vironmental Policy Act of 1969 (NEPA) and led to a drastic increase in the regulatory workload, an increase for which we were not at that time prepared. While progress has been made during the past year in working off the “instant backlog" of environmental reviews created by Calvert Cliffs, a substantial number of reviews remain to be completed. The anticipated large number of new construction permit and operating license applications expected during the remainder of fiscal year 1973 and fiscal year 1974 will add to this activity and affect the time when the enviornmental review workload can be brought to a state of equilibrium.

The key factor contributing to the regulatory workload continues to be the steadily increasing number of nuclear power reactors coming under regulatory surveillance or licensing review, now totaling 120 and expected to reach 181 by the end of fiscal year 1974. The shift of electric utilities to nuclear power since 1965 is illustrated by chart 4, which shows the numbers of nuclear units under review, under construction, and in operation through fiscal year 1974. This development has affected virtually the whole range of AEC regulatory activities. While light water power reactor technology is maturing, safety-related issues continue to be raised concerning design, fabrication, siting and operation. Plants have been increasing steadily in power and complexity resulting in numerous design innovations requiring careful evaluation on a case-by-case basis. In addition, design construction and operational experience continue to disclose issues that must be considered, such as ECCS and the fuel issues that have been emphasized during the past year. Following and evaluating the cumulative operating experience of reactors scheduled for operation in increasing numbers in the near future presents a growing dimension of regulatory responsibility.

Chart 5 lists some of the principal technical issues requiring more regulatory effort.

The development of a comprehensive framework of standards for reactors and other nuclear facilities is a long-term project requiring a sustained high level of effort. In particular, continuing resolution of important safety problems on a generic basis and incorporation of these solutions in AEC regulations or guides is essential both to assure more effective regulation and to contribute to better use of manpower resources.

Another growing function is the antitrust review activity instituted under section 105-c of the Atomic Energy Act as required by legislation enacted in December 1970. This legislation makes license applications for commercial or industrial facilities subject to antitrust review by the AEC, and since the enactment of that legislation, as shown on chart 6, the Attorney General recommended hearings for seven applications in fiscal year 1972 and we anticipate recommendations for four hearings in fiscal year 1973 and eight hearings in fiscal year 1974. Third parties have requested intervention and hearings in one additional case in fiscal year 1972 where the Attorney General had indicated that hearings would not be required and we expect one such request in fiscal year 1973. Prehearing conferences have been held in connection with six applications and the first evidentiary hearing is scheduled to begin in June 1973. We expect to initiate a total of eight antitrust hearings during fiscal year 1974.

Regulation's inspection and enforcement programs constitute a built-in workload of steadily increasing proportions geared to the number of licensed nuclear activities of all types. Reactors and other nuclear facilities receive periodic inspections and surveillance during their construction and operating lifetimes. In addition, unusual construction and operating difficulties with a potentially significant effect on public safety are promptly investigated. An effective inspection program requires continuing effort to develop detailed, factual information about unusual incidents occurring during construction and operation of nuclear powerplants. In the recent past, we have devoted substantial inspection and evaluative effort to valve problems, piping problems and incidents involving accidental release of reactor coolant. These inspections and investigations cover radiological health and safety, materials and plant protection (safeguards), and the new area of nonradiological provisions to protect the environment.

Finally, the growth in facility licensing activity is creating an increasing volume of public hearings, with contested proceedings the rule rather than the exception. These hearings involve both safety and environmental issues as well as antitrust issues. Charts 7 and 8 project the estimated dates for hearings through January 1974. This activity, which has obvious direct impact on the staff counsel and boards, also adds to the workload of technical personnel who must appear on behalf of the regulatory staff.

WHAT IS BEING ACCOMPLISHED WITH FISCAL YEAR 1973 FUNDS

Before I discuss our intended use of the funds requested for fiscal year 1974, I believe the committee will be interested in having a report on our use of the funds made available to us for fiscal year 1973.

The main thrust of our effort during the current year has been to increase regulation's technical and management capability; to reduce the backlog of pending license applications; to maintain rigorous quality standards in license reviews with respect both to the safety and environmental aspects of applications; to continue an adequate level of inspections and investigations to assure that licenses are complying with AEC regulations and the specific terms of their licenses; and to accelerate the generation of the most urgently needed engineering standards. Additionally, we are encouraging industry to move toward greater standardization of nuclear powerplants and their components; we are requiring stronger safeguards against diversion of nuclear materials; and in cooperation with the Department of Justice, we are assuring that the licensing of nuclear powerplants does not create or maintain a situation inconsistent with the antitrust laws. We feel that progress is being made in all of these activities. Substantial improvements in staff capability have been achieved through the hiring of additional personnel and through a thoroughgoing reorganization of the staff.

We feel that progress is being made in all of these activities. Substantial improvements in staff capability have been achieved through the hiring of additional personnel and through a thoroughgoing reorganization of the staff.

We have insisted that the increase in regulatory staff be accomplished in such a way as to maintain the high quality of its professional and clerical personnel. We have been engaged in a nationwide recruiting effort so that we could be highlyselective in our hiring. To hire 25 professional employees, we screen approximately 400 applications and interview 100 candidates. The professionals hired over the past 20 months have, on the average, some 11-13 years of professional experience in their respective specialties; and 56 percent of them have graduate degrees.

The reorganization of the regulatory staff consolidated into three directorates the functions previously performed by seven divisions. The reorganization had five main purposes: (a) To provide assurance that the quality of reviews of license applications will be maintained, (b) to reduce the number of interfaces and overlapping responsibilities involved in processing license applications, (c) to dedicate a strong staff to full-time work on the generation of needed criteria, codes and standards, (d) to provide additional support for planning and scheduling of licensing reviews in order to increase efficiency, and (e) to give increased attention to the surveillance and systematic evaluation of operating facilities. Chart 9 shows the organizational structure which resulted.

Our efforts to break the licensing logjam prompted the introduction of a management information system for project planning, scheduling and control. This system permits reasonably realistic projections and monitoring of the progress of all construction permit and operating license reviews, and assists us in assigning our available manpower where it is needed most. The system utilizes graphic representations of the important activities from receipt of an application to a decision. A schedule is set and responsibility is assigned for each task in this network, which marks the critical path toward a licensing decision. Slippages in the review schedule for any plant must be justified to management. This spotlights problems and focuses attention on solving them.

Some of the other recent actions taken by regulation to improve its efficiency and effectiveness are highlighted on chart 10.

After a hiatus of 17 months during which no major licensing actions were taken on nuclear powerplants, licensing decisions were resumed in May 1972, and have continued at a steady pace since then. During this period to date we have issued full power operating licenses for 11 units, partial power licenses for 1 unit, and construction premits for 15 others.

During my last appearance before this committee, I reported on the status of 15 nuclear powerplants, either completed or nearing completion, which were identified by the Federal Power Commission (FPC) as urgently needed to meet peak load requirements last summer or this winter in several regions of the country. Eleven of the 12 nuclear plants licensed to operate at full or partial power since that time were among the units identified by the FPC. In the Midwest, Quad Cities 1 and 2 and Palisades were operating at significant power in time to contribute to meeting the summer peak demand and Point Beach 2 was licensed for 20 percent power operation in July and is now licensed over 100

percent power. Surry 1 in Virginia, Oconee 1 in South Carolina and Turkey Point 3 and 4 in Florida, also designated as needed in the summer of 1972, were delayed in reaching full power by equipment problems but are now licensed to generate full power. In New England, the Vermont Yankee, Pilgrim, and Maino Yankee plants were designated as needed for the 1972-73 winter peak load. Pilgrim and Vermont Yankee reached full power and Maine Yankee, which is licensed for 75 percent operation, produced significant power during the winter.

The four remaining plants identified by FPC as needed are not yet ready to operate. Browns Ferry 1 in Tennessee, Indian Point 2 in New York, and Prairie Island 1 in Minnesota are still in the construction stage or are undergoing modifications. We expect to make decisions regarding two of these plants prior to July 1973. Fort St. Vrain in Colorado, a high temperature gas-cooled reactor, is undergoing the extended preoperational testing program required for a first-of-akind plant.

In the environmental review area, we are required by NEPA to prepare draft statements on the total environmental impact of nuclear powerplants, to circulate them to other interested agencies for comment, and then to issue final statements taking account of the comments received. When I appeared before this committee a year ago, we had in house some 60 applications for nuclear powerplants, each requiring the preparation of draft and final environmental statements, and had been able to issue 14 draft statements, and only 2 final statements. Chart 11 shows the substantial progress that has been made in issuing impact statements. As of March 31, 1973, we had issued a total of 57 draft statements and 38 final statements. The assistance of staff in the AEC laboratories was vital to this accomplishment.

During the last year several difficult technical issues concerning either the safety or environmental impact of nuclear powerplants required the particular attention of the regulatory organization. The staff conducted a 6-month study of the causes and implications of a fuel rod densification phenomenon observed at several operating plants. Rulemaking hearings were held on the AEC's acceptance criteria for the performance of emergency core cooling systems in light water reactors, and on numerical guides proposed to implement the Commission's policy that releases of radioactivity from light water reactors must be maintained at the lowest practicable level. A third rulemaking hearing was initiated on February 1, 1973, to consider generically the environmental effects of the uranium fuel cycle for light water reactors. This was preceded by an extensive survey conducted by the regulatory staff. An additional rulemaking hearing was initiated on April 2, 1973, concerning the environmental effects associated with the transportation of nuclear fuel and wastes to and from nuclear power reactors and how these effects will be taken into account in individual cost-benefit analysis for light-water-cooled nuclear power reactors. These effects are now being considered on a case-by-case basis in each environmental statement for a nuclear power reactor. In support of the proposed amendments, a report entitled, “Environmental Survey of Transportation of Radioactive Materials To and From Nuclear Power Plants" was prepared by the regulatory staff.

During the past year the AEC has mounted a strong and accelerating drive to speed up the development of urgently needed standards to help assure the protection of public health and safety and the environment, and to inject more efficiency into the licensing process. Staffing of our new Directorate of Regulatory Standards has proceeded rapidly. A systematic reevaluation of standards priorities and goals has been carried out. More than 125 priority topics where standards are needed have been identified and coordinated with priority projects of the American National Standards Institute (ANSI), which acts as a clearinghouse for development and coordination of national industrywide standards. We have accelerated the national standards effort through closer coordination with the Nuclear Technical Advisory Board, ANSI, and through participation on committees. ANSI has set milestones and created a system for scheduling the development of national standards.

By doing so, ANSI has committed itself to a more productive program to see that standards are developed. For our part, regulation has made a commitment either to initiate action to adopt acceptable nuclear standards produced by ANSI with 3 months of issuance or to indicate reasons why this cannot be done.

Other standards activities included a new series of regulatory guides established to consolidate the guidance offered to applicants and licensees in all areas of regulatory responsibility During fiscal year 1973, about 70 regulatory

guides will be issued. Many of these guides deal with safety issues of major importance which arise in a large percentage of licensing reviews and offer accetpable solutions to these generic issues. In addition, standard formats have been developed for the preparation of both the safety and environmental aspects of nuclear powerplant license applications. We issued for comment several major amendments to the Commission's regulations to improve the physical protection and accountability requirements for nuclear materials.

Finally, the Commission has implemented extensive rule changes affecting the licensing process, particularly the conduct of public hearings. It is hoped that beneficial results from these rule changes will be discernible at an early date.

In summary, we feel that a good start has been made in improving the licensing situation, and that progress is being made toward the achievement of some of our long-term goals. We recognize, however, that this is a continuing effort and that much remains to be done in several important areas of regulatory responsibility.

ALLOCATIONS OF FISCAL YEAR 1974 APPROPRIATION REQUEST

In recognition of the rapid growth of regulatory activities, we began our budget planning for fiscal year 1974 by conducting an in-depth study of the overall manpower and contractual support requirements of regulation. The results of this study provided us with a useful basis for the formulation of our funding requirements. At this time, I should like to indicate how we propose to apply the fiscal year 1974 resources requested for each of our major organizational components.

LICENSING

Chart 12 shows the staffing and financial requirements for the directorate of licensing. A funding level of $25.6 million is required for all licensing activities in fiscal year 1974, compared with the revised fiscal year 1973 level of approximately $23.7 million and actual costs of $12.6 million in fiscal year 1972. The functions involved encompass the licensing review of nuclear facilities, including the conduct of both safety and environmental reviews, the licensing review of nuclear materials, antitrust reviews, and indemnity operations. The request involves an increase in licensing personnel from 476 in fiscal year 1973 to 584 in fiscal year 1974, an increase of 128 positions.

The licensing review of nuclear powerplants is the principal activity of this directorate. Applications pending in the process remain at a high level. At this time, 39 power reactors are under review for full power operating licenses, 31 are under review for construction permits, and 21 plants are under construction but not yet under review for operating licenses. Some 40 additional nuclear units have been ordered by utilities, and construction permit applications for most of these can be anticipated during the next 18 months. Chart 13 shows the backlog of applications under regulatory review from fiscal year 1967 to the present, with a projection through fiscal year 1974 to reflect the additional applications anticipated and the expected backlog reduction.

As I mentioned earlier, we have targeted an accelerating volume of licensing decisions to make inroads into this backlog. The regulatory staff's objectives for fiscal year 1973 include the completion of construction permit reviews for 18 power reactors and the completion of full power operating license reviews for 14 units. An increase in these reviews is our objective for fiscal year 1974. Our objective is to reduce the time required for staff processing of a typical construction permit application to 12 months from the time it is accepted until it is ready for a hearing by an Atomic Safety and Licensing Board. This means, essentially, completion of the basic regulatory staff technical and environmental reviews in about 10 months, to be followed by ACRS comments and their resolutions. At the operating license stage the objective is to finish the licensing process, including a possible ASLB hearing, at substantially the time plant construction is completed or in about 16 months. We are confident that progress toward these goals will become apparent during the coming months when actions on recently received applications will reflect the full effect of our scheduling and management control system.

In regard to the environmental reviews required by NEPA, I mentioned earlier that the progress being made in reducing the backlog in this area will be affected by the addition of a large number of anticipated new applications. We still have an inventory of 31 final environmental statements covering a total of 50

power reactors. The appropriation request accordingly provides for a continuation of assistance from Commission laboratories which is essential to achieving our schedule objectives.

The appropriation request also reflects continued assistance for technical support from the laboratories and other contractors in the resolution of complex safety issues such as those involved in emergency core cooling system evaluations and the fuel densification problem.

Last May, the Commission announced a policy of strongly encouraging the standardization of nuclear powerplants and their components. The benefits anticipated from such standardization include increased assurance of safety, higher operating reliability, greater ease of maintenance, and greater efficiency in the AEC's regulatory processes. During the past year, we have worked continuously on methods of implementing the standardization goal and, on March 5, 1973, the Commission announced a major policy change in this direction. Effective immediately, the regulatory staff will be prepared to consider applications for review and licensing of standardized designs for nuclear powerplants and for major plant systems important to safety. Three procedural options are offered under which applicants may take advantage of the special review procedures developed for processing applications for standardized designs. In a significant related action, we are limiting the size of all new plants accepted for licensing review under the standardization policy, as well as in connection with any specific construction permit application, to power levels of about 3,800 thermal megawatts or less. Mr. Chairman, I would like to submit for the record the Commission's latest policy statement on standardization.

I would emphasize that, while long-term savings in regulatory effort will accrue from the eventual achievement of standardization, a substantial amount of regulatory activity has been, and will be, directed at the outset to developing procedures for handling some of the new concepts included to performing technical safety review of the proposed standardized designs and to providing feedback into the review process for subsequent applications to assure future savings in regulatory manpower.

Fuels and materials licensing activities continue to expand, particularly in the nuclear fuel cycle area, which is being stimulated by the increasing numbers of power reactors that have been placed in operation, proposed, and ordered. One construction permit application and two operating license applications as well as several license amendments for irradiated fuel reprocessing plants are expected to be under regulatory review during fiscal year 1974. Applications for three new fuel fabrication facilities, including one plutonium (mixed oxide) facility, and four major modifications of existing fuel fabrication facilities, which will require environmental reviews, are expected. In the transportation field, 53 radioactive material container designs, including three for large spent fuel casks, are expected to be under regulatory review during fiscal year 1974, compared to 35 in fiscal year 1973. Increases are also expected during fiscal year 1974, in the area of radioisotopes and other materials, which account for more than 8,000 licensing actions annually.

REGULATORY STANDARDS

The increase of about $1.3 million from the revised fiscal year 1973 level of $4.5 million for the directorate of regulatory standards will provide a 25 percent augmentation in staff required for in-house effort and contractual services related to the development of urgently needed standards in the safety, environmental protection and materials protection areas. Chart 14 indicates the staffing and funds requested for this effort.

Objectives for fiscal year 1974 include the development of 85 regulatory guides in the areas of nuclear powerplant design and engineering, nuclear fuels and materials, special nuclear materials protection, environmental and siting considerations, and radiation protection. In addition, we expect that, among the nuclear standards that ANSI will approve during the next 12 months, there will be approximately 30 that will be suitable for implementation through our regulatory program. (Chart 15.)

In rulemaking activities during fiscal year 1974, 37 amendments to regulations are expected to be published in proposed or effective form, six draft or final environmental statements related to rulemaking are expected to be issued, and public rulemaking hearings will continue to be held.