 The Mexico Senator, Pete Domenici, called it the NRC's Day of Reckoning. Domenici chaired the NRC's Budget Subcommittee and, in early June 1998, he gave Chairman Shirley Jackson an ultimatum, change the NRC's nuclear power plant oversight process, or face cuts of up to $150 million, a third of the NRC's budget, and the loss of 700 staff. I'm Tom Wellock, the NRC's Historian. The NRC terminated its controversial oversight program, the Systematic Assessment of License Performance, known as the SALT, and created the ROP, the Reactor Oversight Process. The ROP was a significant step toward more objective oversight, which combined quantitative insights of risk assessment with plant performance data to produce measurable safety outcomes – what the NRC calls risk-informed performance-based regulation. The Domenici-Jackson meeting was so momentous it is still remembered as the agency's near-death experience. The demise of the SALT and the birth of the ROP marked the swift resolution of a fractious 20-year debate over the NRC's proper oversight role – one that began after the 1979 Three Mile Island accident. Before Three Mile Island, the NRC tended to limit its oversight of plant operations to citations for rules violations. Going beyond that, to investigate licensee quality, was considered an intrusion on management discretion. Regulators feared aggressive oversight could destroy a licensee's sense of ownership for plant safety. Through the errors that led to Three Mile Island, concern for licensee quality grew, and the NRC placed resident inspectors at every plant, and created the SALT to rate plant performance through a mixture of inspection findings, performance data, and regulatory judgment. The contribution of poor management to the 1986 Chernobyl accident in the Soviet Union added another intangible to oversight – that a licensee safety culture, a hard-to-measure commitment to safety, was crucial in preventing accidents. While the U.S. nuclear industry maintained it had a safety culture distinctly superior to the Soviets, some wondered if it was a distinction without a difference. Lacks management was blamed for a series of malfunctions and errors during a significant event at the Davis-Vessing nuclear power station near Toledo, Ohio. In 1987, the NRC fined dozens of plant operators at Pennsylvania's Peach Bottom nuclear power plant for sleeping on duty. Time magazine's headline, Wake Me If It's a Meltdown, was a humorous comment on a serious problem. The NRC ordered Peach Bottom to shut down, but it did not restart for over two years. Management issues also kept Alabama's Browns Ferry station offline for years. The NRC struggled to assess operational performance fairly, but licensees came in all sizes, from small municipal utility districts to Fortune 500 companies, and there were few common traits that consistently predicted safety performance. The industry complained that salt scores were arbitrary and opaque. To be consistent, the NRC added more layers of review and, to distinguish the good from the bad, it created a watch list of problem plants. These measures only made the salt more unpopular. In 1989, the NRC's Executive Director of Operations, Victor Stello, admitted to an industry audience that the United States had the world's most adversarial regulator licensing relationship. We do not trust you, you do not trust us. In 1994, the industry took its grievances public. It polled industry leadership and workers about the NRC, and found most thought the NRC was arrogant, a regulator that ruled by fear. Even as plant performance improved, the poll found, licensees received little credit. Instead, inspectors wrote up numerous seemingly trivial safety violations. While the industry complained of regulatory overreach, problem plants continued to make headlines. In March 1996, Time Magazine featured the story of George Galatis, an engineer at the Millstone Station in Waterford, Connecticut. Galatis waged a successful battle to force revisions to refueling procedures and safety systems. Subsequent NRC investigations uncovered numerous issues with plant management. Millstone units two and three remained shut down for two years. Faced with expensive safety upgrades, the licensee closed Millstone Unit 1 for good. After Millstone, plants on the NRC's watch list of problem sites jumped from 6 to 14, and the industry fumed that the NRC tarred licensees with the same brush. While the NRC pointed out that inspection hours had declined as industry performance improved, impatience grew. Calls increased for an oversight process that was less subjective and took enforcement action proportional to the risk significance of a violation. In the 1994 congressional elections, the Republican Revolution established a Congress intent on reducing federal regulations, and, as conflict between the NRC and industry grew, Senator Domenici was in a position to do something about it. His proposed budget reductions, he said, were meant to administer some tough love. It worked. Jackson Promise performs and budget cuts were limited. The commission moves swiftly to suspend the assault and the hated watch list. The new ROP established cornerstones of safety and risk-informed thresholds for regulatory action appropriate to the safety significance of the deficiency. The new process favored licensee corrective actions over fines and shutdowns. Some NRC staff objected that Domenici was challenging the NRC's status as an independent regulator. At an agency-wide meeting with the NRC commissioners, one employee said, We are being threatened by someone who has the power of the purse over us. Jackson disagreed. We are creatures of Congress, she said, and we have a responsibility to be responsive. Congress has provided us with a platform to accelerate our movement in a direction we know we must go, a direction we ourselves already had decided we needed to go. Under both the SALP and the ROP, the safety performance of U.S. licensees improved. But perhaps the most important difference between the two is that the reactor oversight process is less intrusive and more objective, transparent, and adaptable. That adaptability was evident in the NRC's response to continuing concerns for licensee safety culture when it strengthened the ability of resident inspectors to identify safety culture concerns. Since the 2011 accident at the Fukushima Daiichi Nuclear Power Station, the NRC has made several modifications to the ROP's inspection procedures to cover new accident management equipment and guidelines. Thus, the NRC's oversight program continues to evolve as the agency seeks the optimal balance in the roles of the regulator and licensee in protecting the public's health and safety.