	Regulatory and Oversight Functions Vital to NRC’s Mission Need to be Improved

Our recent analyses of NRC programs identified several areas where NRC  needs to take action to better fulfill its mission and made associated  recommendations for improvement. With respect to NRC’s security  mission, we found that the security of sealed radioactive sources and the  physical security at nuclear power plants need to be strengthened. Sealed radioactive  sources, radioactive material encapsulated in stainless steel or other  metal, are used worldwide in medicine, industry, and research. We were asked to review (1) NRC’s  efforts since September 11, 2001, to improve security at nuclear power  plants, including actions NRC had taken to implement some of GAO’s  September 2003 recommendations to improve security oversight, and (2)  the extent to which NRC is in a position to assure itself and the public that  the plants are protected against terrorist attacks. Operations Related to NRC’s Public Health and Safety and Environmental Missions Can Be Improved

In October 2003, we reported that NRC needs to more effectively analyze  whether nuclear power plant owners are adequately accumulating funds  for decommissioning plants. In May 2004, we also issued a report documenting the need for NRC to  more aggressively and comprehensively resolve issues related to the  shutdown of the Davis-Besse nuclear power plant. The most serious  safety issue confronting the nation’s commercial nuclear power industry  since Three Mile Island in 1979, was identified at the Davis-Besse plant in  Ohio in March of 2002. NRC Faces Several Broad Challenges in Effectively Regulating and Overseeing Nuclear Power Plants

Based on our recent work at NRC, we have identified several cross-cutting  challenges that NRC faces as it works to effectively regulate and oversee  the nuclear power industry. Third, and finally, NRC must ensure  that the agency effectively manages resources to implement its risk- informed strategy and achieve the appropriate regulatory balance in the  current context of increasing regulatory and oversight demands as the  industry’s interest in expansion grows. NRC has adopted a risk-informed approach  because it believes that it can focus its regulatory resources on those areas  of the plant that the agency considers the most important to safety. Nevertheless, we believe that NRC faces a significant challenge in  effectively implementing its risk-informed strategy, especially with regards  to improving the quality of its risk information and identifying emerging  technical issues and adjusting regulatory requirements before safety  problems develop. NRC has sought to strike a balance between verifying plants’ compliance  with requirements through inspections and affording licensees the  opportunity to demonstrate that they are operating their plants safely. For example, incidents such as the 2002 discovery of the extensive reactor  vessel head corrosion at the Davis-Besse plant and the unaccounted for  spent nuclear fuel at several plants across the country, raise questions  about whether NRC is appropriately balancing agency involvement and  self-monitoring by licensees. NRC’s resources have been challenged by the need to  enhance security at nuclear power plants after the September 11, 2001,  terrorist attacks, and they will continue to be challenged as the nation’s  fleet of nuclear power plants age and the industry’s interest grows in both  licensing and constructing new plants, and re-licensing and increasing the  output of existing plants. Conclusion

In closing, we recognize and appreciate the complexities of NRC’s  regulatory and oversight efforts required to ensure the safe and secure  operation of the nation’s commercial nuclear power plants. Whether NRC carries out its regulatory and  oversight responsibilities in an effective and credible manner will have a  significant impact on the future direction of our nation’s use of nuclear  power. Spent Nuclear Fuel: Options Exist to Further Enhance Security. Nuclear Regulatory Commission: NRC Needs to Do More to Ensure that  Power Plants Are Effectively Controlling Spent Nuclear Fuel.
Why GAO Did This Study

The Nuclear Regulatory Commission (NRC) has the regulatory responsibility to, among other things, ensure that the nation's 103 commercial nuclear power plants are operated in a safe and secure manner. While the nuclear power industry's overall safety record has been good, safety issues periodically arise that threaten the credibility of NRC's regulation and oversight of the industry. Recent events make the importance of NRC's regulatory and oversight responsibilities readily apparent. The terrorist attacks on September 11, 2001, focused attention on the security of facilities such as commercial nuclear power plants, while safety concerns were heightened by shutdown of the Davis-Besse nuclear power plant in Ohio in 2002, and the discovery of missing or unaccounted for spent nuclear fuel at three nuclear power plants. GAO has issued a total of 15 recent reports and testimonies on a wide range of NRC activities. This testimony (1) summarizes GAO's findings and associated recommendations for improving NRC mission-related activities and (2) presents several cross-cutting challenges NRC faces in being an effective and credible regulator of the nuclear power industry.

What GAO Found

GAO has documented many positive steps taken by NRC to advance the security and safety of the nation's nuclear power plants. It has also identified various actions that NRC needs to take to better carry out its mission. First, with respect to its security mission, GAO found that NRC needs to improve security measures for sealed sources of radioactive materials---radioactive material encapsulated in stainless steel or other metal used in medicine, industry, and research--which could be used to make a "dirty bomb." GAO also found that, although NRC was taking numerous actions to require nuclear power plants to enhance security, NRC needed to strengthen its oversight of security at the plants. Second, with respect to its public health and safety, and environmental missions, GAO found that NRC needs to conduct more effective analyses of plant owners' funding for decommissioning to ensure that the significant volume of radioactive waste remaining after the permanent closure of a plant are properly disposed. Further, NRC needs to more aggressively and comprehensively resolve issues that led to the shutdown of the Davis-Besse nuclear power plant by improving its oversight of plant safety conditions. Finally, NRC needs to do more to ensure that power plants are effectively controlling spent nuclear fuel, including developing and implementing appropriate inspection procedures. GAO has identified several cross-cutting challenges affecting NRC's ability to effectively and credibly regulate the nuclear power industry. Recently, NRC has taken two overarching approaches to its regulatory and oversight responsibilities. These approaches are to (1) develop and implement a risk-informed regulatory strategy that targets the most important safety-related activities and (2) strike a balance between verifying plants' compliance with requirements through inspections and affording licensees the opportunity to demonstrate that they are operating their plants safety. NRC must overcome significant obstacles to fully implement its risk-informed regulatory strategy across agency operations, especially with regards to developing the ability to identify emerging technical issues and adjust regulatory requirements before safety problems develop. NRC also faces inherent challenges in achieving the appropriate balance between more direct oversight and industry self-compliance. Incidents such as the 2002 shutdown of the Davis-Besse plant and the unaccounted for spent nuclear fuel at several plants raise questions about whether NRC has the risk information that it needs and whether it is appropriately balancing agency involvement and licensee self-monitoring. Finally, GAO believes that NRC will face challenges managing its resources while meeting increasing regulatory and oversight demands. NRC's resources have already been stretched by the extensive effort to enhance security at plants in the wake of the September 11, 2001, terrorist attacks. Pressure on NRC's resources will continue as the nation's fleet of plants age and the industry's interest in expansion grows, both in licensing and constructing new plants, and re-licensing and increasing the power output of existing ones.