Consideration of Michigan Pursuing an NRC Agreement

1. Consideration of Michigan Pursuing an NRC Agreement A Discussion with Stakeholders March 2, 2007

2. Presenters: Jim Sygo, Deputy Director, DEQ Jan Christensen, Deputy Director, DCH George Bruchmann, DEQ Thor Strong, DEQ Sheri Minnick, NRC

3. DEQ Thor Strong 517-241-1252 Robert Skowronek 517-241-1253 T.R. Wentworth 517-241-1438 DCH Tom Freebury 517-241-1968 Bruce Matkovich 517-241-1993 Don Parry 517-241-1986 DEQ/DCH Work Group

4. Goals for Today • Present Case for an Agreement State • Provide Stakeholders an Opportunity for Comment • Solicit Stakeholder Support and Commitment • Obtain Volunteers for an Advisory Committee

5. What is an Agreement State? • Section 274(b) of Atomic Energy Act provides for transfer of certain NRC authority to states. • State chooses to assume authority over any of these categories: • Radioactive Materials - Section 11e(1)(2)(3)(4) • Source Materials • Special Nuclear Materials (small quantities) • Low-Level Radioactive Waste Disposal • Sealed Sources and Device Safety Evaluations

6. What is an Agreement State? • Section 274(b) of Atomic Energy Act provides for transfer of certain NRC authority to states. • State chooses to assume authority over any of these categories: • Radioactive Materials - Section 11e(1) (2) (3) (4) • Source Materials • Special Nuclear Materials (small quantities) • Low-Level Radioactive Waste Disposal • Sealed Sources and Device Safety Evaluations

7. What is an Agreement State? For the categories included in Agreement: • State becomes responsible for all phases of regulatory oversight: licensing, inspection, enforcement, decommissioning; • State sets and retains own fees; • NRC periodically evaluates state’s performance.

8. AGREEMENT STATES AGREEMENT STATES

9. Advantages To the Licensee: • Better service; • Regulatory Agency more accessible and responsive; • Regulatory authority centered in one agency, rather than two or three; • Reduced Annual Fees.

10. Advantages To the State: • Greater capability to deal with all radiation issues, incidents, threats; • Individual programs strengthened; • Fees remain in state.

11. Disadvantages Cited in Some Agreement States • Fees not necessarily reduced for all licensees; • Some Agreement States have more restrictive rules; • Growing pains; • Lots of work!

12. How to Become an Agreement State • Letter of Intent from the Governor • Statute/Rules Revisions needed to meet NRC criteria • Adequate Staffing • Adequate Training and Expertise • 4-5 Year Process.

13. Key Conditions for Proceeding With Agreement State Proposal • Better protection of the public; • Better responsiveness to licensees – efficacy; • Better synergy of resources – efficiency; • Operate program at a lower cost (than NRC); • Share cost savings with licensees as much as possible.

14. Our Proposed Strategy • Time Line • Staffing • Agreement State Program Funding Needs • Program Development Funding Concept

15. Timeline An aggressive timeline to finalize an NRC Agreement in 4 – 5 years. • Letter of Intent – May, 2007 • Introduction of Legislation – May, 2007 • Program Consolidation – late 2007 • Submittal of Application – August, 2010 • Signing of an Agreement – Sept. 2011

16. Staffing Adequate, well-trained staff is a prerequisite to signing an Agreement • Current Program Staff: 3.5 FTEs • Projected Additional Program Staff: 10 FTEs (8 tech., 2 admin. support) • 2.25 FTEs per 100 licensees; • Added staff to be hired 2008-2011; • Tech. Staff must be trained prior to submitting Agreement Application.

17. Program Financing Assure that a State Program can be conducted for lower costs than that of NRC’s. • Other Agreement States program costs are less than that of NRC’s; annual fees often less; • Most licensees will pay less; • Retain Small Entity discount and Academic Fee exemptions.

19. Comparison of Fees(if Michigan was an Agreement State)

20. Program Start-up Funding Develop a Funding Mechanism that is limited, reasonable and equitable. • NRC provides no funding – State must develop a functional and capable program before signing Agreement; • State will not provide start-up funds; • Recommending a four year interim fee system.

21. Interim Fee Structure • WI used a fixed percentage of NRC fees each year for 4 years; • We propose: • Fixed fee for 4 years - based on percentage of NRC fee in Year 1 (2007) • Fee will generate $ 849,400/year

22. Interim Fee

23. Financial Summary • Assuming comparable cost increases for both NRC and State, State fees in 2012 will be 32% less than comparable NRC fees; • Most licensees will recoup their interim fee expenditures in less than 4 years; • If NRC fees remained at 2007 levels, MI fees in 2012 would still be 9% less.

24. Training Need to train staff quickly but fully. • Use NRC courses as needed; take advantage of “space available” spots; • Sponsor NRC courses in Michigan • Shadow NRC inspectors – doing so now; • Visit other Agreement States; • Work with MI licensees to identify other opportunities.

25. NRC Sheri Minnick Regional Government Liaison Officer, Region 3, Lisle, IL 630-829-9659 SAM9@nrc.gov

26. Agreement State Questions Contact: James Lynch, Regional Agreement State Officer, NRC Region 3 630-829-9661 JLL2@nrc.gov

27. Energy Policy Act of 2005 Contact: Kevin Null, Senior Health Physicist, NRC Region 3 at 630-829-9854 KGN@nrc.gov

28. “I believe that all good things come to those who wait – provided they work feverishly while they are waiting.” Dale Klein NRC Chairman

29. Questions and Discussion