The Nuclear Reorganization Act

Repackaging Underwriter Certification

People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public.[Adam Smith]

A recent GKN piece Why Can't the NRC be like the FAA? really surprised me. The article called for a total redesign of the NRC. The piece envisions a regulator who says releases will happen and are tolerable. No Two Lies. No LNT. Not a hint of ALARA. Prototype gets built and rigorously stress tested before a design can be certified. NRC delegates inspections to third parties. Once a design is certified the NRC does not license individual plants. It has no say in whether they get built or not. Does this sound anything like the NRC? Yet there were no gripes from the NRC defenders in the choir.

In the FAA system, the people who are really in charge are the airlines (the customers) and their insurers.¹ This sounds a lot like Underwriter Certification. It belatedly hit me that what bothers the save-the-nrc section of the choir about UCert is not the system itself. It's the perceived lack of a regulator. In their view, market regulation is an oxymoron. For them it is axiomatic that we must have a "real" regulator, preferably one with three initials.

We can work with that. In the past I have over-emphasized the need for the competing forces inherent in the market to balance the benefits and risk of nuclear. I have downplayed the degree of governmental participation in Underwriter Certification. Clearly what the Gordian Knot Group(GKG) needed to do is repackage UCert correcting my imbalance and and showing UCert for what it is, a highly regulated system that has many similarities to commercial aviation.

The GKG immediately convened an ecumenical council. While the conclave is on going, the Gordian Knot News has obtained exclusive access to a draft of their forthcoming pronouncement. The working title is the Nuclear Reorganization Act (NRA). The NRA calls for replacing the NRC with not one but three federal agencies:

a) the Nuclear Certification Authority (NCA),

b) the Nuclear Monitoring Agency (NMA),

c) the Nuclear Arbitration Board (NAB).

This triad of triplets should satisfy the most tridential of triphiliacs.

Nuclear Certification Authority

The NCA will be responsible for testing and certifying designs. The NCA will provide and maintain one or more prototype testing sites. Since some of the stress testing will require disabling safety systems, the test sites should be on federal property at least [10] km from the nearest residence. The site shall be fitted with security and infrastructure that is a common requirement for all or almost all concepts. This shall include a heat sink and grid connections for using the electricity produced by the prototypes. The site shall have a facility for disposing of Class C Low Level Waste and storing High Level Waste.

The test site shall be run on a user pays basis. Each tenant would pay rent and other usage fees based on how much of the site's land and services it requires. Each shall build its prototype entirely with its own money. Each shall also be required to leave its site in an approved condition at the end of its tests. If a test site is successful, it will cost the taxpayer little or no money.

Each tester shall be required to post a bond based on a worst case release as determined by the NMA , using a Congressionally approved method. See NMA section. If a potential tester posts that bond, he is allowed to start testing. As soon as the tester is unable to pay the premium on this bond, the NCA shall immediately halt testing and require the tester to shut down.

A second bond will be required to cover the costs of decommissioning and removal. If the tester is unable to re-instate the bond within a [month], he shall be required to leave the facility after cleaning up his site to the approved condition.

The list of required tests and trials and the pass/fail criteria shall be determined by the applicant's Certification Society. The Test Protocols shall be approved by the NCA, which approval shall not be unreasonably withheld. The Nuclear Reorganization Act must include a statement that no nuclear design need be any safer than alternative sources of dispatchable electricity. If the Cert Society and the NCA cannot agree on the test protocol, the tester can take the case to the NAB (See NAB Section) for resolution.

The actual testing shall proceed in a step by step manner in which undertaking the next test shall require approval from both the Cert Society and the NCA based on the results of the tests so far. If the Cert Society disagrees with an NCA decision to stop testing, the tester can take the case to the NAB for resolution.

Once the Certification Society is prepared to certify a design, it will present its certification, which will incorporate operational requirements and restrictions, to the NCA for counter-signature, which shall not be unreasonably withheld. If the NCA declines to sign the certification, the tester can appeal the case to the NAB for resolution.

Once a design has been certified, the plant's Certification Society and local governments shall be responsible for ensuring that each plant is built and operated to the requirements of the Certification. This shall not be an NCA responsibility.

Any material changes to the design shall be reported to the NCA. If the NCA rejects the change or requires additional testing that the Cert Society thinks is unnecessary, the Certification Society can appeal the case to the NAB for resolution.

Nuclear Monitoring Agency

The NMA will be responsible for ensuring the area around each plant is properly instrumented. Figure 1 shows a schematic of such a grid.

The NMA will make the sensor readings public in real time. Under normal circumstances, the readings will be posted to a public website and given to the media on at least a daily basis. People will become used to the background levels near the plant. In the event of a release or any upset, the NMA will post the readings on at least an hourly basis.

The NMA will detect any violation of the plant boundary limits and enforce the corresponding penalty or intervention. Both the limits and the penalties are explicitly set by Congress in the Nuclear Reorganization Act, not by the NMA.

In the event of a release, the sensor data will also be fed to a weather model. This model will then produce projections of the plume and the resulting dose rates over the next few days. These predictions will also be made public on a real time basis.

The NMA will use the sensor data to estimate the maximal daily dose at each residence. It will then use SNT to convert the resulting dose rate profiles to Lost Life Expectancies(LLE), and pay the inhabitants of each residence the compensation set by Congress in the NRA for that LLE, drawing from the fund set up by the insurers to do so.² The NMA will also be responsible for determining if the daily dose at each business is above the Shutdown Rate set by Congress. If it is, it will pay the owner and employees the compensation set by Congress, once again drawing from the insurers' fund. See Underwriter Certification Manual for details.

The NMA will be responsible for determining the amount of insurance a plant at a particular site must carry, using a model explicitly approved by Congress. The model assumptions are outlined in the Underwriter Certification Manual. The key assumption is the release of 60% of the I-131 and Te-132/I-132, and 40% of the Cs-134 and Cs-137 end-of-fuel-life (largest) inventory of fission products in the [95] percentile most harmful weather pattern experienced at that location in the last ten years. The plume calculations shall be based on combining a hybrid Lagrangian puff model, the actual historical weather patterns, and the current population distribution around the plant. The insurance cap shall be based on the total compensation that would be awarded in that release and weather.

The NMA will update the cap calculation every 5 years to account for population changes in the plant's vicinity. If the plant is unable to obtain insurance for the cap amount that it can afford, the NMA shall shut the plant down. An important aspect of this procedure is that it is technology agnostic. No attempt is made to estimate the probability of the cap release. That's the underwriters' job when they set the premium for a particular plant.

The NMA shall use essentially the same model to determine the bond that each tester must post in order to be allowed to test at the specified test site. See NCA Section. The main difference is that the source term shall depend on the actual inventory of I-131, Te-132/I-132, Cs-134, and Cs-137, as the test proceeds. The required bond will increase as the source term grows. As soon as the tester is unable to make the premium payments, the NCA shall stop the testing.

The NMA shall prepare a package of recommendations for local authorities in the vicinity of each plant. This package shall cover:

1) recommended buffer zone and mini-buffer radii;

2) recommended shelter in place and masking up behavior;

3) a sample pamphlet with instructions for what to do if the plant has a release, and an explanation of the release compensation program for distribution to the local population.

4) a sample pamphlet explaining radiation damage and repair.

See the Underwriter Certification Manual for details.

Nuclear Arbitration Board

The NAB shall be responsible for resolving any dispute between the NCA or NMA and providers of nuclear power, nuclear underwriters, and nuclear Certification Societies. The NAB shall consist of:

a) one representative appointed by the Secretary of Energy,

b) one representative appointed by the Federal Energy Regulatory Commission Chairman,

c) one representative appointed by the EPA Administrator.

d) one representative appointed by the Council of Lloyd's.

e) one representative appointed by the American Public Power Association.

f) one representative appointed by the National Rural Electric Cooperative Association

g) one representative appointed by the Edison Electric Institute

The NAB shall maintain a slate of NAB approved arbitrators. In the event of a dispute, each side shall select an arbitrator from that list. Those two arbitrators shall then select a third arbitrator to form the tribunal that will decide which side is correct, and if appropriate, set the awards. If the two arbitrators selected by the contestants cannot agree on a third within a [week], the NAB shall appoint one. The three member panel shall render a judgement within [two weeks] of its formation.

If either party to the dispute disagrees with the panel's decision, they can appeal the case to the full NAB. However, the panel's judgement shall remain in affect until the full board makes its decision. NAB shall be guided by the Nuclear Reorganization Act statement that nuclear power need not be safer than other sources of dispatchable electricity. NAB's decision can be appealed to the courts but the NAB decision shall remain in affect until the appeal process has been exhausted. For example, if the NAB decision is that testing can continue, then testing shall continue.

If the NAB finds by majority vote, an arbitrator's actions have been unprofessional or inconsistent with the NRA, that arbitrator shall be removed from the approved list. In the event of corruption, the case shall be referred to the Department of Justice for prosecution.

If the majority of the panel, thinks the NCA's or NMA's position in a case is clearly inconsistent with the NRA, it shall recommend to the Board that the federal employee(s) responsible be terminated. If a majority of the Board concurs, these people shall be fired with cause, and any pension and deferred compensation voided.

It should be clear that Underwriter Certification envisions a highly regulated market based system. A Federal agency has final say in whether a design gets certified. Congress sets the plant boundary limits and the penalty/intervention that exceedance of each limit triggers. A Federal agency enforces those rules. Congress dictates a radiation exposure compensation scheme, and requires iron clad insurance covering that compensation. A Federal agency determines how much that compensation is, collects the money from the insurers, and doles it out. A Federal agency shuts a plant down as soon as it can no longer obtain the required insurance. And we have not even started talking about the role of local government in determining whether a particular plant gets built, and how it's operated.

My concern is not too little government participation but rather not enough competition. Underwriter Certification depends on competition at every level:

1) competition among the vendors,

2) competition among the underwriters,

3) competition among the Cert Societies,

4) competition among the potential host locations.

Government's most important function here is minimizing barriers to entry and ensuring an even playing field at each of these levels. With sufficient competition, we will find a good balance between cost and risk. The problem is that well intentioned regulation usually leads to less competition. That's the point that Smith goes on to make in the paragraph in the Wealth of Nations that starts with the quote at the top of this piece. Here's the next two sentences.

It is impossible indeed to prevent such meetings, by any law which either could be executed, or would be consistent with liberty and justice. But though the law cannot hinder people of the same trade from sometimes assembling together, it ought to do nothing to facilitate such assemblies; much less to render them necessary.[The Wealth of Nations, Book I, Chapter X]

Smith goes on to list some examples where regulation has resulted in less competition. This has certainly happened to nuclear. The NRC system erects a massive barrier to entry and stifles technical progress. It does not help that the people in this trade are quite prepared to collude not only among themselves but also with government agencies. We must be very careful that our triad of triple types does not aid them in that endeavor. Perhaps we need a Nuclear Anti-collusion Authority. It's job will not only be cracking down on collusion among all the parties, but also reporting any regulatory practice that it regards to be anti-competitive to Congress.

1. Recently, their power has been eroded somewhat by the lack of competition among the vendors. But this is fixable with more competition, perhaps from the Koreans, or the Chinese, or the Russians.

2. If the release is caused by war or terrorist attack, the compensation will be paid out of the public treasury.