RELICENSING HYDROELECTRIC FACILITIES

Mrs. Smith. What is your position on legislation that would

eliminate the municipal preference in hydro relicensing?

Mr. Sousa. I support enactment of such legislation to the extent

it is consistent with the Commission's decision in the Merwin Dam case.

COMMISSION PRODUCTIVITY

Mrs. Smith. We were all so pleased by your 20 percent increase in

-

staff productivity in FY 1984 I see that the increase was only 7

percent in FY 1985. Any increase is commendable, of course

accounts for this sharp drop?

but what

Mr. Sousa. The 7 percent productivity increase in FY 1985 does not represent a sharp drop but is in fact an increase on top of the 20 percent increase in productivity realized in FY 1984. I would also point out that since FY 1980, total Commission productivity has increased by 52 percent.

Mrs. Smith. Has the workload increased?

Mr. Sousa. Over the last two years, pending workload has decreased slightly. Management has been placing special emphasis on streamlining workload through improved processing techniques. However, changing conditions in the industries we regulate has resulted in an increase in complex filings which require processing on a case-by-case basis.

Mrs. Smith. Do you need to reorder your staff priorities?

Mr. Sousa. Management has the continuing responsibility of observing fluctuations in the regulated industries and adjusting workload to accommodate these changes. By using the existing management information system, we have been able to identify workload trends, and priorities have been adjusted to reflect the changing workload patterns. Two ajor reorganizations took place during FY 1984. First, the Office of hydropower Licensing was formed to handle the increasing workload in the hydropower program. Second, the functions of the Office of Opinions and Review were merged into the Office of the General Counsel.

THURSDAY, MARCH 20, 1986.

U.S. NUCLEAR REGULATORY COMMISSION

WITNESSES

NUNZIO J. PALLADINO, CHAIRMAN

THOMAS M. ROBERTS, COMMISSIONER

JAMES K. ASSELSTINE, COMMISSIONER

FREDERICK M. BERNTHAL, COMMISSIONER

LANDO W. ZECH, JR., COMMISSIONER

VICTOR STELLO, JR., ACTING EXECUTIVE DIRECTOR FOR OPERATIONS JACK W. ROE, DEPUTY EXECUTIVE DIRECTOR FOR OPERATIONS

HAROLD R. DENTON, DIRECTOR, OFFICE OF NUCLEAR REACTOR REGULATION

JOHN G. DAVIS, DIRECTOR, OFFICE OF NUCLEAR MATERIAL SAFETY AND SAFEGUARDS

ROBERT B. MINOGUE, DIRECTOR, OFFICE OF NUCLEAR REACTOR RESEARCH

JAMES M. TAYLOR, DIRECTOR, OFFICE OF INSPECTION AND ENFORCEMENT

GUY H. CUNNINGHAM, EXECUTIVE LEGAL DIRECTOR

RONALD M. SCROGGINS, DIRECTOR AND CONTROLLER, OFFICE OF RESOURCE MANAGEMENT

PATRICIA G. NORRY, DIRECTOR, OFFICE OF ADMINISTRATION

MARTIN MALSCH, DEPUTY GENERAL COUNSEL FOR DOMESTIC LICENSING AND REGULATION

Mrs. BOGGS [presiding]. The Subcommittee meeting will please come to order. Welcome to all of you. Chairman Palladino, you have not been before our Subcommittee since it was announced that you would be leaving the Commission in June. Please accept our belated thanks to you for all your services as history's longest sitting NRC Chairman. Commissioner Zech, we want to congratulate you on your selection by the President to be the next Chairman of NRC.

We would also like to express our congratulations to Vic Stello on being named as the Acting Executive Director of NRC. The Committee has been very pleased, Mr. Stello, with your work in the past.

We would be very happy, Mr. Chairman, to have your remarks. Any reports or remarks that any one would like to have placed in the record, with the concurrence of the Committee, we will place in the record and you may summarize and proceed as you wish. Mr. PALLADINO. Thank you, Madam Chairman.

Madam Chairman and members of the Committee, the Commission appears before you today to discuss NRC's fiscal year 1987 budget request. With me are my fellow Commissioners, the Acting

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Executive Director for Operations, the Directors of the principal of fices of the Agency.

With your permission, I would like to submit our prepared statement for the record and summarize it orally.

Our budget request for fiscal year 1987 is for $405 million. This is $13 million below our fiscal year 1986 appropriation, prior to any reduction resulting from the provisions of the Balanced Budget and Emergency Deficit Control Act of 1985, Public Law 99-177, and our 1987 budget is $43 million below our fiscal year 1985 appropria tions.

Our staffing ceiling is also being reduced by 122 full time equiva lent staff.

Appendix A to our testimony graphically demonstrates how actual purchasing power has decreased every year since 1981. The past two years have seen the most significant reductions. The Defi cit Control Act will reduce NRC an additional $18 million for fiscal 1986. A reduction of this magnitude almost halfway through the fiscal year will have a significant impact on the programs neces sary to support our regulatory responsibilities.

While we recognize and are supportive of the need for budget austerity, the Congress and public must recognize that with these reduced resource levels, the NRC will be performing less regulatory oversight activities, not more. Our capability to respond to and re solve issues from unplanned events in a comprehensive and timely manner will be diminished.

For example, I want to point out the accident at the Sequoyah Fuels Plant as the type of unplanned event for which additional re sources may be needed. Reduced resources severely hamper our ability to focus on such issues in a timely manner without reassign ing resources fully committed to other important areas.

At the same time, many forward looking actions in programs necessary to meet future issues and challenges have been reduced or eliminated. Our prepared statement and the attached table, Ap pendix B, summarizes the NRC budget request by major budget categories. The reductions vary in magnitude but all major pro grams are affected.

Please note that the table in Appendix B does not reflect the de tails resulting from budget cuts due to Public Law 99-177.

With regard to the nuclear reactor regulation program, it is in transition. While demand for resources needed to review new li cense applications decreases, the number of resources needed to evaluate safety related licensing actions, respond to events and per form overall management is increasing with the number of reac tors coming on line. Budget cuts will severely constrain our ability to resolve major unanticipated problems at operating facilities and will reduce or eliminate other improvements.

With regard to research, in terms of constant dollars, our re search budget will be lower in fiscal year 1987 than it was when the Agency was formed in 1975. Between 1981 and 1987, the nucle ar regulatory research program had been reduced by more tha $110 million, about 53 percent. Joint programs with other parties and improved operating economics cannot make up for these reduc tions over the years.