Saturday, March 13, 2010

Principles of Good Regulation:

A Little History

I just spent much of the past week at the annual Regulatory Information Conference (RIC) put on by the U.S. Nuclear Regulatory Commission (NRC) in Rockville, Maryland. This is the 22nd year the conference has been run, and it has gotten bigger and better every year. Registration this year topped 2700, and attendees came from all over the United States and the world.

While many blogs could be written on the different sessions and discussions held at the meeting, I'd like to focus today on one theme that was of particular interest to me--that is, references by several speakers during the meeting to the importance of NRC's Principles of Good Regulation.

The first to convey this message was NRC's Executive Director for Operations, Bill Borchardt, in his remarks during the opening plenary of the conference. After commenting that this year marks the 35th anniversary of the NRC, he stated that the Agency "remains dedicated to the Principles of Good Regulation."

In the final plenary session the same day, Commissioner Kristine Svinicki expanded upon this theme. She read the five principles aloud to the audience, and discussed their importance and relevance to the Commission's activities. Reading the full text of the Principles reminded the audience not only of the Principles themselves (Independence, Openness, Efficiency, Clarity, and Reliability), but of key points in the explanations of each of these Principles.

The following day, Brew Barron, President and CEO of Constellation Energy Nuclear Group, raised the Principles yet again during a panel discussion on operating new reactors. In reference to a question on improving the amendment process, he cited Commissioner Svinicki's mention of the Principles of Good Regulation and opined that these provide direction to take the time to get the amendments right, and then they "should be dependable."

The repeated references to the Principles of Good Regulation was of particular interest to me because I had, shall we say, more than a passing involvement in their formation.

The real credit for the concept of the Principles of Good Regulation belongs to Commissioner Kenneth C. Rogers, for whom I worked at the time. About 20 years ago, during one of our staff meetings, we were discussing how NRC viewed its role and how it was viewed by others. In the course of the discussion, Commissioner Rogers said that he thought NRC needed to articulate the key principles that should guide its behavior.

He threw out a few ideas, which became the basis for the document we eventually developed, and assigned me the job of completing and fleshing out the details. The process of developing the document represented collaboration at its best. Not only did I meet frequently with the Commissioner to discuss various ideas and nuances, but I also met with assistants for each of the other Commissioners, as well as with some senior NRC managers, to iron out differences in points of view.

One important objective Commissioner Rogers and I had for the document was to clarify that regulatory independence did not mean that we should operate in a vacuum. We had seen too many cases, both within the staff and outside, of people who thought that independence meant isolation. We tried hard to find the words to describe what we thought independence should mean.

We also thought it was critical to assure that NRC focused its attention in the right places, and that its regulations helped licensees focus their attention in the right places, so we gave a lot of attention to finding language that would emphasize the linkage regulation should have to the potential risk, and that would clarify how resource requirements were to be considered.

We were aware that one major industry concern was that NRC's regulations were a moving target. We tried to address this concern by enunciating the idea that NRC should seek stability in its requirements, and that there must be sufficient justification for change. In the process of developing the key points of the document, we also sought to address other considerations, such as the need for timely action, and the importance of openness and clarity.

Every word and phrase was the subject of discussion. Which items rose to the top as key principles, and which words were explanatory. How much explanation was needed to get the point across. What could be misinterpreted if we didn't quality it. All the other offices took this project seriously, raising valid points and making valuable suggestions. In the end, I worked with Commissioner Rogers to synthesize everything we had heard.

Most of the basic ideas in the Principles of Good Regulation were not completely new to the NRC. Qualities such as independence and openness had long been considered objectives of Agency performance. However, the explanatory statements helped focus attention on the most important performance measures and helped assure that everyone understood all the goals in the same way.

The principles were adopted by the Agency in late 1990 or early 1991. Posters were printed with the complete text of the Principles and they were distributed widely within the Agency. However, slowly, as people moved offices and as people moved on, I saw fewer and fewer of the posters, and heard the Principles mentioned less and less often. While I was convinced that they did become part of the Agency culture, I sometimes wondered if very many people knew of the document or its exact words.

Thus, I was delighted to hear so many prominent references to them at the recent RIC. Pride of authorship aside, I think they did help serve to focus the attention of NRC staff on what behaviors were critical to being good regulators, and what balance was necessary to provide regulation that was efficient and effective. They also put the rest of the world on notice as to what should be expected of NRC.

Of course, following such principles is, and always will be, a work in progress. I'm sure that people inside and outside the Agency could point to times within the last 20 years where NRC fell short. However, to a very large extent, I think, the promulgation of a set of Principles of Good Regulation has helped the Agency focus its efforts, and has helped those outside the NRC understand better how NRC should operate.

Thus, even if I had had nothing to do with the creation of this document, I would have been pleased to hear the comments at the RIC. Having helped produce the document, hearing it discussed nearly 20 years later was even more of a pleasure.



  1. Gail

    Thank you for the excellent summary along with your historical perspective.

    One aspect of independence versus isolation that I have been working to try to understand is the commission's reluctance to consider the effect of alternative power systems. As I understand it, the commission has a legal responsibility to protect the environment.

    In conversations with NRC public affairs officers, however, I have learned that the Commission does not consider the environmental effects that inevitably result when nuclear plants are forced to shut down from minor infractions or when nuclear projects are stretched out for years before approval of licenses.

    When those commission actions take place, customers do not stop buying electricity, they simply buy it from generators that use coal, natural gas and even oil to produce it.

    Obviously, there is a responsibility to keep the nuclear plants safe, but if the rules are not applied with at least some consideration of the effects of alternative energy supplies, the tendency is to assume that the conservative approach is to demand perfection and not allow production until that elusive goal is achieved.

    Do you have any thoughts on this issue?

  2. Funny, funny, funny. "However, independence does not imply isolation," the second sentence of the first of the Principles of Good Regulation, was lifted by Ken Rogers and whoever helped him from an announcement that the late Chairman Lando Zech sent to all employees under the title "Arm's-Length Regulation." I wrote it. I no longer remember the exact date. Probably about 1987. It was issued at a time when the agency was under fire for what was commonly termed "coziness with industry," and the point was that constant communication with industry was a necessity. I was amused to see Commissioner Svinicki quoting it, I believe in her confirmation testimony. I do not mention my role in it out of pride of authorship -- not at all. The Principles of Good Regulation are not worthy of anyone's taking pride in them. Indeed, a central problem for the NRC -- and I joined the agency ten weeks after its creation in 1975, and spent my career there, retiring as Counsel for Special Projects in 1999 -- is its penchant for believing its own propaganda. The Principles of Good Regulation are propaganda, nothing more, nothing less. If the NRC practiced them, it would be one thing. But one of the NRC's abiding problems is its ability to confuse rhetoric with deeds. If they have altered the agency's behavior at all, it is probably for the worse, by fostering a smug self-satisfaction that only makes it harder for the NRC to perceive and correct its own shortcomings.

    Not long after Ken Rogers came down from the mountaintop bearing the tablets inscribed with the Principles of Good Regulation, a bunch of agency up-and-comers, newly enrolled in the candidate program for the Senior Executive Service and eager to earn brownie points, came up with a "Statement of Organizational Values" to complement the Principles of Good Regulation. It was nonsense piled on nonsense.

    -- Peter Crane, Counsel for Special Projects, Office of General Counsel, USNRC (retired)