Safety in the deregulated era

30 September 1999

The restructuring of the nuclear industry is changing the nature of safety issues for regulatory bodies as well as utilities.

A draft report by the Nuclear Installations Inspectorate, which raised concerns that reducing staff levels at British Energy plants in the UK may eventually compromise safety, has highlighted a delicate area for the nuclear industry throughout the world (see NEI, Sept, p2). The NII report suggested that staffing levels at the Sizewell B PWR may become too low to be able to deal with a severe accident at the plant.

Commercial pressures are changing the way in which nuclear power stations operate: in the US, for example, it is possible that within a few years as few as a dozen companies will run the country’s power reactors, down from 50 in the 1970s. Throughout the European Union electricity utilities are having to adapt to an increasingly competitive environment; in Canada, seven of Ontario Hydro’s nuclear plants have been laid-up since August 1997 as a result of a back-log of maintenance and repair work caused to a large extent by cost cutting and the resultant loss of experienced staff (see NEI, May, p25); and Eastern European plants have had to adapt to an entirely changed world in the 1990s, with the new democracies legislating for an independent regulator and developing a safety culture (see NEI, Aug, p12).

The commercialisation of the industry poses the regulators and utilities with a dilemma. Management, processes and production has to become more efficient if nuclear power is going to compete with other forms of energy production, but at the same time safety levels must be maintained and in all likelihood improved. Many utilities argue that the most economically successful plants are also the safest, and that therefore there is no conflict between economic performance and safety. This may be true, but the public perception of commercial organisations cutting corners to improve the bottom line is one that is very difficult to shift.

Agnes Bishop, president of the Canadian Atomic Energy Control Board (AECB), explained the difficulty regulators have at an OECD Nuclear Energy Agency workshop on nuclear regulatory effectiveness in Paris in June “Industry may think the regulator cannot be effective unless cost versus benefit is considered. The public, on the other hand, becomes suspicious and uncomfortable about cost versus benefit considerations, and frequently interprets such considerations as money being more important than safety,” she said.

Recent events in Canada have exposed a number of issues related to safety and the new economics. The AECB itself is restructuring as a result of the Nuclear Safety and Control Act (NSCA), passed in 1997, and the deregulation of the Canadian industry, with the market opening to competition in January 2000, means that regulators are working in a new game with different rules. The NSCA allows the AECB to restructure itself to reflect the new situation.

The AECB is also developing a new set of regulations defining its regulatory requirements. Bishop argues that an effective regulatory process requires internal quality assurance, as well as a clear separation from both industry and government, so that independence is guaranteed.

“For years, regulators have insisted that licensees develop and implement quality assurance programmes for reasons of safe nuclear operations,” she said. “However, until recently, regulators have resisted or ignored the idea that they themselves should also have quality assurance programmes ... Are we still resisting the introduction of other good practices which could impact on our effectiveness?”

In the liberalised market regulators as well as utilities are under intense scrutiny. The quality of management culture within the regulatory body affects safety as much as the quality of management at the plant. Methods need to be developed to assess the regulators’ performance.

“The AECB is currently attempting to develop indicators to measure our performance in terms of the volume, quality and level of service we provide. We would also like to develop indicators that will measure the overall impact of out activities in terms of improving the safety of nuclear operations,” said Bishop.

The problem was put another way by Shirley Jackson, former head of the US Nuclear Regulatory Commission (NRC): “It is well established that the best operating nuclear power plants from the safety perspective are the best economic performers. Thus, the issue is not whether licensees are lean and mean, but how they get there. If licensees plan to be lean, they must do so as part of an integrated plan that keeps safety as the first priority.”

The NRC is also concerned that the funds set aside for decommissioning are maintained as plants are transferred from one owner to another.

“Organisations are going to have to meet certain criteria to own nuclear plants,” said an NRC representative. “We have looked into anti-trust reviews and also altered fuel assurance rules to make sure decommissioning funds will be there. We will be reviewing decommissioning funds’ status on a regular basis.”

Despite these concerns, there is no opposition within regulatory bodies to the deregulation of electricity markets and no sense that the increasing competitiveness will lead to reductions in safety. As Shirley Jackson says, lean does not mean dangerous. Regulatory bodies are not there to make life difficult for plant operators, but to ensure safety and as a result help develop public confidence in plants.

Nils Diaz, an NRC commissioner, told a conference on Nuclear Power in the Competitive Era last year that: “To draw a hard-and-fast distinction between benefiting the public on the one hand, and benefiting the regulated industry on another, would make sense only if there were no benefit to the public in having a safe and economic nuclear power industry in this country.

“Our goal as regulators is not to maximise nuclear assets; it is our goal to do the job of protecting the well-being of the American people in such a way that we do not unnecessarily impede industry’s efforts to maximise its assets and be competitive in the American marketplace.”

In the UK the NII’s draft report was not written to embarrass British Energy or to suggest that any of its plants are currently unsafe. It was written, according to an NII statement, “to see how staffing reductions were affecting the ability of British Energy to maintain their safety standards into the future”.

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