ML23104A086

Enclosure 2_Official Transcript of the Public Meeting on the Fiscal Year 2023 Proposed Fee Rule

ML23104A086
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Issue date:	03/21/2023
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NRC-2292
Download: ML23104A086 (1)

Text

Official Transcript of Proceedings NUCLEAR REGULATORY COMMISSION

Title:

Fiscal Year 2023 Proposed Fee Rule Docket Number:

(n/a)

Location:

teleconference Date:

Tuesday, March 21, 2023 Work Order No:

NRC-2292 Pages 1-79 NEAL R. GROSS AND CO., INC.

Court Reporters and Transcribers 1716 14th Street, N.W.

Washington, D.C. 20009 (202) 234-4433

1 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com U.S. NUCLEAR REGULATORY COMMISSION

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PUBLIC MEETING

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FISCAL YEAR 2023 PROPOSED FEE RULE

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TUESDAY MARCH 21, 2023

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The meeting convened via videoconference, at 10:00 a.m. EDT, Sophie Holiday, Facilitator, presiding.

NRC STAFF PRESENT SOPHIE HOLIDAY, Facilitator BILLY BLANEY, OCFO THERESA CLARK, NMSS JAMES CORBETT, OCFO CHRISTIE GALSTER, OCFO JO JACOBS, OCFO ANTHONY ROSSI, OCFO CARRIE SAFFORD, NMSS JASON SHAY, OCFO BRIAN SMITH, NRR

2 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com ALSO PRESENT DANIEL ASHWORTH JOHN BUTLER TOM HOLLY JANET SCHLUETER

3 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com TABLE OF CONTENTS Welcome and Logistics..............................4 Opening Remarks....................................9 FY 2023 Proposed Fee Rule Overview................11 Questions and Answers.............................54 How to Submit Public Comments.....................77 Closing Remarks...................................79 Adjourn

4 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com P-R-O-C-E-E-D-I-N-G-S 10:00 a.m.

MS. HOLIDAY: Good morning and welcome to today's virtual public meeting to discuss the NRC's Fiscal Year 2023 Proposed Fee Rule.

My name is Sophie Holiday and I am an Executive Technical Assistant here at the U.S.

Nuclear Regulatory Commission, or NRC, as you'll hear it referred during this meeting. It is my pleasure to facilitate today's meeting.

Before I launch into my remarks, I would like to inform you that for accessibility purposes, you may turn on the closed captioning for this meeting by selecting the three dots on the top of your screen, it has the word "more" underneath it. From the drop down menu, depending on your version of Microsoft Teams, you can select language and speech or accessibility to turn on the live captions.

The goals for today's meetings are to, one, provide you with an overview of the budget hearing considerations associated with the FY 2023 proposed fee rule which was published in the Federal Register on March 3, 2023. Two, answer any clarifying questions that you may have. And, three, share the different methods by which you may submit comments on

5 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com the proposed rule by our deadline of April 3, 2023.

Now, a term that you will hear a lot today is fees. This simply refers to the amount of money that the NRC charges to applicants and licensees for the services that we provide.

Under the Independent Offices Appropriation Act, 1952, or the IOAA, we are statutorily required to recover the costs for NRC work that provides specific benefits to identifiable recipients, such as licensing activities, inspections, and special projects.

You will also hear the term NEIMA, which stands for the Nuclear Energy Innovation and Modernization Act. NEIMA requires that the NRC

recovers, to the maximum extent practicable, approximately 100 percent of the Commission's budget authority each fiscal year, less those activities excluded from fee recovery.

There will be other terms or acronyms referenced on the slides which are, of course, defined on our very last slide titled "Glossary."

Next slide, please. One more slide, please. Thank you. As you can see on this slide, the meeting will essentially have three parts.

First, we'll hear presentations from NRC

6 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com staff to highlight the FY 2023 budget and the proposed fee rule, followed by a licensee fee policy overview and presentations to cover the Nuclear Reactor Safety Program, which is the Operating New Reactors Business Lines, the Fuel Facilities Business Lines, and the Nuclear Material Users Business Line.

The second part will include a

presentation on the proposed policy change which expands the Title 10 Code of Federal Regulations Section 171.15.

Lastly, I will facilitate a question and answer session during which you will have the opportunity to interact with the staff to ask any clarifying questions on the proposed rule.

Now, let's cover a few ground rules. As stated earlier, this is a completely virtual public meeting being held on Microsoft Teams. A link to the presentation slides, which you can see on the screen here can be found on the NRC's public meeting schedule website.

Please keep in mind that we are also transcribing this meeting to make sure we fully capture your questions and to assist in the development of a meeting summary.

This summary will be placed into the

7 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com NRC's Agencywide Documents Access and Management System, or ADAMS, as a publicly available document approximately 30 days after the meeting.

You can help us get a clean recording and have a smooth meeting by muting your telephones and/or microphones when you are not speaking.

Additionally, we ask that you minimize any background noise if you choose to speak and that you identify yourself and any group or organizational affiliation, if applicable.

The NRC categorizes this meeting as an information meeting with a question and answer session. So, attendees will have an opportunity to ask questions of the NRC staff or make comments about the topics discussed throughout the meeting.

However, I'd like to be clear that the NRC is not accepting any comments made at today's meeting as official comments on the proposed rule itself. Rather, comments will have to be submitted in writing to receive formal consideration. We'll be going over the various ways you can provide your formal comments later on in the meeting.

You may notice that our chat feature is open and accessible to those who have joined us on the MS Teams application. We will not be using the

8 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com chat feature to receive any comments on the meeting presentations or as formal comments on the proposed rule. That said, the chat should only be utilized if you encounter any technical issues with Teams during this meeting.

Alternatively, you may send me an email at sophie.holiday@nrc.gov for your technical difficulty.

Now I'd like to take a moment to introduce the NRC staff panelists in attendance here today. First, we have Mr. Jason Shay, the Budget Director, who will be discussing how our budget reflects our activities and the relationship between budget and fees.

Next, we have Ms. Christie Galster, Senior Accountant on the Licensee Fee Policy Team.

She will provide a license fee policy overview of the FY 23 proposed fee rule.

Next, we have Mr. Brian Smith, Division Director for the Division of New and Renewed Licenses in the Office of Nuclear Reactor Regulation, or NRR, which will discuss the Reactor Safety Program which consists of the Operating and New Reactors Business Lines.

Next, we have Ms. Carrie Safford, Deputy

9 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com Director for the Division of Fuel Management within the Office of Nuclear Materials Safety and Safeguards, or NMSS. She will provide an overview of the Fuel Facilities Business Line.

After that, we have Ms. Theresa Clark, Deputy Director for the Division of Material Safety, Security State and Tribal Programs, also within NMSS.

And she will provide an overview of the Nuclear Materials Users Business Line.

Following Theresa, we have Mr. Anthony Rossi who is a Team Leader of the Licensee Fee Policy Team in the Office of the Chief Financial Officer.

Anthony will provide us with an overview of the proposed policy change to expand 10 CFR Part 171.15.

And last, but not least, we have Mr.

James Corbett, the Acting Chief Financial Officer at the NRC who I will now turn the meeting over to for some opening remarks.

Thank you, James, the floor is yours.

MR. CORBETT: Thank you, Sophie. Good morning. I'm James Corbett, the Acting Chief Financial Officer at the Nuclear Regulatory Commission. I'm happy to be here today as we engage with NRC stakeholders about -- around the fiscal year 2023 proposed fee rule.

10 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com In my role, I've had the opportunity to gain a much greater understanding of the factors at play with the proposed fee rule.

I would like to start by sharing my deep appreciation for my staff's work developing this year's fee rule and acknowledge that their success would not be possible without our various partner offices across the NRC.

I also want to thank you for joining us today in this public meeting. It is our view that this virtual format enhances our dialogue with NRC stakeholders, and we welcome your questions and comments during the Q&A portion of the meeting.

Next slide, please. As we get started, I want to briefly emphasize the type of inquiries that would be considered in scope for the proposed fee rule. Today's panel is best prepared to provide timely responses on topics that are within the scope.

Some examples of in scope comments are the NRC's methodology for calculating fees, changes to fee regulations, or the fee schedules.

A few examples of what we consider to be out of scope comments are general comments on agency efficiencies, regulatory practices and processes, technical guidance to licensees, or public

11 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com participation in the budget formulation process.

Even though this meeting on our fees is not the proper venue for out-of-scope questions, we really do want to hear from you. So, we encourage you to use the appropriate venues so we can address any questions or concerns directly.

In closing, I want to emphasize that the NRC is continually evaluating our fee setting processes to determine improvements to increase transparency, equity, and timeliness.

As always, we welcome your questions and formal comments and look forward to a continued dialogue with you, our stakeholders.

Again, thank you for your participation.

And I will now turn the meeting over to our Budget Director, Jason Shay, who will provide a budget overview of the key considerations that relate to the fiscal year 2023 proposed fee rule.

Next slide, please.

MR. SHAY: Yes, thank you, James. And good morning. Again, my name is Jason Shay, Budget Director in the Office of the Chief Financial Officer. It's a pleasure to be here today. And my goal over the next two slides is to provide you an overview of the FY 2023 budget, including authorized

12 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com carryover and the relationship between budget and fees.

Next slide, please. So, if I can draw your attention to the FY 2023 enacted column, the resources for the FY 2023 enacted budget totals

$927.2 million, including 2,859.6 FTEs.

This represents an increase of approximately $37.5 million or 4.2 percent when compared to the FY 2022 enacted budget.

The FY 2023 budget FTEs decreased by 201.5 FTEs or approximately.7 percent when compared to the FY 2022 enacted budget.

Now, I'm going to go down the list here of major programs.

So, the first one on the list, the Nuclear Reactor Safety Program increased by approximately $13.3 million for 2.8 percent when compared to the FY 2022 enacted budget, primarily due to increases in salaries and benefits.

Now, while the Nuclear Reactor Safety Program budget increased overall, there was a decrease of 34.7 FTEs, primarily associated with the anticipated transition of Vogtle Electric Generating Plant Unit 4 from construction to operations and the anticipated closure of Palisades Nuclear Plant.

13 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com As was mentioned earlier, Brian Smith will be providing a presentation on the Nuclear Reactor Safety Program, including a discussion on workload.

The Nuclear Materials and Waste Safety Program increased by approximately $3.3 million or 2.5 percent when compared to the FT 2022 enacted budget, primarily, again, due to increases in salaries and benefits.

The FTEs also increased by 11.2, that's primarily for projected workload, including routine and non-routine inspections and training and qualification of the inspectors to support rulemaking activities associated with decommissioning, financial assurance requirements, for sealed and unsealed radioactive

material, and to support licensing actions related to enrichment and manufacture of HALEU Advanced Reactor Fuel, and accident tolerate fuel.

Now, Carrie Safford and Theresa Clark will be providing presentations on the Fuel Facilities and Nuclear Materials Users Business Lines including a discussion on workload also.

The last major program, the Corporate Support Program, increased by approximately $19

14 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com million, or 7.1 percent when compared to the FY 2022 enacted budget.

And FTEs also increased by 2.

The Corporate Support Business Line constitute approximately 31 percent of agency's total budget, authority, and reflects the agency's effort to meet the corporate support cap in Section 102 of NEIMA to maximum extent practicable.

The FY 2023 enacted budget for the Corporate Business Line increased primarily due to increases in salaries and benefits consistent with the other major programs, for support of the agency's cybersecurity operations to comply with OMB mandates, and for IT infrastructure resources and software licenses.

Now, before I move on to the next slide, I do want to mention that the NRC follows the direction of Congress and the explanatory statement that accompanies the annual Appropriations Act, once again, in FY 2023, Congress directed the NRC to use

$16 million in authorized carryover to fund the University Nuclear Leadership Program, or UNLP.

Now, carryover by definition, may be used to describe funds that were appropriated but not obligated in a prior fiscal year or funds that were

15 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com de-obligated because the funds were no longer needed in subsequent fiscal years.

Now, while congressional direction to use carryover has been a trend either to offset our budget or to fund the UNLP, the agency has received questions from stakeholders on the use of carryover in previous roles.

While the meeting will not include a discussion on the NRC's FY 2024 Congressional Budget Justification which was published on March 13th of this year, I do want to highlight that the NRC is requesting the use of approximately $27 million of carryover to offset its Nuclear Reactor Safety Program budget request.

Next slide, please. This slide represents the agency's budget authority offsetting fees and net budget authority calculations.

The NRC must recover to the maximum extent practicable $790.2 million of its FY 2023 enacted budget for fees assessed to NRC licensees and applicants.

This results in a net budget authority of

$137 million, a slight increase when compared to the FY 2022 enacted budget.

The Nuclear Energy Innovation and

16 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com Modernization Act requires the NRC to recover to the maximum extent practicable 100 percent of its annual budget less excluded activities.

Now, under NEIMA, excluded activities include any fee-relief activity identified by the Commission, Generic Homeland

Security, waste incidental to reprocessing activities, Nuclear Waste Fund, and advance reactors regulatory readiness activities.

Along with Inspector General Services for the Defense Nuclear Facilities Safety Board and the University Nuclear Leadership Program.

These fee-relief identified by the Commission are consistent with prior year fee rules.

Some examples include international activities, regulatory support to agreement states, fee exemption for nonprofit educational institutions, and agreement state oversight.

So, after accounting for the excluded activities and any net billing adjustments, the NRC must recover approximately $791.4 million in fees in FY 2023 which Christie Galster will go over in further detail during her presentation.

So, with that, I'm now going to turn the presentation over to Christie who will be discussing

17 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com our fee calculation. Christie?

MS. GALSTER: Thank you, Jason. Good morning, today I'll be presenting an overview of the fiscal year 2023 proposed fee rule. The statutory and regulatory framework -- oh, next slide, sorry.

The statutory and regulatory framework authorizing NRC's fee policy includes the Independent Offices Appropriation Act, or IOAA, which requires the NRC to collect fees for service.

This is established under 10 CFR Part 170. These services provide a specific purpose and have identifiable recipients who are billed as hours expended times the NRC hourly rate.

Examples of these services are activities such as license renewals, license reviews, and inspections.

The other law affecting NRC fee collections is NEIMA, the Nuclear Energy Innovation and Modernization Act of 2018 which requires the NRC to recover to the maximum extent practicable a 100 percent of its annual budget minus certain excluded activities.

NEIMA also sets a ceiling on the annual fee for power reactors at the 2015 rate as adjusted with yearly inflation. The annual appropriation

18 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com enacts the NRC's budget authority to which we formulate the required fee recovery amount.

If absent, the Congressional Budget Justification, or CBJ, requested budget acts as our budgetary authority.

The NRC did receive its 2023 signed appropriation as of December the 29th which is utilized in this year's proposed fee rule.

Next slide. As stated in the proposed FY 2023 fee rule, the budgetary authority for the salaries and expense and Office of Inspector General appropriations totaled in $927.2 million.

This slide illustrates the budget and fee recovery for the proposed FY 2023 fee rule.

As you can see from the top circle on the slide, NRC's budgetary authority minus the excluded activities of $137 million calculates the fee base budget of $790.2 million. The required recovery amount is also the amount of the fully fee-based budget.

The second circle displays the adjusted fee recovery rate totaling the $791.4 million which is to be collected with a combination of Part 170 and 171 fees. At the very bottom of the slide are two subsets of budget authority excluded activities.

19 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com

First, the fee-relief resources authorized by the Commission totaling $97.1 million.

This is an increase of $5.6 million from last year based on the rise of the salaries and benefits that Jason just mentioned.

And the second set of statutory activities excluded specifically identified with in the NEIMA regulations total $39.9 million, an increase of $400,000 from last year.

Next slide.

An important step in estimating and recovering Part 170 fees per IOAA is developing the hourly rate and understanding the components that are involved.

In developing the hourly rates budget, the components include mission direct salaries and benefits and mission indirect resources which support the agency's core activities such as supervisory and administrative assistant support.

The third component is the agency support which consists of the Corporate Support Business Line along with the Inspector General funding.

These three components sum to the $777.5 million which is the total resources included within the Part 170 hourly rate.

The final step in multiplying is the

20 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com mission direct FTEs of 1,672 by the mission directly FTE productive hours annually of 1,551.

That is then divided by the total budgetary resources of the $777.5 million.

This calculates the Part 170 hourly rate of $300. This is an increase of $10 or 3.4 percent from the previous year.

The hourly rate increase is primarily due to the salaries and benefits increase per OMB guidance, as Jason previously mentioned, to support the federal pay raises, but this was offset by a rise in the productive hours resulting from the staff's reduced leave during the COVID-19 pandemic.

The FTE rate at the bottom of the slide presents the full cost of an FTE. The amount is calculated by using the budgetary resources of the

$777.5 million divided by those mission direct FTEs.

Next slide. Here's an illustration of how the calculation for the Part 170 professional hourly rate is formulated. As you can see, the total budgetary resources to calculate the Part 170 hourly rate is in the numerator.

And the denominator, we have the product of direct FTEs multiplied by the annual productive hours. These components have an inverse relationship

21 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com on the hourly rate computation.

Next slide. Business Lines budgets versus Fee Class budgets, the percentages of appropriated resources varies between the Congressional Budget Justification business lines and the fee rule allocation by fee classes.

The important distinction is that the budgetary business lines within the CBJ incorporate fee and non-fee resources.

As discussed previously, NEIMA requires the NRC, through the fee rule process, to recover the annual budget of that $927.2 minus those certain excluded activities of $137 million.

This results in the total fee class budget of the $790.2 million.

Reconciliation of this year's budgeted business lines to the proposed fee class budgets are available in the accompanied work papers to the 23 proposed fee rule located on NRC's public website.

Next slide. In the next few slides, I'll be reviewing the annual fee calculations.

Illustrated in this table are the operating power reactor annual fees over the last four years along with this year's proposed annual fee.

22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com The first component, the budgetary resources of $665.3 million allocated to the power reactors fee class increased by $19.9 million or 3 percent higher than last year.

The contributing factor to the rise in resources is the salaries and benefits costs for the agency. However, the closure of Palisades and the development of operating reactor licensing action infrastructure for process improvements along with special projects were some activities which decreased in FTEs offsetting the increase in salaries and benefit costs.

The second component, the Part 170 estimated billings for operating and new reactors total $160.2 million this year which declined by $5.6 million or 3.4 percent from 2022.

The decrease is primarily due to the workload decline for Palisades and the delay of expected design and license applications including white papers and topical reports.

The Part 171 billing adjustment increased by $4.4 million primarily due to the elimination of last year's credit of $3.4 million. The remaining proposed annual fee recovery amount of $510.2 million, an increase of $29.9 million or 6.2 percent

23 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com from last year.

The recovery amount divided by the 93 operating reactor which incorporates the closure of Palisades and the proposed inclusion of Vogtle Unit 3 in the operating reactor fleet, an annual fee per reactor of $5.486 million.

Next slide. Continuing with the overview of annual fees, this slide illustrates the non-power production or utilization facilities fee class Part 171 over a five-year period.

Proposed for the FY 2023 fee rule, the budgetary resources are approximately $6 million resulting in a reduction of $73,000 from the resources in 2022.

The decrease is due to SHINE Medical's operating license application nearing completion. And this is offset, again, by the rise in the S&Bs across the agency.

The Part 170 estimated billings in FY 2023 declined by $53,000 compared to last year.

As the activities associated with the restart of NIST reactor have reduced, however, the workload for the advanced test reactor and the medical isotope production facilities remains steady.

With SHINE construction inspection along with Kairos

24 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com Power Hermes construction application.

The main driver for this year's annual fee increase of $27,000 is the result of the 171 billing adjustment transitioning from a credit last year to a surcharge this year.

Next slide. In this slide, the fuel facilities fee class annual fee is displayed. The FY 2023 budgetary resources allocated to the fuel facilities fee class is $4.2 million or 18.9 percent higher than in fiscal year 2022.

Factors contributing to the increase include licensing actions related to enrichment and manufacturing of high-assay low-enriched uranium fuel, advanced reactor fuel, and accident tolerant fuel, and also reviews of the greater than critical mass facility license renewals, and a new facility application.

In

addition, support for Honeywell NSITRIS restart activities as well as resources for rulemaking.

Next, the Part 170 estimated billings total $9 million. This is a rise from the previous year by $1 million.

The increase in Part 170 workload consists of Westinghouse completion of their license

25 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com renewal, Nuclear Fuel Services U-Metal amendment requiring additional staff time, and Louisiana Energy Services transitioning of the authority to operate from the Department of Energy to the NRC.

The third component adjustments rose by

$300,000, mainly resulting from the generic transportation resource increase for salaries and benefits.

The remaining annual fee amount of $19.9 million is a 21 percent increase, or $3.5 million rise from the prior year.

The effort factors for both the safety and safeguards remains unchanged for most licensees except for the safety effort factors for the fee category 2.A.(1), which is the UF6 conversion since the licensee plans to resume full operations in 2023 as well as the safeguard effort factors declined for the limited operations fee category 1.A.(2)(a) for downgrade operations which started this past December of 2022.

Next slide. The last fee class to cover today is the Material Users Fee Class. This year, the budgetary resources rose by $4.6 million or 13 percent from the previous year.

The main contributing factor of the

26 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com increase is to support for the new estimation tool rulemaking activities and the agency's rise in salaries and benefits.

The estimate Part 170 workload increased slightly by $300,000 which was offset with the change in the Part 171 billing adjustment of $200,000.

The annual fee recovery for this year's proposed fee rule totals $39.6 million which is fairly and equitably distributed to over 2,400 licensees within 60 diverse fee categories.

As the beginning of 2023, the Material Users Fee Class had over 30 percent of its licensees qualify as small entities with the reduced annual fee.

Details of the inputs and calculations formulating the Material Users 2023 proposed annual fees are located within the fee rule work papers currently on the NRC public website.

This concludes the overview presentation on the FY 2023 proposed fee rule.

I'd now like to turn you over the Brian Smith.

MR. SMITH: Good morning, everyone. I'll be providing an overview of the budget for the NRC's Nuclear Reactor Safety Program, which is comprised of

27 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com both the Operating Reactors, New Reactors Business Lines.

The program encompasses licensing and oversight of civilian nuclear power reactors as well as non-power production and utilization facilities, resource intense reactors, for example.

The goal of the program is to ensure that those activities are completed in a manner that protects public health and safety. It also provides reasonable assurance of the security of facilities and the protection against radiological sabotage.

Now, the operating reactors and new reactors business lines can be split between mission direct, mission indirect, and excluded resources.

Mission direct resources account for about 75 percent of the enacted budget of 1,753 FTE in fiscal year 2023.

Mission indirect resources account for approximately 21 percent of the enacted budget and supports supervisors, administrative assistants, program analysts, and travel needs.

Excluded activities are not recovered through fees and represent workloads like Generic Homeland Security, university research and grant

programs, advanced reactor regulatory

28 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com infrastructure, and any fee-relief activities such as the regulatory support for agreement states, medical isotope production infrastructure, and fee exemption for nonprofit educational institutions.

Next

slide, please.

Licensing and oversight are the most significant mission direct product lines. Examples of some of the activities that's performed within those product lines are shown on this slide.

The NRC ensures the safety and security of operating power reactors and non-power production or utilization facilities within our established regulatory framework.

We license reactors to operate, and we ensure that the new and existing reactor designs meet regulatory requirements.

We also oversee the continued safe operation of those reactors through our inspection program.

In the Operating Reactors Business Line, we continue to see interest in programs that provide increased operational flexibility.

Requests for subsequent license renewal which represent an extension to a license from 60 to 80 years account for a significant workload in the

29 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com Operating Reactors Business Line. And the NRC has invested significant resources in ensuring that that can be done safely.

There is also increased activities and licensing new non-power production or utilization facilities such as test reactors and medical isotope facilities.

Oversight activities are the largest core portion of the business line. That includes the onsite resident inspectors at each power reactor, as well as the safety and security inspections conducted out of our four regional offices.

In the New Reactors Business Line, NRC completed efforts to issue the final rule certifying NuScale's small modular reactor design and recently completed the acceptance review of NuScale's standard design approval application.

The NRC continues to provide licensing and oversight of construction efforts at Vogtle Units 3 and 4. Construction inspection of Vogtle Units 3 and 4 is led by our Region II office, and NRR has a small team of licensing, ITAAC, and construction experts at headquarters to ensure the NRC is able to make the findings necessary to support the transition to operations.

30 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com We are conducting pre-application meetings with multiple light-water SMR, small modular reactors, and non-light water advanced reactor developers, and reviewing topical reports and white papers supporting the technical merits of these future design applications.

We also recently provided the draft Part 53 rulemaking package to the Commission for their consideration.

Next slide, please. To develop the budgets for the Operating Reactors and New Reactors Business

Lines, we first review the current environment and perform workload forecasting.

As part of that, we look for significant drivers that can impact our future workload. This includes technical, regulatory, and legislative developments that have the potential to either generate additional work or reduce work.

That could include a rulemaking or guidance change that we expect to drive new submittals from licensees or known plant closures that will reduce the overall size of our program.

We then look at the historical data and trends to measure how our execution in previous years lines up with the budget assumptions at the time.

31 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com We use that data to inform the future budget and identify areas where the assumptions we used previously are still applicable with the future work we anticipate.

Historical data also allows us to employ some trending for areas where the workload in a given year can be highly variable in terms of quantity and complexity or where we can incorporate efficiencies gained based on previous data.

We also rely heavily on communication with our stakeholders to identify accurate dates for plan submittals. We consider letters of intent and regulatory engagement plans provided by licensees and applicants to the NRC. We collect information from our project managers and we consider responses to our periodic regulatory issue summaries on that topic.

In order to budget for large licensing projects, we try to balance the appropriate resource needs against the relative certainty that an application will be submitted on schedule and when in the year the application is expected, for example, at the beginning or end of the fiscal year.

We recognize that business plans within the industry are subject to change and may be influenced by many factors.

32 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com But this is an area of better certainty and the information we receive leads to more accurate budgeting for the NRC.

Once we've identified the workload drivers, we determine the level of effort needed in each of our areas of responsibility. We develop and assign resources for major projects and then allocate those resources across the NRC offices to align with the type of work being performed.

Next slide, please. The one point I want to make clear is that we develop our budget, and the Part 170 fee estimates on different timelines.

The Operating Reactors and New Reactors budgets, just like our other business line budgets, are prepared two years in advance.

This budget includes resources to be recovered to the assessment of Part 170 fees in addition to the resources for all other mission direct and mission indirect programs.

The budget reflects anticipated changes in the Part 170 workload such as the permanent closure of power plants or new licensing applications.

Unlike the budget, the Part 170 fee estimates are prepared at the beginning of a given fiscal year. Fact of life changes and the intervening

33 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com time will drive the Part 170 fee estimates lower or higher than what was anticipated in the budget.

Changes such as a

license renewal application that was submitted early, a delayed application for design certification, an early reactor closure, or a cancelled application for a combined operating license will impact the Part 170 fee estimates and, in turn, impact the Part 171 annual fees.

Next slide, please. The fiscal year 2023 operating reactors budget include a reduction for the closure of Palisades and reduced resources for licensing action infrastructure development.

There were also increases to support licensing the Kairos Hermes test reactor construction permit application.

In addition to changes anticipated in the budget, the fiscal year 2023 Part 170 fee estimates were reduced to continued impacts of COVID-19 on our operating reactors oversight programs.

Next slide, please. For new reactors, the fiscal year 2023 budget included increases for construction permit applications and design certifications. One application under review now is NuScale standard design approval application.

34 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com Licensing and construction inspection activities at the new Vogtle units were significantly reduced based on the assumption that transition to operations would be completed for the site.

In addition to the changes anticipated in the budget, the 2023 Part 170 fee estimates declined due to delays in the submittal of several licensing applications.

This reduction was partially offset by an increase in the Part 170 fee estimates, construction inspection, and licensing at Vogtle that caused the transition to operations was delayed.

Now, I'll turn the meeting over to Carrie Safford, Deputy Director for the Division of Fuel Management in NMSS.

MS. SAFFORD: Sorry about that, I'll try again. Thanks, Brian.

Good morning, my name is Carrie Safford and I'm the Deputy Director of the Division of Fuel Management in the Office of Nuclear Material Safety and Safeguards. I'll be providing an overview this morning of the budget for the NRC's Fuel Facilities Business Line.

The Fuel Facilities Business Line encompasses licensing and oversight of a variety of

35 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com fuel cycle facilities. And the goal of the program is to ensure that those activities are completed in a manner that protects public health and safety.

It also provides reasonable assurance of the security of facilities.

Next

slide, please.

Licensing and oversight are the most significant activities that we do in the Fuel Facilities Business Line, although I would be remiss if I didn't mention rulemaking as well.

Examples of some of the activities performed within those product lines are shown on this slide. To run through a few, in licensing, we've got the development and maintenance of the overall program. We have amendments, decommissioning funding plans, emergency plans, security, license renewals, and environmental reviews.

We have a robust oversight program and, in addition, we have a number of rulemaking activities and associated guidance development.

The NRC ensures the safety and security of operating fuel facilities within our established regulatory framework.

We license the fuel facilities to operate, and we ensure that any new applications for

36 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com 10 CFR Part 70 licenses meet the regulatory requirements.

Other Part 70 applicants and licensees include certain medical isotope production facilities and university programs using greater than critical mass quantities of special nuclear material.

We also oversee the continued safe operation of these facilities through our inspection program based in our Region II offices.

Next

slide, please.

Much like the Operating Reactors Business Line, in developing the budget for fuel facilities, we take a look at the current environment and forecast future workload.

We also look for the significant drivers that impact our workload such as pre-application activities for new facilities, potential major amendments and license determinations.

Estimates are data-driven to the extent practicable. Historical data and trends give us an indication in the power execution in previous years lined up with budget assumptions. That data then informs our future budget and identifies areas where the assumption we used previously are still applicable with the future work that we anticipate.

We identify trends in quantity and

37 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com complexity or where we can incorporate efficiencies gained and lessons learned from previous data and apply that information appropriately.

We also rely heavily on communication with our stakeholders to identify accurate dates for planned submittals.

We consider letters of intent provided by licensees and applicants to the NRC and we collect information from our project managers.

In order to budget for large licensing projects, we try to balance the appropriate resource needs against the relative certainty that an application will be submitted on schedule and when in the year the application is expected, the beginning, the middle, or the end of the year.

We recognize the business plans within the industry are subject to change and may be influenced by many factors. But this is an area where better certainty in the information we receive leads to more accurate budgeting.

Next slide, please. The 2023 budgetary resources allocated for fuel facilities fee classes is $4.2 million higher, which is approximately 18.8 percent higher than in 2022.

Factors contributing to the increase

38 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com include licensing actions related to enrichment and manufacturing of HALEU fuel, advanced reactor fuel, and accident tolerant fuel, reviews of greater than critical mass facilities, license renewals, and a new facility applications. Additionally, more resources have been used to support restart activities.

Next, the Part 170 estimated billings total $9 million, which rose by $1 million from the previous year.

The increase in Part 170 workload consisted of the completion of Westinghouse license renewal and the NFS U-Metal amendment requiring additional staff time.

Louisiana Energy Services transitioning of the authority to operate from DOE to the NRC and upgrades to NIST-800-53 Revision 5 also applied.

In terms of our Part 170 direct fee collections, we have had schedule shifts for a number of licensing actions.

For

example, we received a

new application for the TRISO-X fuel facility that is under review. And a majority of that review will be completed in fiscal year 2024.

An area of growth in the Fuel Facilities Business Line is the increased importance of

39 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com information security at some of our sites. This additional workload is directly billed to the respective licensee.

I would like to highlight that the Fuel Facilities Business Line has two stakeholder meetings each year that often include discussion of fees and other topics of mutual interest.

One of these areas is the importance of early and frequent engagement with the

NRC, submission of letters of intent, and regulatory engagement plans.

The next opportunity for engagement on this topic is during the next stakeholder meeting which will be held in early May.

The public meeting will be noticed through our usual system so interested parties can monitor the website for more information on topics and timing when it becomes available.

Thank you.

And I'll now turn my presentation over to Theresa Clark.

MS.

CLARK:

Good

morning, everyone.

Thanks, Carrie. So, again, my name is Theresa Clark.

I'm the Deputy Director of the Division of Material Safety, Security State and Tribal Programs in the Office of Nuclear Materials, Safety and Safeguards.

40 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com And I'm going to talk to you about the Nuclear Materials Users Business Line as well as the related fee classes in the materials fee category.

Next slide, please. So, the Nuclear Materials Users Business Line is one that's very exciting to lead because this is a nationwide program that affects over 18,000 licensees across the NRC and 39 agreement states.

So, when we put our budget together, it supports regulation and guidance development across

-- that are used across all those jurisdictions as well as our direct activities of the over 2,400 NRC licensees in the materials program.

And this is a very broad and diverse set of licensees which can be anything from a

manufacturer of an exempt product like smoke detectors to an industrial irradiator facility that sterilizes medical equipment, for example, broad scope medical facilities that might do cancer treatment, and small businesses, for

example, radiography licensees who inspect pipe welds and construction projects. So, a lot of different types of activities.

And so, when we talk about the fact that we have 60 fee classes, that's why you're seeing some

41 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com of that diversity of work.

So, when we build our budget for fiscal year 2023 or for every year, we split our work out into a variety of categories.

So, just like others, we have a lot of licensing oversight work, but we also have a lot of work related to the execution of that national program that I mentioned, the National Materials Program. And that's where we see some of our fee-relief and excluded activities come in because our support to agreement states is an excluded activity when we're helping them develop guidance and supporting their training of staff.

So, on this slide, you'll see licensing where, you know, just like in other business lines, we support the review of new applications, renewals to those license applications and amendments, which are supported under the annual fee.

We also have state, tribal, and federal programs. I've mentioned the agreement states a couple of times, but the implementation of the NRC's Tribal Policy Statement also falls under the Nuclear Materials Users Business Line. So, we have staff in my division that support outreach to federally recognized Native American tribes.

42 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com You'll also see an acronym here on this

slide, IMPEP.

That's the Integrated Materials Performance Evaluation Program where both the NRC and those 39 agreement states are audited every few years to make sure that they're implementing a safe and effective program.

Next slide, please. Here's where you'll see also oversight as another business line. So, we have inspectors -- inspections conducted mostly be regional based inspectors. We also develop the inspection program that's carried out across the National Materials Program. And those inspections do, in some cases, lead to enforcement.

We have a special set of activities under Generic Homeland Security that, again, is an excluded activity. And that's where we put together the Integrated Source Management Protocol, or the ISMP, which is a tool that's used nationwide to ensure source security of high-risk radioactive sources.

So, those sources are tracked in the National Source Tracking System. And we also use other components of this IT portfolio to manage licensing an inspection both at the NRC and in a growing number of agreement states.

So, these activities support our overall

43 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com goals related to radioactive source security.

Next slide, please. On this slide, you'll see rulemaking where, I believe, Christie mentioned earlier that we have some rulemakings included in our budget increases. I'll show that later on.

We have rulemakings related to a variety of topics, including our medical and industrial licensees. And we also provide support to the rulemaking guidance development in a variety of topics.

And then, in the research area, our partners in the Office of Nuclear Regulatory Research help us develop the technical basis that's used in rulemakings to ensure that we have the suite of health physics analysis codes for dose analysis and other applications and that we have the guidance that's needed to address the emerging technologies of the future.

Next slide, please. So, when we look to develop the Nuclear Materials Users budget, we have a variety of data sources. But the ones that I want to focus on today are how we develop the licensing and oversight budgets that are key to these fee collections.

And so, if fiscal year 2023, we really

44 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com transformed how we develop those by doing estimates.

And I'd like to give major credit here to Sullivan Donaldson who was instrumental to developing these.

And we have a growing source of live, real-time data that we can use from that integrated source management portfolio which captures licensing and inspection data as well as from our timekeeping system.

And we can marry those inputs together for both the backward and the forward look when we're developing out budget.

So, our online licensing system allows us to forecast the workload in terms of how many license applications we expect to have in a given year, how many amendments we think we'll process, and other licensing activities.

And then, similarly, to project how many inspections we'll be doing. Some inspections we do on an annual cycle, some every three years, some every five years.

And so, we have that data in the system to project in any given year how much our workload is. And then we can link those forecasts up with historical looks at how we've spent our money over time, how many hours we spend on a given inspection

45 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com or a given type of licensing action.

And that has allowed us to have a real data focused method of estimating our budgets for this fiscal year that we're talking about here. And we really appreciate having those data sources available to us at our fingertips.

Next slide, please. So, the changes in the fiscal year 2023 budget we described when we put our budget out several of -- a while back.

And so, the primary drivers are really the first here is what I was just talking about that data driven resource estimation tool.

With all this data at our fingertips, we had a much better estimate of how much resources our regional offices needed to carry out those the licensing and inspection workload that was projected for a given year.

And we wanted to make sure that we weren't just giving them resources without the data underpinning. And we found that, in some cases, certain offices were underfunded. And so, we made sure that they had the resources they needed to carry out that work.

We also had increases related to rulemaking. Christie mentioned decommissioning and

46 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com financial assurance. There's others related to our medical activities as well as guidance for release of pets who are treated with radiopharmaceuticals.

And then, finally, we have increased our tribal outreach, as I mentioned a little bit earlier.

And so, our resources are applied to what we need to do that increased outreach.

Next slide, please. So, all of those budget estimates and some increases to some extent get put into the calculations for the fee process.

And as I mentioned, there are 60 different fee classes. I think Christie mentioned that as well.

And so, the changes to the actual fees that are charged to our licensees come largely from what was discussed earlier about the fully cost in FTE, the changes to salaries and benefits which are reflected across a variety of fee categories.

We looked at whether there were other aspects driving it. And then, small changes to the number of licensees. And then, the amount of work that's excluded versus on the fee-based. Those are not significant drivers to the overall fee changes.

And then, within the materials fee class, as I said, we distribute our fees to 60 diverse fee categories that reflect the types of work that we

47 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com conduct for those different fee categories.

Some require more effort than others. And so, we work to fairly distribute the amount that we have to collect across all of those categories.

And we, again, use data to develop that distribution method. We look back at how much effort used on licensing and inspection to each of those fee categories. And we provided analysis to our budget analyst and our fee analyst so that we can do that distribution.

And in the 2023 fee rule, that includes an updated assessment that included two more years of data. So, we're looking at fiscal years 2017 through 2021 and the average hours on the licensing and inspection activities. And then, we use that information to distribute to the fee categories.

Next slide, please. And now, I'll turn it over to Anthony Rossi. I appreciate your time.

MR. ROSSI: Good morning. My name is Anthony Rossi. I am the License Fee Policy Team Leader.

In this fee rule, we're proposing one policy change to the small modular reactor annual fees, amending 10 CFR 171.15.

Next slide, please. In our approach to

48 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com determine the best approach to this policy change, we engaged with stakeholders in a multi-year effort to develop a fair and equitable approach for charging annual fees to advance in very small SMRs.

NRC staff discussed various approaches and developed alternative proposals which were presented and discussed in multiple public meetings on advanced reactors.

The proposed policy change reflects a consensus approach from this process.

Next slide, please. To review, in 2016, the NRC established a rule for light water small modular reactors in order to assess fair and equitable annual fees.

The primary reason for this rulemaking was the much smaller size of the light-water SMRs when compared to the existing fleet of commercial power reactors. And due to their smaller size, it is anticipated that SMRs may require less regulatory effort.

Without this 2016 rule, light-water SMRs would be charged the same annual fee as the current operating fleet of large power reactors.

At this time, the 2016 rule was developed

-- I'm sorry, at the time the 2016 rule was developed,

49 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com advanced technologies were not included due to the fact that the light-water SMR designs discussed with NRC in pre-application discussions were similar to the current U.S. operating fleet of reactors in terms of physical configuration, operational characteristics, and applicability to the NRC existing regulatory framework.

NRC made the commitment to consider the inclusion of non-light water advanced SMRs in a future rulemaking once the agency had an increased understanding of the technical factors with respect to non-light water or advanced reactors.

For fee purposes, the 2016 rule defined SMRs as light-water power reactors that have a licensed thermal power rating or less than or equal to 1000 megawatts thermal.

The 2016 rule scaled the annual fees for light-water SMRs to the size of their reactor based upon the licensed thermal power rating.

Another characteristic of SMRs that was considered is the design concept that multiple SMRs could be placed on one multi-module site.

As a result, the 2016 rule established a provision to fairly and equitably assess annual fees for multi-module sites by establishing a bundled unit

50 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com concept which would base the annual fee on the cumulative licensed thermal power rating or all of the units on a single multi-module site rather than charge an annual fee for each unit on the site.

The result of the 2016 rule was to fairly and equitably assess annual fees for multi-module site -- I'm sorry, the result of the 2016 SMR rule was to fairly and equitably assess annual fees to light water SMRs rather than charge the same fee per unit as the existing fleet of large commercial power reactors.

The annual fee assessed to light water SMRs would be consistent with the anticipated reduced regulatory effort for these smaller power reactors.

As of this date, there are no SMRs licensed to operate, thus, no annual fees have been assessed.

Next slide, please. As a result of this recent collaborative

effort, we have proposed revisions to the SMR annual fee policy in this proposed fee rule.

The following changes to the 2016 rule are proposed. Change the definition of SMRs to be technology inclusive and not limited to light water SMRs. Establish a new minimum fee for SMRs equal to

51 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com the annual fee charged to the non-power production or utilization facilities or bundled units on a single site with the cumulative thermal power rating of less than or equal to 20 megawatts thermal.

Since it is anticipated that the regulatory effort for these SMRs will be similar to the NPUF regulatory effort. And establish a new variable rate that gradually increases the annual fee for SMRs or bundled units on a single site with license thermal power ratings greater than 20 megawatts thermal, but less than or equal to 250 megawatts thermal. This avoids an abrupt increase to a higher minimum fee once the thermal power rating is above 20 megawatts thermal.

All other components of the 2016 SMR rule are retained and applied to light-water and non-light water or advanced SMRs. This proposed policy change will assist industry in planning and budgeting for future SMR annual fees.

At this time, there are no operational licensed SMRs. Because the annual regulatory costs associated with SMRs is uncertain before such a licensed facility is operational, the NRC will re-evaluate the variable annual fee structure at the appropriate time to ensure consistency with NEIMA.

52 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com This re-evaluation will occur once SMR facilities become operational and sufficient regulatory cost data becomes available.

Next

slide, please.

This chart illustrates the proposed revised policy for SMRs.

A minimum fee equal to the annual fee for the NPUF fee class is assessed up to 20 megawatts thermal.

Above 20 megawatts thermal, the minimum fee gradually increases at a variable rate as the licensed thermal power rating increases to 250 megawatts thermal.

At 250 megawatts thermal, consistent with the 2016 rule, a second minimum fee is applied which is equal to the average of the spent fuel storage reactor decommissioning fee class and the NPUF fee class annual fees.

Above 250 megawatts thermal, a different variable fee formula is added to this minimum fee, gradually increasing the annual fee up to 2000 megawatts thermal at which the maximum fee is equal to the annual for the current fleet of operating power reactors.

The same pattern continues as licensed thermal capacity increases where multiple -- or multiples of the maximum fee are applied at 6500 and

53 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com 11000 megawatts thermal respectively.

At this time, I will turn it back to our moderator, Sophie Holiday.

MS. HOLIDAY: Thank you, Jason, Christie, Brian, Carrie, Theresa, and Anthony for your respective presentations.

We have allotted 30 minutes for this question and answer portion of this meeting, albeit we're running a little bit ahead of schedule. So, if need be, we can extend the Q&A session as well.

Alternatively, if we run out of time to address any follow up questions, the NRC staff will include the questions and their responses as part of the meeting summary.

I'd also like to remind you that as I stated earlier, the NRC is not accepting any comments made at today's meeting as official comments on the proposed rule.

Rather, comments will have to be submitted in writing to receive formal consideration.

At this time, to ask a question, please utilize the raise hand function on Teams. You can find this at the top of your window with the hand icon.

For those that have joined us via the

54 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com audio bridge line, you can dial star five to raise your hand that way. Teams will automatically put you into queue in the order of your hand raising. Once I have called your name, I will unmute your microphone.

Alternatively, if you have joined us via the audio bridge line, you can press star six to unmute your microphone.

Once unmuted, you are free to ask your question. To ensure that everyone is given an opportunity to ask their questions, should you have any, we request that each person only ask one question at a time.

If there are no additional questions or time permits, we will take your additional questions.

As a kind reminder, since this meeting is being transcribed, we ask that you state your name and any organizational group affiliation if applicable.

If there's a particular panel member that you would like to address your question to, you may also do that as well.

At this time, see Mr. John Butler, your hand is raised. You may proceed with your question.

MR. BUTLER: Good morning, can you hear me?

MS. HOLIDAY: Yes, we can.

55 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com MR. BUTLER: Great, this is John Butler.

I'm with NEI. I have a number of questions, but I'll take my turns as they come.

My first question is related to carryover. So, I don't know who this would be addressed to, but I'll just ask the question.

My question is, what level of carryover does the agency desire to have for the purpose of addressing lapses and appropriations, you know, short-term lapses and appropriations which, in the past, has been about two weeks of funding for that lapse of appropriation?

Can you give me a figure of what level of carryover would be necessary to support that?

MS. HOLIDAY: Thank you.

Jason will direct that question today.

MR. SHAY: Yes, thanks, John, for the question. Typically, I think we strive -- we talk about internally about ten days' worth of carryover funding. And again, that changes from year to year based on the cost of doing business.

So, typically ten days, ten Business days is our kind of sweet spot.

MR.

BUTLER:

Approximately how many million would that be?

56 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com MR. SHAY: Again, I think that's from year to year due to cost escalations. I don't want to throw out a number, you know, just arbitrarily. But again, I think ten days is where we like to be at.

MR. BUTLER: But that's primarily just the salary and benefits for that ten days?

MR. SHAY: No, there's the cost of some of the guard services. There's some other things in there that we have to take into consideration just Because the people, if there is a shutdown or in terms of like, you know, during that time frame of staying open, there's things that we have to consider, rent.

MR. BUTLER: Can you give me a ballpark what that is?

MR. SHAY: Again, ballpark, I'll say, you know, $25 million-ish.

MR. BUTLER: Okay, great, thank you.

MS. HOLIDAY: Thank you.

Next, I'm see Janet Schlueter, your hand raised. If you would please, unmute your microphone and ask your question.

MS. SCHLUETER: Yes, thank you. This is Janet Schlueter from the NEI. And I think it would be helpful if maybe we went back to slide 17 that has to do with the Fuel Facilities Business Line.

57 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com So, first, I wanted to say thank you to the staff for putting together this slide Because it gives a great overview of where the Fuel Cycle Business Line has been in the past versus today.

And we had a lot of conversation with the NRC back in 2015, 2016, 2017, 2018 in order to try to inform their budget formulation processes and assumptions so that the Fuel Facilities Business Line moved into a more right sized program, if you will, to reflect the fleet.

Because numbers were, at the time, representative of a much larger fleet. But as you can see by the number of licensees on this slide, we've held steady in the seven to eight zone now for several years.

And so, as we went into those conversations and the NRC made those adjustments, you can see that the annual fee for this category of licensee has gone down quite a bit, and appropriately so, as the NRC had determined.

But then, this year, we now have an 18.5 percent increase across the board, except for Honeywell which is going to see a much large increase due to restart. Right?

So, I hear the discussion about salaries

58 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com and benefits being a reason for that increase, but also as I go back to the Federal Register Notice, and I think it's on page 13364, there's a description paragraph there about the basis for the increase.

And as I read them and listen to you guys talk, it really is focused on licensing actions for enrichment, you know, enriched uranium, critical mass licensing, restart activities, material control and county inspection.

So, all these activities from our vantage point look more like Part 170 or billable hour activities. So, I'm struggling to figure out how did the Fuel Facilities Business Line see this huge increase?

Whereas, when I hear you discuss it for other Business lines, they're in the 2 percent, 3 percent, 4, 5 percent range, but the Fuel Facilities Business Line sees this enormous increase which now puts the Category 1 fuel facilities up at an annual fee level that is creeping back up close to the operating power plant level, which in the past, NRC has acknowledged from a risk perspective is not appropriate. But it's inching back up and we can't decipher from the Federal Register Notice why.

And as you can imagine, these licensees,

59 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com they have planned back in calendar year 2022 for an FY 2023 annual fee that is now not budgeted because it's 18.5 percent higher.

So, you have to come up with that money somewhere and it's not an easy task to try to find funding to have that kind of gap filled which will now be in your, NRC's, third and fourth quarter of this fiscal year, meaning they're going to paying these bills before the end of September.

So, lots of tidbits there, but I'm hoping somebody can explain to us a full bases for the 18.5 percent across the fleet. Thank you.

MS. HOLIDAY: Thank you for your question, Janet.

Carrie, if you can?

MS. SAFFORD: Sure, hi Janet, it's Carrie, I'll try. I don't know how satisfactory the response is going to be.

Starting I guess with your last point first about licensees and their budgets and the fact that the budget increase hits them in their last quarter that they budgeted for last year.

It's the nature of the fee rule process and putting in a new fee rule on an annual basis. And it's the nature of the timing of it.

60 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com With respect to the increase and whether or not, you know, we're able to let people know in advance, of course, we can't do that. This is something that goes to the Commission. The Commission reviews it and it's all pre-decisional up until the point where the Federal Register Notice and the associated papers come out. So, that's the answer there.

With respect to the big jump, as you characterize it for the Part 171 annual fee resources, going back to formulation which would have occurred in 2021 for the 2023 year, we have to base that off the information we have.

If work doesn't materialize, if direct fee billable work doesn't materialize, it will, due to NEIMA, get rolled over into the annual fee. And I hope I'm saying that right. Somebody stop me or kick me if I'm getting it wrong, I'm trying here.

That that is a significant impact, I think, in the increase that you're seeing for this year.

I recognize that it's going up. It is increasing in looking at the chart, that's slide 17.

I recognize that it's increasing. That would be the primary driver, in my view.

61 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com I don't know if anyone else has anything that they'd add as a primary driver.

MS. HOLIDAY: Thank you, Carrie. I'd also like to remind everyone that the NRC published the FY 2023 Congressional Budget Justification, I believe, in April of 2022. That is a publicly available document and that outlines the staff's projected workload as they were determining their budget formulation.

So, while the NRC staff cannot release pre-decisional information regarding the proposed fee

rule, the

CBJ, the Congressional Budget Justification, does outline the anticipated resources that the staff budgeted for based on the anticipated workload.

Thank you. All right?

MS. SCHLUETER: Well, yes, thank you for that process focused answer. I guess I'm still just struggling, based on the Federal Register Notice, to understand why all those activities that really do appear to be licensing and inspection and Part 170 seem to be falling over into the 171 bucket.

And that's the part that just doesn't make sense to us out here.

So, it's, you know, if anybody can think

62 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com of anything additional that would help clarify how those two buckets seem to be getting all sloshed together, that would help.

Yes, you know, we're aware and we'll be taking a look at the FY 2024, you know, congressional request, but I would think that NRC would have a way to be more agile when it comes to predictions that took place what is now a year and a half, two years ago and then the reality of today's environment.

So, I'm just very concerned that this business line is beginning to creep up again with no real clear articulated transparent basis for the increase in the annual fee.

Although, I recognize there are advanced fuel, you know, work going on, but that's licensee and applicant specific. It is not in the broad category of the annual fee that is generic activities that applies across the fleet like jelly. So, thank you.

MS. HOLIDAY: Thank you, Janet.

Okay, next up, I see in the queue Daniel Ashworth. If you are ready, you can unmute your microphone and ask your question.

MR. ASHWORTH: Yes, thank you. This is Daniel Ashworth and David Spangler with BWX

63 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com Technologies.

Janet, thank you for your statement earlier. We are in agreement that the proposed licensing fees are non-proportional increase. That is, the reactors or operating reactors are seeing approximately 6

percent as compared to fuel facilities increase of 18.5 which, as was stated and we'll reiterate, this increase is not commensurate with the risk profile of fuel cycle facilities versus operating reactors.

BWX Technologies, with our two sites, NOGL and

NFS, that's Category 1

fuel cycle facilities, based on your proposed fees would be incurring an additional $1.6 million for, as you all stated earlier, no additional planned safety factors at these two sites.

The corporation between the two sites accounts and pays for upwards of approximately 40 percent of fees collected from fuel cycle facilities.

And you know, superficially, it appears that you're asking current fuel cycle facilities to shoulder the burden or cost of work that either didn't materialize as you stated a minute ago, or either future anticipated work for potential new licensees.

Which in turn, may be competitors of

64 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com ours, BWXT, NOGL, and Nuclear Fuel Services in the markets we serve.

Thank you, it's not really a question just more of a statement.

MS. HOLIDAY: Thank you, we appreciate your statement.

All right, next up I see Mr. John Butler, your hand is up again. Please go ahead and unmute your microphone and ask your question.

MR. BUTLER: All right, thank you.

Again, I don't know who this should be directed to, so I'll just say at random, Jason. I know that in the 2023 budget, there's a portion of the rental payments for 3 White Flint that are covering or subsidizing FDA and NIH. Can you give me that number and what that rental subsidy is in the 2023 budget?

MR. SHAY: Yes, John, one second, I have that here. Just let me take a look at my notes, one second.

John, let me come back to you, bear with me just one second, I'm just pulling up a document real quick.

MR. BUTLER: All right.

MR. SHAY: Sorry, it's slow pulling up.

65 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com Do you have another question, John? I don't want to like delay the point with this document.

So, might as well go on.

MR. BUTLER: I don't know if this goes to Brian or not, but when you're doing your predictions of workload, clearly, I mean, you're focused on the, I guess, as you start that, two years out.

But how far out do you try to project future workload? Is it -- do you try to go out as far as five years or even ten years in any of those predictions?

Recognizing, I know, that that would be very uncertain as you -- the further out you get. But I'm just curious, how far out do you try to plan?

MR. SMITH: We -- well, we don't develop the budgets for -- like right now, we're working on fiscal year 2025. We're not developing the budget for fiscal year 2026 at this time.

But we are taking into account the applications that we're aware of that we would either be receiving in fiscal 2026 or 2027 or be continuing to review that we received earlier like in 2024 or 2025.

We do have tables; I don't know they're in the CBJ. I know we develop them that we provide to

66 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com our Commission that looks out to -- for new applications and license renewals that goes out to 2028.

MR. BUTLER: If that could be made publicly available, that would be fantastic. So, if someone could look into that.

MR. SMITH: Okay. There are some aspects of it that are non-public, some schedules are proprietary.

Sometimes when we do that, we'll just say Unnamed Plant 1 or Unnamed Plant 2.

MR. BUTLER: Understand, thank you.

MR. SHAY: Hey John, I've got an answer to your question. It's $5,650,000 for the rent subsidy.

MR. BUTLER: Great, thank you very much.

MR. SHAY: Yes, sorry about that. My notes document froze on me. So, appreciate your patience.

MS. HOLIDAY: Thank you.

Okay, Janet, I see your hand is raised, but I'm going to go to T. Holly first just so that we give another person an opportunity to ask a question.

And then, I'll circle back to you.

So, T. Holly, if you would, please unmute your microphone, state your name, and any affiliation if appropriate.

67 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com Go ahead, please.

T. Holly, if you can hear me, you can unmute your microphone and ask your question.

MR. HOLLY: Hello, this is Tom Holly, can you hear me now?

MS. HOLIDAY: Yes, we can.

MR. HOLLY: Okay, thank you. I have a phone line and as well as the computer, so thank you.

Tom Holly, I'm the licensing manager at BWXT Nuclear Fuel Services.

I just wanted to thank, again, the NRC for the public meeting and just echo here the comments that my colleagues made in Lynchburg and express, you know, again, our concern as a Cat 1 fuel facility.

And just look forward to continuing to work, you know, with the NRC to understand that changes in the fee base, specifically, again, for us as a Cat 1.

That's all I have, not a question. Just wanted to, you know, let the group know that both sides are participating in the call and are very interested in the outcome of this rule.

So, thank you, again.

MS. HOLIDAY: Thank you, Tom.

Okay, Janet, if you would, go ahead and

68 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com unmute your microphone and ask your question.

MS. SCHLUETER: All right, don't worry, I'm not going back to fuel cycle again.

But if you'd go back to slide 16, the one before, this one is on the research and test reactors, the non-power production facilities.

So, my question here is, and I'm asking this on behalf of my colleague, Hillary Lane at NEI that takes care of the community, so we see an increase for this category of licensee.

And if we go back to the Federal Register Notice on page 10, I wanted to read just a sentence to you Because we don't understand it.

It says, furthermore, the proposed annual fee is increasing as a result of an increase in the 10 CFR Part 171 billing adjustment (moving from a credit to a surcharge) due to the timing of invoices issued in FY 2022.

If someone could explain the difference between a credit and a surcharge or what those are and why did that adjustment result in this increase?

MS. HOLIDAY: Sure, thanks for your question, Janet.

MS. SCHLUETER: And there's some billing

-- there's some timing of the billing issue there

69 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com that's sort of enveloped as well.

MS. HOLIDAY: Sure, thanks for your question, Janet.

Billy Blaney is going to answer your question.

MR. BLANEY: Hi Janet, this is Billy Blaney.

So, the time of the invoice adjustment is the timing in which invoices are paid from the prior years.

So, we have invoices that are paid from prior year which are also, you know, we may have an increase in invoices paid the prior year which would be additional funds received this year.

Or we may have an increase and decrease in invoices that will not be paid in this year.

So, you have invoices that are paid from prior years that give us kind of additional money in this current year, and then you may have invoices for the current year that are paid in a future year. So, it would be less money received in this year.

Just trying to simplify that a little bit to try to make it clear.

So, we compare what is received this year compared to what will be received in future years or

70 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com not paid in the current year.

So, last year, there was a credit to --

everybody received a credit because there was more money received in the current year.

And right off the top of my head, I'm probably assuming this Because we had some deferrals from COVID, so we had additional money paid from prior years last year.

Whereas, this year, we no longer have those additional invoices or, you know, an influx of additional invoices paid from prior years in the current year.

So, this year, we actually have a surcharge. So, we have more invoices that we're predicting will not be paid in the current year that will be paid in future years.

Does that help you out?

MS. SCHLUETER: I think so, yes. Yes, it does. It explains the difference in the use of the terms and how that can impact anyone collection, you know, the year -- the collection in any one fiscal year versus what you've budgeted.

MR. BLANEY: Yes, and we base the surcharge and credit percentages based on the percentage of the budgetary resources for each fee

71 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com class. So, that's how we divide up the overall credit or surcharge to each individual fee class.

MS. SCHLUETER: Okay, thank you.

MS. HOLIDAY: Okay, John, I see your hand is up again.

If you would, go ahead and unmute your microphone.

MR. BUTLER: Thank you.

I have a general question to kind of teach me something about the budget process.

Can someone speak to how the budget for research, the Office of Research, is developed? And specifically, is there any external input considered in that budget development?

MR. SHAY: Hey John, thanks for your question.

So, yes, research is a partner office and they get their resources and -- from the business line leads with any organization.

So, either materials side or the reactor side.

So, they coordinate their needs and the needs of the respective business lines every budget cycle.

There's a review process that happens

72 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com internally where business line leads look at the requests from the partner offices and it goes through an extensive review throughout the process in terms of what they're requesting, timeliness, those types of things.

MR. BUTLER: And at what level is the approval of that budget?

MR. SHAY: First, it's -- the first iteration is CFO/EDO level. Then it goes to the Chair and the Commission for a vote.

And then, of course, typical process to OMB and then to Congress.

MR. BUTLER: All right, so is it -- it sounds like you're saying the research budget is developed from, basically, user need requests? Is that fair or --

MR. SHAY: Well, they are a partner office by our definition. And so, they do coordinate and collaborate with their respective business line lead.

So, they do partner in terms of the workload that's being requested by the business lines or through other mechanisms, either maybe SRMs, things like that that are directed by the Commission.

MR. BUTLER: Okay, all right, I got you.

Thank you very much.

73 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com MR. SMITH: Jason, this is Brian Smith from NRR and I'll add a little bit to that.

So, it's the majority of their budget is like John said, from what we call a user need request.

It's a request from our program office, NRR, to the Office of Research to conduct research activities for us.

And those user need requests can span a number of years to start the research and take it all the way to completion.

And so, that's where a lot of their budget comes from. They do support some licensing reviews for us as well. They may develop some plant-specific models that we'll utilize as part of the licensing review.

And as you asked, who all's involved in the development of their budget, it starts at the staff level and works up through branch chiefs. All the division directors take a look at the work that research is proposing to do for the future budgets all the way up to the office director.

Then it gets into what Jason said, to the CFO-EDO level.

So, it's reviewed at all levels.

MR. BUTLER: Brian, very helpful, thank

74 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com you.

MS. HOLIDAY: Thank you.

Before we take our next question, I would like to remind everybody that the purpose of today's meeting is to discuss the proposed fee rule.

So, if possible, your question should be related to the proposed fee rule, and particularly, any clarifying questions as it pertains to the fee rule. Okay?

So, at this time, I would like to open it up to Janet again.

MS. SCHLUETER: All right, I have a generic question.

I think, if I recall, it's back on maybe slide 13. But it has to do with the Mission Direct FTE hours.

So, for many years now, the Mission Direct FTE at NRC has been about 1,551, it really hasn't changed a whole lot.

So, I was just curious as to when NRC has last revisited this number for its accuracy? You know, does it reflect sort of current staff practices?

And the reason I ask this is Because I think that, you know, all of us have seen in our

75 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com companies, in our, you know, whether it's industry or government, you know, we are all being able to take advantage of the use of information technology and digital systems much more today here, sitting here in 2023 than we ever have, of course.

We have things like digital platforms which are shared between the NRC and licensees for document sharing.

We had a decrease in travel during COVID, which to some degree, that continues a little bit Because there are some efficiencies that we have all recognized have occurred by having virtual exit meetings, entrance meetings, and so forth.

So, a little bit of less travel, more ubiquitous use of IT, digital platforms, all these things are allowing us in the private company world, too, to be more efficient.

So, I would think at some point it would be fair to say that NRC might want to turn a microscope on that area to see, you know, is that still the right number for staff?

And I realize you, you know, there's the holiday hours and vacation and so forth, but is that same time still necessary to be allocated for travel and training, for example?

76 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com Any thoughts about that? Has that been looked at in the last five years?

MS. HOLIDAY: Thanks for your question, Janet.

If I can, I'd like to call on Christie to address this question.

MS. GALSTER: Hi, hi Janet, this is Christie.

So, as you can see, the last few fee rules, I believe, starting with maybe 2019 or 2020, are annual productive hours have been very close to the 1,510.

And it did actually increase this year by 41 hours4.74537e-4 days <br />0.0114 hours <br />6.779101e-5 weeks <br />1.56005e-5 months <br /> due to exactly what you said, people are taking less travel hours. So, it actually did increase.

We do have, like I said, we do have work papers that break into this number. I believe this is, yes, the COVID period, and that is why the travel hours and vacation hours did actually decline, hence, the productive hours increased for this particular fee rule.

I can only speak to this year. I'm not really sure -- I believe that we're still going to be using the same methodology, but we will take this

77 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com information back to the budget folks and see what else -- the other components they're looking into.

MS. SCHLUETER: Thank you.

MS. HOLIDAY: Thank you.

Okay, John, I see your hand is raised again. Go ahead and please ask your question.

MR. BUTLER: All right, I think this will be my question, so bear with me.

It's kind of going back to the first question on carryover.

I know in the proposed or 2024 budget, there's a use of carryover to reduce licensee fees.

Is there any latitude to utilize any of currently available carryover for the 2023 budget?

MR. SHAY: John, thanks for the question.

No, I mean, not at this time, obviously.

Through our appropriations, we do have our appropriated amounts already given to us. And like I said earlier, you know, we are following the appropriation language and the explanatory statements to the fullest. And we would not be able to offset our budget using carryover this year.

MR. BUTLER: All right, thank you.

MS. HOLIDAY: Thank you.

Okay, before we wrap it up, are there any

78 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com other individuals that would like to ask a question that has not done so yet? Now is your opportunity.

And I am not seeing any. So, Joe, if we could go to -- sorry, we're advancing the slides.

All right, so, at this time, I'd like to discuss with you the five different methods by which you can submit your comments on the record for this proposed rule.

As I stated earlier during this meeting, the deadline to submit your comments for consideration is April 3, 2023. There are five methods that are reflected on this slide and the following slide.

The NRC will highly encourage that you use the very first option which is the Federal Rulemaking website listed here on the top of the slide.

That includes the electronic comment submission and it's located under Docket ID Number NRC-2021-0024.

Alternatively, you can also email your comments to the email address listed in the second row, rulemaking.comments@nrc.gov. If you email your comments, please be sure to specify the Docket Number NRC-2021-0024 so that that can be binned together with all of the comments.

79 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com The third option you see on the screen is to fax your comments. You can fax them to the Secretary at 301-415-1101. Again, specify the Docket ID Number NRC-2021-0024.

Next slide, please. You may also mail in comments. You can mail them to the Secretary at the address listed here, Attention Rulemakings and Adjudications Staff. Again, include the NRC Docket ID Number 2021-0024.

You can hand-deliver your comments here at the NRC Headquarters location, 11555 Rockville Pike, Rockville, Maryland, between the hours of 7:30 a.m. and 4:15 p.m.

Should you have further questions or need additional information, please feel free to contact Anthony Rossi, License Fee Policy Team Leader at the contact information here.

Lastly, I would appreciate if you took the time to fill out our public meeting feedback form.

This can be found on the NRC's public meeting schedule page for this particular meeting.

Your opinion on how this meeting went will help us improve upon future meetings. So, please, if you would, take a moment to let us know your thoughts.

80 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1716 14th STREET, N.W., SUITE 200 (202) 234-4433 WASHINGTON, D.C. 20009-4309 www.nealrgross.com Thank you for your time, your attention, and your engagement during this meeting.

Without further ado, I would like to turn this meeting back over to James Corbett for closing remarks. James?

MR. CORBETT: Thank you, Sophie.

As you guys can see, there's plenty of ways to make your comments. So, to our public commenters, we really appreciate your comments and your feedback. To all our staff and stakeholders, I hope you have a better understanding of your fee setting program and its relationship to our budget formulation activities. We look forward to any comments that you may submit on our proposed rule.

And I would like to thank Sophie for her exceptional facilitation today.

And I would also like to thank my folks, the licensee Fee Policy Team, for their outstanding work and all of our partners for putting together the presentation and the slides that you see today.

With that, we are concluded, thank you.

(Whereupon, the above-entitled matter went off the record at 11:38 a.m.)