The NRC recently hosted a public meeting—exclusively via teleconference—to discuss regulatory implications of the coronavirus (COVID-19) pandemic for power reactor licensees. Of particular note, the NRC Staff is developing pandemic-related enforcement guidance. The first installment of this guidance is expected to be released early this week.
The US Nuclear Regulatory Commission (NRC) on March 11 issued a Notice of Violation to Avera St. Luke’s Hospital stemming from findings during an inspection of its Aberdeen, South Dakota facility in July 2019. During the inspection, NRC identified three apparent violations in the following areas:
- Monitoring occupational exposure of workers from various sources of radiation
- Developing and implementing a robust radiation protection program
- Reporting an occupational exposure in excess of the annual limits in 10 CFR 20.1201
FERC and NERC issued a joint notice on Wednesday providing compliance flexibility on certain key reliability standard requirements during the ongoing coronavirus (COVID-19) pandemic. Although this guidance can allow utilities to avoid findings of noncompliance for certain requirements where timely compliance activities could be difficult due to personnel shortages and other limitations, this is not a blanket waiver. Instead, utilities must provide written notices of their intent to use this guidance. The content of those notices must be drafted carefully as they will be necessary to demonstrate compliance in future reviews.
The new flexibility is as follows:
- Due to the limited availability of NERC-certified operators, if a utility cannot provide sufficient certified operators to comply with PER-003 due to COVID-19, the use of noncertified operators is permitted through the end of 2020. In order to take advantage of this flexibility, utilities will need to notify their Regional Entities and Reliability Coordinators (ISO-NE and NYISO). Training requirements, such as those in PER-005, continue to apply.
- Because of the resource limitations during this time period, periodic actions required by the reliability standards that must occur between March 1, 2020, and July 31, 2020, can be missed on a case-by-case basis if the activities cannot be performed due to COVID-19. To use this flexibility, utilities will need to notify their regional entities of the specific actions that will be missed. These periodic requirements exist in both the Operating & Planning standards (such as protection system maintenance and testing) and the Critical Infrastructure Protection standards (such as patching and vulnerability assessments).
The US Nuclear Regulatory Commission (NRC) Office of Investigations (OI) recently published its Office of Investigations Annual Report FY 2019, providing an overview of OI’s activities during the previous fiscal year. The report shows that OI opened 21% fewer cases in 2019 than in 2018, continuing the downward trend of the last 10 years.
Notably, OI Director Andy Shuttleworth identified two important factors contributing to the decline: “(1) the number of operational reactors and (2) the operating experience of the reactor operators.” Interestingly, Director Shuttleworth also referenced the possibility of the agency making other unspecified use of its collection of information gathered by OI agents.
The director of the Nuclear Regulatory Commission’s (NRC) Office of Enforcement (OE) issued Enforcement Guidance Memorandum (EGM) 2020-001, “Enforcement Discretion Not to Cite Certain Violations of 10 CFR 73.56 Requirements” on February 13. The purpose of the EGM is to formalize that the NRC will not cite certain “violations” of 10 CFR 73.56(d)(3) based on an updated interpretation of what that regulation requires regarding confirmation of “true identity” when granting access authorization.
The US Nuclear Regulatory Commission (NRC) issued a final rule in the Federal Register on January 15 updating the maximum amounts of civil monetary penalties it can impose. The final rule revises 10 CFR 2.205(j) to increase the maximum penalty the NRC can issue from $298,211 to $303,471 per violation, per day, an increase of 1.764%. Similarly, the final rule revises 10 CFR 13.3 to increase the amount of a civil penalty under the Program Fraud Civil Remedies Act from $11,463 to $11,665. These monetary penalty amounts go into effect immediately and can be assessed regardless of whether the violation occurred before or after January 15.
As we previously reported regarding last year’s revisions to the civil monetary amounts, the NRC is required by the Federal Civil Penalties Inflation Adjustment Act of 1990, as amended by the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015, to annually adjust the amounts of the civil monetary penalties for inflation in accordance with a statutory formula set forth in the legislation. The NRC last updated the maximum amount of civil penalties in February 2019.
The NRC recently issued an allegation guidance memorandum (AGM) to provide guidance on the handling of certain drug and alcohol fitness-for-duty (FFD) violations. The AGM directs that licensee-identified drug and alcohol FFD violations by nonlicensed individuals not be processed in the NRC’s allegation program. This guidance took effect immediately and will be incorporated into the Allegation Manual. The next revision of Management Directive (MD) 8.8 will also incorporate this guidance by adding “Licensee-identified [FFD] drug- and alcohol-related violations by nonlicensed individuals” to the list of concerns excluded from the definition of an “allegation.”
The AGM is the result of changes to Section 4.1 of the NRC’s Enforcement Policy approved by the Commission on April 18, 2019. As we discussed at that time, an NRC Staff review found that for most FFD drug and alcohol violations, the licensees had identified the issue and conducted an internal investigation into the violation by the time the NRC received notification of the violation. Staff also found that licensees were imposing the penalties required by 10 CFR § 26.75 to appropriately disposition individual FFD drug and alcohol issues before most NRC investigations began.
As noted in this article by Morgan Lewis antitrust lawyers, the role of antitrust laws in labor markets, including in the energy field, remains a key area of focus by enforcers, including the Antitrust Division of the US Department of Justice and the Federal Trade Commission. At a public workshop on competition in labor markets in September 2019, Assistant Attorney General Makan Delrahim reaffirmed “that criminal prosecution of naked no-poach and wage-fixing agreements remains a high priority for the Antitrust Division.”
The US Department of Energy (DOE) published a notice of proposed rulemaking (NOPR) in the October 3 Federal Register to establish procedures for imposing civil monetary penalties for violations of 10 CFR Part 810 (Part 810). Notably, DOE also proposes a maximum penalty, per violation, of $102,522. If DOE views a violation as a continuing one, then each day from when the violating activity began to when it stopped would constitute a separate violation for purposes of computing the penalty. Comments on the NOPR are due by November 4, 2019.
In its updated guidance issued on April 30, the US Department of Justice Criminal Division places effectiveness at the epicenter of its factors to be utilized when evaluating a company’s compliance program in the context of a criminal investigation. As corporate compliance programs continue to be closely scrutinized, companies and their boards, senior management, and legal and compliance departments should tailor their corporate compliance programs to issues and risk areas specific to the company’s business. Senior management plays a critical role in identifying these issues and risk areas and must serve as an example and enforcer of good compliance practices. Companies cannot let their compliance programs get stale and must continue to innovate, revamp, and enhance their corporate compliance practices based on lessons learned. DOJ emphasizes that “one hallmark of an effective compliance program is its capacity to improve and evolve.”