Thursday, July 29, 2010

NRC Decision on FPL (Part 2)

NRR Director’s decision addresses FPL Retention Bonus Agreement and ECP.

As described in our previous post, a decision by the NRC’s Director of NRR (DD-10-01) was released last week addressing certain contentions raised in a petition to the NRC Chairman by a former FPL nuclear employee.*  In this post we address several aspects of the second issue raised by petitioner regarding the efficacy of the Employee Concerns Program (ECP).

In brief the petitioner “raised issues related to weaknesses in the ECP as a means of getting issues entered into the CAP and "chilling effects" that exist at Turkey Point and are spreading to St. Lucie where employees are dissuaded from freely raising nuclear safety concerns to the NRC or within FPL for fear of retaliation by FPL management.”  [DD-10-01]  As described in the Director’s Decision, the petitions overlap a fairly prolonged history of weaknesses in the CAP at FPL and regulatory and licensee actions to improve the program.  For example, the NRC held a public meeting on October 20, 2009 (ADAMS Accession No. ML093090274), to discuss FPL's processes for addressing employee concerns and planned, fleet-wide corrective actions for addressing FPL-identified weaknesses. The licensee indicated that it planned to implement 86 corrective actions to address the weaknesses.

In this post we are taking a selective focus on a few important findings emanating from the comprehensive actions undertaken by FPL.  The first relates to a root cause analysis performed by FPL in 2009 and reported at the October 2009 meeting with the NRC.  Two root causes were identified, the second being:

Root Cause 2 (RC 2):

“Certain management actions have negatively impacted employee trust and resulted in a perception that production often takes precedence over safety”  [Slide 18 of FPL presentation]
    Associated with RC 2 were a number of Contributing Causes including:  

    Contributing Cause 2.2 (CC 2.2):     

    “Many operational and other management decisions have been perceived to place emphasis on production at the expense of safety” [Slide 19]  

    Contributing Cause 2.4 (CC 2.4):     

    “The reward and recognition system is perceived to be heavily weighted toward production over safety” [Slide 21]  

    We found the results of the root cause analysis to be quite interesting, remarkable even.  The RC went right to the issue of competing priorities, production taking precedence over safety, which we have argued many times may be the most important threat to safety culture.  The root cause also correctly connects management actions, and the perception of those actions, as the linchpin of employee trust.  Finally, CC 2.4 also explicitly identifies the reward and recognition system (read: compensation and promotion) as a potential conflicting influence on management decision making.  We applaud this effort and the results it produced.  

    Corrective actions were identified for each contributing cause.  For CC 2.2 the approach was to implement a decision-making process that identifies risk criteria and communication requirements.  It also establishes a DPO process.  In our view this is an important and potentially highly useful approach, if implemented rigorously.  We have argued that many of the decisions nuclear managers make are very nuanced and fuzzy in terms of safety implications.  Reaching the appropriate decisions in an environment where other business priorities are also present creates the opportunity for the misperception of those decisions or decisions that do not adequately reflect safety priorities.  Providing for a defined and open process, including explanation of how safety risks are considered, should improve decision making as well as the perception of those decisions by the organization.

    With regard to CC 2.4, the corrective action was to evaluate the current reward system and “ensure measures of NSC [nuclear safety culture] are considered”. [Slide 21]  This action is hard to assess based only on the available documentation.  As we have described in recent posts on nuclear compensation, we see potentially significant conflicts in current compensation structures given the amounts of compensation at risk for performance and the metrics used to trigger those incentives.  

    FPL reported on progress in addressing its 86 corrective actions in a meeting with the NRC on April 20, 2010 [ADAMS Accession No. ML101110727].  Based on the FPL slides it is difficult to see exactly how some of the new processes are designed and whether they are effective.  With regard to the reward system, it is simply stated, “Revised current reward system to ensure consistent health of NSC” [Slide 28].   

    We would have hoped that FPL would provide their analysis of specifically what aspects of the compensation system were found to be problematic with regard to safety culture and how the system was re-structured to mitigate the problems.  It is more than likely that similar issues could exist in the compensation systems at other nuclear operators and the approach taken by FPL could be highly useful.  We would welcome a post from FPL on this blog to provide such clarification.

    *ADAMS Accession Number ML101790315

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