              Now, I've been to a number of plants.  I've seen
         17    some things that lead me to believe that we're overdoing it
         18    in some areas, but we may very well find down the road that
         19    there are areas where we need to bolster your performance
         20    that will require additional use of financial resources.
         21              The second comment I would make is, you know, I
         22    hear about these consultants you've brought in to give you
         23    analysis of what they think you need to do in order to pass
         24    our exam, and it reminds me of when I was trying to pass the
         25    bar exam and become a lawyer, and I had all kinds of people
          1    come after me -- well, you really need to take this review
          2    course and you need to have these review materials, because
          3    otherwise you're not going to pass that bar exam, and like
          4    anything else, you know, all us good capitalist consumers
          5    have to be careful about the things that people try to foist
          6    on us, and that's not all our fault.
          7              I mean some of it may be, but I think there's a
          8    self-interest, perhaps, of some of your consultants in
          9    selling you probably very expensive services and
         10    demonstrating the need for them to be there.
         11              So, I do want to make that comment to
         12    counterbalance.
         13              MR. BEEDLE:  So, we should get rid of all of our
         14    consultants.  Well, maybe some of them.
         15              COMMISSIONER McGAFFIGAN:  They should all take law
         16    exam prep courses.
         17              CHAIRMAN JACKSON:  Commissioner Dicus?
         18              COMMISSIONER DICUS:  One of the things that was
         19    brought up in the first panel is the potential or
         20    possibility, say, in the biennial exercises, of using the
         21    simulator.  Do you have any comments about that,
         22    particularly if we really go to the criteria, what we're
         23    really trying to accomplish is not to have a Part 100
         24    release?
         25              MR. McGAHA:  I really hadn't thought much about
          1    that.  I think that's one of the things that we as an
          2    industry need to look at.
          3              On the one hand, there's probably -- I can
          4    probably sit here and come up with some pros and cons.  As
          5    was mentioned earlier, we do use the simulator and emergency
          6    preparedness exercises, and we found it beneficial there. 
          7    As I recall, part of the emergency preparedness exercise
          8    also includes a security threat.
          9              So, who knows?  Maybe we can think of a way to
         10    combine emergency preparedness and security together.
         11              MR. JOSIGER:  I think we have to evaluate that and
         12    think it through, because there's many ways that we could
         13    incorporate the operational aspect into the mitigation of
         14    the various scenarios.  Using the simulator is one. 
         15    Table-tops are another.
         16              Review of the design basis, the defense-in-depth
         17    philosophy that the plants are constructed and operated to
         18    -- all that has to be integrated into the functional
         19    inspection of security.
         20              CHAIRMAN JACKSON:  Commissioner Diaz?
         21              COMMISSIONER DIAZ:  I have no comments.
         22              CHAIRMAN JACKSON:  Commissioner McGaffigan?
         23              COMMISSIONER McGAFFIGAN:  No further questions.
         24              CHAIRMAN JACKSON:  Commissioner Merrifield.
         25              Let's hear from Mr. Leventhal, please.
          1              MR. LEVENTHAL:  Thank you, Madam Chairman, and to
          2    you and members of the Commission, I --
          3              CHAIRMAN JACKSON:  Let me make one comment.
          4              If any of you had -- I think, Mr. Rosano, you went
          5    around and --
          6              MR. ROSANO:  Yes, ma'am.
          7              CHAIRMAN JACKSON:  -- traded -- there was an
          8    original version of Mr. Leventhal's testimony, that if you
          9    have the one that you picked up when you came in, we would
         10    ask you to exchange it with Mr. Rosano.
         11              Please go on.
         12              MR. LEVENTHAL:  We do appreciate the opportunity
         13    to testify before the Commission and your willingness to
         14    hear a public interest view on the issues that are before
         15    you today.
         16              My name is Paul Leventhal, and I'm president of
         17    the Nuclear Control Institute.  We're a non-profit research
         18    and advocacy center concerned with problems of nuclear
         19    proliferation and the threat of nuclear terrorism.
         20              With me today is our counsel, Eldon Greenberg, a
         21    partner in the Washington, D.C., law office of Garvey,
         22    Schubert & Barer.
         23              Mr. Greenberg will address the legal question that
         24    I made reference to in response to your question on
         25    73.55(b)-(h) at the conclusion of my testimony.
          1              I would appreciate the opportunity to begin by
          2    establishing some context for the concerns that I have about
          3    much of what I've heard today, and so, there is something of
          4    a philosophical bent to this, and I hope you'll indulge me,
          5    because there is a point to it.
          6              Before founding NCI in 1981, I worked on the staff
          7    of the U.S. Senate and was responsible for preparing the
          8    investigations and the legislation that resulted in
          9    enactment of the Energy Reorganization Act of 1974 and the
         10    Nuclear Non-proliferation Act of 1978.
         11              I was co-director with Jim Asselstine, who later
         12    became a commissioner here, of the bi-partisan Senate
         13    special investigation of the Three Mile Island nuclear
         14    accident, and I helped prepare the lessons learned
         15    legislation that was enacted as a consequence of this
         16    investigation.
         17              For the past 25 years, I've been concerned with
         18    various ways -- I've been concerned in various ways with
         19    prevention of the misuse and abuse of civilian nuclear
         20    energy programs, including prevention of radiological
         21    sabotage.
         22              I'm particularly interested in the Commission's
         23    present engagement in the staff's OSRE program.
         24              We are highly supportive of the OSRE program.  We
         25    think it's actually done a pretty good job, and I think one
          1    thing that has been absent in the discussion today, at least
          2    to my hearing, are what the problems are that need to be
          3    fixed.
          4              We have a good sense of what the problems are in
          5    terms of security performance at the plants that OSRE has
          6    run exercises at and the need to improve that performance
          7    and keep it improved, but I do not see any problems that
          8    require a major reorganization of OSRE, perhaps some
          9    upgrading of regulations so that there is enforcement power
         10    in terms of grading these exercises and getting improved
         11    results.
         12              I would say that, given the dire consequences that
         13    would result from a successful attack, the consequences that
         14    the OSRE exercises are designed to try to prevent -- that
         15    is, to successful repel an adversary whose objective is
         16    radiological sabotage, the destruction of a plant's vital
         17    systems to cause a core meltdown and breach of containment
         18    -- given those dire consequences that could result from a
         19    successful attack, I cannot think of anything more important
         20    for the NRC staff to do and for the Commission to make sure
         21    that the staff does well.
         22              Among the lessons learned from the TMI accident
         23    was that, when a severe accident occurs, the uncertainty
         24    among operators and supervisors in the control room can run
         25    very high, can contribute to the severity of the accident,
          1    and that uncertainty itself should be considered a condition
          2    of the plant in weighing whether an evacuation of the
          3    surrounding population is called for.
          4              That was the core finding of the Senate
          5    investigation, as I recall it.
          6              The lessons learned legislation enacted as part of
          7    the NRC Authorization Act of 1980 included a requirement
          8    that newly-constructed plants must be denied operating
          9    licenses if the Commission cannot determine that the
         10    surrounding area can be successfully evacuated.
         11              As a consequence, the Shoreham plant was shut down
         12    before reaching full power after Federally-supervised local
         13    drills demonstrated that Long Island could not be
         14    successfully evacuated.
         15              The Seabrook plant in New Hampshire came close to
         16    suffering a similar fate but was eventually granted an
         17    operating license.
         18              Now, I review this bit of history to illustrate
         19    the overriding importance of protecting a reactor's vital
         20    systems so that evacuation is never required.
         21              None of the plants operating today were really
         22    constructed with evacuation in mind.  Emergency planning was
         23    an afterthought, considered not before issuance of the
         24    construction permit but just prior to granting of the
         25    operating license -- that is, after the plant is built.
          1              The 10-mile inhalation zones and the 50-mile
          2    ingestion zones established by the Commission post-TMI will
          3    have little meaning to the residents of New York City or
          4    Chicago, for example, if one of the plants operating nearby
          5    is successfully hit and a radioactive plume is heading their
          6    way.
          7              There will be a spontaneous desire to evacuate,
          8    and it will not be pretty, to say the least.
          9              TMI was a close call.  A total meltdown was
         10    averted after a newly-arrived shift supervisor, Brian
         11    Mehler, who, for my money, is the unsung hero of Three Mile
         12    Island, figured out two hours into the accident that the
         13    pressure-operated relief valve was stuck open and draining
         14    coolant from the core.
         15              As it turned out, about half the fuel melted as a
         16    result of the stuck valve and the confusion that this
         17    caused.
         18              How likely that a total melt could be averted if
         19    the precipitating event were not a mechanical failure, as in
         20    the case of TMI, but rather, the failure of security guards
         21    to prevent terrorists with explosives from successfully
         22    penetrating the protected area of a plant or the failure to
         23    prevent a truck bomb the size of the one used against the
         24    Federal building in Oklahoma City or the Marine barracks in
         25    Dhahran, Saudi Arabia, from being detonated at or near the
          1    protected area fence.
          2              Now, we could, of course, debate what the actual
          3    consequences of a successful attack would be, and of course,
          4    we have done that today, but I ask, why bother engaging in
          5    such a debate?
          6              Why not simply give NRC staff the resources and
          7    impose the necessary requirements on industry to make it
          8    extremely unlikely that such an attack could ever succeed? 
          9    That, in my view, is the essential question before the
         10    Commission today.
         11              The public expects that kind of protection. 
         12    That's what public perception's all about.  The public
         13    expects that kind of protection and would surely demand it
         14    if the current deficiencies became widely known.
         15              If there were a successful attack, the human
         16    suffering and the property loss that would ensue would
         17    almost certainly bring about the downfall of the nuclear
         18    industry, something that members of the Commission who
         19    regard the industry's survival as a sacred trust should
         20    ponder hard.
         21              Now, the basic position of the Nuclear Control
         22    Institute is, one, current security regulations at nuclear
         23    power plants are inadequate to protect against radiological
         24    sabotage; two, the design basis threat, 10 CFR 73.1, against
         25    which plants are protected, does not correspond to current
          1    real world dangers and is not even fully applied with regard
          2    to the insider threat -- I'll return to the insider threat
          3    in a moment; three, the Commission cannot rely on advanced
          4    warning to provide the necessary lead time to bolster
          5    defenses against an armed assault or vehicle bomb attack.
          6              I was interested to hear the discussion today of
          7    General Gossick's 1978 -- April 10, 1978, memorandum to the
          8    Commission, approved by the Commission at that time, which
          9    exhibited wisdom that is as true today as it was then.  I'll
         10    quote two passages from it.
         11              "Operating assumption:  A prudent, viable
         12    safeguard system should not rely for its effectiveness on
         13    the accuracy and timely availability of intelligence
         14    information concerning the plans, characteristics, and
         15    intentions of a hostile adversary with regard to theft,
         16    diversion of SNM, or sabotage of a nuclear facility."
         17              I would say that pretty much characterizes the
         18    situation with regard to the Oklahoma City bomb, total
         19    surprise.
         20              "Degree of conservatism:  This operating
         21    assumption accommodates the conservative perception that,
         22    given the manifestation of a significant threat to the
         23    nuclear industry, there is a possibility that the U.S.
         24    intelligence community would not be able to collect and
         25    report that information to the NRC in a sufficiently
          1    accurate and timely manner so that appropriate safeguards
          2    actions might be taken to thwart the threat."
          3              I would say that characterizes the situation with
          4    the World Trade Center.  There was some information, it was
          5    not properly processed, the threat was not dealt with before
          6    the explosion took place.
          7              Now, since 1985, our organization, in
          8    collaboration with another organization, the Committee to
          9    Bridge the Gap in Los Angeles, has pressed the Commission to
         10    upgrade its regulations regarding the design basis threat.
         11              The current DBT contemplates several external
         12    attackers, in collaboration with one insider, approaching
         13    the plant as a single team and employing no more than
         14    hand-held weapons and explosives.
         15              The design basis threat for the truck bomb rule
         16    promulgated in 1994, after both the attack on the World
         17    Trade Center and the intrusion at Three Mile Island, which,
         18    admittedly, Commissioner Merrifield, did not include a bomb,
         19    but for four hours, they didn't know whether it included a
         20    bomb, and I would question whether the operator acted
         21    prudently with that degree of uncertainty in not scramming
         22    the plant.
         23              The point, however, is that, with regard to the
         24    truck bomb rule promulgated in 1994, we have reason to
         25    believe that it is insufficient to protect against the
          1    larger terrorist bombs used since the time the rule was
          2    promulgated in response to the World Trade Center explosion.
          3              We have interacted with the Commission a number of
          4    times on this, and basically, we have not gotten what we
          5    would regard as a definitive response as to whether a bomb
          6    as large as the Oklahoma City bomb or the Dhahran bomb could
          7    be adequately protected against based on present set-back
          8    distances and barriers, and there are other problems, but I
          9    agreed with -- when I inquired whether I could raise this
         10    issue, not to elaborate on it to the extent of neglecting
         11    the subject of the meeting today.
         12              Now, the subject of the meeting today is this set
         13    of recommendations by the SPA task force, and we did not
         14    have the document in hand when we prepared this testimony
         15    that was discussed today.  So, I had some generalized
         16    comments on it to the effect that -- and I think that what
         17    I'd like to do at this point is summarize my statement so I
         18    allow some time for Mr. Greenberg to deal with the legal
         19    question and maybe address some of the specific points that
         20    were made today.
         21              I want to raise the insider threat, because I find
         22    the discussion today about the possibility of operator
         23    intervention somehow mitigating the consequences of an
         24    accident and thereby implicitly making the security
         25    protection of the plant relatively less important -- at
          1    least that's what I gather the message to be, but as I
          2    understand it, based on the discussions that took place
          3    between NEI representatives and NRC staff, the full design
          4    basis threat is not applied in the OSRE exercises.
          5              The insider is assumed to be only passive, not
          6    active.  He provides the attackers information.  He in no
          7    way participates in the attack.  He in no way tries to
          8    neutralize the guard force inside the plant.  He in no way
          9    tries to interfere with control room operations.  He is
         10    passive.
         11              The design basis threat says that he is active as
         12    well as passive, and I question -- seriously question how
         13    you can reasonably expect to do exercises that presumably
         14    mimic real-world attack-type situations, particular when
         15    you're going to begin applying Part 100 release standards to
         16    this whole process and apply some sort of probabilistic risk
         17    assessment, as well, as far as I can gather from the
         18    discussion today, if you assume that there is an insider but
         19    he's just passive, then clearly you are not making a
         20    real-world assumption as to what might actually happen in
         21    the event of a concerted attack on a plant, and I question
         22    -- this is my one principle criticism of OSRE.
         23              I gather from the discussions that I observed that
         24    this is sort of an unwritten staff guidance to OSRE not to
         25    press the active insider as a player in a mock attack.
          1              I would ask the Commission to consider that,
          2    especially in the context of what you are now about to
          3    engage in, this integrated approach, risk-informed
          4    assessment.
          5              I don't see how you can apply risk assessment to
          6    human behavior when it comes to trying to anticipate what a
          7    determined group, for whatever reason, might attempt to do
          8    to bring down a nuclear power plant.
          9              You have to assume that the attack could come as
         10    suddenly as the attack on the Oklahoma City Federal
         11    building, and the capabilities of the plant must be
         12    sufficient to repeal such an attack, because the
         13    consequences of a successful attack are unthinkable,
         14    absolutely unthinkable.
         15              Evacuation must never happen, particularly in a
         16    major population center, a major city, because it's
         17    unfeasible, and of course, in terms of the potential loss of
         18    life and loss of property will be such, as I indicated
         19    before, that it could well bring the nuclear industry down.
         20              There will not be much tolerance if a nuclear
         21    plant has proven to be vulnerable because of an exercise --
         22    and I do regard this as an exercise -- where industry's
         23    complaints about the cost, about the inconvenience, about
         24    the embarrassment of highly professional physical protection
         25    exercises, what this brings to bear on them, as if that
          1    somehow is more important than the public health and safety
          2    and the common defense and security of the United States,
          3    and I think the Commission seriously has to weigh that
          4    question.
          5              I mean all this is happening on your watch, and if
          6    the result of this is to give industry more and more
          7    discretion to run its own drills, to keep NRC out as much as
          8    possible, because I think that's where it's really heading,
          9    if that's where it's heading, my concern is that you will
         10    not be satisfied with the end result, and our simple
         11    solution is beef up OSRE, give it the regulatory authority
         12    it needs so that fines and other enforcement actions can be
         13    taken, if needed, and Mr. Greenberg, in a moment, will
         14    discuss whether you really need a new regulation or whether
         15    you just interpret present regulations differently, and I
         16    would say that that would be the more useful approach.
         17              CHAIRMAN JACKSON:  I think Commissioner McGaffigan
         18    had a question for you.
         19              COMMISSIONER McGAFFIGAN:  The question really goes
         20    to the -- you know, there's a lot of absolutism in your
         21    comments today, and you know, I take an analytical approach
         22    to almost everything, so you know, the sort of questions we
         23    asked earlier, I'll ask you.
         24              I can posit a design basis threat that, you know,
         25    a rogue company of special operations forces or battalion
          1    or, you know, the entire U.S. special operations command
          2    going haywire and deciding -- even if I posit that big a
          3    threat, why do they go after nuclear plants as opposed to
          4    all the other soft targets where they can do even more
          5    damage, and why do you not bring the same absolutism to the
          6    chemical industry or to various other various soft targets
          7    that are available in the United States?
          8              There's a tremendous deterrent.  I mean this is --
          9    whatever else you say, this is the safest private sector set
         10    of institutions in the country from the point of view of
         11    being able to repeal terrorist attacks.
         12              MR. LEVENTHAL:  I would add to that statement the
         13    phrase "thus far."
         14              I would respond by quoting what the FBI apparently
         15    briefed security staff on, which was that there is no such
         16    thing as an unlikely target and that any perception of
         17    softness might well be exploited, and therefore, if what the
         18    public perception is is a ratcheting down of physical
         19    protection standards in order to accommodate the complaints
         20    of industry over the cost and the inconvenience and the
         21    embarrassment, the perception may be that nuclear plants are
         22    becoming soft targets.
         23              I think security can be improved.  There are
         24    obviously limitations.
         25              COMMISSIONER McGAFFIGAN:  But how much is enough? 
          1    I mean where do you draw the line?
          2              You're saying the design basis threat isn't high
          3    enough in one place -- I mean should I assume that there's a
          4    company of rogue special operations forces fully armed to
          5    the teeth with whatever weapons they can bring in, with
          6    whatever helicopters, etcetera, they have available to
          7    themselves?
          8              Where do I draw the line?  I can defeat anything
          9    if you give me enough fire power.
         10              MR. LEVENTHAL:  Given General Gossick's operating
         11    assumption, there are limits as to what you can expect from
         12    intelligence, but surely the CAT program, for example,
         13    should not have been terminated, if indeed it has been
         14    terminated, the program in cooperation with FBI and DOE
         15    based at Livermore, which presumably was designed to process
         16    information as quickly as possible for the NRC.
         17              I think, sure, there are probably upper limits
         18    beyond which you could not protect the plant, and I won't
         19    get into the scariest of scenarios, which are the nuclear
         20    scenarios, but the point is that, even though other
         21    industries may be less protected -- that may well be so.
         22              Nuclear is different.  First of all, there is a
         23    certain panache in the minds of terrorists and radical
         24    groups, perhaps, in doing something nuclear, and the
         25    potential consequences are uniquely insidious.
          1              If there were a radioactive plume heading for a
          2    major city or population center, it would just be terrible,
          3    and it's something that, therefore, the Commission should
          4    use every resource available to it to prevent.
          5              I'm not saying, of course, it can be 100-percent
          6    prevented, but I'm saying you can make it extremely unlikely
          7    or as unlikely as humanly possible, and the sense that I get
          8    of the discussions thus far, the two meetings between NEI
          9    and NRC staff that I monitored and the discussion today, is
         10    that you're sort of on a slippery slope toward giving
         11    industry more discretion and NRC less of a role, to put it
         12    in kind of plain language, and I don't think that's in the
         13    public interest.
         14              CHAIRMAN JACKSON:  Can you speak to the SPA task
         15    force recommendations?
         16              MR. LEVENTHAL:  Well, yes, I can, and I do in my
         17    statement.
         18              The first two show promise.  The first two, which
         19    speak to the modifications of regulations and the
         20    preparation of regulatory guide to develop target sets,
         21    protective strategies, and an exercise regimen -- that's all
         22    to the good, I would think, because that doesn't exist
         23    today, and it could strengthen OSRE in doing its job.
         24              But the second two are a clear indication -- the
         25    second two being this notion of training NRC regional
          1    inspectors to -- first of all, identifying their role and
          2    observing tactical response exercises and to train them for
          3    new responsibilities -- this suggests that what the ultimate
          4    objective is here is to eliminate the outside consultants,
          5    and by the way, these outside consultants, which their very
          6    existence and identification is so sensitive that it's
          7    classified, they obviously know their stuff, they're
          8    charging the Commission all of about $90,000 a year, which
          9    is not prohibitive, it's a bargain for what you're getting,
         10    and it is not like prepping -- Commissioner Merrifield, I
         11    think the analogy about prepping for the bar exam and
         12    prepping for an OSRE exercise doesn't really hold, because I
         13    mean you might fail the bar exam and have to take it over
         14    again if you get the wrong advice, but presumably these are
         15    experts in black hat exercises, in Green Beret tactics.
         16              These are the guys who you wouldn't want to have
         17    against you and you definitely want to have with you, and I
         18    think the kind of review and expert advice they give on
         19    correcting inadequacies is invaluable, and nothing should be
         20    done to in any way diminish their role.
         21              Again, if I could just ask Mr. Greenberg to deal
         22    with the final point having to do with a situation where the
         23    physical protection plan is just fine but the licensee
         24    happens to fail to protect against a design basis threat,
         25    how do you enforce that kind of a situation?
          1              COMMISSIONER MERRIFIELD:  Chairman, if I may,
          2    before you do that, I just wanted to get a clarification. 
          3    In response to Commissioner McGaffigan's comments, you
          4    mentioned something about soft targets, and I was wondering
          5    if you could -- I missed that, if you could go over that
          6    again.
          7              MR. LEVENTHAL:  Yes.  It was one of the different
          8    professional view papers.  They apparently cited a FBI
          9    briefing for security staff.  I don't have that paper before
         10    me, but it was the one that accompanied Captain Orrik's
         11    paper back in August, I believe.
         12              COMMISSIONER MERRIFIELD:  You were quoting the
         13    paper, then.
         14              MR. LEVENTHAL:  Yes.  It was characterized in that
         15    paper as a briefing in which the FBI said that there is no
         16    such thing as au unlikely target and doing nothing that
         17    might project the appearance of a hard target becoming a
         18    softer target, because if a hard target becomes a softer
         19    target, it is more vulnerable to attack and more likely to
         20    be attacked.
         21              COMMISSIONER MERRIFIELD:  I have some other
         22    comments, but I'll withhold those till the end.
         23              MR. LEVENTHAL:  Mr. Greenberg.
         24              MR. GREENBERG:  Thank you.
         25              Madam Chairman and members of the Commission,
          1    you've been very patient over a long morning.
          2              COMMISSIONER MERRIFIELD:  Well, this is important
          3    stuff.
          4              MR. GREENBERG:  Contrary to what is usually
          5    expected of lawyers, I'll try to be brief nonetheless.
          6              CHAIRMAN JACKSON:  That's all right.  We've got
          7    our own.
          8              COMMISSIONER MERRIFIELD:  And they put up with me,
          9    too.
         10              MR. GREENBERG:  There was a certain amount of
         11    discussion this morning about regulatory requirements and
         12    enforceability, and I think it was made clear by the staff
         13    presentation that, at least insofar as OSRE has been run in
         14    the period from 1992 to 1998, the Commission did not
         15    consider that a licensee which was otherwise in compliance
         16    with 10 CFR 73.55(b) through (h) could be subject to an
         17    enforcement action if it failed to demonstrate successfully
         18    its capability to defend against the design basis threat. 
         19    The report of the ad hoc review panel at various points
         20    refers to the fact that findings of security weaknesses are,
         21    quote, beyond enforceable requirements.
         22              As we read the rules, that kind of judgement is
         23    not necessary.  We believe that the regulations as they now
         24    exist can properly be read as requiring licensees to be able
         25    actually to defend against the design basis threat, and we
          1    set out in our written statement the arguments in support of
          2    that position, and I won't go over them in depth this
          3    morning.
          4              It does seem to me that the staff indicated that
          5    it does not necessarily interpret the regulations
          6    differently than we do insofar as the modified OSRE program
          7    from 1999 to 2000 will be one in which the NRC may issue
          8    enforceable orders to upgrade security and will not be
          9    relying solely upon voluntary actions that might be taken by
         10    the licensee in response to OSRE findings.
         11              Even so, to the extent that there is any ambiguity
         12    in the current regulations, we would favor removing that
         13    ambiguity through rule-making to make it clear that
         14    compliance, for example, with 73.55(b) through (h)
         15    requirements is not a safe haven and that, in fact, the
         16    licensee must be able to demonstrate an ability to meet the
         17    design requirement to protect against the design basis
         18    threat.
         19              Mr. Leventhal mentioned in his prepared testimony
         20    that the institute supports recommendation number one of the
         21    SPA.
         22              That recommendation, as stated this morning, would
         23    be to modify the rules, quote, "to require licensees to
         24    maintain the effectiveness of their contingency plans and to
         25    upgrade their security plan commitments whenever these
          1    exercises reveal weaknesses in their ability to protect
          2    against the design basis threat."
          3              We think that's a salutary change, we think it's
          4    appropriate, and we think it's one that should be made by
          5    the Commission when it considers these issues in the
          6    upcoming rule-making.
          7              Thank you.
          8              CHAIRMAN JACKSON:  Thank you.
          9              Mr. Leventhal, any further comments?
         10              MR. LEVENTHAL:  That concludes my remarks, and
         11    we'd both be happy to respond to any questions.
         12              CHAIRMAN JACKSON:  Okay.
         13              Commissioner Dicus.
         14              COMMISSIONER DICUS:  I don't have any further
         15    questions.
         16              CHAIRMAN JACKSON:  Commissioner Diaz.
         17              COMMISSIONER DIAZ:  No further questions.
         18              CHAIRMAN JACKSON:  Commissioner McGaffigan.
         19              COMMISSIONER McGAFFIGAN:  I think I had my
         20    questions earlier.
         21              CHAIRMAN JACKSON:  Commissioner Merrifield.
         22              COMMISSIONER MERRIFIELD:  Yes, a couple of things
         23    I would comment on.
         24              Mr. Leventhal, you've got some relatively detailed
         25    testimony here which I find quite interesting and
          1    informative.  It's not my point to make this, but it would
          2    have been helpful for me to get this in advance so that I
          3    could have had a chance to go through it and ask --
          4              MR. LEVENTHAL:  I apologize for that.
          5              COMMISSIONER MERRIFIELD:  -- some more detailed
          6    and penetrating questions.  It makes it very difficult for
          7    me not to be able to prepare adequately given what I think
          8    is probably some very good testimony.
          9              Regarding your comment on my comment on bar review
         10    exams, the point that I was simply trying to make with the
         11    industry is -- you know, it may be very appropriate
         12    activities that they were doing.
         13              There is a lot of grumbling among some licensees
         14    that these are in response to things that we're forcing on
         15    them, and I just wanted them to be aware that it may be --
         16    their consultants may be encouraging them to purchase things
         17    that aren't necessary to meet our requirements.
         18              Finally, there is a statement that you have in
         19    your printed statement I do want to touch on.  On the second
         20    page, on the last full paragraph, you state, "Members of the
         21    Commission who regard the industry's survival as a sacred
         22    trust should ponder hard."
         23              I'm speaking only for myself.  When I swore in as
         24    a Commissioner of the Nuclear Regulatory Commission, it was
         25    in mind with keeping -- making sure that the health and
          1    safety of the American people were protected.
          2              It was not in my mind that I was swearing in to
          3    protect the industry's survival as part of my sacred trust. 
          4    So, at least for my purposes, I will tell you that is not at
          5    all my intention of being a U.S. NRC Commissioner.
          6              COMMISSIONER McGAFFIGAN:  I second that, and I'm
          7    sure there will be a third, fourth, and fifth.
          8              MR. LEVENTHAL:  Let me say, as a drafter of the
          9    Energy Reorganization Act, that was intended -- and I do
         10    have this in my testimony elsewhere -- it was intended to
         11    essentially fission the AEC into separate promotional and
         12    regulatory agencies.
         13              Members of the Commission could well be supportive
         14    of the nuclear industry in the sense that the feeling is
         15    that it's an important and vital industry and it represents
         16    an important part of the infrastructure, as Captain Orrik
         17    said before, but as an independent regulatory body, you do
         18    have to make the tough judgements that sometimes the
         19    industry must pay for things that it doesn't want to pay for
         20    and that, while this particular industry has difficulties in
         21    a more competitive marketplace today, in the context of
         22    deregulation, as I indicated before, it is -- nuclear is
         23    different, because if something goes wrong, the consequences
         24    are grave, and again, Commissioner McGaffigan, not to in any
         25    way contest your point that the chemical industry is
          1    probably a softer target and the consequences could be
          2    horrible -- I surely agree with that, but nuclear is
          3    different in the sense that the consequences could be
          4    long-lasting and result in a -- if not permanent, a
          5    long-term evacuation and with very difficult cleanup, I'm
          6    sure you're all aware of that, and therefore, that extra
          7    measure of conservatism is essential, and I think where
          8    there should be no compromise is that these plants are
          9    protected against what the experts say is a credible
         10    real-world threat, and at the end of my testimony, I
         11    suggested that you do revisit the design basis threat to
         12    look at whether it does reflect what the experts say is the
         13    current threat out there.
         14              I mean the design basis threat probably should be
         15    revisited on a periodic basis, because the threat does
         16    change, and unfortunately, the threat is getting worse and
         17    worse.
         18              So, I would hope the Commission would take that
         19    recommendation seriously.  We surely stand ready to interact
         20    with you, and we do appreciate this opportunity to be heard,
         21    and Commissioner Merrifield, if, after reading the
         22    testimony, you want to discuss it further, I'd be happy to.
         23              CHAIRMAN JACKSON:  Well, I will make three
         25              One, you know, I've said in testimony I think that
          1    the nuclear power industry is an important part of our
          2    energy mix, but I probably am the member of the Commission
          3    that that nuclear industry likes the least, because you
          4    know, I have been willing to make tough calls, etcetera,
          5    etcetera.
          6              Your comment about soft targets is something that,
          7    you know, has played in the back of my mind, or perception
          8    of it, and I think it's one that, in a threat environment,
          9    one has to keep in mind.
         10              And third, I have, in fact, been pushing the staff
         11    on the interpretation we've made of 73.55(a) relative to
         12    this focus on items (b) through (h) as opposed to the rest
         13    of what's in that regulation, but sometimes clarification or
         14    further hardening of the clarification is a useful exercise,
         15    and I think that one shouldn't misunderstand the integrated
         16    approach in terms of the ability to help one understand
         17    where all of the vulnerabilities are, including things like
         18    what happens if operators are incapacitated because of an
         19    insider or blowing up the control room or whatever it is,
         20    and that's why one has to do that kind of integrated
         21    analysis.
         22              But let me just close by thanking each of the
         23    panelists today for sharing their insights and concerns
         24    regarding the OSRE program and the NRC recommendations
         25    overall for the program for safeguards performance
          1    assessment.
          2              As I stated at the outset of the meeting, I
          3    believe that the additional scrutiny that we have been
          4    giving this program will, in fact, result in a more
          5    effective regulatory oversight, a program that is
          6    defensible, is consistent, and coherent with clear
          7    performance objectives and ultimately providing, you know, a
          8    better regulatory approach to all of our stakeholders, and
          9    the Commission is evaluating and will continue to evaluate
         10    the NRC staff proposals.
         11              We will weigh the thoughtful input we've received
         12    today from all parties, and we will monitor and assess the
         13    results of the program as it evolves.
         14              I do not believe we're going to stop the modified
         15    OSRE program but we're going to learn from it and try to
         16    move along, and I thank all of you for your attention.
         17              Unless my colleagues have any comments, we're
         18    adjourned.
         19              [Whereupon, at 1:02 p.m., the briefing was
         20    concluded.]