Margin Management

PAGE 2 Margin Management Plant Shutdowns 1.Late 1990’s – numerous “surprise” long-term plant shutdowns 2.Shutdowns resulted when a history of events (equipment failures / complicated transients) lowered confidence in plant and raised scrutiny by external organizations 3.General lack of “rigor” in evaluating and correcting problems

PAGE 3 Margin Management Plant Shutdowns 1.Design issues evident shortly before or after shutdown 2.Resolution and extent of condition extended shutdown considerably 3.Key issues included Accident analysis – translation into operation Operating margin Physical condition of plant not in conformance

PAGE 4 Margin Management Plant Shutdowns Similar issues and causes and contributors are evident in plants today Palo Verde Kewaunee Point Beach Others?

PAGE 5 Margin Management Basic Approach 1.INPO does: Encourage more systematic consideration Look for margin contributors to performance Promote identification and resolution of “latent problems: Promote site-wide approach to MM 2.INPO does not: Dictate how much margin was acceptable Prescribe how to manage Push plants to build another complicated infrastructure Push utilities to quantify unknown margins unless there was a risk / need.

PAGE 6 Margin Management Status Today 1.Higher awareness and consideration of margins 2.Margin preservation and improvement is more explicitly considered during Prioritization of equipment improvements Design change options Reconstitution of design basis, calculations, etc.

PAGE 7 Margin Management Gaps Today 1.No industry consensus on: Attributes/principles of margin management Which margins are of most concern (i.e. critical equipment functions) 2.Some stations elected not to establish a “program” but normal processes don't have explicit standards and expectations 3.Most “programs” focus on identification & prioritization – little guidance that describes the desired site-wide management and organizational behaviors 4.At some stations – MM still viewed as an engineering activity – not embraced by the full management team 5.May not be rigorous if BOP

PAGE 8 Margin Management CM & EN Evaluation Results Data Through 3/31/2008

PAGE 9 Margin Management Guidance Document Development 1.Industry working group meeting at INPO April attendees 2.Current schedule to publish the document is end of NX-1068 Exelon Margin Management

PAGE 10 Margin Management Key Elements 1.Understanding margin 2.Identifying margin concerns 3.Evaluating margin concerns 4.Prioritizing margin issues 5.Resolving margin issues 6.Roles and responsibilities 7.Process considerations 8.Periodic assessment and communications

PAGE 11 Margin Management Understanding margin 1.Objective The concept of design and operating margin are defined, communicated, and understood by station personnel 2.Attributes The definition of various margins is provided to plant personnel Concepts understood by appropriate personnel Location of limits and their bases are communicated to plant personnel Training tools developed at plants

PAGE 12 Margin Management Identifying margin concerns 1.Objective Margin concerns are identified and documented by station personnel 2.Attributes Scope of SSCs covered by program defined Cross disciplinary input used Existing processes identify margin concerns Corrective Action Program Self Assessments Latent Issues Review System Health Reports Margins are identified when new plant configurations are implemented

PAGE 13 Margin Management Evaluating Margin Concerns 1.Objective Margin concerns are sufficiently understood to allow for proper prioritization 2.Attributes Operating and design requirements are known SSC capability is known The resulting margin is assessed The aggregate impact of margin issues is evaluated, as required The associated risk to plant safety and reliability is established

PAGE 14 Margin Management Prioritizing margin issues 1.Objective Conditions that result in unacceptable design and operating margins are prioritized commensurate with the associated risk to plant safety and reliability 2.Attributes Prioritization based on safety and reliability Cross-disciplinary reviews determine priority The prioritization scheme correlates to site prioritization Management reviews, validates priority, and provides sponsorship

PAGE 15 Margin Management Resolving Margin Issues 1.Objective Plans are comprehensive and address interim compensatory measures and contingencies 2.Attributes Plans developed Associated actions are captured and tracked in the appropriate station work process Interim actions and contingencies developed as req’d

PAGE 16 Margin Management Roles and Responsibilities 1.Objective Roles and responsibilities for monitoring, protecting, and resolving operating and design margins are defined and understood by plant personnel 2.Attributes Site management sponsors the disposition of margin concerns and provides effective oversight of margin management implementation Engineering is the champion of margin management and owns design margins Operations owns operating margin Maintenance ensures equipment maintained and tested to ensure performance requirement are met

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PAGE 19 Margin Management Process Considerations 1.Objective Sufficient station processes exist to allow margin concerns to be identified, prioritized and dispositioned 2.Attributes Station personnel are aware and consistently apply the process(es) designated to identify, prioritize and disposition margin issue Processes revised to drive consideration (institutionalized)

PAGE 20 Margin Management Periodic assessment and communications 1.Objective The effectiveness of margin management decisions is periodically evaluated and communications reinforce the importance of effective margin management 2.Attributes Periodic oversight reviews by station leadership Periodic communications reinforce the importance of effective margin management

PAGE 21 Margin Management Examples of Margin Areas for Improvement 1.Weaknesses in identifying and resolving low operating and design margin issues are affecting equipment that is important to safety. 2.Compensatory measures for low operating and design margins are affecting plant operations. 3.Power uprates reducing BWR power-to-flow map operating region and operation outside the design basis 4.Excessive cooler flows erode coils and cause unplanned LCOs 5.EDG loading margin and voltage response

PAGE 22 Margin Management Examples of Margin Assistance Recommendations 1.Improve awareness of margin shortfalls during high-risk and emergent events. 2.Improve communications and understanding of margin issues. 3.Improve pathways of highlighting margin issues in existing plant processes. 4.Develop clear margin issues and follow a systematic process to resolve shortfalls.