 It's my pleasure to introduce Commissioner Ostendorf. He served on the commission since April of 2010 and is approaching four decades of dedicated public service. Before coming to the NRC, Commissioner Ostendorf served as the principal deputy administrator for the Department of Energy's National Nuclear Security Administration, as well as holding senior positions at the National Academies and the House Armed Services Committee staff. This was preceded by a distinguished 26-year naval career where he notably held command of a nuclear attack submarine as well as a submarine squadron. Excuse me. Commissioner? Well, good morning. I agree with Brian that Commissioner Svendiki is a tough act to follow. I'm not going to try to do that. It's interesting. Bill Magwood, for the last four years, I spoke after him, and usually he had the podium way up here at this level. And so it's, Commissioner Svendiki, at about the same height, so it's good to have a compatible podium precede me. So it's a great opportunity to be here today thanks to privilege of speaking to this distinguished group of colleagues from the nuclear safety community. I particularly want to welcome our international colleagues. We really value our relationship with you across the board. Before I begin, I have a few notes of appreciation. First, I want to thank the NRC staff, Bill Dean, Brian Sheeran, their staffs who work so hard every year to prepare for the RIC. I'd also like to thank fellow Commissioner colleagues here in the front row. For Chairman Burns, Commissioner Barron, welcome to your first RIC and your new roles. I've been impressed with how smoothly you and your staffs have transitioned into new responsibilities. To Commissioner Svendiki, thank you for continuing to be a close colleague and dear friend these past five years on the commission. To the NRC staff, a heartfelt thanks to you for your high caliber of work and your dedication to NRC's mission. It is a true privilege to work alongside you. And two final personal notes of thanks. First a former member of my staff, John Tappert. John left my office last year after two years as my chief of staff. He is now serving as the Director of Division of Engineering in the Office of New Reactors. I could not have asked for a more high-performing professional and collegial individual. I'm most grateful, John, for your hard work and service to the NRC. Thank you. And second to Jim Wiggins. Jim's down here in the front row, back three chairs. The Director of the Office of Nuclear Security and Instant Response. Jim will be leaving the NRC after 35 years of dedicated service following six years as a Nuclear Submarine Officer. I know that we are all indebted to Jim for his commitment to common sense pragmatic regulation. I've learned a lot from Jim and I thank you, Jim, for your leadership, service and friendship. Commissioner Svendiki has been here for seven weeks. This is my fifth. It's kind of like Thanksgiving at the kitty table. Last year, for the last four years, I've been on day two. Jeff, don't take any offense about it. So this is my first time to quote, sit and talk with the big boys and girls. Since last year, we've seen some significant changes. New commission is arriving. Dear friends and colleagues leaving, George Apostolakis, Bill Magwood, Allison McFarland. But as you know, change is not new to the NRC. We've handled changes in the past, as Chairman Burns noted, with Three Mile Island, 9-11, Fukushima, and various reorganizations, as well as changes in the economics of the nuclear industry. And changes will continue into the future, as our agency will face new technical issues and will no doubt adopt new and better ways of doing business. But throughout these changes, the NRC remains committed to the principles of good regulation. These principles are the bedrock upon which we build our regulatory framework. I find the periodic assessments of how we are doing as a regulator to be a constructive exercise, especially reflecting upon how we live up to our principles of good regulation. Last year I talked about independence and openness, as well as the importance of our highly valued technical staff. Today, I'll focus consistent with the project aim theme of the Chairman and a Mark Satorius and Commissioner Spenike, I'll talk about the principle of good regulation associated with efficiency. And I'll focus on the NRC as a team in my remarks. The principle of efficiency has the following attributes. It provides that the NRC should have the best management and administration. It requires the highest technical and managerial competence. It values the ability to continually upgrade our regulatory capabilities. And it holds that regulatory activities should be consistent with the degree of risk reduction achieved. And finally, efficiency emphasizes timely decision making while minimizing the use of resources. Why should a commissioner talk about efficiency? The short answer is very simple, because making efficiency real is essential to being an effective regulator. The principle of efficiency was at the forefront of the commission's mind when it charted the project aim effort last year to determine how best to enhance the agency's ability to plan and execute its mission while adapting to a dynamic environment. You may wonder, why did the NRC need to change at this time? It is not because we were doing things wrong or are doing things wrong. As Chairman Burns noted for 40 years, the NRC has met its safety, security and safeguard mission and has met or surpassed agency performance measures in large part. But it is not enough to accomplish the mission or meet internal metrics. We ought to the public to be as effective, efficient, agile and flexible as possible so as to provide the best value for the dollar spent on our budget. While we will never be perfect in this regard, we acknowledge that there is ample room for improvement in these areas. The project aim report points out that we have grown over the years to respond to a number of events. For example, following the terrorist attacks of 2001 when I was an actor doing the Navy then, the agency grew to enhance security and instant response. The agency also grew after the Energy Policy Act of 2005 in response to a forecast of a nuclear renaissance. In 2011, we faced difficult and complex decisions about what regulatory actions were needed in response to the Fukushima event. And the NRC's committed professional efforts taken in response to each of these events, the orders and rule makings that came out of 9-11 and Fukushima and the work we've done in the new reactor arena have clearly illustrated the high quality work of this agency and its staff. But now is an inflection point in our agency's history and an opportunity to thoughtfully reflect upon where we have been and where we need to be in the future to ask how are we conducting our work, to ask what adjustments, if any, need to be made to our structure, workforce and regulatory processes given that the nuclear renaissance has not occurred as forecasted, that 9-11 and Fukushima related activities were drawing to a close and that several existing nuclear power plants are decommissioning earlier than expected. These elements were the backdrop for Project AIM, which I believe is a real opportunity for us to take a fresh look at how we operate and see where we can gain efficiencies. I applaud Mike Weber's team for producing an insightful strategic report. I'll also observe that not many organizations get this kind of an opportunity and if those that do, fewer still actually take advantage of them. I am actually, as a commissioner, excited and have great hope that this agency will take advantage of this opportunity and be guided by the principles of good regulation to move forward constructively. Now some of you may be wondering, can a government agency really be efficient? So now I'll tell my one joke. Once upon a time, the government had a vast scrap yard in the middle of a desert. Government said someone may steal from it at night, so government created the night watchman position and hired a person for the job. Then government said, how does the watchman do his job without instruction? So they created a planning department and hired two people. One person to write the instructions and one person to conduct time studies. Then government said, how will we know the night watchman is doing the task correctly? So they created a quality control department and hired two people. One to do the studies and one to write the reports. Then government said, how are these people going to get paid? So they created the following positions, a timekeeper and the payroll officer then hired two people to fill them. Then government said, who will be accountable for all of these people? So they created an administrative section and hired three people, an administrative officer, a system administrative officer, and a legal secretary. Then government said, we've had this command and operation for one year. We are now $18,000 over budget. We must cut back overall cost. So they laid off the night watchman. Not quite the response the commissioner's finicky got. Government efficiency and action. Fortunately this type of behavior and the joke and all seriousness is not what I saw in my years in the Department of Defense nor the Department of Energy. It is certainly not what I've seen in my time the last five years of the NRC. Rest assured, no matter how the commission votes on the project name recommendations, this agency will continue to improve and it's already strong performance. Why am I so confident about this? Because I've seen the great work of this agency and its talented staff. Especially when we have an eye towards efficient operations. For my service on six submarines, I can attest to the value in having positive, real tangible models to follow when teaching others. Whether training a new ensign, how to direct propulsion plant casual actions by his watch section. Whether conducting a smart landing on a single propeller submarine, conducting a landing alongside a pier without a tugboat. Or how to effectively conduct a submerged attack with a torpedo against a quiet adversary. Seeing others do something well is almost always a good starting point for teaching and actualizing change for the better. Unfortunately, the NRC has a number of positive models to offer to help us improve efficiency. The project name report categorizes recommendations into three strategic categories, people, planning and process. For symmetry, I will use these same categories to discuss examples of efficiency in action at the NRC. These examples show that when we start with the end in mind, establish clear direction and priorities, and are flexible to change, we do regulate in an efficient and effective manner. The first example of a people strategy I'll point to is the agency's ability to reallocate resources in response to changing priorities and workload. Last fall, the commission approved the staff's recommendation to merge the Office of Nuclear Materials Safety and Safeguards, NMSS, and the Office of Federal and State Materials and Environmental Management Programs, or FISME, back into one office. In making this recommendation, the staff recognized that the increased workload that drove the split of NMSS into two offices years ago no longer existed, and that there was some duplication in effort between the two offices. The merger back into one office gained efficiencies by eliminating unnecessary duplication and reducing overhead. I personally thank Kathy Haney and Brian Holian along with their teams for achieving this successful, efficient merger. Likewise, efficiencies were seen when the Office of New Reactors, or NRO, shifted personnel to the Office of Nuclear Reactor Regulation, or NRR, given changes in its workflow and priorities over the past two years. When I was sworn in as a commissioner, April 1st of 2010, the NRC was reviewing license applications for 26 new reactors. Since that time, we have completed several significant new reactor projects, including the AP1000 Design Certification Amendment, the issuance of four combined licenses for the Voglund Summer Sites, work on the ABWR Design Certification Amendment, and establishment of the Construction and Reactor Inspection Program. But with this work completed and with changing plans of prospective licensees, our new reactor workload has significantly decreased. At the same time, there is a need to address several high priority actions in NRO, including addressing the operating reactor licensing backlog and to post Fukushima activities. Therefore, in response, the staff moved resources from NRO to NRO to support these efforts while not losing sight of ongoing new reactor priorities. For example, NRO and their partner offices achieved a significant milestone last year as part of the Safe Closure Initiative by completing the ESBWR Design Certification, as well as a final safety evaluation for the Firmity Unit 3 combined license. This is a good news story. I applaud Glenn Tracy and the NRO team for their agility and flexibility in responding to changing new reactor plans and schedules and for their support of broader agency priorities, including support of Fukushima and waste confidence activities. This staff has demonstrated that we can work together efficiently to make sure the most important work gets done first. I'll now turn to the second project name strategy, that of planning. How have we demonstrated the ability to efficiently plan our work? While there are many examples to choose from, I will offer only two here. The update to our waste confidence or continued storage rule completed last August and the completion of the last Yucca Mountain Safety Evaluation Report volumes in January of this year. In 2012, the D.C. Circuit Court vacated and remanded the agency's waste confidence rule. The commission gave the staff clear direction. Addressed the specific deficiencies identified by the court, used the best NEPA practitioners in the agency and bring back an updated rule to the commission within 24 months. Keith McConnell and his very talented team, along with dedicated support from the Office of General Counsel, did just that. Throughout the process, the staff was committed to effective and timely communication, both with the public and with NRC management and the commission. This helped ensure that schedules were met, documents were responsive to concerns raised, and internal and external meetings were effective. At both an individual and agency level, we focused on the principle of efficiency to accomplish our important mission without undue delay. The second example of demonstrated planning ability is the staff's efforts on the Yucca Mountain Safety Evaluation Report. The staff was tasked by the commission to complete and issue several volumes of the SCR associated with the Yucca Mountain Construction Authorization Application. This was a monumental effort. Many of the staff with expertise on the Safety Evaluation Report had left the agency or had been tasked with other assignments. There is a considerable amount of reorganizing, reprioritizing that went along with this effort to ensure that the right people with the right skills were on board to accomplish the mission. And of course, the Yucca Mountain Safety Evaluation Report involved highly technical and complex issues. The staff developed a plan of attack and executed that plan in such a way that the SCR volumes were completed on time and under budget. While the primary mission, reaching safety findings based on science and engineering, was achieved. I point out at this time that we must always remember the power of good leadership. Good leadership inspires people and creates its own efficiencies. The Yucca Mountain Efforts show how important good management and leadership are to achieving efficiencies. Josie Pecone headed the staff's efforts in completing the Yucca Mountain Safety Evaluation Report. Josie's clear dedication and tireless work ethic led by example and along with the hard work of talented staff resulted in efficient and effective regulatory action. I'll now turn to the third and final project name strategy, Process. In short, how can we streamline or standardize our processes, roles, and responsibilities? I offer two examples from the rulemaking arena. Insert cybersecurity rulemaking and the post Fukushima mitigating strategies rulemaking. Now, some might wonder why I would mention our cybersecurity rulemaking as an example of efficiency given that the NRC's rule as 10 CFR 73.54 came out in 2009 and the NRC just endorsed revised guidance in December 2014. But it's important to remember that efficiency is not only about being fast. It is also about making risk informed licensing decisions to help ensure the regulatory burden is actually commensurate with the risk. That's why I'm telling this story. In 2009, the NRC put in place cybersecurity requirements for power reactors. Nuclear power plant cyber programs required to protect what's called critical digital assets or CDAs. In January 2010, the NRC published a red guide 5.71 that provided guidance to licensees on an acceptable way to meet the requirements of this rule. This red guy contains guidance on how to identify CDAs, among other things. Now, as industry began implementing the rule, it became evident there is much more work involved than originally envisioned by either the staff or industry. Instead of finding hundreds of CDAs, plants were identifying thousands of CDAs. The staff and I will personally command Barry Westrick and Russ Feltz. Staff took a step back and worked with stakeholders to adjust the approach to focus on the most important CDAs. What resulted is a consequence based approach, which is consistent with our efficiency principle, whereby regulatory activities should be consistent with the degree of risk reduction they achieve. The NRC staff engaged thoughtfully with industry to develop NEI 13-10 to implement the consequence based approach. NEI 13-10 was endorsed by the NRC in January 2014 by streamlining the process for identifying and addressing CDAs. The approach reduces the burden on licensees while contending to ensure that proper adequate protection standards are met. Revised guidance was endorsed by the NRC in December 2014. One final process example is in the area of post Fukushima regulatory actions. The staff led by Mike Johnson in concert with industry has consolidated thoughtfully many of the post Fukushima requirements into one effort called the mitigation of beyond design basis events rulemaking. The scope of this rulemaking now includes near term task force recommendation for regarding station blackout mitigation near term task force recommendation seven regarding spent fuel pools recommendation eight regarding onsite emergency response capabilities and recommend nations nine 10 and 11 regarding emergency preparedness. Consolidating these rule makings will produce a more coherent framework and will certainly reduce the potential for inconsistencies between the related regulatory actions. Consolidation also adds clarity for external stakeholders as they will be able to comment on a single rulemaking package. This consolidation was an efficient way to move forward given the number of interdependent and interrelated safety issues involved. Going forward these efforts can be looked on as an example of how the NRC adapts to changes in stakeholder feedback and tailors this regulatory response accordingly while maintaining a risk informed focus. I will now conclude we the NRC and the Commission regulate in the field where not everyone is going to be happy with the decisions we make. Some might want us to do more. Some might want us to do less. Let's face it some don't want to surround at all. But we are here as a regulator fulfilling our statutory responsibilities. We owe it to the public we serve as well as the industry we regulate to come to our decisions in an efficient and effective manner. The good news is that we do not need any new agency values or different or new principles of regulation to guide us into the future. We already have them in place. We also are fortunate to have a number of positive examples of how to operate efficiently to guide the broader agency as we move forward to implement project name. I have great confidence that the NRC team is up to this task. I thank you the chance to be with you today. I look forward to your questions. Okay. Thank you. We have a number of questions here ready for the first one. Okay. As NRC implements AIM 2020 how will you prioritize work among the staff national labs the Southwest Research Institute and commercial contractors. That's a great question. It's interesting the Southwest Research Institute team was just in here in the last week to visit commissioners for drop-ins was had a really good discussion with that team from San Antonio. Now the commission is in the process of acting on the project name recommendations. I'll comment on one of those recommendations that I think gets to this particular effort. That's two of them. One of them deals with a recommendation to rebaseline the agency's work to step back take a thoughtful review of what should we be doing what work should we stop doing what should we shed related to that is looking at what skill sets are needed to do this rebaseline work that obviously involves looking at critical skills. There's a notion of centers of expertise and project name that might look at an option of taking seismic experts hydrologist digitalized C engineers and moving them into particular centers of expertise to serve as a miniature of I'm using this example technical support agency or technical support office for all parts of the agency. How that comes out remains to be seen. I think part of that Brian is looking at what we do internally what we look at the Department of Energy National Labs for would look for consultants contractors Institute and so forth. So I think that those that question will be fully answered once the commission comes to its final decision on the direction for issues necessary and then turns over the staff to execute. OK thank you. Next one the agency has a trend of standing up large organizations and directorates in a reactive response to external drivers. For example Japan lessons learn waste confidence this often results in an ad hoc redirection of a significant number of staff from ongoing activities to new work which is often still being defined. Do you believe this is an appropriate way to respond or that the agency is able to respond or that the agency could handle these factors with less impact on day to day act activities. That's a very thoughtful question for ever asked it. I would I would provide the following and the Commission's finicky now we're here as commissioners for all the post Fukushima decision making and all the waste confidence court remand decision. So we've been involved in this as colleagues for some time. I would say with respect to Fukushima given the nature of the event and the term task force work that it was appropriate at the time to stand up the JLD Japan's lessons learn directorate to establish a separate body with a steering committee associated with that to work with the staff as well as with industry. But there's also natural time to sunset that move back into the regular line work of the staff. And I think we're approaching that latter stage right now to move those bodies of work back and in our respect to waste confidence and I commented very sincerely on the work done by Keith McConnell and his team a lot of health mothers in the agency. I think given the Commission's desire to move forward and address the DC circuit courts remand and the spent fuel pool fires spent fuel pool leaks what happens if there's never a repository in those very three specific issues. The agency was well served by a dedicated group of NEPA experts to go in there and take a hard look do it in an efficient manner as their sole task and then to back out of it. And that's what they've done. OK. Thank you. Next one. Answer was formed post 9 11 to oversee needed improvements. Now four years later these regulations. I'm sorry. No 14 years later these regulations have been implemented for years in the spirit of reducing unnecessary costs. Is there some discussion of returning the answer function to the regions where it belongs and was formally located. Let me address the specific question asked and then I'll make a general comment on security issues. I'm not aware of any effort. I'm not aware as a commission of any effort to change the reporting relationship or a venture and move things back in the regions. I will say as with any organization when you have an external event 9 11 was one of those for everybody in this room that agency takes actions they believe are appropriate at that point in time and then you get into a need to reevaluate where security issues are and how are we handling these issues whether it's physical security or cyber security. I would suggest that and I wrote a comment this with George Apostolakis back in 2013 to look at our force on force exercise program to take a thoughtful look. I thought that then in 2013 early 2014 is the right time for this agency to take a fresh look at the F.O.F. force on force program to see was that meeting objectives headed perhaps in some areas may be gone a little past what was originally intended. That's just one example. But I think overall that the project aim effort does allow us to take a fresh look at insert as well as other offices and we'll see what happens. But I'm not aware of any effort to disestablish the office or move it back into the regions. OK. Next one is interesting as a submarine commander. How would you have presented the mission objectives of a project of a program like project aim to your crew. What could the NRC learn from a subcrew in execution. Wow. There's a number of people in the audience here that also could answer that question. Now I'm aware that my former boss when I was prospective commanding officer and strut instructor for the Atlantic Fleet Joe Henry flag officers in the audience today. So Joe if I get this wrong you can tell me afterwards. You know the hardest job I had my entire life. When I was I guess 30 years old I was engineer in the old attack submarine USS John Marshall just came out of an overhaul the Puget Sound shipyard to be converted from a ballistic missile submarine into special warfare platform. For Navy SEALs now relieved in the overhaul and brought the ship around the Panama Canal to Norfolk Virginia where we're working with SEALs based on Little Creek. And I'll never forget. Every single machinist mate. Was important starboard watch rotation. They're standing 12 hours of watch a day six hours on six hours off and then responding to different training drills in between their watches. And we were really short on people and qualified people that took a long time to break out that was called Portland starboard six on six off routine. And that was really a challenge for the crew and we were operating I thought as efficiently as we could with the people we had but it was hard. And so I take that experience and I say well how are we utilizing our people today. Sometimes one has to be one to say there is work that no longer needs to be done. There's work that needs to be shed or deferred not placed just a low priority we're saying we're not going to do this anymore. I think we're perhaps at a juncture in our history we need to do just that say we're no longer going to do X prime Y prime and Z prime we'll do X Y and Z but we need to be willing to make some tough decisions as a commission and senior leadership leadership of the staff to do that. So that's what I would say my experience sometimes you can't do everything you have to prioritize and do what's important. OK thank you. As part of VIM to I'm sorry as part of VIM 2020 does NRC intend to create this is capability I think it means like centers of excellence the crosscut directorates can you discuss. Certainly that's that's one of the recommendations from the team and I thought it was a very thoughtful recommendation to have consider standing up centers of expertise. Quite frankly we've already done that many areas where Scott Flanders group and NRO has provided the hydrologist to look at the flooding hazard re evaluations for Fukushima and so we have de facto been doing this for the last couple of years I think in a very thoughtful practical way. And I think we'll leverage that experience from the hydrology side of the house from seismic perhaps PRA in the context of NFPA 805 lots of good examples to call from and we can say hey this has worked well doing it this way this may not work as well we'll have the benefit of that experience. Okay here's a good philosophical one. Many people think of regulation as as a detriment to innovation but innovation in certain technologies has the potential to improve safety. How does DNR think or what does DNR say think about promoting innovation for safety purposes. Is there a way to change regulations so that it is not a burden but a welcome way to improve safety performance. Is that somebody's PhD dissertation topic. That's a very thoughtful question. I just one thing that comes to mind is I think this agency sees attention at times. We all support innovation we want to see new ways of doing business. At the same time we have to fulfill our regulatory responsibilities and I'd say the battleground in which this has been more obvious to me as a commissioner has been in the introduction of digital eye and see technologies in the context of digital upgrades for existing nuclear power plants. I think we've seen a lot of examples in that area where industry has some really good ideas our staff wants to support it but what level of pedigrees are required how do we look at assessing the reliability of certain types of processors. So it's a lot easier said than done I don't know that we have gotten there yet on digital eye and see. I know when my son came back in his first combat tour in Iraq was telling me engagements with Al Qaeda about the use of digital technology to call in close air support from F-18s and F-16s in Diyala province is all digital. Communications laser guided weapons that had lethal consequences people are dying every hour out there using digital technology and so perhaps criticism of the broad nuclear enterprise as we've been maybe a little bit slow a little bit reluctant to embrace digital technology but it's here to stay and so I think that's one area that we can continue to make progress and I know that that's an area we talk a lot to international colleagues about I know that in office research you do just that. From your your vantage point Brian. Okay and I think we have time for about one more question. This is on Yucca Mountain licensing it says after the licensing board rejected DOE's request to withdraw the Yucca license application. Has DOE notified NRC that the DOE will not support the NRC Yucca licensing process. I want to make sure I understand the question. Here's what I think the question is what is our current understanding of what the Department of Energy is doing or is not doing. I think as the chairman indicated in his remarks Department of Energy informed the NRC last year that DOE would not be performing the supplemental environmental impact statement and so the Commission directed our staff to do that as part of our own NRC staff efforts. I can't speak to what the Department of Energy is willing to do or is actually going to do I think the legal case is still in a state of suspension. There is still a legal applicant maybe not a willing applicant. I think as far as what DOE plans to do that's best addressed to DOE. And I think that's all the questions we had and we're just about out of time. So I would like to thank you very much. Thank you all.