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pliance with the rule. After that time, it is my understanding that representatives of the industry met with members of the NRC staff and presented their position in opposition to the rule—a small number, I believe, of the utilities that opposed it. Mr. DEFAzio. Were these any of the same utilities that opposed the rule in court? Mr. ZECH. I am not sure, but I believe that is probably so. Mr. DEFAzio. So they sort of had their day in court, so to speak, but now they are back to the Commission, or to the staff of the Commission. Mr. ZECH. Yes, that is true, but they are talking now about the implementation of the rule—the rule itself, as I understand it, now in effect. But it is awfully important to interpretation of the rule— and we do this in many cases—but anyway, 83–33 gave detailed guidance for how to meet the rule itself. The industry then was questioning the implementation of the rule and how we would interpret the rule. Now, this is not abnormal at all. It is rather routine, because the rules are broadly based and their interpretation is generally given through reg guides and standard review guides and other forms of procedural papers that interpret the rule and the details of the rule. Mr. DEFAzio. But wouldn't normally the resource for consultation be line staff, technical staff, rather than going to higher management? Mr. ZECH. Not necessarily. Mr. DEFAzio. Well, I see Mr. Stello shaking his head. I guess if I were asking for technical interpretation I wouldn't go to a management person. I would want technical people. Mr. ZECH. We respond to all forms of requests for information. Mr. Stello, at the time, it is my understanding, was the head of the CRGR, the Committee for the Review of Generic Requirements. So it would be appropriate to go to him as well as to other members of the staff. And there were problems, as I understand, with interpretation of the rule since it now applied to operating plants as well as plants under construction. Plants were already out there operating, and to apply this rule to them was a real challenge. I can say from my personal experience in visiting plants throughout our country and I think, if my memory is correct, I am up to number 78 that I visited in our country so far, but in any case I have seen the results of the Fire Protection Rule myself. I can interject this personal observation. I can just say that in many cases it has been a challenge to put this rule into effect on the older plants, the operating plants, because in many cases you do indeed run up against a decision as to whether to wall off, for example, a certain area of the plant to prevents fires. And if you do wall it off, are you not indeed perhaps keeping access to the point where you are concerned about safety? In other words, not only maintenance, but also in emergency situations. So, to apply the rule to the older plants has been a challenge, and the interpretation of the rule, at least in my judgment, was very necessary. And there was a need, in my judgment, to allow leeway so that you would not just put this rule in effect in isolation.

Mr. DEFAzio. That is, I guess, where we might have a difference is leeway. When you say something should be continuous barrier— and we might get into this a little later—and it no longer is a continuous barrier when you say safety equipment or backup equipment—shutdown equipment is to be segregated from the effects of a fire and/or the retardants or things used on the fire, and you decide no, they can be in the same room where the fire might occur, I don’t know that that is just leeway or whether that is going to the basic thrust of the rule that was promulgated and tested in the courts and that was found necessary in the aftermath of Browns Ferry to prevent this sort of event. At this point, I might ask Mr. Asselstine to, as we go along, perhaps go back and forth to see if we get different perspectives. Mr. ASSELSTINE. Mr. DeFazio, let me add one thing to what the Chairman has said. There is no question about it, that the fundamental part of this rule that caused the industry concern was the fact that it was applied to existing plants. Now, that wasn't something that came up later on. The Commission did that explicitly in the rule itself. The Commission said we want this rule to apply to the existing plants, and we recognize that that is going to require some backfitting. It is going to mean changing these plants. It is going to mean going back and doing Some analyses because the fact is we are not satisfied that the plants have been properly designed to withstand the effects of a fire. It is that simple. The Commission did it; there is no question about that. The NRC staff was not overly enthusiastic about it, but the Commission itself said we want this rule to apply to the existing plants as well as to those under construction, and that is the way we are going to write the rule. That is what the industry didn't like. That is why they . us. That is why they tried to overturn the rule in court and OSt. What happened here was, you had a group of utilities that had fought this thing every step of the way, coming in at the eleventh hour and saying, we are going to try and fight it once more and see if we can get these staff interpretations and get the onerous problems of this rule thrown out. That is why they went to Mr. Stello, and that is why they tried to overturn the staff interpretations that had been developed through the formal staff review process, using the input of the real technical experts on our staff, the fire protection engineers and inspectors, the people who knew the situation at the plants, who understood fire protection, and who understood what was necessary to ensure that the rule would have the effect that we wanted, which is to be able to get a plant shut down safely in the event of a fire. Mr. ZECH. If I may add, Mr. DeFazio, I don’t find too much to argue about with what Commissioner Asselstine has said. I think I, too, if I were on the Commission, at the time would have probably agreed that it should apply to all plants, not just new plants. I think that was a sensible decision. However, when you do that, it certainly must be taken into consideration—when you are applying a rather significant rule to plants that are already built, there are judgments that come in and they are reasonable judgments that can be made as to how do we best ensure safety. Certainly we don't want fires, but also we don't want to constrict our people from handling emergencies, nor do we want to make maintenance so difficult it can't be done. So, whereas I think I would have supported the Commission decision—I think it was a wise decision—I do think in the case of plants that are already constructed, you simply, because we have so many custom-built plants out there and we are not standardized, it was a very real problem. Now, I don't know all the details of why some of the utilities objected. I simply was not there at the time. But I can tell you from looking at some of the plants, I can understand it was necessary to provide a certain amount of leeway. The final judgment has to be, is this going to help safety or is it going to hurt safety? And as a result, there are judgment calls being made. And this is why, in my review of it since I have been on the Commission, the rule has been so difficult. I know there were a number of conferences, I understand, held throughout the country to explain the rule, to try to provide guidance. I think it was a responsible effort. Here we applied a rule to plants that were already built and I think it is very important to focus on—the ultimate mission of this agency is public health and safety, and certainly we have to consider all the systems and all the things we do to a plant, rather than just consider something in isolation. Mr. DEFAzio. Right. Now, what I want to get at is to make certain that we didn't sacrifice certainty of safety because of resistance in the industry, because of expense the industry might incur, and other reasons. I guess the consultations that Mr. Stello had with the industry, they were, I assume, not public events; they were not publicly noticed or not open to the public. They were private meetings. Mr. ASSELSTINE. I think that is correct, Mr. DeFazio. Mr. DEFAzio. And were fire protection or other technical staff invited to participate in the meetings? Mr. ASSELSTINE. No. Mr. DEFAzio. Is that correct, to the best of your knowledge, Mr. Chairman? Mr. ZECH. I will find out, sir. [Pause.] The answer is no, I am informed. Mr. DEFAzio. OK. So we are having the meetings with Mr. Stello, and we don't have the fire protection staff there, and yet we are developing interpretations of fire protection standards which are quite technical if you had to go to this length, I assume. It seems a bit unusual to not involve the fire protection engineerS. Mr. ZECH. Let me just say this, too. We have some very good, very competent fire protection engineers. And as you well know, there did turn out to be differing professional opinions among some of our people. But again, not having been in on the whole history of this rule, I can tell you, I feel that if they made all these kinds of modifications to my nuclear submarine, and I had an old nuclear .* I would say wait a minute; is this going to help me or urt me.

I can really see that some of those utilities in good faith—and I don't know if it was all good faith or not—but I can see some of them might well have said, I don’t want to put a wall up there; I would rather coat my cables with some kind of material than do that. And is this permissible? In other words the decision, having been reviewed by fire protection engineers, it is not, at least in my judgment, completely unrealistic to recognize that the decisions would be made by Mr. Stello at a higher level, recognizing the fire protection engineers would prefer one system or another, but looking at it from his standpoint, looking at it from the safety standpoint and systems standpoint, it would seem to me—at least in hindsight and not having been there—that it was not an improper decision for him at his level to be involved in. Mr. DEFAzio. I know a lot of other industries that would like that leeway in interpreting rules, and they don't get it. If I could just point out a basic difference in operating your submarine, I don't believe that you were allocated a certain budget for any necessary upgrading as an individual captain and told this is going to come out of some other part of your budget or somehow you are going to have to raise the funds. What we are dealing with here is a regulated industry whose bottom line is profits and not the defense of the nation or the safety of their individuals. They also have to mix in how much safety, at what point are we going to buy, and jeopardize our profit picture. That is always a decision that is being weighed in that industry. That is why we have to regulate them. That is why they aren't just doing all these safety things themselves. I just make that observation. Mr. ZECH. Yes, sir; that is a good observation. I can understand that. But I would like to say this, too. This agency has a primary mission of public health and safety. We do that through the regulatory framework, regulations requirements and so forth. We have the authority to do what we think is necessary. On the other hand, the utilities have also the primary responsibility for public health and safety, and they come about it differently, of course. They use operations, maintenance, management, that kind of supervision to achieve public health and safety. So if I were a utility executive and I were told by NRC that I had to do a lot of things to my old plant that I felt honestly would prevent safe operations, I would feel an obligation to say so and to say, now look, NRC, do you really want me to do this because, in my judgment, it could harm safety. So I can understand why there could be honest differences of opinion not only by our fire protection experts, but also by the utilities when they felt perhaps that safety was not being served. That is their obligation to bring up. Mr. DEFAzio. At that point we might come back to additional rulemaking. Mr. Asselstine. Mr. ASSELSTINE. Mr. DeFazio, there are two things, I think, wrong with what this group of utilities was arguing for. First, this notion that it simply can't be done; that this is going to cause all sorts of safety problems or difficulties.

We had a good example in this industry of a company that had taken fire protection seriously, that had looked at the Commission's regulations, and they had said, well, it is going to cost us some money but we recognize those are the rules and we are going to do it. And that case was Calvert Cliffs Plant, Baltimore Gas & Electric in Maryland. That was a utility that hired fire protection engineers. They went about implementing the rule rapidly after the rule was adopted, and they were able to put their plant into compliance with the rule on a very expeditious basis. They were the first plant to get everything done and to have everything all fixed up. Those guys understood what the rule required. They put their shoulder to the wheel and they got the job done. You had this other group that was arguing not to have to do those things, and of course there ought to be a process in place to allow a utility to say, in our particular case this doesn't make sense. We had that process in place for the Fire Protection Rule, and it was the exemption process. Every utility was free to come in and say there is a particular aspect of this rule that gives us particular difficulties. We think we can achieve the objectives of the rule in a different way, and therefore we want an exemption from this aspect of the rule, and here is what we propose as an alternative. The advantage of that process—and in fact the court recognized that process in upholding the validity of the rule—the advantage of the process is that it provides for the kind of technical review of that kind of a proposal that you want to see. The utility has to document its proposal; they have to do an analysis to show that in fact they are right and that is not going to cause a major safety problem or defeat the purposes of the Fire Protection Rule. It is reviewed by the people who really have the knowledge, the technical experts, the fire protection engineers, and then a decision is made on whether the exemption should be granted or not. And if the utility doesn't like the answer, they can always appeal that decision up the line and have some senior staff reviewers take a look at it. The difficulty with what these utilities were proposing is that they wanted to throw that process out the window. What they wanted to do is to say, look, you have granted some exemptions in some of these areas in the past to other utilities who have asked for them; we don't even want to ask for an exemption. What we want you to do is give us an interpretation document that will allow us to go off on our own, do our analysis, and if we want to deviate from what has been the accepted interpretation of this rule, we are free to do so, as long as we maintain that analysis at the plant. Then, if your inspectors get around to it, those inspectors can then come inspect our analysis and if they have a problem with it, then they can object at that time. The fire protection engineers and inspectors objected to this kind of a reversal of the role. First, they said, it puts the burden on us rather than the utility to find something wrong; and, second, it makes it almost impossible for us to do our job. Of course, what we need before we go out to do an inspection of the plant is to see their detailed analysis, to be able to study it in detail, for the engi

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