DOE/ORO-2203

DEPARTMENT OF ENERGY.ANNUAL REPORT ON THE .STATUS OF :

ENVIRONMENTAL, SAFETY, AND HEALTHCONDITIONS AT THE PADUCAH AND PORTSMOUTH

GASEOUS DIFFUSION PLANTSFOR FISCAL YEAR 2004

(Covering the Period from October 1,2003, through September 30, 2004)

U.S. Department of EnergyOak Ridge Operations

Oak Ridge, Tennessee 37830

UNCLASSIFIEDW. J. Lemmon•uý,•/Critique /D f e.L•, _ "

'Date

DOE/ORO-2203

DEPARTMENT OF ENERGYANNUAL REPORT ON THE STATUS OF

ENVIRONMENTAL, SAFETY, AND HEALTHCONDITIONS AT THE PADUCAH AND PORTSMOUTH

GASEOUS DIFFUSION PLANTSFOR FISCAL YEAR 2004

(Covering the Period from October 1, 2003, through September 30, 2004)

August 2005

Prepared byXE Corporation

Albuquerque, New Mexicounder subcontract 23900-SC-JJC39U

Prepared for theU.S. Department of Energy

Office of Nuclear Fuel Supply

BECHTEL JACOBS COMPANY LLC-managing the

Environmental Management Activities at theOak Ridge National Laboratory Y-12 National Security Complex

East Tennessee Technology Parkunder contract DE-AC05-980R22700

and.Paducah Gaseous Diffusion Plant

under contract DE-AC05-030R22980for the

U.S. DEPARTMENT OF ENERGY

CONTENTS

A cronym s . ...... ....... ........... .... ... . . .. ................................... v

Executive Summary .... ...................................................... ix

1. B ackground . ................... .... . ... ......... .........................1.1 Regulatory Responsibilities ..........................................1.2 Memoranda of Understanding ......................................... 3

2. DOE Environmental, Safety, and Health Policy ......................................... 4

3. Status of DOE Oversight Activities Related to Leased Areas ............................... 43.1 Regulatory Oversight Program Status ................................... 5

3.1.1 Arming'and Arrest Authority Regulatory Activities .......... 53.1.2 Arming and Arrest Authority Inspections ............................. 5

3.2 Centrifuge Lead Cascade ActiVities ..................................... 63.2.1 Centrifuge Lead Cascade Deployment Activities ................. I...... 73.2.2 Centrifuge Lead Cascade Regulatory Activities ................ ........... 7

3.2.2.1 Centrifuge Lead Cascade Regulatory Oversight Agreement ......... 73.2.2.2 Centrifuge Lead Cascade 10 CFR 830 and 835 Exemptions ........ 83.2.2.3 Memorandum of Understanding Between DOE and NRC Regarding the

Centrifuge Lead Cascade .......................... ...... 93.2.3 Centrifuge Lead Cascade Inspections and Assessments .................. 10

3.2.3.1 Inspections ...................... 103.2.3-2 Assessments.............. ......... ..... ......... 12

3.3 Cold Standby Program Activities ........................................ 133.4 Oversight of Paducah Gaseous Diffusion Plant Enrichment Capability ............. 143.5 Lease Modifications ............................................... 14

4. Status of DOE Environmental, Safety, and Health Initiatives ............................ 154.1 Environmental Cleanup Initiatives ..................................... 15

4.1.1 Environmental Cleanup Initiatives at Paducah ....................... 164.1.2 Environmental Cleanup Initiatives at Portsmouth ..................... 17

4.2 Status of Energy Employees Occupational Illness Compensation Program ActIm plem entation ........ _............................................... 17

4.3 Environmental, Safety, and Health Investigations ........................... 184.4 Highly Enriched Uranium Disposition ................................... 19

4.4.1 Highly Enriched Uranium Suspension and Removal Program ............. 204.4.2 Highly, Enrithed Uranium Transparency Implementation Program .......... 21

4.5 Depleted Uranium Hexafluoride Long-term Management ....................... 224.6 Other Environmental, Safety, and Health Initiatives ........................... 23

4.6.1 Environmental, Safety, and Health Initiatives at Paducah ................ 234.6.2 Environmental, Safety, and Health Initiatives at Portsmouth .............. 24

5. Environmental, Safety, and Health Status of DOE Nonleased Areas ...................... 2-5

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5.1 Environmental, Safety, and Health Status of DOE Nonleased Areas at Paducah ...... 265.1.1 Facilities and A creage .......................................... 265.1.2 Construction Activities ....................................... 265.1.3 Depleted Uranium Hexafluoride Management .......................... 275.1.4 Integrated Safety Management ...... 275.1.5 Update of Documented Safety Analyses ........................... 285.1.6 Environmental Restoration ...... .................... ........... 28

5.1.6.1 Decontamination and Decommissioning ........ .............. 295.1.6.2 Environmental Restoration Highlights ...................... 30

5.1.7 Waste Management ...................... 325.1.8 DOE Material Storage Areas ................................... 345.1.9 Environmental Status ........................................ 355.1.10 Safety and Health Status ...................................... 365.1.11 Litigation Summary ........ .......... .... 375. 1' 12 Reportable Occurrences ...................................... 385.1.13 Overall Paducah Sum mary ........................................ 39

5.2 Environmental, Safety, and Health Status of DOE Nonleased Areas at Portsmouth . ... .405.2.1 Facilities and Acreage ........................................ 405.2.2 Construction Activities ........... ............................ 415.2.3 Depleted Uranium Hexafluoride Management ....................... 415.2.4 Uranium Materials Management Activities ......................... 415.2.5 Integrated Safety Management . .................. 425.2.6 Update of Documented Safety Analyses ........................... 425.2.7 Environmental Restoration 435.2.8 Waste Management .............................. ........... 445.2.9 DOE Material Storage Areas ................................... 455.2.10- Environm ental Status .................................. ......... 455.2.11 Safety and Health Status .............................. ........ 465.2.12 Litigation Sum mary ....................................... ...... 475.2.13 Reportable Occurrences ......... I. ......... * ...................... 475.2.14 Overall Portsmouth Summary .................................. 48

6. Compliance with Applicable Laws ................................. ............. 49

E ndno tes . . . . . . .I . . . . . . . . .. . . . . . . . . . . . . . . . . ... . . . . ... . . . . . . . . . . . . . . . . . . . . .. . . . . . 5 1

A ppendices ....... ...... ............ .. :......................................... . 57

A. Summary of DOE Regulatory Oversight Program Inspection Reports ...................... A-I

B. Summary of Reportable Occurrences in DOE Nonleased Areas at the Gaseous Diffusion Plants .. B- 11. Paducah Gaseous Diffusion Plant ........................................... B-32. Portsmouth Gaseous Diffusion Plant ..................................... B-11

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ACRONYMS

AA accident analysisAEA Atomic Energy Act of 1954ALARA As Low As Reasonably AchievableASTM. American Society for Testing and MaterialsBJC Bechtel Jacobs Company LLCCAA Clean Air ActCAB CitizensAdvisory BoardCAAS Criticality Accident Alarm SystemCERCLA Comprehensive Environmental Response, Compensation, and Liability ActCFR Code of Federal RegulationsCLC Centrifuge Lead CascadeCMS Corrective Measures StudyCWA Clean Water ActCY calendar yearD&D decontamination and decommissioningDFFOs Director's Final Findings and OrdersDMSA DOE Material Storage AreaDOE U.S. Department of EnergyDOJ U.S. Department of JusticeDOL U.S. Department of LaborDOT U.S. Department of TransportationDSA Documented Safety AnalysisDU Depleted UraniumDUF6 Depleted Uranium HexafluorideEA Environmental: Assessment'-!EEOICPA Energy Employees Occupational Illness. Compensation Program ActEM Environmental ManagementEPA Environmental Protection AgencyEPAct Energy Policy Act of 1992ER Environmental RestorationES&H environmental, safety, and healthETTP East Tennessee Technology ParkFEIS Final Environmental Impact StatementFFA Federal Facility AgreementFFCA Federal Facilities Compliance AgreementFHAI fire hazard analysisFNOV Final Notice of ViolationFY fiscal yearGAO General Accounting OfficeGCEP Gas Centrifuge Enrichment Plant

-GDP gaseous diffusion plantHA hazard analysisHEU highly enriched uraniumHHE Health Hazard EvaluationHHS U.S. Department of Health and Human Services

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IEZ Immediate Evacuation ZoneIFI Inspection Follow-Up ItemIG Inspector GeneralISMS Integrated Safety Management SystemJCO Justification for Continued OperationsKDOW Kentucky Division of WaterKDWM Kentucky Division of Waste ManagementKPDES Kentucky Pollutant Discharge Elimination SystemLCO Limiting Condition of OperationLDR Land Disposal RestrictionLEU low-enriched uraniumLLW low-level wasteLMC Lockheed Martin CorporationLMES Lockheed Martin Energy Systems, Inc.LOI Letter of IntentM&I management and integrationMOA Memorandum of AgreementMOU Memorandum of UnderstandingNCS Nuclear Criticality SafetyNCV non-cited violationNCRP National Council on Radiation Protection and MeasurementsNDA non-destructive assayNE Office of Nuclear Energy, Science and TechnologyNEPA National Environmental Policy ActNIOSH National Institute for Occupational Safety and HealthNOV Notice of ViolationNp Neptunium.....NPDES National Pollutant Discharge Elimination SystemNPL National Priorities ListNRC U.S. Nuclear Regulatory CommissionNSDD North-South Diversion DitchNSO Nevada Site OfficeNTS Noncompliance Tracking System (used only in Appendix B with reference to reports)NTS Nevada Test SiteOAC Ohio Administrative CodeOE Office of Price-Anderson EnforcementORO Oak Ridge Operations -

ORPS Occurrence Reporting and Processing SystemOSHA Occupational Safety and Health AdministrationOU Operable UnitPAAA Price-Anderson Amendments ActPACE Paper, Allied-Industrial, Chemical and Energy Workers International UnionPACRO Paducah Area Community Reuse OrganizationPBI performance-based incentivePCB Polychiorinated BiphenylPCR Plant Change ReviewPGDP Paducah Gaseous Diffusion Plant

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SPHS Preliminary Hazard ScreeningPISB Potentially Inadequate Safety BasisPNOV Preliminary Notice of ViolationPORTS Portsmouth Gaseous Diffusion PlantPPE Personal Protective EquipmentPPO Permanent Presence OfficePu Plutonium'QA Quality AssuranceQAP Quality Assurance ProgramRAP Radiological Assistance ProgramRCRA Resource Conservation and Recovery ActRCT Radiological Control TechnicianRECA *Radiation Exposure Compensation ActRFI RCRA Facility InvestigationRGA Regional Gravel AquiferRII recordable illness or injuryRMA radioactive material areaRO Regulatory Oversight•ROA Regulatory Oversight AgreementROD Record of DecisionRosAtom Russian Federation's Federal Agency for Atomic EnergySAIC Science Applications International CorporationSAR Safety Analysis ReportSB Safety BasisSC Significance 'CategorySER Safety Evaluation ReportSMP SiteManagement Plan.SORC Site Operations Review CommitteeSPO Security Police OfficerSWU separative work unitSWMU Solid Waste Management Unit99Tc Isotope of TechnetiumTCE TrichloroethyleneTEDE total effective dose equivalentTRE Toxicity Reduction EvaluationTRI/E Toxicity Reduction Identification/EvaluationTSCA Toxic Substances ControlActTSR - Technical Safety RequirementsTUa acute toxicity unit235.U Isotope of Uranium

UCD Unreviewed Change DeterminationUF6 Uranium HexafluorideUSEC United States Enrichment CorporationUSEPA U.S. Environmental Protection AgencyUSQ Unreviewed Safety QuestionWAC Weapons Authorization CardWET Whole Effluent Toxicity

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WFO Work for OthersWHPP Worker Health Protection Program

WvM. Waste Management

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EXECUTIVE SUMMARY

This report, covering fiscal. year (FY) 2004,is prepared in furtherance of the Energy PolicyAct of 1992 (EPAct) mandate that the U.S.Nuclear Regulatory Commission (NRC) consultwith the U.S. Department of Energy (DOE) andthe U.S. Environmental Protection Agency(USEPA) in preparing a report to Congress onthe status of environmental, safety, and health(ES&H) conditions at DOE's gaseous diffusionplants (GDPs) near Paducah, Kentucky, andPortsmouth, Ohio. This report providesinformation on (1) the status of ES&H conditionsand initiatives at the DOE-managed (nonleased)portions of the GDPs during FY 2004;(2) activities of the highly enriched uranium(HEU) disposition and transparencyimplementation programs conducted by DOE;(3) activities at the GDPs to develop andimplement plans and strategies for long-termmanagement of DOE-owned depleted uraniumhexafluoride (DUF6) and other uraniummaterials; (4) the status of the DOE RegulatoryOversight Program; and (5) the status of the ColdStandby Program and Centrifuge Lead Cascade(CLC) activities at the Portsmouth Gaseous'Diffusion Plant (PORTS). This report brieflydescribes the Memoranda of Understanding(MOUs) that are used by DOE and NRC toassure effective and efficient cooperation in theirjoint oversight of activities conducted at theGDPs and the Security Agreement that delineatesthe security roles-and responsibilities of the twoagencies at the GDPs. Finally, this reportdiscusses modifications to the Lease AgreementBetween the United States Department ofEnergy and the United States EnrichmentCorporation (Lease) during FY 2004.

Throughout FY .2004, DOE provided ES&Hprotection at the nonleased portions of the GDPs-under DOE management and oversight inaccordance with DOE regulations, DOE Orders,and other applicable statutory and regulatoryrequirements. The DOE EnvironmentalRestoration (ER) and Waste Management (WM)

programs at the Paducah Gaseous DiffusionPlant (PGDP) and PORTS continued makingprogress toward site cleanup during this period.At PGDP, DOE continued to remove scrap metalfrom the site, disposed of site wastes, received apermit modification for its solid, waste landfill,'and characterized material in the DOE MaterialStorage Areas. DOE also completed remediationof portions of the site and continued activitiesrelated to initial D&D of inactive facilities. InSeptember 2004, following incidents in whichnon-radiological, absorbent material was foundon trailers transporting waste containers to theNevada Test Site (NTS), DOE suspended wasteshipments from PGDP to NTS pending re-evaluation of the' PGDP NTS Waste CertificationProgram. At PORTS, DOE completedconstruction of and began operating a newgroundwater pump and treat facility, continued toperform site remediation activities, and disposedof site wastes during FY 2004. Site remediationactivities included conducting additionalsampling at various locations, installingadditional monitoring wells, and preparingregulatory, documentation related to the ER andWM programs. In FY 2004, environmentalreleases and discharges for which DOE isresponsible at PGDP and PORTS were withinregulatory limits with the exception of fiveexceedances at PGDP outfalls. No exceedancesoccurred at PORTS during FY 2004. At PGDP,DOE received three Notices of Violation (NOVs)from-the Commonwealth of Kentucky while DOEreceived two NOVS, one from USEPA and onefrom Ohio Environmental Protection Agency, atPORTS.

The DOE Safety and Health programs atPGDP and PORTS continued to provide safetyand health protection to plant workers and thepublic. During calendar year 2003,. no individualat either GDP received radiological exposures inexcess of the administrative occupationalexposure control limit of 500 mrem per personper year set by the M&I Contractor, and the total

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amount received by all monitored individuals atboth GDPs was less than the Federaloccupational exposure limit of 5,000 mrem perperson per year set by Federal regulations inTitle 10 Code of Federal Regulations (CFR)Part 835, Radiation Protection. At PGDP, theradiation exposure average for personnel whowere monitored was 3 mrem per person per year,while the radiation exposure average formonitored personnel at PORTS was 1.1 mremper person per year. These averages are belowthe average annual background radiation levelsper person and significantly below administrativeand Federal occupational exposure limits.

During FY 2004, DOE and its primeContractors, and subcontractors at PGDP hadfive recordable injuries or illnesses (RIIs). AtPORTS, DOE and its prime Contractors andsubcontractors had eight RIIs, all of which wereLost WorkdaS Cases. Also, during FY 2004, 20incidents at PGDP and 16 incidents at PORTSassociated with activities in the nonleased areaswere significant enough to be classified asreportable occurrences by DOE and were enteredin the DOE occurrence reporting and processingsystem. Lessons learnediwere derived from theseincidents, applied at the GDPs, and distributedthroughout the DOE Complex. The developmentand implementation of Documented SafetyAnalyses (DSAs) for both GDPs continued inaccordance with 10 CFR 83 0, Nuclear SafetyManagement. As of the end of FY 2004, DOEhad approved, and the management andintegration (M&I) Contractor had implemented,the first three of four DSAs developed fornonleased nuclear facilities at PGDP. In addition,DOE approved the two DSAs prepared fornonleased nuclear facilities at PORTS, one ofwhich was implemented by the M&I Contractorin FY 2004.

DOE continued with initiatives to enhanceES&H protection at both PGDP and PORTSduring FY 2004. At PGDP, two Agreed Orderswere entered into the record in early FY 2004.These Orders, signed by DOE and the

Commonwealth of Kentucky, addressenvironmental issues and the DUF6 CylinderManagement Program. Among the provisions ofthe first Agreed Order, DOE formally agreed tocontinue to address specific environmentalcleanup issues at PGDP and pay a settlementpenalty of $1 million plus expend $200,000 forenvironmental projects, and the Commonwealthagreed to release DOE for identified liabilitiesassociated with alleged Violations at PGDP. Inthe second Agreed Order, DOE formally agreedto implement and comply with the PGDPCylinder Management Plan and provide theCommonwealth an inventory of all DUF6cylinders at PGDP. In a second initiative, DOEleased certain Gas Centrifuge Enrichment Plant(GCEP) facilities at PORTS to the United StatesEnrichment Corporation (USEC) in support ofthe CLC project. DOE also initiated cleanup ofthese facilities to facilitate the demonstration anddeployment of the advanced gas centrifugeenrichment technology. In a third initiative, DOE,pursuant to the 2002 SupplementalAppropriations Act, continued implementingplans and strategies during FY 2004 to convertDOE's DUF6 inventory to amore stable form fordisposal or reuse. In accordance with theCongressional mandate that construction of theDUF 6 conversion facilities start by July 31,2004, DOE broke ground for this construction atPGDP on July 27 and at PORTS on.July 28.

During FY 2004, DOE also continued toimplement other ES&H-related initiatives at bothGDPs. As part of the effort to address health-related concerns of current and former workers at-PGDP and PORTS, DOE continued to assist theU.S. Department of Labor and other federalagencies in addressing claims filed by individualspursuant to the Energy Employees OccupationalIllness and Compensation Program Act. DOEalso added testing for beryllium exposure to itsscreening program for current and formerworkers and continued its efforts to identify theextent of beryllium contamination at the GDPs.At PORTS, DOE continued to remove anddisposition HEU materials from the PORTS site

X

during FY 2004. DOE also continued toimplement transparency measures related to theHEU Purchase Agreement between the UnitedStates and the Russian Federation, including thereceipt at PGDP of low-enriched uranium derivedfrom Russian HEU.

In addition to management and oversight ofthe DOE nonleased areas of PGDP and PORTS,DOE continued to (1) administer the Leasebetween DOE and USEC, (2) maintain the leasedgaseous diffusion uranium enrichment facilitiesat PORTS in a cold standby mode, and(3) monitor the uranium enrichment capabilitiesat PGDP. DOE also exercised regulatoryoversight responsibility under the RegulatoryOversight Agreement for three USEC activitiesduring FY 2004: (1) the Federal arming andarrest authority at both GDPs, (2) activitiesassociated with uranium enriched to greater thanor equal to 10% assay Uranium-235 that isdiscovered or made accessible in USEC-leasedareas at PORTS, and (3) activities associatedwith the CLC project in USEC-leased areas atPORTS. During FY 2004, DOE conducted

regulatory inspections at both GDPs. Theseinspections, specifically addressed USEC'simplementation of the Federal arming and arrestauthority at both GDPs and the CLC project atPORTS. Upon request by USEC and USEC Inc.,DOE granted temporary exemptions to bothentities from the provisions in 10 CFR 830,Subpart A and 10 CFR 835. These exemptionswere issued in relation to the removal, ofequipment and material from the GCEP facilitiesat PORTS and deployment of USEC Inc.'s CLC.In March 2004, DOE and NRC entered into anMOU that delineates the nuclear safety,safeguards and security regulatory oversightresponsibilities of DOE and NRC for the CLCfacilities at PORTS.

In conclusion, DOE maintained ES&Hprotection in both the nonleased and those leasedareas at the GDPs for which it retainedregulatory oversight responsibility during FY2004. In those instances where regulatoryviolations occurred, actions were taken to notifyappropriate authorities, identify the cause of theviolation, and implement corrective measures.

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1. BACKGROUND

On October 24, 1992, the Energy Policy Act of1992 (EPAct) amended the Atomic Energy Act of1954 (AEA) to require that the U.S. Department ofEnergy (DOE) transfer certain functions associatedwith its uranium enrichment operations at facilitiesnear Paducah, Kentucky, and Portsmouth, Ohio, tothe United States Enrichment Corporation (USEC),a government corporation created pursuant to theEPAct. On July 1, 1993, in furtherance. of thismandate, DOE leased to USEC those portions ofthe Paducah and Portsmouth Gaseous DiffusionPlants (GDPs) that are required for uraniumenrichment operations. In the Lease AgreementBetween the United States Department of Energyand-the United States Enrichment Corporation(hereinafter referred to as the Lease), dated July 1,1993, and in other subsequent agreements, DOEand USEC identified the roles and responsibilitiesfor each organization at both GDPs.

To promote the privatization of DOE'suranium enrichment operations, the EPAct alsorequired that Within two years after the transitiondate of July 1, 1993, USEC prepare a plan fortransferring ownership ofUSEC to privateinvestors. Pursuant to this requirement, USECsubmitted a plan titled Planfor the Privatization ofthe United States Enrichment Corporation to thePresident and Congress in June 1995. On April 26,1996; the USEC Privatization Act was enacted.'This Act directed the USEC Board.of Directors toestablish a for-profit private corporation to receivethe assets and obligations of USEC, to continue theoperations of the government corporation, and tosecure the maximum proceeds to the United States,from the sale of the United States' interest inUSEC. On July 28, 1998, USEC became a privatecorporation, USEC Inc. A wholly owned subsidiarycorporation, United States Enrichment Corporation(USEC), operates the GDPs.'

The EPAct assigns responsibility to DOE forthe payment of any costs of decontamination anddecommissioning (D&D), response actions, or

corrective actions at the GDPs related topreexisting conditions (i.e., conditions existingbefore lease of the GDPs to USEC). With thisassignment, DOE retains responsibility forenvironmental restoration (ER) and legacy wastemanagement (WM) at the GDP sites and for theoperation of the nonleased facilities that are usedfor the storage of DOE-owned source and specialnuclear material such as the cylinder storage yardsfor depleted uranium hexafluoride (DUF6)generated-before July 1, 1993.3

The EPAct also required that DOE transferregulatory oversight authority over the leasedportions of the GDPs to the U.S. NuclearRegulatory Commission (NRC). This transferoccurred on March 3, 1997. However, under theEPAct, DOE retains possession of, and regulatoryresponsibility for, all highly enriched uranium(HEU) and oversight authority over the nonleasedportions of the GDPs.

This report is prepared pursuant to the EPActmandate that NRC consult with DOE and the U.S.Environmental Protection Agency (USEPA) inreporting on the status of environmental, safety,and ,health (ES&H). conditions at the GDPs.,

1.1 REGULATORY RESPONSIBILITIES

The EPAct assigns safety and safeguards andsecurity regulatory responsibility at the leased(i.e., USEC-operated) portions of the GDPsinvolving low-enriched uranium (LEU) activitiesto NRC. In furtherance of this assignment, theEPAct required that within two years of the dateof its enactment, NRC promulgate regulationsestablishing (1) safety and safeguardsand securitystandards for the GDPs and (2)a certificationprocess to ensure that USEC complies with thesestandards. This certification process is in lieu ofany requirement for a license. Thus, the EPActmade NRC regulation of the GDPs conditional onthe issuance of new regulations, which werepromulgated in September 1994 in Title 10 Codeof Federal Regulations (CFR), Part 76 (10 CFR

I

76), Certification of Gaseous Diffusion Plants.

However, the EPAct required DOE to lease theGDPs to USEC on July 1, 1993, more than a yearbefore the deadline for establishing safety andsafeguards and security regulations. This schedulecreated an interim. period between the lease of theGDPs to USEC and assumption of regulatoryoversight by the NRC on March 3, 1997. Duringthis period, there was a need for continued •regulatory oversight of safety and safeguards andsecurity at the GDPs until NRC assumedregulatory oversight responsibility. Consequently,DOE developed a Regulatory Oversight Agreement(ROA) with USEC that became the basis for DOEoversight of safety and safeguards and security forthe leased areas of the GDPs during this period.Originally used to regulate the entire USEC-leasedportions of the GDPs during the interim period, theROA (Exhibit D to the Lease) continues to be usedby DOE to regulate activities involving uraniumenriched to greater than or equal to 10% assayUranium-235 (235U) in leased areas at thePortsmouth 'Gaseous Diffusion Plant (PORTS),4

the Federal arming and arrest authority of theprotective force personnel at -both GDPs, and theCentrifuge Lead 'Cascade,(CLC) activities atPORTS.

The ROA consists of those'performance-basedstandards extracted froTn DOE Orders.that arerelated to nuclear safety and safeguards andsecurity. These standards were considered essentialfor continued safe and secure operation of theGDPs during the interim period and arecommensurate with the standards that werepromulgated by NRC in 10 CFR 76. The ROAcontains provisions for DOE appraisals andinspections of the leased facilities, for issuance ofNotices of Violation (NOVs) in response to USECfailures to meet ROA standards, and for USECself-assessments of compliance with ROAstandards. Provisions also are included forenforcement actions-including civil penalties andcurtailment or shutdown of operatibns-inresponse to violations. Because the ROArequirements were deemed adequate for continued

safe and secure operation of the GDPs during theinterim period, DOE exempted USEC and theleased portions of the GDPs from the regulations.that DOE promulgated to implement thePrice-Anderson Amendments Act (PAAA).

The EPAct also provided for the possibilitythat USEC initially might not be able to complywith the safety and safeguards and security _standards established by NRC. To address thiscontingency, the EPAct permitted NRC toapprove continued USEC operation of the GDPsif NRC approved DOE-prepared plans, referred toas Compliance Plans, for bringing the GDPs intocompliance with any unsatisfied provisions of theNRC regulations. 5 On November 26, 1996, NRCcertified USEC's operation of the GDPs to be incompliancewith 10 CFR 76 with the exception ofthe noncompliances identified in the NRC-approved Compliance Plans. Following atransition period, NRC began regulating mostUSEC'operations in the leased areas at the GDPson March 3, 1997. In December 2003, NRCissued the second renewal of the Certificates ofCompliance.6

DOE retains responsibility for ES&Hprotection and safeguards and security in thoseportions of the Paducah Gaseous Diffusion Plant(PGDP) and PORTS that are not leased to USECand in those portions of PORTS that are leased toUSEC where activities involving uranium enrichedto greater than or equal to 10% assay 235U maytake place. In fiscal year (FY) 2000, DOE.assumed responsibility for regulation' of theFederal arming and arrest authority of the USECprotective force personnel at PGDP and PORTS.In FY 2003, DOE also assumed responsibility forregulation of the CLC project at PORTS. Thus, atPGDP, regulatory oversight responsibility isdivided into three programs: (1) NRC oversight ofleased areas, (2) DOE oversight of nonleasedareas, and (3) DOE oversight of the Federalarming. and arrest authority. At PORTS,regulatory oversight responsibility is divided intofive programs based on the location and type ofactivity being performed. These consist of (1)

2

NRC oversight of leased areas, (2) DOE oversightof nonleased areas, (3) DOE oversight of activitiesinvolving uranium enriched to greater than or equalto 10% assay 235U in leased areas, (4) DOEoversight of the Federal arming and arrestauthority, and (5) DOE oversight of the CLCproject. Although regulatory responsibilities at theGDPs are divided between DOE and NRC, DOEmaintains overall ownership responsibilities for thesites.

DOE regulates nonleased areas at the GDPsaccording to applicable DOE regulations and DOEOrders. DOE will continue to regulate indefinitelyany uranium enriched to greater than or equal to10% assay 235U discovered or made accessible inleased areas at PORTS under the ROA. DOE willregulate CLC activities in accordance with theROA until such time as NRC takes over regulation.DOE also uses the requirements of the ROA toregulate the Federal arming and arrest authority forUSEC Security Police Officers (SPOs) at bothGDPs.

NRC regulates all other USEC operations inthe leased areas at both GDPs according to 10CFR 76, other applicable NRC regulations, theUSEC certification applications, and the NRCcertificates of compliance. Currently, the areasregulated by NRC at the GDPs comprise a largerportion of the operations than those regulated byDOE.

1.2 MEMORANDA OFUNDERSTANDING

In October 1997, DOE and NRC signed aMemorandum of Understanding (MOU) titledMemorandum of Understanding Between theDepartment of Energy and the Nuclear RegulatoryCommission-Cooperation Regarding theGaseous Diffusion Plants. This MOU, whichreplaced an MOU for the interim period, definesthe responsibilities of DOE and NRC regardingcooperation at the GDPs after NRC assumption ofregulatory oversight responsibility for USECactivities. The MOU also clarifies the framework

for coordination regarding issues that may involveDOE and NRC areas of responsibility.

In February 2001, pursuant to the October1997 MOU, both agencies agreed to a jointprocedure titled Joint Procedure Between the US.Department of Energy and the U.S. NuclearRegulatory Commission Response toEmergencies in the Leased Areas at the Gaseous.Diffusion Plants.

The security roles and responsibilities of DOEand NRC after NRC assumption of regulatoryoversight responsibility for USEC activities aredescribed in the Agreement Defining SecurityResponsibilities at the Paducah and PortsmouthGaseous Diffusion Plants Between theDepartment of Energy's Office of Safeguards andSecurity and the Nuclear RegulatoryCommission. DOE and NRC formalized thisAgreement in March 1995.

In June 2002, DOE and USEC entered into anagreement titled Agreement Between the U.S.Department of Energy ("DOE") and USEC Inc..("USEC'). Major articles of this Agreementaddress three USEC commitments:: (1)..ensuringcontinued'removal of Russian weapons-originHEU under the U.S.-Russian HEU PurchaseAgreement; (2) ensuring the stability of existingdomestic enrichment capabilities, includingoperations at PORTS7 and continued operations atPGDP at or above 3.5 million separative workunits (SWU) per year, until new, cost-effectiveadvanced enrichment technology is deployedcommercially in the United States; and(3) facilitating the deployment of new,cost-effective advanced enrichment technology inthe United States on a rapid schedule.

Major DOE commitments under thisAgreement include (1) authorizing the executionof a Cooperative Research and DevelopmentAgreement by the Oak Ridge National Laboratoryfor USEC-funded work associated with DOE-owned gas centrifuge technology; (2) replacingany out-of-specifications uranium hexafluoride

3

(UF6) that DOE transferred to USEC on or aboutJune 30, 1993, April 20, 1998, and May 18, 1998,pursuant to terms identified in the Agreement;.(3) expediting resolution of the outstandingaccounts payable between DOE and USEC; and(4) receiving title to up to 23.3 million kg ofuranium in the form of DUF6 generated by USECat PGDP from 2002 through 2005 for eventualprocessing in DOE's DUF6 conversion facility.

In December 2002, USEC announced that ithad chosen the Gas Centrifuge Enrichment Plant(GCEP) at PORTS as the site for a CLC uraniumenrichment test facility. In March 2004, DOE andNRC entered into an MOU titled Memorandum ofUnderstanding Between the Department of Energyand the Nuclear Regulatory CommissionCooperation Regarding The Gas Centrifuge LeadCascade Facilities at the Portsmouth GaseousDiffusion Plant Site. (See Section 3.2.2.3.)

2. DOE ENVIRONMENTAL, SAFETY,AND HEALTH POLICY

On August 2, 2004, DOE approved DOEPolicy 450.7, Department of Energy Environment,Safety and Health (ES&IJ) Goals.' The purpose ofthis Policy is to establish ES&H goals for DOEpersonnel and DOE contractors. It is one of severalDOE Directives that address DOE's complex-wideES&H policy.9 DOE Policy 450.7 states that "[i]tis DOE policy that the safety of our workers,respect for the environment, and protection of thepublic health and safety are paramount in all thatwe do [and that] DOE's ultimate ES&H goal iszero accidents, work-related injuries and illnesses,regulatory enforcement actions, and reportableenvironmental releases." To this end, the Policydirects that DOE must. integrate ES&H protectioninto its work in order to meet its strategic goals innational security, energy security, environmentalcleanup, and science leadership.

In addition, the Policy "reaffirms theSecretary's commitment to implement and evaluatethe effectiveness of Integrated Safety Management(1SM) and Environmental Management Systems."

Thus, attention to ES&H concerns is an integralpart of DOE's planning, budgeting, and workactivities at all DOE sites. At the GDPs, DOEapplies its ES&H policy in those areas for whichit retains regulatory oversight responsibilitythrough its management and integration (M&I)Contractor's Integrated Safety ManagementSystem (ISMS) program."

The Policy also states 'that "[a]s DOE and itscontractors strive to achieve this ultimate goal,DOE will continue to have 'zero tolerance' foraccidents that result in life-threatening injuries ormajor environmental contamination." Inaddressing the establishment of ES&H goals, thePolicy states that "it is DOE policy that ES&Hgoals be established that drive performance.excellence, thereby reducing or precluding otherwork-related injuries and illnesses, and adverseimpacts to the.public and environment. It isexpected that these goals will be established, andchanged over time as necessary to improveperformance."

Section 3 of this report presents the status ofDOE's oversight activities related to the leasedareas at the GDPs. Section 4 presents the status ofDOE's ES&H initiatives at the GDPs during FY2004, and Section 5 presents the status of ES&Hconditions for the nonleased portions of the GDPsfor which DOE had oversight responsibilityduring FY 2004.

3. STATUS OF DOEOVERSIGHT ACTIVITIES

RELATED TO LEASED AREAS

During FY 2004, DOE continued to exerciseoversight responsibility for certain USECactivities in leased areas at PGDP and PORTS.DOE exercised this responsibility through fiveDOE programs and activities, including (1) theRegulatory Oversight Program for PGDP andPORTS, (2) activities related to the CLC projectat PORTS, (3) the Cold Standby Program atPORTS, (4) activities related to oversight of theuranium enrichment capability at PGDP, and

4

(5) administration of the Lease for both PGDP andPORTS. Sections 3.1 through 3.5 describe thestatus of these DOE programs and activities duringFY 2004.

3.1 REGULATORY OVERSIGHTPROGRAM STATUS

As part of its regulatory oversightresponsibility at PGDP and PORTS, DOEcontinued to use the ROA to oversee USEC-relatedactivities in two areas: (1) the Federal arming~andarrest authority of the USEC plant protectiveforces at both GDPs, and (2) activities associatedwith storage in DOE areas of any USEC-owned or-leased equipment, containers, and materialcontaining uranium enriched to greater than orequal to 10% assay 235U that is discovered or madeaccessible (i.e., removed or uninstalled) inUSEC-leased areas at PORTS."

The DOE Oak Ridge Operations (DOE ORO)Regulatory Oversight (RO) Manager manages theDOE RO Program pursuant to the ROA. In thisrole, the RO Manager schedules and coordinates allRO Program activities, including inspections andenforcement actions. The RO Manager is, _authorized to modify the ROA whenever the RO-Manager determines that changes, are requiredeither to protect public health and safety or topromote the common defense and security. TheROA also includes a change control processwhereby USEC may propose changes to the ROA.

Sections 3.1.1 and 3.1.2 discuss the activitiesof the DOE RO Program related to the Federalarming and arrest authority during FY 2004.

3.1.1 Arming and Arrest Authority RegulatoryActivities

In the FY 1999 Energy and WaterDevelopment Appropriations Act,12 Congressamended the USEC Privatization Act to address theFederal arming and arrest authority for the plant'protective forces at PGDP and PORTS. DOE hasimplemented these amendments and assumed

regulatory authority for the plant protective forceactivities under the provisions of the ROA to theextent required to permit DOE to issue WeaponsAuthorization Cards (WACs). These cards, issuedpursuant to the AEA of 1954, as amended,'3

authorize plant protective force personnel to carryfirearms and, in specified situations, to makearrests at the GDPs.

Following a review of the TrainingDevelopment and Administrative Guide for DOEArming and Arrest Authority, United StatesEnrichment Corporation, Portsmouth GaseousDiffusion Plant, Protective Force Section (Rev.3), DOE provided written approval of thisTraining Development and Administrative Guiderevision on November 7, 2003. This revision,which incorporates additional DOE CentralTraining Academy Training Modules for SPOs,provides for an SPO training program at.PORTSthat is (1) comparable with training programs atother DOE sites and (2) compliant with a directivefrom the Secretary of Energy dated May 15, 2001,Basic Security Police Officer New Hire Training.

On June 2, 2004, USEC submitted Revision 4of the Arming and Arrest Authority Security Planfor the Paducah and Portsmouth GaseousDiffusion Plants (Security Plan), for DOE'sreview and comment. Following DOE review ofthis revision, DOERO and USEC PGDP staffmet in Nashville, Tennessee, on June 25, 2004. Inthis meeting, DOE provided comments onRevision 4 of the Security Plan for incorporationor resolution by USEC prior to DOE's approvalof the revision. At the end of FY 2004, DOE hadnot received USEC's response to these comments.

3.1.2 Arming and Arrest Authority Inspections

The DOE RO office is responsible forconducting routine and special inspections ofUSEC's implementation of the Security Plan forPGDP and PORTS. In accordance with the ROAenforcement process,"4 DOE may issue NOVs andimpose civil penalties if these inspections identifyROA violations. The amount of a civil penalty is

5

based on the severity of the violation. The DOERO Manager assigns one of three severity levels tothe violations. Severity Level I violations are themost serious and are violations that significantlyincrease the hazard to plant workers or the risk ofoff-site consequences. Severity Level II violationsare violations that moderately increase the hazardto plant workers or the risk of off-site consequencesand are serious or recurring violations. SeverityLevel Ill violations are significant violations thatdo not indicate any overall degradation in nuclearsafety or safeguards and security programs. DOEtracks corrective actions associated with both cited

• and non-cited violations to closure.

From November 17 to November 20, 2003, theDOE RO office conducted a routine inspection atPORTS to evaluate USEC's implementation ofROA requirements as contained in-Revision 3 ofthe Security.Plan relating to the issuance of WACs.DOE inspected the following functional areas:Firearms Qualification and Safety; MedicalCertification, Physical Fitness Qualification andAssessment Programs; and Training. In addition,DOE reviewed those findings in-Inspection Reports70-7002/01-01 and 70-7002/02-01 that requiredfurtherevaluation by DOE before resolution orclosure and observed physical fitness qualificationsattempts by SPOs during this routine inspection.Two SPOs were not able to attempt the physicalfitness tests due to medical reasons. Theseindividuals, however, attempted and passed thetests on May 17, 2004, and August 6, 2004, in thepresence of DOE Site personnel who weredesignated by the RO Manager to witness thetesting. A third SPOattempted and failed thephysicalfitness test. This individual was placed onlong-term disability and, therefore, isnot permittedto carry arms.

During the November inspection, DOE alsoobserved a physical fitness re-qualification attemptby a fourth SPO. This individual had previouslybeen removed from armed status for inability torun. The individual's attempt to re-enter the SPOprogram was unsuccessful. The individual wasremoved from armed status, and any attempt to re-

arm the individual will require DOE approval.DOE monitored this attempt as a continuation offollow-up activities associated with resolution of apreviously identified issue related to DOE ROresponsibilities at the site."5 DOE prepared areport for this routine inspection in FY 2004. Thisreport was in the internal review and approvalprocess at the end of FY 2004.

On November 19, 2003, an incident occurredat PGDP in which weapons and ammunition wereleft unattended while equipment was being issuedto SPOs during a shift change. The weapons andammunition were inadvertently left outside theweapons vault for approximately one hour beforebeing discovered. Following an investigation byUSEC, USEC submitted documentation of itsfindings, corrective actions taken, planned.corrective actions; and its root cause analysisregarding the incident to DOE. On February 23and 24, 2004, the DOE RO office investigated theincident at PGDP and reviewed USEC'scorrective actions. Upon receipt of the results ofthe DOE investigation, the RO Manager decidedto further evaluate the adequacy and effectivenessof the corrective actions taken by USEC as aresultof this incident during the, inext;ro.uitje...WAC inspection at PGDP, which is scheduled tooccur during October 2004. In addition toevaluating USEC's corrective actions related tothe November 2003 incident, DOE will alsoeIvaluate USEC's adherence to the ROArequirements for the issuance of WACs in thisinspe~tion and review previously identified openitems.16

3.2 CENTRIFUGE LEAD CASCADEACTMTIES

In FY 2003, USEC announced that it wouldsite the CLC uranium enrichment test facility atPORTS utilizing the existing GCEP facilities.During FY 2004, DOE worked with USEC tolease and prepare the CLC facilities at PORTS forUSEC's demonstration and deployment of theadvanced gas centrifuge enrichment technology.Section 3.2.1 discusses DOE activities at PORTS

6

related to the deployment of the CLC. Also, in FY2003, DOE regulatory responsibilities at PORTSincreased when the DOE RO Program assumedresponsibility for regulatory oversight of USECand USEC Inc. activities related to the developmentand deployment of the CLC at PORTS. Sections

-3.2.2 and 3.2.3 describe DOE's regulatoryactivities related to the CLC during FY 2004.

3.2.1 Centrifuge Lead Cascade DeploymentActivities

On February 17, 2004, DOE and USECentered into a lease agreement regarding certainGCEP facilitiesto support the CLC project efforts.(See Section 3.4.) On February 24,.2004, NRCissued a 10 CFR 70 license for USEC to possessand use source and special nuclear material in theCLC facilities, called the American CentrifugeLead Cascade Demo nstration Facility."7 The CLCfacilities will have up to 240 centrifuge machinesarranged in a cascade configuration operating in a.recycle mode and may contain up to 250 kg of UF 6.No enriched product will be withdrawn from theCLC. The only withdrawal of enriched UF 6 fromthe CLC will be in the form of samples.

Because USEC is scheduled to beginoperations-of the CLC inthe near future, DOE and.USEC held several meetings in FY 2004 to address(1) leasing of GCEP facilities and (2) thedisposition of DOE centrifuge equipment and wastefrom the GCEP X-3001 Process Building and thoseareas of the X-7725 facility required for the CLC.Key activities that are required for DOE to providethe GCEP facilities to USEC for the deployment ofthe CLC technology include the following:

Relocation or disposition of waste in theX-3001 and X-7725 facilities (completed in FY2004);Removal of old GCEP centrifuge equipmentand machines (ongoing in FY 2004);Relocation of office personnel (ongoing in FY2004);Partial closure of the Resource Conservationand Recovery Act (RCRA) Part B Hazardous

Waste Storage Facility (nearly completed inFY 2004);.

* Modification to the RCRA Part B Permit(scheduled for FY 2005);

* Update of the SB documents (scheduled forFY 2005); and

* Leasing of requited GCEP facilities to USEC(nearly completed in FY 2004).

During FY 2004, DOE legacy waste in, thesouth half of the GCEP X-3 001 facility wasrelocated to the X-3002 facility.. In addition,USEC relocated 656 original centrifuge machinesfrom the north half of the X-3001 facility toprepare space for the CLC centrifuge machines.Finally, DOE initiated activities to perform partialclosure of the X-7725 RCRA Part B-permittedHazardous Waste Storage Areas.

In January 2004, USEC selected PORTS asthe location for the commercial AmericanCentrifuge Plant, expected to be operational by2010 in accordance with the June.2002 Agreementbetween DOE and USEC Inc. In August 2004,USEC Inc., submitted a license application toNRC to build and operate the. AmericanCentrifuge. Plant; Acoording toUSEC, thisPlant..is anticipated to reach an initial annual productionlevel of 3.5*million SWUs by.20.10.

3.2.2 Centrifuge Lead Cascade RegulatoryActivities

3.2.2.1 Centrifuge Lead Cascade RegulatoryOversight Agreement

In FY 2004, DOE ORO establishedregulatory requirements for the regulation ofUSEC and USEC Inc. activities in thedevelopment and deployment of the CLC atPORTS. On March 16, 2004, DOE implementedthese regulatory requirements in a revision to theROA between.DOE and USEC Inc."8 Thisrevision, titled Appendix A. 1, Centrifuge Lead.Cascade Regulatory Oversight Agreement (CLCROA), provides a regulatory framework similar to.that utilized by DOE in the existing ROA for the

7

regulation of the GDPs. 9̀ The CLC ROA, whichwas developed to ensure the ýafe performance ofCLC activities, identifies objectives andimplementation requirements in eighteen nuclearsafety, safeguards and security functional areas..DOE will utilize these requirements to regulateUSEC and USEC Inc. CLC activities until NRCassumes this responsibility.

With the exception of the Qtiaiity Assurance(QA) (10 CFR 830.120) and Radiation Protection(10 CFR 835) functional areas, the enforcementprocess for the CLC ROA is the same as theenforcement process utilized under the existingROA, which is outlined in Appendix B to ExhibitD of the Lease and briefly addressed in Section3 i1.2 of this Report. Violations of the nuclearsafety requirements of 10 CFR 830 and 835 aresubject to the enforcement process in 10 CFR 820(see Section 3.2.2.2). All other violations of theCLC ROA r:equirements will be addressed by theRO Manager in accordance with Appendix B of theROA.

In May'2004, DOE ORO issued the GaseousDiffusion Plant and Centrifuge Lead CascadeRegulatory Oversight Inspection and EnforcementManual. This manual, which establishes thegeneral framework for the DOE ORO RegulatoryOversight inspection program, includes thenecessary administrative and inspection proceduresfor DOE ORO to regulate the arming of the USECplant protective force at both GDPs as well asUSEC and USEC Inc. CLC activities at PORTS.Use of this manual provides assurance that USECand USEC Inc. are in compliance with the nuclearsafety, safeguards and-security requirements ofboth the existing ROA and the CLC ROA and thatthe health and safety of the publicand workers areadequately protected with respect to (1) the armingof the plant protective force at both GDPs and (2)'the operation of the CLC facility at PORTS.

3.2.2.2 Centrifuge Lead Cascade 10 CFR 830and 835 Exemptions

In November 2003, USEC and USEC Inc.

requested that DOE grant temporary exemptionsfrom the provisions contained in 10 CFR 830,"Nuclear Safety Management," Subpart A,"Quality Assurance Requirements," and 10 CFR835, "Occupational• Radiation Protection," inrelation to the removal of equipment and materialfrom the GCEP facilities at PORTS anddeployment of USEC Inc.'s gas centrifugeenrichment technology in these facilities. Anexemption from 10 CFR 830, Subpart B, "SafetyBasis Requirements," was not requested becausethe relevant GCEP facilities are below NuclearHazard Category 3.

In early calendar year (CY) 2004, DOEgranted USEC and USEC Inc. temporaryexemptions pursuant to 10 CFR 820, "ProceduralRules for DOE Nuclear Activities," withconditions, from the provisions of 10 CFR 830,Subpart A,2̀ and 10 CFR 835.21 The purpose ofthese temporary exemptions, which have aneffective period of three years, is to permit USECand USEC Inc. to perform nuclear safetyactivities, includingQA and radiologicalactivities, in the GCEP facilities in accordancewith plans, programs, and procedures currentlyutilized by USEC under NRC requirements in 10CFR 76, 10 CFR 20, and other NRC regulations.In addition to the requirements of the CLC ROA,DOE will utilize the requirements specified in theexemptions to regulate nuclear safety activities inthe CLC facilities until NRC assumes thisresponsibility.

The 10 CFR 830, Subpart A, exemptionrequires USEC and USEC Inc. to conductactivities at the GCEP facilities in accordancewith the NRC QA requirements of 10 CFR 76 andthe USEC Quality Assurance Program (QAP) asupdated to reflect CLC activities. Following areview of the updated USEC QAP, DOEconcluded that the QAP reflects the activities atthe GCEP facilities as required by the 10 CFR830, Subpart A, exemption decision, and the ROManager approved the QAP.22

The 10 CFR 835 exemption requires USEC -

8

and USEC Inc. to conduct operations at the GCEPfacilities in accordance with NRC radiationprotection requirements contained in 10 CFR 20,10 CFR 76, and other NRC regulations and theUSEC Radiation Protection Program as updated toreflect CLC activities." In a subsequentassessment, DOE found that the RadiationPrbtection Program for the CLC facilities isupdated to reflect CLC activities and meets therequirements of 10 CFR 19, 20, and 70 asdocumented in the NRC Safety Evaluation Reportfor the American Centrifuge Lead CascadeFacility at Piketon, Ohio, dated January 2004 (seeSection 3.2.3.2).

The DOE Office of Price-AndersonEnforcement (OE) will investigate potentialviolations of the 10 CFR 830 and 835 exemptionrequirements in accordance with 10 CFR 820.These violations will be subject to the 10 CFR 820,Subpart B, enforcement process,

3.2.2.3 Memorandum of UnderstandingBetween DOE and NRC Regarding theCentrifuge Lead Cascade

On March 24, 2004, DOE and NRC enteredinto an MOU titled Memorandum ofUnderstanding Between the Department of Energyand the Nuclear Regulatory CommissionCooperation Regarding the Gas Centrifuge LeadCascade Facilities at the Portsmouth GaseousDiffusion Plant Site.2 4 This MOU delineates thenuclear safety, safeguards and security regulatoryoversight responsibilities of DOE and NRCregarding the CLC facilities. The MOU alsodefines the process for the transition of regulatoryoversight responsibilities for the CLC facilitiesfrom DOE to NRC. Transition of the CLCfacilities from DOE to NRC regulation will occurafter NRC's pre-operational inspections andregulatory compliance reviews, but prior to theintroduction of UF6 into the CLC facilities.25

The purposes of the DOE and NRC MOUregarding the CLC facilities are to (1) enter into awritten, mutual understanding of the roles and

responsibilities of NRC and DOE during thedeployment and utilization of gas centrifugetechnology by USEC Inc.; (2) outline the processfor the transition of CLC regulatory oversightresponsibilities from DOE to NRC; (3).clarify theregulatory boundaries between NRC and DOE toavoid dual regulation of USEC Inc., recognizingthat USEC Inc. will be conducting both NRC-regulated and DOE-regulated activities associatedwiththe CLC concurrently in the same buildings;(4) define how NRC and DOE will cooperate tofacilitate the exchange of information andknowledge regarding gas centrifuge technologyand facility operations; and (5) supplement otherDOE and NRC agreements applicable to the CLCfacilities and activities.2 6 In addition, the MOUstates that "[n]othing in this MOU restricts orotherwise limits the authority of either NRC orDOE to exercise its full regulatory authority,including both inspection and enforcementauthority."'

The DOE and NRC MOU addresses theregulatory responsibilities of both DOE and NRCfor the following periods: (1) upon leasing of theCLC facilities to USEC and prior to the transitionto NRC regulation, (2) following transition to:,NRC regulation, and (3) upon termination of the10 CFR 70 license. After leasing, but prior totransition, DOE is responsible for ensuring thatUSEC and USEC Inc. are in compliance withapplicable DOE nuclear safety, safeguards andsecurity requirements, i.e., the 10 CFR 830 and835 exemption decisions and the CLC ROA.

Prior to transition, NRC is responsible forpre-operational inspections and licensing reviews.NRC is solely responsible for reviewingcompliance with 10 CFR 70 requirements.Following transition, NRC is solely responsiblefor all regulatory oversight of the CLC facilitiesunder the 10 CFR 70 license including conductingnuclear safety, safeguards and security reviewsand inspections. DOE ,will regulate any otherUSEC centrifuge-related activities that are notregulated by NRC. After termination of the 10CFR 70 license, DOE will resume its regulatory

9

responsibilities except for those portions of theCLC facilities that are licensed as part of USECInc.'s commercial gas centrifuge enrichment plant.

In addition -to describing the nuclear safety,safeguards and security responsibilities of DOEand NRC related to the CLC, the MOU describesthe interfaces between DOE and NRC relating toexchange of information and technical staffsupport, emergency response, referrals,coordination and the transition date. Finally, theMOU identifies the principal points of contact foreach agency. and addresses the resolution .ofdisputes.

3.2.3 Centrifuge Lead Cascade Inspections andAssessments

In FY 2004, the DOE RO Program officeinspected USEC and USEC Inc.'s CLC project atPORTS to determine whether CLC activities wereconducted safely and in accordance with therequirements of the CLC ROA. During these -inspections,, DOE inspected USEC activitiesinvolving the removal of material and equipmentfrom the GCEP facilities. Also, DOE OROperformed assessmentsof the adequacy of theregulatory controls contained in the 10 CFR 830and 835 exemptions for the QA and radiationprotection activities at the CLC project. Theseinspections and assessments are described inSections 3.2.3.1 and 3.2.3.2.

3.2.3.1 Inspections.

From June 21 to June 25, 2004, the DOE ROoffice conducted a routine inspection of USEC'sCLC project activities at PORTS. In thisinspection, DOE evaluated USEC's compliancewith the implementation requirements. of the CLCROA in three functional areas: Organization Plan,Management Control and Oversight, and Trainingand Qualification. The inspection team interviewedpersonnel, examined programs and procedures, andreviewed representative training records. Inaddition, DOE reviewved specific USEC proceduresgoverning ongoing GCEP clean-up activities

including:. (1) facility change process,(2) equipment removal and transport, (3) craneoperations, (4) safety evaluation of facilitychanges, (5)' safety review committees, (6) eventreporting, (7.) commitment management,(8) records management, (9) work control, and(10) stop work authority. The inspection team alsoreviewed the training records of the GCEP clean-up and disassembly crew regarding training forcrane operations. During this routine inspection,DOE identified one inspection follow-up item inthe Management Control and Oversight functionalarea. This follow-up item involved determiningwhether the USEC Plant Operations ReviewCommittee or USEC Inc.'s Facility Safety ReviewCommittee as described in the CLC 10 CFR 70license has final internal safety review authorityover CLC facilities and activities within theUSEC/USEC Inc. organization. DOE reviewedand closed this item during an inspection inSeptember 2004 and determined that USEC as theCLC facilities lease holder is accountable formeeting the requirements of the CLC ROA.

From July 19 to July 22, 2004, the DOE ROoffice conducted a second inspection of USEC'sCLC project: activities at PORTS..In this.:inspection, DOE reviewed two CLC ROAfunctional areas: Engineering/Construction andOperations. The inspection team interviewedpersonnel and examined programs, and reviewedprocedures and representative records. In theOperations functional area, DOE reviewed USECoperations activities for the cleanup of the CLCfacilities. Specific areas reviewed includedknowledge of operating personnel performing theclean-up work, crane operations, status ofmanagement self-assessments, the performance ofshift turnover, plant changes requiring DOEapproval, and as-found conditions requiring DOEnotification. In the Engineering/Constructionfunctional area, DOE reviewed the Plant Change

• Review (PCR) procedure, engineering calculationsand drawings, engineering service. orders, andPCRs related to the CLC clean-up operations.:During this inspection, DOE identified twoinspection follow-up items. These items involved

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(1) the scheduling of a management self-assessmentto evaluate GCEP design control and the workcontrol process (Operations) and (2) the submittalof PCRs to the DOE Site Office at PORTS(Engineering/Construction): In the past, thesePCRs have not been provided to the DOE SiteOffice as required by the applicable procedure.DOE plans to review these items during a futureinspection.

During a third inspection of USEC's CLCproject activities at PORTS from August 2 toAugust 6, 2004, the DOE RO office reviewedUSEC's compliance with the implementationrequirements of the CLC ROA in the Securityfunctional area. The inspection team interviewedpersonnel, examined implementation of securityplans and procedures, and reviewed representativerecords. During this inspection, the team identifiedsix inspection follow-up items. These inspectionfollow-up items will be reviewed during a futureinspection.

The DOE RO office conducted a-fourthinspection of USEC and USEC Inc.'s CLC projectactivities at PORTS from August 23 to August 26,2004. In this inspection, DOE reviewed one CLCROA functional area, QA, and identified oneinspection follow-up item. The inspection teaminterviewed-personnel, examined QA programs andprocedures, and reviewed representative records. Inaddition, DOE reviewed clean-up operations at theCLC facilities, independent and self assessments,audits and surveillances, the corrective actionprocess, and-the USEC and USEC Inc. QAprocedures for the CLC. The inspection follow-upitem involved an inadequate surveillance by CLCpersonnel of the GCEP clean-up operations andequipment relocation. Subsequent surveillances bythe CLC personnel were found to be adequate.DOE plans to review this inspection follow-up itemduring a future ,inspection.

During a fifth inspection of USEC and USEC-Inc.'s CLC project activities at PORTS fromSeptember 13 to September 16, 2004, the DOE ROoffice reviewed USEC and USEC Inc.'s -

compliance with the implementation requirementsof the CLC ROA in the Radiation Protectionfunctional area as well as USEC and USEC Inc.'scompliance with the requirements of the DOE 10CFR 835 exemption decision. DOE also reviewedthe occupational health program. In conductingthese reviews, the inspection team interviewedpersonnel,, examined radiation protection plansand procedures, reviewed representative trainingrecords, and observed on-going activities. In theRadiation Protection area, DOE reviewed thestatus of the control of radiation measuring andtest equipment, radiological work permits,radiological work practices, radiological controlbarriers and postings, audits, radiation surveys,and training. The review of the occupationalhealth program included inspection of electricalsafety, head protection, fall hazards, and eyeprotection.

As a result of this inspection, the inspectionteam identified four non-cited violations andclosed the inspection follow-up item that wasidentified during the routine inspection of CLCactivities in June 2004. Three of the non-citedviolations identified in the September inspectioninvolved.(1) radiological barrier controldeficiencies, i.e., items were breaking the plane ofa posted-radiological barrier, (2). lack-of. _appropriate documentation of internalcontamination of equipment destined for off-sitedisposal, and (3) numerous violations of theoccupational safety program.2" These threeviolations of the CLC ROA were issued as non-cited violations due to the adequacy andeffectiveness of USEC's prompt correctiveactions..

The fourth non-cited violation identified inthis inspection involved the potential forinadvertent use of DOE reporting criteria for CLCradiological events rather than the NRC reportingcriteria required by the 10 CFR 835 exemptiondecision. The applicable procedure includes bothDOE and NRC reporting criteria in separateappendices of this procedure. A condition of the10 CFR 835 exemption decision requires that

1II

USEC and USEC Inc. use only the NRC reportingcriteria when reporting significant radiologicalevents in the CLC facilities to DOE. This non-citedviolation was forwarded to DOE OE.

The DOE inspection reports for activities in theUSEC-leased CLC facilities at PORTS during FY2004 are summarized in Appendix A, "Summaryof DOE Regulatory Oversight Program InspectionReports."

3.2.3.2 Assessments

According to the original 10 CFR 830 and 835exemptions, DOE was required to assess theadequacy of the regulatory controls established inthese exemptions for the USEC and USEC Inc.CLC project at PORTS within 60 days after theexemptions were granted and filed. In March 2004,DOE ORO conducted two assessments as requiredby the exemptions. These-two assessmentsevaluated the adequacy of the regulatory controlsfor the GCEP QA and radiation protectionactivities and made recommendations regardingmodifications to the regulatory controls andconditions in the exemption decisions. In addition,the assessmrent'required by.the .QA -exemption wasto evaluate the USEC QAP, the safety basis (SB)documentation, implementing documents such asprograms, plans and procedures, and conformanceof the QAP and implementing documents to NQA-I to verify that USEC has adequate control of theproposed CLC work. In April 2004, DOE OROissued two assessment reports as describedbelow.

28.29

DOE ORO conducted an assessment of the 10CFR 830, Subpart A, exemption criteria for theCLC project at PORTS from March 15 to March18, 2004. During this assessment, the DOEassessment team, conducted a walkdown of theleased GCEP facilities, reviewed USEC and USEC-Inc. QA programs and procedures, and interviewedsite personnel. In its report of this assessment, theDOE team identified eight open items related to theUSEC QAP.

The assessment team concluded, that theUSEC QAP was acceptable for performance offour specified CLC tasks: (1) processing securityclearances, (2) relocating records and excessmaterials, (3) installing security fencing, and(4) procuring long lead-time items. The team alsoconcluded, however, that no further tasks,including the relocation of centrifuge machines,should be authorized until the eight open items areresolved.3"

The assessment. team also recommendedchanging Condition 1 of the 10 CFR 830exemption decision to include requirements fromthree additional documents. In addition to the QArequirements contained in 10 CFR 76.93 and theUSEC QAP, the team -recommended including thefollowing requirements in Condition I of theexemption decision: (1) the Health Physics,Environmental Protection, WM, Industrial Safetyand Hygie-ne, and Fire Protection requirements ofthe USEC Safety Analysis Report (SAR) for the10 CFR 76 certificate; (2) the ManagementMeasures, Health Physics, EnvironmentalProtection,,WM, Industrial Safety and Hygiene,and Fire Protection requirements of the USEC Inc.license application for.the. 10 CFR,70 license; and(3) the USEC Inc. Gas Centrifuge QAP

• Description.

From March 15 to March 17, 2Q04, DOEORO also conducted an assessment of the 10 CFR835 exemption criteria for the CLC project atPORTS. During the assessment, the DOEassessment team conducted a walkdown of theleased GCEP facilities, reviewed the radiation

• protection program and procedures, and theUSEC Inc. license application for the CLC. Theassessment team also interviewed site personneland reviewed the NRC Safety Evaluation Report(SER) for the CLC, the lease agreement betweenDOE and USEC for the CLC facilities, and USECcommitment tracking system documents.

In its report of this assessment, the DOE teamrecommended several changes to the conditions of

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the 10 CFR 835 exemption decision. The teamrecommended that while Condition 1 of the 10 CFR835 exemption contains an appropriate set ofradiation protection requirements, it should specifythat these requirements apply only to the USEC-leased portions, of the GCEP facility. The team also.recommended that the 10.CFk, 30, 32, 36, 39, and40 requirements for the control, inventory, and leaktesting .of sealed radioactive sources be deletedfrom Condition 1. As related to Condition 1, theteam recommended adding a condition that use ofall sealed radioactive sources at GCEP shall beconducted under USEC's 10 CFR 76 certificate.Lastly, based on its review, the team found that theRadiation Protection Program as described inChapter 4 of the CLC License Application isconsistent with the requirements of 10 CFR20.1101. Therefore, the team recommended thatCondition 2 be identified as completed.

The 10 CFR 835 assessment team also notedthat Condition 3 had not been completed andrecommended revising the condition to allow USECto continue to report results of individualradiological monitoring to NRC annually- Theassessment team also recommended revisingCondition 5 to allow use of radiation-producingdevices (e.g., x-ray machinery) in the GCEPfacilities. These devices are not regulated by NRCbut are licensed by the State of Ohio, Departmentof Health. Finally, the assessment teamrecommended that Condition 6 be identified ascompleted and that an additional assessment of theimplementation of the USEC and USEC Inc.radiation protection programs be conducted.

Pursuant to the recommendations in theseassessments, DOE issued modified 10 CFR 830and 835 exemption decisions in August 2004 that

,incorporated all recommended revisions to theconditions of the original exemption decisions.'

3.3 COLD STANDBY PROGRAMACTIVITIES

In March 2001, following USEC's decision in

FY 2000 to cease uranium enrichment operationsat PORTS, DOE decided to place the PORTSuranium enrichment cascade in cold standby. 32

The cold standby mode is designed to allow theplant to be maintained in a condition so thatproduction can restart within, 1.8-24 months, ifnecessary, at a capacity of three million SWUsper year. The cold standby status of the plantenables DOE to maintain the existing enrichmentcapability until USEC has demonstrated newadyanced gas centrifuge enrichment technology.

In FY 2004, DOE continued the cold standbyprogram at PORTS. DOE initially awarded aletter contract on July 31, 2001, to USEC toperform operations to maintain the GDP in coldstandby status in accordance with USEC's 10CFR 76 certificate of compliance. Theseoperations in USEC-leased facilities includeplacing enrichment cascade cells in cold standby,maintaining them using specific preventive andcorrective maintenance actions,.remediatinguranium deposits in cells, winterizing processbuildings, and training the transitioned USEClabor force. NRC regulates USEC's cold standbyoperations according to the requirements in 10CFR .76.

. In- September 2003, DOE exercised -an optionto extend the cold standby contract with USECthrough March 31, 2004. In April 2004, DOEfurther extended USEC's cold standby contractthrough FY 2005. Beginning on April 1, 2004,DOE contracted with USEC to complete. severalpei-formance-based incentive (PBI) goals duringcold standby operations. These PBIs includeremediation of existing uranium deposits (i.e., thePlanned Expeditious Handling deposits) in theenrichment cascade'equipment, non-destructiveassay (NDA) measurements of LEU and HEUenrichment cascade equipment, disposal ofhazardous materials, disposition of excessequipment and parts, and downgrade of thenuclear hazard categorization of the three gaseousdiffusion process buildings. This contractcoincided with a recommendation of the DOE

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Inspector General (IG) on the cold standbyprogram at PORTS that recommended negotiationof a performance-based contract..3 The FY 2004budgetfor cold standby operations was $103.5million. The budget request for cold standbyoperations in FY 2005 is $98.5 million.

In addition to cold standby operations that aredesigned to support potential restart of the LEUportion of the enrichment cascade at PORTS,surveillance of shutdown lIEU cells in the X-326Process Building continues.34 In accordance withthe surveillance plan, each HEU cell in the X-326Process Building is monitored. The previous nineyears of sampling have shown that the cells arestaying dry and that UF6 levels remain below 10parts per million, indicating that there is no leakageor movement of UF6 between cells. Another part ofthe surveillance plan is the monitoring of UF6deposits by .NDA measurements. The results of themonitoring indicate that no uranium bearingdeposits containing quantities of 23.U greater thansafe mass exist in the compressors, converters, orcoolers. Some level of HEU surveillance willremain in place until the equipment and facility areremoved.

In FY 2004, USEC also continued to operatecertain other leased facilities at PORTS inaccordance with the June 2002 Agreement (seeSection 1.2). DOE provided funding to USEC tocontinue operations of the Shipping and Transferfacilities at PORTS. These operations are designedto clean up contaminated feed material to meetASTM C-787-90 specifications or producematerial acceptable to USEC for use in itsenrichment facility. In the June 2002 Agreement, -DOE agreed to replace up to 9,550 metric tons ofany out-of-specification UF6 that DOE hadpreviously transferred to USEC. These operationsat PORTS are designed to ensure the stability ofthe domestic supply of enriched uranium, until new'commercial gas centrifuge uranium enrichmentcapability can be demonstrated and deployed.

3.4 OVERSIGHT OF PADUCAH GASEOUSDIFFUSION PLANT ENRICHMENTCAPABILITY

In accordance with the June 2002 Agreementbetween DOE and USEC Inc., USEC continued tooperate PGDP at a production level of greaterthan or equal to 3.5 million SWUs per year (seeSection 1.2). In FY 2004, DOE ORO continued tomonitor the uranium enrichment capabilities atPGDP to ensure that USEC was operating theenrichment plant at greater than or equal to thespecified 3.5 million SWUs per year. During FY2004, USEC exceeded the annual productionrequirements specified in the June 2002Agreement.

3.5 LEASE MODIFICATIONS

Upon leasing of portions of PGDP andPORTS to USEC on July 1, 1993, DOE ORO, aslandlord of the leased premises, assumedresponsibility for administering the day-to-dayactivities associated with the Lease. In this.administrative role, DOE ORO actively providesoversight of the implementation of the Lease and

• works with USEC to: modify the: Lease as requiredto meet the changing needs of both entities atPGDP and PORTS. In addition, DOE OROmaintains the controlled copy of the Lease,including the facility lease status drawings,exhibits, and the DOE Material Storage Area(DMSA) drawings.

In FY 2004, DOE ORO continued to work onrevising the Lease in response to (1) USEC'sdecision to lease additional facilities from DOE atPORTS for CLC activities and. (2) the proposedreturn of eight areas and facilities at PORTS fromUSEC to DOE. At the end of FY 2004, USECwas also evaluating approximately 50 proposedchanges to Exhibit A of the Lease, LeasedPremises As Agreed Between United StatesDepartment of Energy and United States

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Enrichment Corporation, and the Lease StatusMaps for each of the PGDP and PORTS sites.These changes were proposed by USEC to moreaccurately reflect minor changes that occurred atthe GDPs during FY 2004.

In support of USEC Inc.'s efforts to deploy a.new, cost-effective advanced enrichmenttechnology at PORTS, DOE and USEC enteredinto an Agreement titled Agreement Between theU.S. Department of Energy and the United StatesEnrichment Corporation Concerning theTemporary Lease of Certain Facilities in Supportof the American Centrifuge Program on February17, 2004. According to this Agreement, DOEagreed to lease five facilities or portions of thesefacilities in the GCEP complex at PORTS toUSEC, with the transition of these facilities tooccur in a phased approach.36 These facilities•include the X-3001 Process Building #1, X-3012

. ... Process Support Building, X-7727H TransferCorridor, most of the X-7726 Centrifuge Trainingand Test Facility, and a large portion of the X-7725 Recycle/Assembly Building. At the end of FY2004, DOE was in the process of completing thetransition of these facilities to USEC.

Also, during FY 2004, DOE, USEC, and theM&I Contractor actively worked together toaccommodate the proposed return of eight leasedareas and facilities at PORTS from USEC to DOE.These areas and facilities include the following:

. X-746 Materials Receiving and Inspection

Building,* X-747 Clean Scrap Yard,* X-747J Decontamination Storage Yard

(Concrete Pad),two DMSAs in the X-342A Feed, Vaporizationand Fluorine Generation Building (whichincludes two cold traps),one DMSA in the X-344A UF6 SamplingFacility (cylinder storage area, second floor),X-745G-1 Cylinder Storage Yard (which ishalf of the X-745G Cylinder Storage Yard),anda portion of the X-700 Converter Shop and

Cleaning Building (consisting of the "WeldArea" on the west side).37"

To facilitate the return of these areas andfacilities, DOE entered into two temporaryagreements with USEC. to "de-lease" a portion ofthe X-747J Storage Pad and the X-745G-1 (WestHalf) Cylinder Storage Yard. In addition, onAugust 3, 2004, DOE notified NRC that it had"taken immediate possession of the X-747J pad inorder to expedite mobilization of the X-627Groundwater Treatment Facility to satisfy anOhio Environmental Protection Agency (EPA)commitment" and that it was setting a transitiondate of August 8, 2004, for the transfer of the X-745G-1 Cylinder Storage Yard from USEC toDOE.38 In this notice to the NRC, DOE stated thatthese "temporary changes [will be made]permanent with the next change to the. PortsmouthLease Status Map and Exhibit A.. . ." Also, onAugust 13, 2004, DOE notified USEC that,pursuant to a request from USEC, it had acceptedthe return of a portion of the X-700 Building"bounded essentially by columns Al to D5.""9 Atthe end of FY 2004, work was underway topermanently "de-lease" the eight areas andfacilities -by, revising the PORTS Lease StatusMap and Exhibit A to reflect these changes.

On August 6, 2004, DOE requested USEC totemporarily "de-lease" a designated section ofroadway at PORTS to permit the ConversionContractor to perform site preparation and otherconstruction activities for the new DUF6conversion facility at PORTS. 4. This section ofroadway was subsequently declared a commonarea and, as such, remains leased to USEC.

4. STATUS OF DOE ENVIRONMENTAL,SAFETY, AND HEALTH INITIATIVES

4.1 ENVIRONMENTAL CLEANUPINITIATIVES

During FY 2004, DOE continued toimplement environmental cleanup initiatives thatwere established in FY 2003 at both GDPs. These:

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initiatives relate to an Agreed Order between DOEand the Commonwealth of Kentucky at PGDP andcleanup of the GCEP facilities at PORTS asdiscussed in Sections 4.1 .1 and 4.1.2, respectively.

4.1.1 Environmental Cleanup Initiatives atPaducab

In August 2003, the DOE Assistant Secretaryfor Environmental Management (EM) and theGovernor of Kentucky signed a letter of intent(LOI) on behalf of DOE and the Commonwealth ofKentucky, respectively, documenting theircommitment to. "promote accelerated cleanup" atPGDP, develop integrated planning and fundingrequests, meet commitments under the PaducahFederal Facility Agreement (FFA), and "settle all

• identified outstanding enforcement and complianceissues through an Agreed Order(s)."'" In September2003, the parties to the LOI signed two.Agreed..Orders, both of which were entered inti-the recordon. October 2, 2003.42 The first of these, which isdiscussed in this section, addresses environmentalissues to be resolved at PGDP and is referred to asthe ER Agreed Order in this Report. The second,which. addresses issues related to the DUF6Cylinder Management Program, is discussed inSection 5.1.3.

The ER Agreed Order incorporates theprovisions of the LOI.43 This Agreed Orderidentifies alleged violations and the remedialmeasures intended to address the alleged violations.The remedial measures include agreements relatingto (I) the manner in whichDOE may obtain"contained-in" determinations .for environmentalmedia or determinations that debris is no longercontaminated with listed hazardous waste; (2) thecharacterization and sampling of DMSAs; (3) thecharacterization, storage, and disposal of specifiedcontainers that may contain hazardous waste;(4) the closure requirements for unpermittedhazardous waste storage. units; (5) contained-indeterminations for the C-746-U Solid WasteLandfill 44; (6) closure/post-closure requirements for

the C-746-S and C-746-T Solid Waste Landfills;(7) water remedial measures; and (8) the mannerin which DOE and the Kentucky NaturalResources and Environmental Protection Cabinet-(the Cabinet) will resolve disputes which mayarise relating to the Agreed Order. DOE alsoagreed that it would make good faith efforts tofulfill its obligations under the Agreed Order. Bothparties agreed to stipulate that it is premature todetermine whether DOE can raise as a defense thefailure to receive adequate funding to comply withthe terms of the Agreed Order in the event thatsuch funding is not appropriated.

Work is currently underway to supportimplementation of remedial measures identified inthe ER Agreed Order. Characterization andsampling of DMSAs and characterization,storage, and disposal of specified containersreferred to in Items 2 and 3 above are in progress.

IIn additiona work planf-to support the C-746-Sand C-746-T Landfill Site Investigation has beendeveloped and is in use (Item 6 above). As a partof the water remedial measures (Item 7 above),DOE continued to work to identify the source ofthe toxicity in Outfall 00 1. This Outfall was thesubject of a Toxicity Reduction Evaluation (TRE)dating from March 2003. (See Section 5.1.9.).

DOE also agreed to pay a civil penalty of$1,000,000 and to spend $200,000 on anenvironmental project(s) to be mutually agreedupon by both DOE and the Cabinet. In addition,DOE agreed to a stipulated penalty in the event itfailed to comply with the terms of the ER AgreedOrder. The stipulated penalty is in lieu of anyother penalty that might be assessed; The Cabinetagreed that performance of the terms of the ERAgreed Order, payment of the civil penalties, andimplementation of the environmental project(s)would satisfy DOE obligations with respect to theidentified violations and potential violationsreferred to in the ER Agreed Order. The Cabinetreserved its rights to pursue any claims againstany DOE contractors who may have violated

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Kentucky statutes or regulations at Paducah.

4.1.2 Environmental Cleanup Initiatives atPortsmouth

Due to the extensive cleanup that had alreadyoccurred at the site, an Accelerated Cleanup Plan

• was not developed for the PORTS site. Between1990 and 2004, the following significantenvironmental cleanup accomplishments wereachieved at PORTS:

All remediation requirements that wereidentified for Quadrants I, III, and IV havebeen completed. Remedial design activitiesbegan in FY 2004 for the primary unit (X-701B Holding Pond and Retention Basins) inQuadrant Il. Decisions relating to some of thesolid waste management units (SWMUs) havebeen deferred.until final D&D of the site.

" Eighteen'of the 21 RCRA units on the PORTSsite have been successfully closed. -

" Six interim, actions have been completed.45

o All six onsite landfills have been closed.

.. More than_.70% of legacy waste has beentreated and disposed.

In addition, DOE has undertaken an initiativeto clean up the former GCEP buildings for USECto use as its CLC uranium enrichment test facility.During FY 2004, DOE, USEC, and the M&IContractor continued to hold planning and interfacemeetings on this initiative. In FY 2004,. more than650 of the original centrifuge machines wererelocated from the north half of the X-3001 ProcessBuilding to prepare for eventual dismantlement.Cleanup of these buildings. involves the removaland disposal of DOE waste and equipment,establishment of additional permitted storage areas,decontamination of the buildings, and relocation ofDOE and contractor staff to other office space.Personnel were relocated from the X-3012 Buildingto the X-1000 GCEP Administration Building in :

FY 2004, and efforts began to perform a partialclosure of the X-7725 Hazardous Waste StorageFacility to support the CLC requirements. Theestimated cost of this initiative, which willbefunded over a three-to-four year period, isapproximately $60 to $70 million.46

Under the current PORTS cleanup strategy,environmental remediation will be complete by theend of FY 2012 (except those units deferred until.final D&D of the plant), and disposition of alllegacy waste will be complete by the end of FY2009.

4.2 STATUS OF ENERGY EMPLOYEESOCCUPATIONAL ILLNESSCOMPENSATION PROGRAM ACTIMPLEMENTATION

Following the Secretarial Initiative on ES&Hconditions starting in June 1999 and uponenactment of the Energy Employees OccupationalIllness Compensation Program Act (EEOICPA) inOctober 2000, the Federal government began toaddress health-related concerns of individuals whodeveloped illnesses as a result of their employmentin nuclear weapons, production-related activities,;and certain other federally-owned facilities in

-which radioactive materials were. used.-Part B. ofthe EEOICPA provides for payment of medicalexpenses and lump-sum compensation toemployees of DOE and its contractors andsubcontractors who became seriously ill becauseof exposure to radiation, beryllium or silica whileworking in the nuclear weapons industry. Incertain instances, compensation also is availableto survivors of these employees and to uraniumworkers who received benefits under the RadiationExposure Compensation Act (RECA).

Federal agencies involved in administeringand carrying out the EEOICPA Program includethe U.S. Department of Labor (DOL) and DOE aswell as the U.S. Department of Justice (DOJ) andthe U.S. Department of Health and HumanServices (HHS) National Institute forOccupational Safety and Health (NIOSH).47

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Under Part D of the EEOICPA, DOE providesassistance to nuclear weapons workers who workedat DOE facilities and developed work-relatedillnesses as a result of exposure to radiation andtoxic chemicals. DOE assists these workers andtheir survivors by providing them access to panelsof occupational medicine physicians, who can helpdocument whether the worker's illness is work-related. Workers may choose to have positivefindings by the physician panels accompany theirState Workers' Compensation applications. Underthe EEOICPA Program, DOE does not pay anybenefit on Part D claims and does not represent theworkers on their claim to the state.

The Paducah Resource Center for theEEOICPA Program, the first of ten centersestablished in the nation to implement the Act, hasreceived 5,898 PGDP-related claims from the.opening of the center in June 2001 throughSeptember 30, 2004. The Paducah center hasreceived more than. 1,200 additional claims throughFY 2004 related to other facilities covered underthe Program. Of the approximately 5,-898 PGDP-related claims, 1,939 claims were denied, and1,289 claims were referred to NIOSH. As of theend of FY 2004, DOL has paid approximately$163 million in compensation since 2001 inresponse to 1,701 PGDP-related claims. Theseclaims involved current workers and formerworkers in construction of the plant in the 1950sand operation of the plant and other projects, overthe past 50 years. In some cases, multiple survivorsof these workers shared the settlement.

To ensure awareness of eligibility for benefitsor compensation under the EEOICPA Program, themanager and staff of the Paducah ResourceCenter4" continued regular public outreachactivities during FY 2004. These activities includedmaking presentations and distributing information.to medical offices, a county fair, picnics, retireegroups, service clubs, current employees, and thePaducah City Commission.

In the state of Ohio, 3,857 claims had .been

filed as of September 30, 2004, under theEEOICPA Program. According to DOL, 3,460 ofthese claims relate to PORTS, and 921 of theseclaims have been approved for benefits under theProgram. In FY 2004, 913 claims were filed forthe PORTS site with 248 claims approved andover $25 million paid. As of the endof FY 2004,approximately $104 million in compensation hasbeen awarded for claims filed through PORTS.

In FY 2004, the Portsmouth ResourceCenter49 set up a number of informational sessionsat the plant site to meet with employees andanswer questions regarding the EEOICPAProgram. In addition, under the Worker HealthProtection Program (WHPP), the local Paper,Allied-Industrial, Chemical and Energy (PACE)office held meetings and published notices in areanewspapers encouraging current and formerworkers at PORTS, to participate in free healthscreenings. . . -... . . .

4.3 ENVIRONMENTAL, SAFETY, AND.HEALTH INVESTIGATIONS

In FY 2000, DOE, in cooperation with DOJ,,initiated an inyvestigation of the former Work forOthers (WFO) Program at PGDP to identifyhazards associated with past WFO activities thatmight have impacted worker health and safety andthe environment.5" In FY 2001, the investigationteam recommended that DOE further evaluate themachining and crushing of beryllium andberyllium-copper alloy, operations that were partofthe WFO Program at PGDP.5̀ Accordingly, inFY 2002, DOE conducted sampling in nonleasedfacilities at PGDP that had been. involved in theWFO Program to determine whether berylliumfrom historical operations remained inconcentrations requiring protection or restrictionsfor current workers. This FY 2002 samplingdetected the presence of beryllium at low •concentrations in three facilities."2

As a result of this initial sampling, the M&IContractor conducted a second round of sampling

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in FY 2003. During this sampling, which wasconducted pursuant to 10 CFR 850, ChronicBeryllium Disease Prevention Program, the M&IContractor collected approximately 700 samples in11 areas in both leased and nonleased facilities atPGDP. Following analysis of these samples, theM&I Contractor prepared a report titled BerylliumSampling Project at the Paducah GaseousDiffusion Plant (BJC/PAD-581), which was issuedin October 2003. This report concluded that(1) there is no anticipated worker exposure toberyllium from airborne particulates whenperforming tasks similar to those tasks that wereconducted to collect samples, e.g., tasks that have asimilar potential for disturbing surface particulatesand (2) there are limited beryllium-contaminatedareas within certain facilities. The report alsoconcluded that these areas at PGDP did not requireimmediate action.

After health screenings at PORTS indicated thepossible presence of beryllium at the.PORTS site, aberyllium characterization charting group wasformed in FY 2003."3 This group, consisting ofrepresentatives from DOE, the local PACEandsecurity bargaining units, the M&I Contractor, andUSEC, developed a site characterization plan,Beryllium Surface ContaminationCharacterization Plan (BJC/PORTS-467) in FY2003. Under-the terms of this Plan, which wasissued in April 2003, DOE will use a samplingmethodology to conduct a baseline berylliuminventory that is in accordance with 10 CFR850.20.

In FY 2004, as part of the continuing berylliuminvestigation at both PGDP and PORTS, DOEadded testing for beryllium exposure to itsscreening program for all current and former plantworkers at both PGDP and PORTS.54 In addition,at PGDP, the M&I Contractor worked ondeveloping a strategy for continued berylliumsampling in both leased and nonleased facilities atthe PGDP site. During FY 2004, there were noexceedances in air samples at PGDP of the DOEAction Level of 0.2 gg/m3 for beryllium, calculatedas an 8-hour time-weighted average exposure:

At PORTS, the M&I Contractor implementedthe Beryllium Surface ContaminationCharacterization Plan in December 2003. Sinceimplementation, 12 facilities at PORTS, includingnine facilities leased to USEC and three facilitiesretained by DOE have been sampled. Berylliumcontamination above the DOE free release criteriaof 0.2 rg/100 cm2 was found on processequipment and building surfaces in all 12 facilitiessampled at PORTS. Approximately 1,220 surfacewipe samples in these facilities have beencollected to date, with an estimated 30% having asurface contamination level of 0.2 mg/i 00 cm2 orgreater.

In addition, USEC has initiated berylliumdecontamination actions in seven locations in theX-700, X-705, and X-720 leased facilities atPORTS for health and safety reasons. USEC has.also developed and provided, beryllium hazardcommunication and awareness training for over225 employees in areas where beryllium surfacecontamination has been quantified. USEC is alsoimplementing an extensive industrial hygiene airsampling campaign to monitor workers forinhalation exposure to .beryllium. As of September30, 2004, -noneof the .Approximately 250 personalair samples has had a detectable berylliumconcentration, and all samples -have been belowthe DOE Action Level.

4.4 HIGHLY ENRICHED URANIUMDISPOSITION

In November 1991, the Secretary of Energydirected the suspension of HEU production atPORTS, the only remaining facility in the UnitedStates capable of producing HEU. As a result ofpast HEU production, some surplus HEUmaterials remain in storage at PORTS. DOEretains responsibility for this surplus HEUpursuant to the December 1993 Joint Statementof Understanding Between the Nuclea •Regulatory Commission and the Department ofEnergy on Implementing the Energy Policy ActProvisions on Regulation of Gaseous DiffusionUranium Enrichment Plants. DOE efforts during -

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FY 2004 were directed towards (1) removing threetypes of stored HEU-bearing materials fromPORTS, (2) performing preparatory work for theremoval of the remaining stored HEU, and (3).assuring that the remaining surplus HEU continuesto be stored in a safe, secure, and cost-effectivemanner at PORTS until the material is removed.These activities are described in Section 4.4.1..Activities conducted to support the HEU PurchaseAgreement between the United States and theRussian Federation through HEU transparencyimplementation program activities performed atPGDP are described in Section 4.4.2.

4.4.1 Highly Enriched UraniumSuspension and Removal Program

The DOE HEU Suspension and RemovalProgram addresses the overall disposition of HEU

----at PORTS. This program is designed to.accomplishthe following: (1) safely suspend HEU operationsand shut down HEU equipment in Building X-326(complete); (2) modify equipment and systems topreclude production of HEU and performmaintenance in X-326 that is necessary forcontinued LEU production ("legacy maintenance")(complete); -(3) modify' the configuration of:-.,shutdown equipment to minimize long-termsurveillance and maintenance requirements(complete); and (4) remove stored HEU materialsfrom PORTS, including uranyl nitratehexahydrate-, uranium oxide-, and otherHEU-bearing materials (ongoing). The removal ofthese H4EU materials will reduce related ES&Hrisks and safeguards and security operating costs atPORTS.

In September 2003, a subcontract was awardedto a commercial uranium processor for thecharacterization and testing of three types of HEU-bearing materials stored at PORTS. Thesematerials included liEU-bearing oil-leak gunk,filter ash, and incinerator ash containing 12.5 kg ofuranium in 124 containers. After obtaining OhioEPA concurrence with DOE's determination thattwo of these types of HEU materials were classified

as "by-products" under Ohio Administrative Code(OAC) 3745-51-01 (B)(3) and completing a DOEReadiness Assessment, the HEU oil-leak gunk andfilter ash (a total of 11.3 kg of uranium in 98containers) were overpacked into U.S. Departmentof Transportation (DOT) specification shippingcontainers and shipped to the commercial uraniumprocessor in March 2004. Followingcharacterization and testing, the HEU materialswill be processed to recover, purify, downblend,and convert the uranium for use as reactor fuel.The incinerator ash continues to be stored at.PORTS pending the identification of analternative disposition option. The incinerator ashcannot be designated as "by-product" because- itwas generated via a "waste process." As such, thecommercial processor cannot accept nor process*this material.

- PORTS continues to store other HEU-bearingmaterials, the majority of which are classified asmixed waste in two onsite facilities. A total of 146containers (14.9 kg of uranium) of variousHEU-bearing materials, including mixed acid,hydrocarbon oil, incinerator ash, aluminachemical trapping material, and miscellaneousscrap are presently stored at PORTS.. Initialplanning for the final disposition of thesematerials began in late FY 2000. The HEUMaterial Disposition Plan continues to beupdated to reflect changes in I-EU inventories anddisposition options as the materials are furthercharacterized. In the Plan, disposition optionsidentified for each HEU material stream arecoordinated between the M&I Contractor'sInfrastructure and Waste Disposition Projects.Disposition activities under this Plan were fundedand removal activities continued during FY 2004.

Preparatory work began in May 2004 torepair/upgrade a glovebox at PORTS for futureuse in disposition of the remaining HEU materials.Once repairs are completed and the gloveboxbecomes operational in the summer of 2005, theglovebox will be used for the sampling,repackaging, if necessary, and batching of HEU

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materials remaining in inventory.

4.4.2 Highly Enriched UraniumTransparency ImplementationProgram

The HEU Transparency ImplementationProgram, under the direction of DOE's Office ofNonproliferation and National Security, isresponsible for implementing all transparencymeasures related to the U.S. - Russia HEUPurchase Agreement.5 This Agreement, which wassigned on February 18, 1993, provides for thepurchase of 500 metric tons of HEU fromdismantled Russian weapons over a period of 20.years. Since the signing of this initial Agreement,an MOU defining transparency rights of bothparties, implementing HEU purchase contractsbetween USEC and Techsnabexport defining priceand schedule, and a Protocol to. the. MOU havebeen signed to delineate the terms of theAgreement. In addition, a total of 17 annexes to theProtocol have been signed at Transparency ReviewCommittee meetings. These annexes define therights of each party to provide confidence that eachparty is abiding by the terms of the Agreement.

The GDPs continue to play key roles in severalaspects of the. DOE HEO TransparencyImplementation Program. The t-lEU material that iscovered under terms of the agreement is sent to theUnited States as LEU suitable for. use as fuel inlight-water reactors. The HEU is blended withslightly enriched uranium in Russian facilities andshipped to the United States as LEU for sale byUSEC, which acts as agent for the U.S.Government. The material arrives as UF6 at PGDPin 30B cylinders,5 6 in which it is stored until its saleto utilities and subsequent shipment to fuelfabricators.

Upon termination of uranium enrichmentoperations at PORTS in May 200 1, plans weremade to transfer the receipt of Russian LEU toPGDP. The last shipment of Russian LEU toPORTS took place in February 2002. PGDPreceived 316 30B cylinders, containing

approximately 474 metric tons of LEU during FY2002. During FY 2003, PGDP received 722 30Bcylinders, containing approximately 1,083 metrictons of LEU, from Russian blending facilities.During FY 2004, PGDP received 536 30Bcylinders, containing approximately 840 metrictons of LEU, from Russian blending facilities. Theamounts of LEU received at PGDP from Russianblending facilities in FY 2003 and FY 2004represent the removal of 35.4 metric tons and 27.8metric tons of Russian weapons-origin HEU,respectively, From CY 1995 through February2002, PORTS received a total of 2,766 30Bcylinders, containing approximately 4,148 metrictons of LEU. Thus, since CY 1995, the GDPshave received a total of 4,340 30B cylinders,.containing approximately 6,545 metric tons ofLEU from the Russian Federation.

In addition, PGDP has assisted in theshipment to Russia of unsold portions of thenatural uranium feed component derived from theRussian LEU. 7 During FY 2003, PGDP assistedin the shipment of 600 48Y cylinders of naturaluranium feed to the Russian Federation containing4,933 metric tons of natural uranium. During FY.2004,. PGDP assisted, in ,the ,shipment :of 150 48Ycylinders of natural uranium feed to the RussianFederation containing 1,233 metric.tons of naturaluranium. 8 Since March 2001, all of the naturaluranium feed component has been shipped in 48Ycylinders. Prior to March 2001, all of the naturaluranium feed component was shipped in 48X.cylinders.59 PGDP assisted in the shipment of boththe 48X and 48Y cylinders to the RussianFederation. Through the end of FY 2004, a totalof 3,290 48-inch cylinders, containing 24,813metric tons of natural uranium, had been shipped

.to the Russian Federation.

Under terms of the HEU Purchase Agreement,DOE and the Russian Federation's FederalAgency for Atomic Energy (RosAtom) areallowed to establish Permanent Presence Offices(PPOs) at certain facilities where personnel canmonitor prescribed activitiesto provide confidencethat each side is abiding by the terms of the

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Agreement. Inthe United States, RosAtom hasestablished a PPO at PORTS. RosAtommaintained a presence at the PPO in PORTS foronly about one month in April-May 1997.Following USEC's decision to transfer Shippingand Transfer activities from PORTS to PGDP, agroup of Russian monitors visited PGDP for aFamiliarization Visit from September 30 throughOctober 3, 2003.

At a Transparency Review Committee meetingin April 2004, Annex 17. to the Protocol wassigned. Annex 17 defines the rights of the RussianFederation's monitoring activities at PGDP. ThisAnnex allows RosAtom to establish a PPO atPGDP.

4.5 DEPLETED URANIUMHEXAFLUOREDE LONG-TERMMANAGEMENT

DOE is responsible for approximately 739,000metric tons of DUF6 located at PGDP, PORTS,and the East Tennessee Technology Park (ETTP).The DUF6 is.contained in approximately 61,000cylinders, the majority of which are located atPGDP. While most cylinders have a"144ton 1capacity, other smaller cylinders are also used tostore the DUF 6.Although DOE maintains an activeCylinder Management Program, many of thecylinders show evidence of external corrosion thatis believed to be the result of past storage practices.DOE's current management program to assure safestorage includes routine inspections of the cylindersand performance of cylinder maintenance andrepairs as required. Routine inspections includevisual. inspections, ultrasonic wall thicknessdeterminations on selected populations of cylinders,and periodic radiological surveys.

In the 2002 Supplemental Appropriations Act(Pub. L. 107-206), Congress required that twoconversion facilities be built; one at PGDP and oneat PORTS, with construction to begin by July 3 1, -2004. DOE, through competitive selection,awarded a contract on August 29, 2002, to design,build, and operate facilities at PGDP and PORTS

to convert the government's inventory of DUF 6 toa more stable form for disposal and/or reuse. TheConversion Contractor will complete the workunder the contract in a safe and environmentallyacceptable manner. Other services that theContractor will provide include (1) disposition orreuse of all conversion by-products and wastes;(2) surveillance and maintenance of the DOEinventory of DUF 6, LEU as UF6, natural assayuranium as UF6, and empty and heel (containingresidual nonvolatile material) cylinders; and(3) maintenance of DUF6 inventory records.

DOE prepared Final Environmental, ImpactStatements (FEIS) for the construction andoperation of DUF6 conversion facilities at bothPGDP and PORTS.6 ° The USEPA published theFEIS Notice of Availability in the FederalRegister on June 18, 2004.61 In each FEIS, DOEconsidered the potential environmental impactsfrom the construction, operation, maintenance,and D&D of the proposed DUF6 conversionfacility at three alternative locations within eachsite, including transportation of DU conversionproducts and waste materials to a disposalfacility,62 transportation and sale of the aqueoushydrogen fluoride (tIF), produced as a conversionco-product, and neutralization of aqueous HF tocalcium fluoride (CaF2) and its sale or disposal inthe event that the aqueous HF product is not sold.

On July 27, 2004, DOE published Records ofDecision (ROD) for each FEIS. 63 The ROD forthe PGDP conversion facility identified the south-central portion of the PGDP site as the preferredlocation for the facility. The ROD for the PORTSconversion facility identified the west-centralportion of the PORTS site as the preferredlocation for the facility.

Another major focus for the ConversionProject during FY 2004 was preliminary designfor the two facilities. The Conversion Contractorissued the Preliminary Design Packages. for DOEreview and approval and awarded Site PreparationConstruction subcontracts at both sites. TheConversion Contractor will construct and operate

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the two facilities for the first five years. ThePORTS facility is expected to operate for about 18years, and the PGDP facility is expected to operate*for about 25 years.

In accordance with Congressional mandate,DOE broke ground to start construction of theconversion facilities by July 31, 2004. At PGDP,ground was broken for the start of construction onJuly 27, 2004, and at PORTS, ground was brokenon July 28, 2004.

4.6 OTHER ENVIRONMENTAL,SAFETY, AND HEALTHINITIATIVES

4.6.1 Environmental, Safety, and HealthInitiatives at Paducah

DOE ES&H initiatives at PGDP during FY2004 included the following:

Provided funding to NIOSH for a study titledPreliminary Investigation of Health EffectsResulting from Occupational Exposures atPGDP. Researchers from the University ofKentucky and University.of Louisville areconducting the study, which began in May2002. Researchers from the University of -. .Cincinnati, under contract to the University ofKentucky, will assist. The NIOSHinvestigative team continued to determine theavailability of exposure data necessary forconducting epidemiological studies of allpersons who worked at PGDP for 30 days ormore from 1952 to the present. Preliminarywork on the second phase of the study, whichconsists of a mortality study, began in FY2004. The study is one of several conductedunder an MOU between DOE and HHS toexamine health effects that may have resultedfrom DOE operations. These studies areperformed under the auspices of the Centers forDisease Control and Prevention within HHS.

Because strains and sprains have been a majortype of injury at the PGDP site, the M&I

Contractor made ergonomic injury awarenessits safety emphasis for CY 2004. Initiativesimplemented to enhance awareness included:showing informative ergonomic videos in.monthly safety meetings, setting a goal toreduce the number of strain/sprain-relatedinjuries, conducting employcc hazardevaluations, and conducting a safety contest.inviting participation from employees of theM&I Contractor and subcontractors.,

Added a peer review element to the SafetyAdvocate program. Safety Advocates areM&I Contractor safety professionalsresponsible for providing safety-relatedoversight of specific projects andsubcontracts. In FY 2004, the SafetyAdvocates also took a turn providingoversight on one.another's projects.

o Implemented a number of new mandatorysafety-related procedures. Safety Advocatesworked diligently with project team members,including workers, to efficiently incorporatethese procedures into the workprocesses.

Promoted ladder safety by distributing: M&IContractor directives and field compliancesurveillances to project team members.

Placed increased emphasis on using LessonsLearned information in work controldocuments. Both Lessons Learned and DOE

.Operating Experience Summaries aredistributed electronically to site personnel andused in pre-job briefings. Information fromthese sources is now a standing agenda item inthe monthly Safety Team of Paducah (STOP)meetings and is presented by the M&IContractor's Quality organization..

Continued to expand the use of the electronicradiological survey database. This expansionincreased efficiency and reduced the likelihoodof errors associated with manual input bynetworking automated laboratory-basedradioactivity counting instruments to the

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database in order to download data directly tothe system.

Continued toprovide Health Physics support tothe DOE EEOICPA Program. Since itsinception in 2000, a total of 3,517 requests forhistorical dosimetry records have beenprocessed and submitted to DOE through CY2004. A total of 809 requests were processedin CY 2004 alone.

" Provided funding to the Paducah AreaCommunity Reuse Organization (PACRO). Inaddition to economic development activities,PACRO programs include ES&H-relatedactivities such as its facility reuse program thatidentifies assets at PGDP that may have thepotential for reuse. In FY 2004, PACROcompleted tests to determine whethercontaminated scrap nickel at PGDP can be.cleaned sufficientlyfor commercial-, reuse.PACRO also assisted in the disposition andrecycling of abandoned fluorine cells from the

• PGDP site that saved about $2.5 million incleanup costs.

4.6.2 Environmental, Safety, and HealthInitiatives at Portsmouth

DOE ES&H initiatives at PORTS during FY2004 included the following:

Continued to minimize the number andduration of open safety concerns received viathe "I Care/We Care" safety concernsprogram, a partnership between the PORTSES&H organization and PACE that encouragesall employees to identify opportunities toimprove safe working conditions at PORTS.

Requested, along with PACE, that NIOSHconduct a Health Hazard Evaluation (HHE) ofthe X-747H Scrap Yard Project. The NIOSHHHE team leader was impressed with theimplementation of compliance measures andthe level of industrial hygiene sampling andmedical monitoring efforts. The final report

issued in June 2003 by the NIOSH teamrecommended the addition of an articulatingarm exhauster, additional rigor in overallintegrity and maintenance of the portableekhauster components, and continuation of theexisting monitoring and medical surveillanceprograms. The M&I Contractor hasimplemented many recommendations of thisfinal report, including fielding improvedarticulating arm exhaust ventilation units,hand washing of respirators following use,and improvements in the prevention of skincontact and ingestion exposures to metalfumes. An arsenic urine biological monitoringprogram was continued at the project in FY2004.1No reported urinary arsenicconcentrations have exceeded the decisionlevels since July 2003.

* Participated in ajointNIOSH HHIE withUSEC, conducted by the NIOSH RespiratoryDiseases Research Branch, of berylliumhazards at PORTS. NIOSH issued an HHErecommendations letter in June 2004.

" Continued to document the status of the.arsenic protection program..rn correspondencebetween the M&I Contractor industrialhygiene staff and the DOE PORTS SiteOffice. Quarterly estimates of worker arsenicinhalation doses are made from industrialhygiene sampling data and compared torecognized World Health Organization, U.S.Occupational Safety and HealthAdministration (OSHA) and USEPA healthrisk assessment thresholds.

Obtained confirmation of diagnosed and/orcompensated chronic beryllium disease casesamong current and former PORTS workersthroughthe DOL EEOICPA PortsmouthResource Center and with the PACE-organized WHPP. Recent Congressionallegislation has increased access to theberyllium lymphocyte proliferation blood testfor all former and current PORTS employeesparticipating in WHPP medical screenings. At

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the request of the DOE PORTS Site Office, theM&I Contractor has participated with variousother site stakeholders in developing aberyllium characterization plan and facilitypriority ranking. A beryllium surfacecontamination characterization project,consisting of approximately 1,220 samples in12 facilities, was executed from December2003 through June 2004, with final resultsexpected in October 2004.

The M&I Contractor and USEC also hosted aDOE IG audit team reviewing PORTScompliance measures with the DOE ChronicBeryllium Disease Prevention Program.Regulations in 10 CFR 850. An.audit finalreport is anticipated in. late CY 2004.

Implemented enhancements to the fire retardantpersonal protective equipment .(PPE) used inoxy-acetylene torch cutting for size reduction

.of excess process equipment components at theX-747H Scrap Yard. Improvements in the hotwork permitting process have also been madeto include any spark-generating work activity.Experience gained from this effort will bedirectly applicablei foý eventual D&D anddismantling of the GDP process facilities at'PORTS....

Two PORTS subcontractors, theenvironmental monitoring servicessubcontractor and a general- constructionsubcontractor, were recognized bythe M&IContractor Zero Accident Council as monthlyES&H Subcontractors of the Month forexemplary safetyand environmentalcompliance performance. The radiologicalservices subcontractor was recognized for itsCY.2003 safety performance by the RossCounty Safety Council.

Conducted monthly Labor ManagementCouncil meetings with the PACE union, M&IContractor, and the WM and site servicessubcontractor during which safety and healthissues are highlighted for discussion and

action.

Implemented a safety emphasis program inFY 2004 to recognize and evaluate controlmeasures taken to reduce soft tissue injuries

and slips, trips, and falls - two major causalfactors in a number of PORTS recordableinjuries and first aid cases.. Employees wererecognized for their contributions toidentifyuing and controlling unsafe acts andconditions through a "Spotlight on Safety"campaign. This campaign highlighted theimportance of worker input in preventingthese types of injuries.

5. ENVIRONMENTAL, SAFETY,AND HEALTH STATUS OFDOE NONLEASED AREAS

The DOE mission at PGDP and PORTS is*under the direction of the Office of EnvironmentalManagement and the Office of Nuclear Energy,Science and Technology (NE). The Office ofEnvironmental Management is responsible for theEM Program at PGDP and PORTS, includingER, D&D, and WM activities. The. EM Programalso includes the followingformer-,Uranium ....Programs functions: (1) management of DUF6 toensure safe storage of cylinders and to implementlong-term management plans for this material;(2) management of the DUF6 conversion projectand storage of the converted DUF6;(3) management of the polychlorinated biphenyl(PCB) program; (4) surveillance and maintenanceof nonleased facilities awaiting D&D; (5) coldstandby operations at PORTS; (6) storage anddisposition of HEU inventory at PORTS;(7) surveillance and maintenance of shutdown.,HEU facilities at PORTS; and (8) overallprogram direction and management. Themanagement of these-former Uranium Programsfunctions is integrated with the EM Program toaddress the full scope of ES&H risks in the DOEnonleased areas at the GDPs.

NE is responsible for addressing USEC-related policy issues at PGDP and PORTS,

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includingthe commercial aspects of the HEUPurchase Agreement between the United States andthe Russian Federation and the supply of fuel todomestic nuclear reactors. In addition, NE isresponsible for administering and overseeing theLease between DOE and USEC, providing DOEregulatory oversight of certain USEC activities inleased areas, and interfacing with NRC. Theinterface with NRC includes participation in thecertification and regulatory process (e.g.,coordination of regulatory activities, emergencymanagement, and information exchange).

Integration of ES&H activities by these twoDOE Program Offices is conducted in a way thatavoids accidents or injuries to workers and thepublic and avoids harm to the environment. DOEES&H-related activities at PGDP and PORTSinclude, but are not limited to, environmentalprotection, ER, D&D, WM, nuclear safety,engineering, public health, industrial hygiene,industrial safety, radiation protection,transportation safety, risk management, andoccupational medicine.

In early FY 2004, DOE OROand its M&IContractor. managed the DOE EM Program in thenonleased areas at PGDP and PORTS. However,in January 2004, DOE established a new office inLexington, Kentucky, to specifically implementenvironmental cleanup of the PGDP and PORTSsites. The new DOE Portsmouth/Paducah ProjectOffice, which opened on January 16, 2004, reportsdirectly to DOE Headquarters.

5.1 ENVIRONMENTAL, SAFETY, ANDHEALTH STATUS OF DOENONLEASED AREAS AT PADUCAH

During FY 2004, DOE made progress oncompleting goals for environmental cleanup, wastedisposition, and storage of DUF6 cylinders atPGDP. Environmental cleanup is conducted underan approved Site Management Plan (SMP). ThisPlan, along with the Paducah FFA, provides thelegal, technical, ýand administrative framework forsite remediation. In October 2003, DOE and the

Commonwealth of Kentucky signed AgreedOrders promoting accelerated cleanup and DUF6cylinder management. (See Sections 4.1.1 and5.1.3.) While the M&I Contractor remainedfocused on safe storage of DUF 6 cylinders, theDOE Conversion Contractor prepared to start.construction of facilities to convert the DUF6 intoa more stable form. (See Sections 4.5 and 5.1.3.)

5.1.1 Facilities and Acreage

The DOE Paducah Reservation consists of3,553 total acres; 748 of these acres are inside thePGDP plant fence. DOE 'leases 367 buildings andfacilities to USEC and retains 223 as nonleased.The nonleased facilities include the following:

roads and grounds inside and outside the plantfence on the DOE Reservation,

* parcels of land designated for investigationand/or environmental cleanup [SWMUs],

• an operating solid waste contained landfill,* waste storage and treatment facilities,* two groundwater containment systems,* two complexes of facilities in the D&D

program,inactive,:nonleased facilities that are not yet apart of the D&D program,

* office facilities, and* storage yards for cylinders containing DUF6.

5.1.2 Construction Activities

DOE construction and upgrade projects atPGDP during FY 2004 included the following:

* Completed construction of the watershedsedimentation basin for the North-South -

Diversion Ditch (NSDD) remediation project.

• Completed construction of sidewalks for theC-743 subcontractor field offices.

. Completed fence modifications for the C-746-D Scrap Metal Yard.

Completed fire prevention upgrades at the C-

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746-A and -B waste storage facilities.

" Continued lighting upgrades at the C-746-Aand -B waste storage facilities.

* Started fieldwork to upgrade the C-745-FDUF 6 Cylinder Storage Yard.

" Continued project planning for the leachatetreatment facility at the C-746-U Solid Waste.Contained Landfill.

Continued abandonment and refurbishment ofolder groundwater monitoring wells atthe C-746-U Solid Waste Contained Landfill and theC-746-S and -T inactive landfills.

" Started a water line construction project as partof the DOE Water Policy of providingmunicipal water to privately owned propertiesin the area generally north of the PGDP sitethat are affected or potentially affected bygroundwater contamination associated with"past practices at the site.

• Broke ground for construction of the DUF6conversion facility.

. . 5.1.3 Depleted Uranium HexafluorideManagement

At PGDP, DOE EM is responsible for storage,inspection, and maintenance of more than 37,000cylinders that contain approximately 449,000metric tons (i.e., approximately 495,000 ions) ofDUF6 plus an additional 275 empty cylinders. TheDOE inventory also includes an additional 1,667cylinders containing natural or slightly enricheduranium. DOE has oversight of the DUF6 pursuantto the AEA, as amended.

Under the terms of MOAs signed in 1998 and -

2002 and the 2004 Work Authorization betweenUSEC and DOE, USEC is scheduled to transferapproximately 635 DUF6 cylinders to DOE in FY2005. In FY 2004, approximately 941 cylinderswere transferred under the 2002 MOA, and 1,021

cylinders were transferred under the 1998 MOA.The transfer of these 1,021 cylinders completedthe transfers under 1998 MOA.

In FY 2004, DOE surveillance andmaintenance activities included the following:annual inspections of 5,013 cylinders, quadrennialinspections of 7,334 cylinders; baselineinspections of 1,021 cylinders, radiologicalsurveys of 16,000 cylinder valves, movement of4,047 cylinders, ultrasonic measurements of wallthickness on 100 cylinders, and performance of 55cylinder valve changes.

Safe storage of DUF6 remains a significantcommitment for DOE. This 6ommitment hasexpanded to include converting the DUF6 to amore stable form for either future use ordisposition. DOE completed a NationalEnvironmental Policy Act (NEPA) review andissued a ROD on July 20, 2004, for theconstruction and operation of a DUF6 conversionfacility at PGDP. (See Section 4.5.) Thecommitment to safe storage of DUF6 wasreaffirmed in FY 2004 by entry of an AgreedOrder on October 2, 2003, relating to cylindermanagement at PGDP.

DUF 6 cylinder storage costs.at PGDP were .$5.1 million in FY 2004. The budget for FY 2005is $4.9 million. DUF6 conversion project costs.were $5.4 million in FY 2004 and are estimated tobe $51 million in FY2005.

5.1.4 Integrated Safety Management

ISMS integrates safety into all.aspects ofwork planning and execution. DOE policyrequires each major prime Contractor in the DOEComplex to implement ISMS to assure that workis conducted efficiently and in a manner thatensures protection of workers, the public, and theenvironment.

During FY 2003, the DOE ORO Managerapproved certification for the ISMS program ofthe M&I Contractor for the Oak Ridge sites. DOE

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ORO underwent a combined Phase I/II re-verification of the ORO ISMS program duringOctober 20-24, 2003. The DOE ORO Managerdeclared that the ORO ISMS program wasrecertified in a letter that was issued on October29, 2003. Although PGDP and PORTS wereprepared for ISMS re-verification at the same timeas the Oak Ridge sites, re-verification for.the ISMSprogram of the M&I Contractor at PGDP andPORTS had not been scheduled as of September30, 2004.

5.1.5 Update of Documented SafetyAnalyses

During FY 2004, the PGDP SAR establishedthe basis for safe operation of nonleased facilitiesat PGDP. The SAR assures that operations innonleased areas and facilities can be conductedsafely with adequate protection provided for healthand safety of the public and employees as well asprotection of the environment.

In 2001, -10 CFR 830, "Nuclear SafetyManagement," became effective. This Federalregulation governs the conduct of DOE contractors,DOE ,personnel, and other persons who conductactivities that affect, or may affect, the safety ofDOE nuclear facilities. Following a review of thePGDP SB documents (which included the SAR) forcompliance with the 10 CFR 830 requirements, theM&I Contractor concluded that, although they arenot fully compliant in all aspects, they are adequateto serve until DOE approves fully compliantDocumented Safety Analysis (DSA) documents asrequired by 10 CFR 830.207.

During FY 2003, the M&I Contractorprepared drafts of four DSA documents inaccordance with 10 CFR 830.204 and 830.205. Aseparate DSA was prepared for each of thefollowing facilities: (1) the DUF 6 cylinder storage

.yards, (2) the DMSAs, (3) the C-746-Q Hazardousand Low-Level Waste Storage Facility, and(4) theC-410 D&D Project.. As of July 2004, DOE hadapproved three of the four DSA submittals, and theM&I Contractor had implemented these DSAs. As

of the end of FY 2004, the remaining DSA, for theC-746-Q Hazardous and Low-Level WasteStorage Facility, had been revised and resubmittedin accordance with the Conditions of Approvalspecified in the DOE SER. The 1997 SARremains in effect until all new 10 CFR 830 SBdocumentation is implemented. Two DSA annualupdates were submitted during FY 2004. The C-746-Q Hazardous and Low-Level Waste StorageFacility DSA update was submitted on August 9,2004, and the C-4 10 D&D Project DSA updatewas submitted on September 20, 2004.

5.1.6 Environmental Restoration

The regulatory framework for environmentalcleanup at PGDP is the Paducah FFA, a tri-partyagreement among DOE, USEPA Region 4, andthe Commonwealth of Kentucky effective sinceFebruary 13, 1998. The FFA coordinatesCo-mrehensiveEnvironmental Response,Compensation, and Liability Act (CERCLA)compliance, administered by USEPA, with theRCRA corrective action program, administered bythe Commonwealth of Kentucky. PGDP wasplaced on the National Priorities List (NPL) onMay3 1.,,1994: The FFA requires that DOE'submit a PGDP SWP to USEPA, the KentuckyNatural Resources and Environmental ProtectionCabinet, and other stakeholders. An SWP remainseffective until a new SNP is approved. The FY2004 SMP was approved in April 2004.64 Thiswas the first approval of an SMP in four years,representing renewed cooperation between DOEand the Commonwealth of Kentucky.

The FY 2004 SMP describes strategiccleanup initiatives for five Operable Units. (OU) atthe PGDP site including the Groundwater OU, theSurface Water OU, the'D&D OU, the BurialGrounds OU, and the Soils OU. These initiativesinclude a series of prioritized response actions toprotect human health and the environment withemphasis on achieving significant risk reduction atPGDP in the near term, while minimizingdisruptions to the bngoing GDP operations. TheFY 2004 SMP also establishes enforceable

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milestones for FY 2004, FY 2.005, and FY 2006 aswell as completion dates for investigation andresponse actions associated with the strategiccleanup initiatives for accelerated cleanup atPGDP. In addition, the SMP also notes thatdecisions to defer various corrective actions, whichwere reached under the ER Agreed Order, will beincorporated, as appropriate, in future SMPs.

A total of 553 SWMUs and Areas of Concernwere in various stages of investigation andremediation at PGDP as of the end of FY 2004.Most of these areas are on DOE property, eitherwithin the plant fence or on the DOE Reservation.

In April 2004, the General Accounting Office(GAO) published an update to the report that itprepared in 2000 relating to the challenges DOEfaced in cleaning up the PGDP site. 5 The update,Nuclear Waste Cleanup, DOE Has Made SomeProgress in Cleaning Up the Paducah Site, butChallenges Remain,66 notes that DOE hasaddressed two of the four challenges identified inthe original report. In the original report, the GAOexpressed concern that DOE planned to useuntested technology and questioned DOE'sassumptions that funding for cleanup would

* increase. In the 2004 report, GAO notes that DOEhas addressed both of the concerns satisfactorily,and GAO no longer believes that these concernswill impede cleanup. However, two other cleanupchallenges remain of concern to GAO, both ofwhich are identified in the GAO report as stilllikely to impede cleanup at the PGDP site. First,GAO notes that the actual scope of cleanupremains unknown. Thus, actual cleanup actionsand the time frame within which those actions maybe completed are also unknown. Second, the GAObelieves that DOE and its regulators (USEPA andKentucky) have had difficulty in agreeing on the.overall cleanup approach..

The GAO report specifically noted that.DOE'sdecision to discontinue the Core Team approachstopped a collaborative effort with regulators anddelayed progress. DOE objected to thischaracterization, as it found that the Core Team

approach did not effectively include seniormanagement policy input. This resulted in staffmaking decisions that did not incorporate thepolicy input of senior .management. Consequently,while staff was encouraged to continuecollaborating and exchanging information withregulators, the primaiy collaboration withregulators was realigned to take place at seniormanagement levels, rather than staff levels. Inaddition, DOE believes that the GAO report doesnot recognize the significant progress towardscleanup that has taken place at the site.67

During FY 2004, the Paducah CitizensAdvisory Board .(CAB), a DOE EM Site SpecificAdvisory Board, submitted sevenrecommendations to DOE. Theserecommendations, which are related to cleanupactivities at PGDP, and DOE's responses to themcan be found on the CAB web site.68

5.1.6.1 Decontamination andDecommissioning

The first D&D of inactive, nonleased facilitiesat PGDP, which began during FY 2003, continuedduring FY 2004. The current scope of the.D&Dprogram at PGDP consists of infrastructure-removal at the-200,000 sq. ft. C-410/C-420 FeedPlant Complex under an approved RemovalAction Work Plan. 9 Uranium oxide wasconverted to UF6 in the Complex from 1957 to1977. Production of fluorine continued at theComplex until 1994. The PGDP D&D programalso involves surveillance and maintenance of theC-410/C-420 Complex and the C-340 MetalsPlant Complex. Operations at the C-340 MetalsPlant Complex ended in 1977. Contaminants fromhistorical operations include uranium, technetium-99 (99Tc), neptunium (Np), plutonium (Pu),fluorine, and hydrogen fluoride.

D&D highlights and accomplishments duringFY 2004 include the following:

Implemented the new SB documents. for theC-410 Complex, a Category 2 Nuclear

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Facility, in May 2004. While a nuclearcriticality is not possible from the D&Dactivities in the C-410 Complex, theimplementation of the new SB documentsrequired installation of a portable criticalityaccident alarm system (CAAS) to notifypersonnel involved in D&D activities in theevent that a criticality occurs outside the C-410Complex. The implementation also requiredphysical separation of piping that couldintroduce new hazards into the C-410Complex, development of new procedures andtraining of personnel, and an independentevaluation of the readiness to implement the SBdocuments. Implementation of the new SBdocuments allowed D&D work to resumeinside the C-410 Complex. These activities hadbeen suspended during development andimplementation of the new SB documents,which was required due to the identification oftiaterials containing transuranics in the C-41 0Complex.

Shipped.280 cubic meters of compactiblematerial to the Nevada Test Site (NTS) fordisposal. This material, which includedcardboard; paper, trash, used PPE, and-wood,was removed from the C-41 0/C-420 Complex.

* Completed demolition of the hydrofluoric acidtank farm in the C-410/C-420 Complex,

* disposed of 11 large tanks7" at NTS, andpackaged piping, sediment removed from thetanks, and scrap metals for disposition.

C Completed removal of PCB-containing paintand shipped 56 fluorine-generating cells usedin fluorine production to a private company forreconditioning and reuse elsewhere, thus -

minimizing waste and avoiding an estimated$2.5 million in disposal costs.

5.1.6.2 Environmental RestorationHighlights

DOE has completed 14 interim, removal, orfinal actions at the PGDP site under CERCLA.

During FY 2004, highlights from PGDP ERprojects include the following:

Resolved an issue regarding additionalsampling requirements imposed by theCommonwealth of Kentucky for wastecharacterization of soils to be excavated fromthe NSDD. This issue was resolved with theentry of the ER Agreed Order by DOE andthe Commonwealth. Upon entry of thisAgreed Order, both parties committed toexpedite final action on a pending permitmodification. This permit modification, whichwas approved in July 2004, allows DOE touse the C-746-U Solid Waste ContainedLandfill for disposal of cleanup wastes, scrapmetal, and other materials that meet the C-746-U landfill permit requirements and wasteacceptance criteria. Under the modifiedpermit, DOE will perform in-situ sampling ofsoils in the second phase of NSDDexcavation, rather than completelycharacterize 5% of the soils, as wasperformed during the first phase of the NSDDexcavation. The sampling of the soils duringthe first phase of the NSDD excavationindicated that prior data relating to the NSDDsoils were accurate.

Completed rem ediation and restoration of thehalf-mile portion of the NSDD within thesecurity fence at PGDP and construction of asurge basin to contain storm water runoffunder an approved ROD titled InterimRemedial Action at the North-SouthDiversion Ditch at the Paducah GaseousDiffusion Plant (DOE-OR/07/1948&D2).Over 23,000 tons of soil were removed duringthis phase of the NSDD cleanup project. TheNSDD ran from the C-400 EquipmentCleaning Facility near the center of the fencedarea of the plant to the edge of the DOEReservation, where it merged with LittleBayou Creek. Primary contaminants in theNSDD included metals, radionuclides, andPCBs. Additional work included installationof plugs in four culverts to prevent discharge

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of storm water runoff to sections of the NSDDoutside the fence. Previous Interim CorrectiveActions for the NSDD, such as reroutingdischarges and posting signs, were completed*to limit downstream contamination and warnworkers and the public regarding contaminants.

Treated approximately 200 million gallons ofcontaminated groundwater at the twogroundwater containment systems in FY 2004.The C-612Northwest Plume Groundwater -System has processed approximately.927million gallons of groun~dwater contaminatedwith trichloroethylene (TCE) and 99Tc from thestart of operations in August 1995 through FY2004. The C-614 Northeast PlumeGroundwater System has processedapproximately 612 million gallons ofgroundwater contaminated with TCE from thestart of operations in February 1997 throughFY 2004.

Issued the final Six-Phase Heating TreatabilityStudy Report (DOE OR/07ý2113&D1) inDecember 2003. Sampling indicated that theSix-Phase Heating process removed 98 percentof the TCE contamination in soil andgroundwater involved in the study. Anestimated .11 tons of TCE were removed fromthe ground.

Issued the Proposed Remedial Action Plan forVolatile Organic Compound Contamination atthe C-400 Cleaning Building (DOE OR/07-2114&D2) in April 2004. The Plan proposesuse of electrical resistance heating methodssuch as the Six-Phase Heating Technology toremove as much TCE as possible from beneaththe C-400 building, the largest source area atPGDP for groundwater contamination.

* Disposed of approximately 4,500 tons of scrap-metal during FY 2004 as part of a majorundertaking involving removal of the estimated53,000 tons of scrap metal and other materialremaining in nine scrap yards on site. At theend of FY 2004, more than 770 tons of scrap

metal were awaiting disposal.

* Implemented a new method to process andcontainerize scrap metal in response toadditional NTS size reduction requirementsthat had increased costs. This methodminimizes size reduction work, reduces costs,and streamlines disposal in Sealandcontainers.

Issued the final CERCLA Five-Year Reviewdocument, titled Five-Year Review forRemedial Actions at the Paducah GaseousDiffusion Plant, Paducah, KY, (DOEiOR/07-2067&D2) as scheduled, to USEPA and theCommonwealth of Kentucky on October 8,2003.

Completed major field work for a SiteInvestigation to evaluate potential sourceareas for groundwater contamination in theSouthwest Plume. The evaluation of the fieldwork is scheduled for completion in January2005. The Southwest Plume refers to an areaof groundwater contamination at PGDP in theRegional GravelAquifer (RGA) that is foundsouth of the Northwest Plume and west of theC-400 Cleaning Facility. The primarycontaminants inthe Southwest Plume includeTCE, with lesser amounts of volatile organiccompounds and 99Tc. This Site Investigationfocuses on four potential source areas: C-747-C Oil Landfarm, C-720 MaintenanceBuilding, C-747 Contaminated Burial Yard,and the storm sewer between the C-400Cleaning Facility and Kentucky PollutantDischarge Elimination System (KPDES)Outfall 008. The investigation involvedprofiling shallow soils and collecting discretegroundwater samples from the RGA. Sampleswere collected from temporary boringsinstalled during the investigation and existingmonitoring wells within the area of the plume.

Completed major field work for a SiteInvestigation to evaluate whether upgradientsources of groundwater contamination are

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influencing the contamination observed in themonitoring wells for the C-746-S and -Tlandfills. Data from the study are still beinganalyzed, but preliminary indications are thatcontamination observed atthe landfillsprimarily derives from plant sources. The SiteInvestigation will determine if the landfills arecontributing to the contamination. The SiteInvestigation report is scheduled to be issued inSeptember 2005. Temporary borings were usedto collect groundwater samples from the topand base of the RGA at 10-feet intervals. Threetransects of borings were performed on thewest, south, and east sides of the landfills.Primary contaminants are volatile organiccompounds, TCE, and 99Tc. As many as fouradditional groundwater wells will be added.

ER costs, including cleanup, D&D, andDMSA activities, were $75.1 million for FY 2004.The President's proposed budget for FY 2005 -is.$75.2 million.

5.1.7 Waste Management

DOE is responsible for the characterization,storage, treatment, disposal and/or recycling ofwaste generated from ongoing DOE projects andlegacy wastes. DOE defines legacy waste as anywaste generated as a result of DOE operations atthe GDPs prior to July 1, 1993, and certain wastesgenerated by USEC as identified in the Lease.These USEC wastes are contaminated with PCBs,asbestos, chromium, arsenic, transuranics,pentachlorophenol, and TCE. DOE storesapproximately 50,000 containers (55-gallon drumequivalents) of legacy waste at PGDP. During FY2004, DOE management of legacy waste includedongoing monitoring, characterization, repackaging,on-site treatment, off-site treatment, and disposal.

• After characterization to assure the selection of-the appropriate disposition. method, non-hazardous,non-Toxic Substances Control Act (TSCA),non-radioactive wastes are stored pending potentialdisposal in DOE's C-746-U Solid Waste ContainedLandfill on the DOE Reservation while hazardous,

TSCA, low-level, and mixed wastes are shippedoff-site to approved DOE or commercial treatmentand/or disposal facilities. Wastewater is treatedon-site and discharged to surface waters inaccordance with the KPDES permit.

USEPA and the Kentucky Division of WasteManagement (KDWM) are the regulatoryagencies for DOE solid and hazardous waste.Applicable regulations and the DOE Ordergoverning WM include the following:

" RCRA, Part B, Hazardous WasteManagement Permit;

• TSCA regulations for PCB wastes;" DOE Order 435.1, Radioactive Waste

Management; and" Kentucky solid and hazardous waste

regulations for other wastes.

Agreements iri effect during FY 2004 relatedto implementation of these regulations and theDOE Order include the following:.

* Site Treatment Plan and associated AgreedOrder7 ' under the Federal FacilitiesCompliance Actfor characterization and,treatment of mixed hazardous and radioactivewastes.

* The February 20, 1992, TSCA FederalFacilities Compliance Agreement (FFCA) foruse, cleanup, storage, treatment, and disposalof PCBs. 72

Implementation Plan for DOE Order 435.1.73

Important WM developments during FY 2004include the following:

Began accepting soils at the C-746-U SolidWaste Contained Landfill from environmentalcleanup work after resolution of an NOV thatwas issued by KDWM in November 2002 andapproval of an additional permit modification.DOE and the Commonwealth signed the ERAgreed Order in September 2003 (see Section

32

4.1.1) that resolved outstanding complianceissues. This Agreed Order was entered onOctober 2, 2003. The parties also expeditedfinal action on the pending permit modificationrequest so that the C-746-U landfill could beused for disposal of cleanup, wastes, scrapmetal, and other materials meeting permitrequirements and the waste acceptance criteria.The permit modification was approved in July2004.

Suspended PGDP waste shipments followingincidents in June and August 2004 in whichabsorbent materials, consisting of smallquantities of a white, granular powder and aclear, gel-like material, were discovered onseveral truck trailer beds during the transportto NTS of depleted uranium tetrafluoride in"T-hopper" containers. These "T-hopper"containers were overpacked inside of sealedintermodal containers. Also, in August 2004,NTS personnel discovered small quantities ofabsorbent materials on two of nine trailersdelivering intermodal containers to NTSholding DMSA wastes from PGDP. (SeeOccurrence Report No. 17 in Appendix B. L.)74Although there was no release of radioactivematerial and NTS accepted the shipments fordisposal, the M&I Contractor suspendedal1 itswaste shipments from PGDP following theseincidents. NTS requested that the M&IContractor develop a corrective action plan(CAP) to prevent future incidentsv." On August31, 2004, DOE ORO issued a letter to theM&I Contractor in which DOE notified theM&I Contractor that the earned fee for FY2004 would be reduced by $200,000 as a resultof these incidents.7 6 On September 13, 2004,the M&I Contractor formed an internal causalanalysis team to identify aspects of the wastemanagement process that caused the wastepackaging and transportation incidents and todevelop corrective actions to prevent arecurrence. 77 On September 16, 2004, theNational Nuclear Security AdministrationNevada Site Office (NSO) formally notified theDOE Paducah Site Office that NSO hadsuspended PGDP's NTS Waste Certification

Program. The Program must be re-evaluatedprior to resuming shipments from PGDP toNTS. On September 30, 2004, the M&IContractor submitted a CAP to DOE OROrelated to these incidents that addressedmatters which were identified in 'extent ofcondition' reviews conducted for the M&IContractor's operations at five sites. As of theend of FY 2004, the M&I Contractor wasproviding limited approval for wasteshipments from PGDP to non-NTS facilitieson a case-by-case basis.

Completed a review of past shipments and on-site disposals of waste packages that were notoriginally identified as RCRA F-listed wastein order to identify and resolve anynoncompliance issues. (TCE in groundwaterwas not considered a RCRA F-listedhazardous waste at the start of theenvironmental cleanup program in the late1980s. In FY 2002, the M&I Contractordetermined that TCE in groundwater was aRCRA F-listed waste.) DOE and theCommonwealth entered into the ER AgreedOrder that addressed outstanding complianceissues associated with RCRA F-listed wasteat PGDP. RCRA F-listed hazardous wasteshave specific requirements for storage anddisposal. The Agreed Order providedguidelines for a plan to characterize theestimated 5,100 containers at the site that maycontain F-listed hazardous waste by the end ofFY 2007. Any waste determined during thecharacterization process to exceed "contained-in" contamination levels identified in theAgreed Order (based on consideration ofhealth and risk) will be moved to storage areasthat are permitted for hazardous waste. The"contained-in" concept describes soils andwater that have become contaminated withhazardous waste.

Additional DOE WM highlights andaccomplishments at PGDP during FY 2004include the following:

• Disposed of more than 40,000 tons of waste

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in the C-746-U Solid Waste Contained•Landfill.

Disposed of approximately 3,200 cubic metersof legacy waste. This waste was eitherdisposed on-site at the C-746-U Solid WasteContained Landfill or shipped off-site fortreatment and/or disposal at commercialfacilities or the TSCA Incinerator in Oak

* Ridge, Tennessee.

* Neutralized 14 cubic meters (116 containers)of corrosive mixed waste on site.

" Treated and discharged approxii'ately 15,000gallons of wastewater to an on-site KPDESoutfall.

* Shipped approximately 6,600 cubic meters ofscrap metal and D&D wastes to NTS andapproximately 400 cubic meters of DMSAwaste to a commercial facility.

WM costs were $23.7 million at PGDP for FY.2004. The President's proposed budget is $17.6million for FY 2005.

5.1.8 DOE Material Storage Areas

DMSAs are nonleased areas inside leasedbuildings as well as outdoor areas that containmaterial and equipment at the GDPs. To facilitateNRC certification of the GDPs, DOE accepted thereturn of areas that are now the DMSAs fromUSEC on'December 31, 1996, in a supplement tothe Lease. Since December 1996, work on theDMSAs has included documenting DMSA contentsand resolving nuclear criticality safety (NCS)concerns.

DOE's M&I Contractor issued a DMSA workplan, Paducah Gaseous Diffusion PlantDepartment of Energy Material Storage AreaCharacterization/Remediation Plan (BJC/PAD-186/R4), in April 2001. After entry of the ERAgreed Order on October 2, 2003, a programmatic

baseline change aligned the DMSA projectschedule with the Agreed Order requirements. Thecurrent schedule includes completion ofcharacterization of the material stored in DMSAsin 2009 and disposition of the DMSAs in 2010.

Since initiation of the DMSA project in 2001,final DMSA characterization reports have beencompleted on 46 of the 160.DMSAs. In FY 2004,approximately 71,000 cubic feet of material in theDMSAs were characterized. Through FY 2004,characterization of approximately 625,000 cubicfeet of an estimated total of 865,000 cubic feet ofmaterial, in the DMSAs has been completed. Lessthan 0.1% of the total DMSA contentcharacterized to date has been determined to benewly discovered hazardous material. Most of theremaining material is solid waste or low-levelwaste (LLW). Solid waste from DMSAs isdisposed of in the C-746-U Solid Waste NContained Landfill if it meets the waste -.

acceptance criteria. LLW and other waste notmeeting the landfill criteria are shipped off-site fordisposal at commercial or government facilities.

Additional FY 2004 highlights for PGDPDMSA work include, the following:

* Completed the first two major DMSAmilestones of the ER Agreed Order: (1)characterization of the priority "A" DMSA C-400-05 and (2) characterization of the 33remaining priority "A" DMSAs. 71

Continued disposition of stored materials aftercharacterization in order to accelerate removalof materials from the DMSAs. The previousfocus had been to disposition only hazardousmaterials promptly, while holding othermaterials pending completion ofcharacterization of all DMSA contents.

Disposed of more than 118,000 cubic feet ofmaterials from DMSAs in FY 2004, bringingthe total quantity of DMSA materialdispositioned to date to more than 157,000

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cubic feet.

5.1.9 Environmental Status

DOE requires that all its sites conduct anddocument environmental monitoring andsurveillance on the basis of DOE Order 23 1.1 A,Environment, Safety and Health Reporting, andManual 23 1.1 -IA, Environment, Safety andHealth Reporting Manual. DOE's environmentalmonitoring at PGDP includes groundwater, surfacewater, sediment, fish, and deer. DOE's PaducahSite Annual Site Environmental Report(BJC/PAD-543) documents monitoring results,which provide an assessment of compliance withpermits and applicable laws. Another source ofinformation is the Paducah EnvironmentalMonitoring Plan (BJC/PAD-285/R2).

During FY 2004, more than 4,000 sampleswere collected from more than 500 locations in andaround PGDP as part of environmental monitoring.Samples are analyzed for metals, organiccompounds, and radionuclides.

Environmental permits for DOE projects andactivities at PGDP in FY 2004 are listed below.Expired permits rei"ii.in in effect until the KentuckyDepartment for Environmental Protection approvesthe applications for new permits.

Solid waste disposal permit issued by KDWM(Nor 073-00014). This permit, which expiredNovember 1, 2003, relates to the closedC-746-S Residential Landfill. A new permitapplication was submitted on April 17, 2003.

* Solid waste disposal permit issued by KDWM(No. 073-00015). This permit, which expiredJune 11, 2003, relates to the closed C-746-TInert Landfill. A new permit application wassubmitted on December 5, 2002.

Solid waste disposal permit issued by KDWM(No. 073-00045). This permit, which expiresNovember 4, 2006, relates to the construction*and operation of the C-746-U Solid WasteContained Landfill. An application for a permit

modification was submitted on May 30, 2001.The application requested that CERCLAwaste and non-hazardous spill residuals bepermitted to be disposed of in the.C-746-Ulandfill. The modified permit was issued onJuly 14, 2004.

Hazardous and solid waste managementpermit issued by KDWM and USEPA (No.KY8890008982, Modification 15 andModification 6, respectively). An applicationfor a major modification to this permit-hasbeen submitted.

KPDES permit under the Clean Water Act(CWA) from Kentucky Division of Water(KDOW) (No. KY0004049). DOE and USEChave separate KPDES permits. USECcontrols all operational discharge outfallswhile DOE controls most of the area runoffoutfalls. DOE retains responsibility forOutfalls 001, 015, 017, and 019 and anyhistoric environmental problems associatedwith any PGDP outfall. DOE's KPDESpermit regulates non-radiological surfacewater discharges to Bayou Creek and LittleBayou Creek. The permit was set to expire onMarch 31,.2003, but it remains in effectpending KDOW approval of DOE's permitrenewal application which was submitted toKDOW in October 2002. A watershedmonitoring plan under the permit provides formonitoring fish and macroinvertebrate faunain Bayou and Little Bayou Creeks. TheKPDES permit requires biological monitoringas an indicator of effects on the receivingstream. This permit includes four KPDESoutfalls:

- Outfall 001 (outfall for treated dischargefrom the C-612 Northwest PlumeGroundwater Containment System and theC-616 TreatmentLagoon which is leased toUSEC as well as surface runoff from scrapmetal yards);

- Outfall 015 (outfall for surface water runofffrom nonleased areas including the inactive C-

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404 Hazardous Waste Landfill);

- Outfall 017 (outfall for runoff from the DUF6cylinder storage yards and DUF6 conversionfacility construction site); and

-Outfall 019 (outfall for runoff from theC-746-U Solid Waste Contained Landfill).

During FY 2004, acute toxicity exceedanceswere identified at Outfall 017 on two separateoccasions in April and on one occasion in May.The data relating to these exceedances werereported in the quarterly Discharge MonitoringReport that was submitted to KDOW in July 2004.DOE submitted a TRE in June 2004 to KDOW.Once approved, the TRE will be implemented todetermine the cause of the toxicity.

Chronic toxicity exceedances at Outfall 001- were identified in December 2003 and April 2004;ý

A source of the intermittent toxicity has not beenidentified. A revised Toxicity ReductionIdentification/Evaluation (TRI/E) Plan wassubmitted to,.KDOW in September 2004. Noexceedances of effluent permit limits occurred atOutfalls 015 or 019 in FY 2004.

Notices of Violation

During FY 2004, KDOW issued three NOVsto DOE at PGDP. These NOVs are brieflydescribed below.

On May 21, 2004, KDOW issued an NOV toDOE at PGDP. This NOV was issued after theacute toxicity exceedances in April 2004 werereported for Outfall 017. In response to the NOV, aTRE Plan was implemented.

On -July 6,2004, KDOW issued an NOV toDOE at PGDP. This NOV. was issued after thereporting of a chronic toxicity exceedance in April2004 at Outfall 001 and an alleged failure to followEPA test methodology regarding sampletemperature for the chronic toxicity samplescollected in April 2004.

On September 14, 2004, KDOW issued anNOV to DOE for the acute toxicity exceedance atOutfall 017 in May 2004. The NOV also allegedissues involving the sample temperaturesassociated with the chronic toxicity samplescollected at Outfall 001 in June 2004.

5.1.10 Safety and Health Status

DOE goals in safety and health at PGDPinclude (1) zero accidents and (2) limitingexposures to chemicals and radiation to as low asreasonably achievable (ALARA). The basis of thesafety and health requirements supporting thesegoals includes 10 CFR 835 for radiationprotection and the 29 CFR 1910 and 1926 seriesfor industrial hygiene, safety, and fire protection.

During FY 2004, DOE and its primeContractors and subcontractors at PGDP workedapproximately 974,689 hours and droveapproximately 300,000 miles in governmentvehicles. During this time, five OSHA RecordableIllnesses or Injuries (RIIs) occurred in the.performance .of DOE work at PGDP in FY 2004.The 5 RIIs included the following injuries: (1) astrain to the left tricep, (2) a small laceration tothe cheek bone, (3) afractured right thumb, (4) acut to the head and (5) a foreign object in the eye.As result of working two years and more than 2million hours without one lost-time injury, theM&I Contractor hosted a celebration event for allDOE, M&I Contractor, and subcontractorpersonnel in PGDP. There has been only one lost-time injury at the DOE PGDP site since April1998. That incident happened on August 28,2002. No lost-time away cases occurred in FY.2004.

The number of personnel who were monitoredfor protection from radiation exposure was. 1,060in CY 2003 compared with 1,125 in CY 2002.The average occupational radiation exposure forthe personnel who were monitored at PGDP aspart of the DOE Radiation Protection Programincreased from 1.69 mrem per person per year inCY 2002 to 3 mrem per person per year in CY

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2003. No individual received occupationalradiological exposures in excess of regulatorylimits. The highest occupational exposure to anindividual worker in CY 2003, a DUF6 cylinderyard worker, was 342 mrem per year. Thisexposure did not exceed the administrativeoccupational exposure control limit of 500 mremper person per year set by the M&I Contractor.

The dose to personnel at PGDP should becompared with the 5,000 mrem per person per yearoccupational exposure limit set by Federal law in10 CFR 835. It also should be compared withannual background radiation exposure levels perperson of 200 mrem from naturally occurringradon, 40 mrem from food, 30 mrem fromterrestrial sources, and 30 mrem from cosmicradiation (according to the National Council onRadiation Protection and Measurements, NCRPReport 94, Exposure of the Population in theUnited States and Canada from NaturalBackground Radiation).

Health physics surveys increased from 7,606surveys in CY 2002 to 8,697 in CY 2003. A totalof 4,020 air samples were taken inCY 2003.

5.1.11 Litigation Summary

The status of ES&H-related litigation forPGDP at the end of FY 2004 is as follows:

Smith, et al. v. Carbide and ChemicalsCorporation Case No. 5:97-CV-3:M. In thiscase, Plaintiffs are seeking recovery from pastDOE Coiitractors at PGDP. The Plaintiffsallege that past operations of these Contractorscaused toxic substances to be released,resulting in loss of value to Plaintiffs' property.This action originally was brought as a classaction, but the U.S. District Court for theWestern District of Kentucky decertified theclass so that the Plaintiffs represent only theirown individual interests. The U.S. DistrictCourt granted Defendant's Motion for

Summary Judgment on January 5, 2004. ThePlaintiffs appealed to the U.S. Court of -

Appeals for the Sixth Circuit on March 14,

2004. Arguments are scheduled for December2004, and a ruling is anticipated in CY 2005.

Raiher, et al. v. Union Carbide Corporation,et al., Case No. 5:99-CV-255-M. In this case,Plaintiffs allege that they received personalinjuries as a result of exposure to toxicsubstances at PGDP. The Plaintiffs seekrecovery for these injuries from past DOEContractors at the site. The U.S. DistrictCourt for the Western District of Kentuckygranted the Defendants' Motion for SummaryJudgment. Plaintiffs appealed the districtcourt's ruling to the U.S. Court of Appealsfor the Sixth Circuit. Briefing has now beencompleted by both parties; the argument datehas not been set. The case remained on appealat the end of FY 2004.

Oreskovich, et al. v. Union CarbideCorporation, et al., Case No. 5:01-CV-63-M.In this case, Plaintiffs alleged that theyreceived personal injuries as a result of toxic.substances at PGDP and were seekingdamages from past DOE Contractors. Thiscase was dismissed by agreement onNovember. 5, 2003.

United States of America ex rel. NaturalResources Defense Council, -Inc., et al. v.Lockheed' Martin Corporation (LMC), et al.,Case No. 5:99-CV-00170-M. In this Qui Tamaction,7 9 Plaintiffs allege that LMC andMartin Marietta Corporation, as former DOEContractors at PGDP, received millions ofdollars in operating bonuses based on falsestatements to DOE. The false statements arealleged to have been made to cover up illegalstorage and disposal of radioactive andhazardous wastes, unlawful exposure ofworkers to toxic substances, and thecontamination of groundwater and soil withradioactive substances. DOJ intervened onJune 3, 2003, and filed its complaint onAugust 28, 2003. Defendants filed a Motionto Dismiss, and arguments were heard inSeptember 2004. The Court ruled against theDefendants on most. issues, and the case

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remains open.

' United States'of America ex rel. John DavidTillson v. Lockheed Martin Energy Systems(LMES) and Science ApplicationsInternational Corporation (SAIC), Case No.5:00-CV-39-R. This is a Qui Tam actionbefore the U.S. District Court for the WesternDistrict of Kentucky. During FY 2003, theCourt lifted the seal on this action. In a secondamended complaint, Tillson alleges that both.Defendants violated the False Claims Act andthat SAIC violated the WhistleblowerProtection Act. DOJ intervened in one countagainst LMES only on June 3, 2003, and filedits complaint on August 28, 2003. Defendantsfiled a Motion to Dismiss, and arguments wereheard in September2004. The Court has ruledin favor of the Defendants on most issues;however, a resolution of the final two items hasnot been reached.

Natural Resources and EnvironmentalProtection Cabinet v. United StatesDepartment of Energy, File No. DWM-31434-042. This Administrative Complaint was filedby the Kentucky Natural Resources andEnvironmental Protection Cabinet in an actionto enforce a number of NOVs that were issuedto DOE for alleged non-compliances withKentucky environmental regulations relating tothe DMSAs and other miscellaneous matters.8"This complaint was resolved by the entry of theER Agreed Order in early FY 2004.

Ron Lamb, et al. v. Natural, Resources andEnvironmental Protection Cabinet, et al, CaseNo. 03-CI-01-394. In this case, Petitionersseek a Court Order vacating the two October2003 Agreed Orders between DOE and theCommonwealth of Kentucky. Petitioners, whoare individuals' with property interests near.PGDP, allege that their property and otherinterests are adversely affected by the AgreedOrders. DOE filed a Motion to Dismiss,arguing that the Plaintiffs should haveexhausted all administrative remedies before

filing a lawsuit in the Circuit Court. In July2004, the Franklin Circuit Court deniedDOE's Motion to Dismiss, iuling that•exhausting administrative remedies, is"unnecessary when the effort will be futile. Thelawsuit remained pending at the end of FY2004.

5.1.12 Reportable Occurrences

DOE uses an Occurrence Reporting andProcessing System (ORPS) on a national basis toreport incidents at its facilities that need to beevaluated for lessons learned and shared with allDOE sites. Final Occurrence Reports areavailable on a limited basis to registeredsubscribers. Operating Experience summaries,which are developed using Occurrence Reports,are available online to promote the exchange oflessons-learned information."1 Appendix B.1summarizes the reportable occurrences at PGDPfor FY 2004.

During FY 2004, 20 Occurrence Reportswere issued at PGDP related to DOE work. Fourreports entered in ORPS between October 1,2003, and November 16, 2003, were classified as"off-normal" 'dccurrences, which are defined asabnormal or unplanned events or conditions thatadversely affect or that indicate problems in thesafety, security, ES&H protection, or operation ofa facility. One of these four occurrences wasupgraded to "unusual," which is defined as a non-.emergency occurrence that exceeds the* off-normaloccurrence threshold. Corrective actions weretaken on each incident to prevent recurrences ofsimilar or more 'serious events. Lessons learnedwere identified and communicated across the DOEComplex to avoid similar problems.

On November 17, 2003, the M&I Contractorimplemented a redesigned ORPS reporting processto comply with the occurrence reportingrequirements in DOE Order 231.1 A,Environment, Safety, and Health :Reporting. Theremaining 16 occurrence reports were enteredusing the new ORPS reporting process, which

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assigns Significance Category (SC) levels for theoccurrences to correspond with levels ofinvestigation and analysis, corrective actiondevelopment and tracking, and lessons learneddev6lopment requirements.

Ten occurrences entered under the redesignedORPS reporting process were categorized as SC 4.These are occurrences that are not OperationalEmergencies and that have "some impact" on safefacility operations, worker or public safety andhealth, or public/business interests. Fiveoccurrences were categorized as SC 3 occurrences,which are those occurrences that are notOperational Emergencies and that have "minorimpact" on safe facility operations, worker orpublic safety and health, regulatory compliance, orpublic/business interests. One occurrence at thePGDP site was categorized as an SC 2 occurrence.SC 2 occurrences are occurrences that are notOperational Emergencies and that have a"moderate impact" on safe facility operations,worker or public safety and health, regulatorycompliance, or public/business interests. Therewere no higher significance level occurrences.identified at PGDP.

Occurrences and findings from assessments arealso reviewed to determine whether a potentialnoncompliance with PAAA regulations exists.PAAA provides DOE with the authority to assesscivil and criminal penalties for contractor violationsof DOE nuclear safety rules, regulations, or DOEOrders. During FY 2004, two reports were enteredinto the DOE Noncompliance Tracking.System aspotential noncompliances with PAAA regulations.The first report was based upon occurrence reportORO-BJC-PGDPENVRES-2004-0008. Thisoccurrence represented a potential noncompliancewith 10 CFR 830, Subpart A, "Quality AssuranceRequirements" and Subpart B, "Safety BasisRequirements." The second report was based uponoccurrence reports ORO-BJC-PGDPENVRES-2004-0012 and ORO-BJC-PGDPENVRES-2004-0014. These occurrences represented potentialnoncompliances with 10 CFR 830, Subpart A,

"Quality Assurance Requirements." (SeeAppendixB.I* Occurrence Nos. 13, 17, and 19.)

Following an investigation in June 2003 bythe DOE OE, an Investigation Summary Reportissued in August 2003, and an enforcementconference with senior M&I Contractor managersand OE personnel, DOE OE issued a PreliminaryNotice of Violation (PNOV) to the M&IContractor and Proposed Imposition of CivilPenalty in November 2003. The PNOV cited fivenuclear sdfety performance deficiency issues, oneof which involved UF6 cylinder ultrasonic wallthickness testing paperwork deficiencies at PGDP.All remaining cited deficiency issues related toother DOE sites. On December 24, 2003, DOEOE issued the Final NOV (FNOV) relating to thenuclear safety performance issues. The M&IContractor waived further proceedings and paidthe assessed civil penalty. On January 20, 2004,DOE OE deemed the FNOV a Final Order.

5.1.13 Overall Paducah Summary

Noteworthy DOE accomplishments andinitiatives to enhance and improve ES&Hconditions at PGDP in FYI 2004 ,include, butarenot limited to, the following:

" Signed Agreed Orders with theCommonwealth of Kentucky documentingformal commitments to promote acceleratedcleanup at PGDP, to settle all outstandingenforcement and compliance issues, and toimplement and comply with the CylinderManagement Plan for PGDP. (See Sections4.1.1 and 5.1.3.)

* Began designing the facility that will convertthe PGDP inventory of DUF6 to a more stableform for recycle or reuse. (See Section 4.5.)

" Continued safe storage of approximately36,000 DUF6 cylinders. (See Section 5.1.3.)

" Reviewed four DSAs that were prepared and

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submitted by the M&I Contractor. (See Section5.1.5.)

Approved three of the DSAs submitted forreview and approval. (See Section 5.1.5.)

Received and began review of two DSA annualupdates. The C-746-Q Hazardous and Low-Level Waste Storage Facility DSA update wassubmitted on August 9, 2004, and the C-4 10D&D Project DISA update was submitted onSeptember 20, 2004. (See Section 5.1.5.)

Began the first D&D of facilities at the site bystarting removal of infrastructure at theC-410/C-420 Feed Plant Complex.. (SeeSection 5.1.6.1.)

Issued the final CERCLA five-year review forremedial actions at PGDP to USEPA and theCommonwealth of Kentucky. (See Section5.1.6.2.)

Issued the final report on the successful test ofthe Six-Phase Heating Technology. Thistechnology can potentially lead to reduction ofa major source of TCE contamination at thePGDP site. (See Section 5.1.6.2.)

Continued removing scrap metal that had been,stored in outdoor scrap yards. (See Section5.1.6.2.)

Disposed of more than 40,000 tons of waste inthe C-746-U Solid Waste Contained Landfill.(See Section 5.1.7.)

Disposed of more than 10,200 cubic meters oflegacy waste either in the C-746-U Solid WasteContained Landfill or offsite in commercial orgovernment facilities. (See Section 5.1.7.)

Characterized approximately 71,000 cubic feet•of material in the DMSAs. Since thecommencement of the project in FY 2001, lessthan 0.1% of the approximately 625,000 cubicfeet of material characterized, has beendetermined to be newly discovered hazardous

or PCB waste. (See Section 5.1.8.)

5.2 ENVIRONMENTAL, SAFETY, ANDHEALTH STATUS OF DOENONLEASED AREAS ATPORTSMOUTH

During FY 2004, the DOE EM Program atPORTS continued to store DUF6 cylinders,remediate the Federal reservation, and dispositionlegacy waste in storage. DOE also began toreceive shipments of DUF6 cylinders from ETTP.Information on the status of these activities isprovided in further detail in Sections 5.2.3, 5.2.7and 5.2.8.

5.2.1 Facilities and Acreage

DOE owns the 3,714-acre Federal reservationat PORTS and leases the uranium enrichmentfacilities to USEC. DOE currently leases 261 ofthe 357 facilities and systems at PORTS to USECand retains 96 as nonleased facilities and systemsIn addition, during FY 2004, DOE leasedbuildings and portions of former GCEP facilities(X-3001; X-3012, X-7725, X-7726 and X-7727H) to support USEC's CLC efforts. (SeeSection 3.4.) DOE also leases facilities to theOhio Army National Guard and the SouthernOhio Diversification Initiative, the localcommunity reuse organization. Nonlea.sedfacilities and systems include the following:

• Portals (vehicular and pedestrian),• Security fencing,o Holding ponds,* Warehouses (active and inactive),• Five groundwater treatment facilities,• a RCRA Part B-permitted Hazardous Waste

.Storage Facility,* DUF6 cylinder storage yards,• SWMvus," Administrative facilities, and• Inactive process facilities.

USEC also leases, arid is responsible for, thegrounds in the immediate vicinity of the GDPfacilities that are within the Perimeter Road as

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well as all roads and railroads. DOE retains, and isresponsible for, most of the grounds on the exteriorof the Perimeter Road and approximately 60% ofthe grounds inside the Perimeter Road with theexception of areas in the immediate vicinity of theGDP facilities.

5.2.2 Construction Activities

In FY 2004, DOE completed surveying andfencing the entire boundary of the DOEreservation. The fence construction project includedclearing the fence line for access and installation,excavating, backfilling, controlling erosion,installing the fence, and posting of signs.

The DOE Conversion Contractor completedgeological sampling for the DUF6 conversion plantsite at PORTS in early 2004, The ConversionContractor also initiated site excavation work inFY 2004 for construction of the conversion facility.

5.2.3 Depleted Uranium HexafluorideManagement

DOE is responsible for management of DUF 6that was generated at PORTS from the start ofenriched uranium production in 1954 until the

.privatization of USEC in July 1998, The DOEDUF6 cylinder storage yards are some of the moreimportant. nonleased areas from an ES&Hperspective. DOE stores more than 20,700cylinders in these yards at PORTS, including 1,876cylinders that were shipped .from ETTP to PORTSin FY 2004. Of these cylinders, approximately18,000 are full DUF6 cylinders while the remainderare either empty or contain residual materials.

To provide additional information about thecurrent status of.the cylinders, the M&I Contractorperforms ultrasonic wall thickness measurementson 150 DOE-managed cylinders during each fiscalyear. As of September 1, 2004, all of the required150 cylinders had been ultrasonically tested duringFY 2004. The resulting data indicate that thecylinders will not require painting in the near futureto maintain minimum required wall thickness.

Finally, to provide additional assurance that thecylinders remain in a safe condition, cylinders arevisually inspected either annually orquadrennially. As of September 30, 2004, theM&I Contractor had completed annualinspections of 3,617 cylinders and quadrennialinspections of 3,628 cylinders. Radiologicalsurveys were also conducted on all DOE cylindersduring FY 2004.

In addition to these cylinder managementactivities, DOE met with State regulators whofinalized and issued new Ohio EPA Director'sFinal Findings and Orders (DFFOs) to address thetransfer of approximately 6,300 DUF6 cylindersfrom ETTP to PORTS. Shipments of thesecylinders began on March 17, 2004; 1,876cylinders were shipped to PORTS by September30, 2004.

During FY 2004, DOE also completed aNEPA review and issued a ROD on July 20,2004, for the construction and operation of aDUF6 conversion facility at PORTS. (See Section4.5.)

DUF6 Cylinder Management Program costs atPORTS were $3.6 million for FY 2004. The.President's proposed budget is $1.9 million forFY 2005 .u2DUF 6 conversion project costs were$5.7 million for FY 2004 and are estimated to be$56 million for FY 2005.

5.2.4 Uranium Materials ManagementActivities

In FY 1999, DOE undertook an initiative toprovide interim' storage at PORTS for surplusuranium materials from DOE sites at Fernald,Ohio, and Hanford, Washington, and fromuniversities until these materials can bepermanently stored, disposed, reused, or sold.During FY 2001, DOE began preparing aProgrammatic Environmental Assessment (EA)regarding potentially reusable uranium inaccordance with NEPA and DOENEPA-implementing procedures. The final

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Programmatic EA was issued in February 2003.83

At the end of FY 2004, DOE had 4,457 metrictons of uranium materials in interim storage atPORTS. These materials, which were receivedbetween June 1999 and May 2002, from Fernald,Hanford, and universities are packaged in securecontainers and do not present additional hazards tofacility workers, the public, or the environment.They are potentially commercially marketable andare not classified as waste. DOE transferredapproximately 3.04 metric tons of LEU from theuranium management inventory at PORTS toDOE's Richland Operations. for reuse in March2004 as part of a government initiative to supportthe development of an alternative nuclear fuelsupply. In addition, some of the uranium materialsin storage at the PORTS interim storage facilitywere sampled to gather additional data so that thematerials could be characterized to determine their'potential for utilization in commercial activities.

5.2.5 Integrated Safety Management

In FY 2003, a DOE decision limited the ISMSre-verification assessment scope to the M&IContractor's Oak Ridge projects; therefore, ISMSre-verification at PORTS has been delayed. As ofthe end of FY 2004, ISMS re-verification has notbeen rescheduled at PORTS. As part of thePORTS preparations for ISMS re-verification, theM&I Contractor compiled and distributed an ISMSPerformance Sustainability Plan in December2002.84 This Plan compiles numerous objectiveISMS metrics such as OSHA-recordable injury andLWC rates, numbers of first aid cases, occurrencereports, and ISMS assessment findings. It alsoprovides for both customer and employee surveysto obtain additional, subjective measures ofprogram performance.

This Plan has highlighted the need for anincreased sense of urgency for timely resolution ofopen safety issues. For example, IndependentReview Board meetings are scheduled after eachsafety incident that occurs to evaluate a timeline ofevents that led to the incident, investigate anybreakdowns in the ISMS principles and functions,

identify root cause, and establish any requiredcorrective actions. In addition, the I Care/We Careprogram addresses safety issues raised byemployees, and weekly status reports are providedon any open issues. In the larger sense, this Planhas helped to reinforce throughout the ongoingre-verification efforts that ISMS is a continuouseffort versus an end-point objective. Additionalinitiatives have recently been taken to enhance theISMS metrics, their utility and validity, and tocommunicate them to PORTS personnel.

5.2.6 Update of Documented SafetyAnalyses

In accordance with 10 CFR 830, Subpart B,the M&I Contractor submitted a DSA for thePORTS DUF6 cylinder storage yards to DOE inJanuary 2003 for approval. This DSA submittalincluded new accident analysis (AA), fire hazardanalysis (FHA), hazard analysis (HA) andTechnical Safety Requirements (TSR) documentsfor the cylinder storage yards, which are Category2 Nuclear Facilities. Revisions of this DSA weresubmitted to DOE in May, August, andSeptember 2003. DOE issued an SER approvingthe DSA and TSR.for the cylinder storage yardsin October 2003. The SER required additionalM&I Contractor revisions to the DSA and TSRthat were submitted to DOE in December 2003.These revisions were. approved by DOEHeadquarters in an SER revision dated March.2004. The M&I Contractor fully implemented theDSA, TSR and SER for the cylinder storage yardsin March 2004.

The M&I Contractor also submitted a secondDSA to DOE for seven remaining Category 2 and3 Nuclear Facilities at PORTS. This DSAsubmittal included new AA, FHA, and HAdocuments for each facility and a new TSRcovering all the remaining Category 2 and 3Nuclear Facilities. As of the end of September2004, the existing SAR remains in effect for theseseven facilities. DOE Headquarters issued an SERfor the new DSA and TSR for these facilities onSeptember 16, 2004. The M&I Contractor isscheduled to implement the new DSA and TSR in

42

February 2005. At the end of FY 2004, annualupdate documents were being prepared for bothDSAs.

5.2.7 Environmental Restoration

The PORTS ER Program continues to makeprogress in remediating contaminated areas of theplant site. Two Consent Orders signed in 1989, onebetween DOE and the State of Ohio and the otherbetween DOE and USEPA, provide the regulatoryframework for remedial actions. TheAdministrative Order by Consent with USEPA wasamended in August 1997 to include Ohio EPA as aparty to the Order and to delegate day-to-dayoversight to the state agency. In March 1999, anOhio EPA DFFO integrated RCRA units into thecorrective action process. This approach avoidsduplication and permits more efficient performanceof site-wide monitoring, surveillance, andmaintenance activities. The cleanup program at thePORTS site is being conducted in compliance withRCRA and applicable aspects of CERCLA.PORTS is not an NPL site.

The PORTS site has been divided into fourquadrants (I through IV) for investigation andremedial actions. Under RCRA, the cleanup atPORTS follows a three-phased approach: RCRAFacility Investigations (RFIs), Corrective MeasuresStudies (CMSs), and Corrective MeasuresImplementation. Since 1990, all four quadrantshave been investigated and all RFIs and CMSshave been approved. PORTS is completing the lastphase of cleanup other than final D&D of the plant.Corrective actions are now essentially complete forQuadrants I, III, and IV with the exception of thoseSWMUs deferred until final D&D of the plant.

With respect to Quadrant II, Ohio EPA issueda Decision Document on the X-701B SWMU toDOE on December 8, 2003. The alternativeselected by Ohio EPA, with which USEPAconcurred, includes in-situ chemical oxidation withrecirculation for the source area ofthecontaminated groundwater plume and selectiveremoval of soils and capping of the holding pondand two retention basins. Design of the selected

X-701B SWMU groundwater and soil remediationalternative is currently in progress. The 50%design package was provided to Ohio EPA on July30, 2004, and the 95% design is on schedule to besubmitted to Ohio EPA by December 15, 2004.Field work is expected to begin in FY 2005.

To date, over 540 soil borings have beendrilledand sampled and more than 750groundwater monitoring wells have been installedand. sampled across the Federal reservation, all ofwhich provide information on the extent of.contamination that resulted from the 50 years ofplant operations. Investigative studies show that.there are five groundwater plumes, all locatedwithin the plant boundaries. The maincontaminant in these plumes is the chemicalsolvent TCE that was used for many years inindustrial processes at PORTS.

PORTS has identified 156 release sites.Contaminants include volatile organic compounds,uranium, 99Tc, and PCBs. Trace levels oftransuranic elements (Pu, Np, and Americium)have been detected in sediments in Little BeaverCreek and in the 6n-site X-701BHolding Pondarea. Release sites located within close proximityto the GDP facilities that have minimalcontaminants and risk will be evaluated as a partoftfie final D&D of the plant.

Approximately 40 separate cleanup projectshave been completed at PORTS through FY 2004,including remediating lagoons, closing landfills,constructing five groundwater treatment facilities,consolidating and closing waste storage facilities,and conducting soil remediation.

Phytoremediation was implemented forremediation of a TCE-contaminated groundwaterplume on the southern section of the reservation inQuadrant I. Field work was completed in FY2003. A total of 3,360 hybrid poplar trees wereplanted in the area. The first five months ofoperations and maintenance for the X-749/X-120Phytoremediation Project were completed onOctober 16, 2003, three months ahead of theregulatory milestone date of January 16, 2004.

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The Final Progress Certification Report forQuadrant I was provided to Ohio EPA on January14, 2004.

A five-year evaluation of remedial actionsimplemented by the Phytoremediation Project at theX-740 facility was completed in late FY 2003 andsubmitted to Ohio EPA at the end of October 2003.

A 1,257-foot subsurface barrier wall inQuadrant I around the closed X-749 LLW landfillwas completed in FY 2003. The Engineer'sCertification Report for the X-749 Landfill BarrierWall was approved by Ohio EPA on November 4,2003.,

A new groundwater pump and treat facility.was constructed in FY 2004 to replace a temporaryfacility in Quadrant II. Facility utility tie-ins werecompleted in July 2004 providing permanent powertothe facility.Construction was completed inAugust 2004 and operations began on September13, 2004. The treatment facility treats groundwaterfrom the seven-unit groundwater -plume area at thesite..

In FY 2002, in response to an action item fromthe DOE ES&H Independent Investigation, soil andgroundwater samples were collected from sixpotential additional SWMUs. These areas wereidentified as potenitially having environmentalcontamination that had not been identified duringthe RFI and CMS processes. The results from thissampling were analyzed, and a report was issued toOhio- EPA on September 27, 2002. The reportconcluded that "no further action" was required attwo of the six SWMUs investigated. Additionalsampling was conducted in November 2003 on 13wells in the X-751, X-745A and X-326 areas inQuadrant I. A letter report documenting the re-sampling efforts and results was submitted to OhioEPA on September 2, 2004. Two new monitoringwells were installed in February 2004 near the X-746 building to support further investigation andmonitoring activities to determine if any correctiveactions will be necessary. Based on the results,DOE has requested Ohio EPA's concurrence thatno further action is required.

Also during FY 2004, additional groundwaterinvestigation activities were completed at thesouthern boundary of the DOE reservation inQuadrant I to determine if the X-749 SouthBarrier Wall, installed as an interim remedialmeasure in the mid-1990s, is still effective incontaining groundwater on-site. Four on-sitegroundwater monitoring wells were installed inQuadrant I south of.the barrier wall in early FY2004 and four off-site monitoring wells werecompleted by March 30, 2004. Samples werecollected and analyzed. No contaminants ofconcern were identified above the laboratoryreporting levels in these off-site wells. The newwells were added to the site's IntegratedGroundwater Monitoring Program. Monitoring ofthe new wells will continue in FY 2005.

In March 2004, DOE also'completed effortsto reduce the volatile organic concentrations at theX-749 South Barrier Wall in QuadrantI byinjecting a reductive dechlorination compound(HRC-X) at.183 locations in the area of the wall.Effectiveness of this effort will be determined~bymonitoring well sampling and analyses in FY2005.

ER costs at PORTS were $31.9 million forFY 2004. The President's proposed budget is$34.2 million for FY 2005.

5.2.8 Waste Management

The mission of the PORTS WM program is totreat, store, and dispose of all legacy DOE wastein compliance with applicable Federal, state, andlocal regulations and in a manner that protects the.health and safety of the public, the work force, .and the environment. Disposal of the legacy wastethat is located onsite at PORTS is the ultimategoal of the WM program. The PORTS WMprogram treats, ships and disposes (or recycles)waste at off-site facilities throughout the year. Inaddition, PORTS has implemented programs thatfocus on recycling paper products and aluminumcans.

Noteworthy waste management

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accomplishments during FY 2004 include thefollowing:

Treated and/or disposed of 319 containersholding 120 cubic meters of mixed wasteincluding carbon sludge, chromic acid, cyanideplating solutions, spent alkaline solutions,

• broken light bulbs, and other mixed waste.

* Disposed of 4,550 containers holding 1,908cubic meters of debris, soil, empty drums, andother LLW.

Disposed of 5,583 containers holding 1,516cubic meters of mixed waste (PCB soils andPCB empty drums).

Disposed of 295 containers holding 5,729ýcubic meters of scrap metal weighing 2,758tons from the X-747H Scrap Yard.

Disposed of 74 containers holding 1,418 cubicmeters of scrap metal weighing 376 tons fromthe X-747G Scrap Yard.

Recycled. 47,464 pounds of aluminum cans,toner.cartridges, paper, batteries, light bulbsand cardboard.

WM costs at PORTS were $33.1 million forFY 2004. The President's proposed budget is $56.7million for FY 2005.

5.2.9 DOE Material Storage Areas

On December 31, 1996, DOE and USECestablished 44 DMSAs at PORTS. 85 TheseDMSAs, which are located in space that wasformerly leased to USEC but that is now retainedby DOE, are under the regulatory oversight ofDOE. The DMSAs are inside of USEC-leasedbuildings and contain various types and pieces ofoperating equipment as well as PCB wastes.

The majority of the DMSAs are in the X-326,X-330, and X-333 Process Buildings. Theinventories of the DMSAs used for waste storageare tracked via a computer database. Efforts will

continue in FY 2005 to disposition waste stored inthe X-326, X-330, and X-333 Process BuildingDMSAs. During FY 2004, 3,031 containers ofDMSA waste were shipped to an offsite disposalfacility in Utah.

5.2.10 Environmental Status

DOE requires that all its sites conduct anddocument environmental monitoring andsurveillance in accordance with DOE Order231. 1A Environment, Safety and HealthReporting. DOE's environmental monitoringprogram at PORTS includes groundwater, surfacewater, sediments, soils, biological, and ambient airmonitoring. Approximately 100 monitoring wellsare sampled routinely to maintain compliance,monitor the effectiveness of corrective actions,and track the movement of groundwater plumes. 6

DOE's annual Site Environmental Report for2003 at PORTS87 documents the results, whichverify compliance with applicable laws andpermits.

Environmental permits for DOE projects andactivities at PORTS that do or could potentiallyrequire monitoring include the following:

National Pollutant Discharge EliminationSystem (NPDES) permit under the CWAissued by Ohio EPA. The current NPDESpermit, which includes eight outfails, iseffective December 1, 2002, throughDecember 1, 2007. The effluent from Outfalls608, 610, and 611 is treated by the X-6619Wastewater Treatment Facility. This facilityis leased by USEC and monitored at USECOutfall 003 before the effluent reaches thewaters of the state. There were noexceedances in FY 2004. The regulatorylimits for environmental releases related toDOE activities at PORTS have not changed inrecent years even with the renewal of theNPDES permit.

Air permits under the Clean Air Act (CAA)issued by Ohio EPA. DOE holds six airpermits at PORTS, two of which are under

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appeal with Ohio's Environmental ReviewAppeals Commission. No violations of airpermit limits occurred during FY 2004.

On June 9, 2004, Ohio EPA and the PikeCounty Health Department conducted a landfillinspection at PORTS. No violations were noted.Also on June 9, 2004, Ohio EPA conducted a CAAinspection at PORTS. No violations were notedduring the inspection.

Notices of Violation

In FY 2004, DOE received two NOVs relatedto RCRA inspections and was advised that twoadditional NOVs would be issued following aRCRA inspection in August. These NOVs arebriefly discussed below.

On February 9, 2004, DOE received an NOVfrom USEPA as a result of a RCRA inspection thatwas conducted at PORTS by both Ohio EPA andUSEPA on June 10-11, 2003. A letter fromUSEPA, dated February 9, 2004, alleged thatbatteries had been in storage for longer than oneyear and that this was in violation of the OAC3745-273-35(A) and (B) and 40 CFR 273.35 (a)and (b). The M&I ContractOr had storage-information to refute the NOV. Accumulation ofbatteries was started in January 2003 and shipmenttook place in December 2003. Batteries were instorage approximately six months at the time-of theUSEPA inspection in June 2003 and were shippedless than one year from the start of accumulation.A follow-up meeting with USEPA was .scheduledto further discuss documentation and request aretraction of the NOV. USEPA did not retract theNOV.

On February 10 and 11, 2004, Ohio EPAconducted the annual RCRA inspection of theRCRA-permitted units. Three violations were notedfrom this inspection. On February 26, 2004,PORTS received an NOV from Ohio EPA for thethree violations. Two of these violations allegedtraining deficiencies, and one violation allegedincorrect labeling of universal waste batteries instorage for recycling. The training deficiencies

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were corrected by submittal of a revised trainingprocedure to Ohio EPA in order to demonstratethat no persons would be allowed to work in theRCRA area if their training had lapsed.. Theuniversal waste batteries did not have the date forstorage on each battery. Immediately following theinspection, the batteries were containerized andthe date was placed on the container to bring thesite back into compliance.

On August 9 and 10, 2004, Ohio EPA andUSEPA personnel conducted the annual no-noticeRCRA inspection of the DOE PORTS site. Theinspectors indicated that two violations would beissued. These violations alleged improper storageof hazardous waste in a satellite accumulationarea and not checking the Land DisposalRestrictions box on a manifest form. As of the endof FY 2004, no formal correspondence had beenreceived from the agencies regarding thisinspection. '

5.2.11 Safety and Health Status

During FY 2004, DOE's M&I Contractor andsubcontractors worked 922,314 hours andexperienced eight OSHA RIIs. Six of the eightRIIs involved subcontractors, and the tworemaining RIIs involved M&I Contractoremployees. All eight RIIs were classified as LostWorkday Cases, based on lost workdays ormedical restrictions limiting full workperformance. The RIls included the followinginjuries: (1) toe fracture, (2) back strain,(3) shoulder sprain, (4) back injury from fall atsame level, (5) back strain, (6) ankle fracture,(7) heat exhaustion, and (8) ankle sprain. PORTSconvened incident review boards to investigatecauses of the incidents that led to these injuries.

The estimated annual average occupationaltotal effective dose equivalent (TEDE) in CY2003 for all 538 monitored employees working onDOE programs at PORTS was 1.13 mrem perperson. The site collective TEDE was 609 mremper year. No administrative or regulatoryradiological dose guidelines were exceeded in CY2003.

Although the occupational radiation doses aretracked on a calendar year cycle, the averageTEDE per person at PORTS remained extremelylow for FY 2004. The collective TEDEradiological dose received by all monitoredindividuals at PORTS was less than the Federaloccupational exposure limit for one worker. Nopersonnel radiological contamination incidentsoccurred in FY 2004.

5.2.12 Litigation Summary

The status of ES&H-related litigation forPORTS at the end of FY 2004 is as follows:

United States of America ex rel. KennethBrooks v. LMC, LMES et al., Case No.LOO-CV-1088, U.S. District Court for theDistrict of Maryland, Southern Division. Inthis Qui Tam action, which alleges widespreadradiation contamination originating fromPORTS, LMES is accused of concealing safetyfindings and destroying databases as well asknowingly presenting a fraudulent claim forpayment to the government. DOJ declined tointervene on January 20, 2003. A Motion toDismiss was filed by LMES on September 17,2003. As of the end of FY 2004, no decisionhad been issued.

United States of America ex rel. Jeff Walburnv. LMC, Case No. C2-02-1109, U.S. DistrictCourt for the Southern District of Ohio. In thisQui Tam action, Plaintiff is seeking damagesunder the False Claims Act. Plaintiff allegesthat he was exposed to gases while working atPORTS as a security guard in 1994 and thathis badge dosimeter reading was changed byDefendant to. reflect no exposure. Defendant'sMotion to Dismiss was granted in March 2004.The Plaintiff filed an appeal withthe U.S.Court of Appeals for the Sixth Circuit inCincinnati, Ohio. The matter has been briefed.As of the end of FY 2004, no date forargument had been set.

Guillermo Barrientos, et al. v. UT-Battelle, etal., Case No. 02-CV-937, U.S. District Court

for the Southern District of Ohio atColumbus. On August 21, 2002, Plaintifffiled a Complaint relating to personal injuriesincurred during a chemical explosion thatoccurred at PORTS in August 2000. AnAnswer was filed, and discovery is underway.The Plaintiff has. filed a Motion to Remandthis case to state court. Defendants have fileda Motion to Dismiss the second claimregarding alleged violations of safety statutesand regulations.

Wilkes, Donald, David Pentecost, and BurchUpham v. Bechtel Jacobs Company LLC,Docket No. 121 CIV03, Court of CommonPleas, Pike County, Ohio. Plaintiffs,. formeremployees of Bechtel Jacobs Company, LLC(BJC), were terminated for violating BJC'sHuman Resources Policy 301 and theStandards of Conduct and Business Ethicspolicy. In their Complaint, Plaintiffs allegecauses of action based on defamation andcommon law whistleblower retaliation. Thiscase was settled on December 23, 2003.

5.2.13 Reportable Occurrences

From October 1, 2003, through September30, 2004, 16 incidents occurred in the nonleasedareas at PORTS that were sufficiently serious tobe classified as reportable ES&H occurrences byDOE. One incident was classified as "unusual."On November 17, 2003, the M&I Contractorimplemented the redesigned ORPS reportingprocess to comply with the occurrence reportingrequirements in DOE Order 231.1 A,Environment, Safety, and Health Reporting. Theremaining 15 occurrence reports were enteredusing the new ORPS reporting process, whichassigns SC levels for the occurrences tocorrespond with levels of investigation andanalysis, corrective action development andtracking, and lessons learned developmentrequirements.

Four occurrences entered under the redesignedORPS reporting process were categorized as SC4, which are those occurrences that are not

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Operational Emergencies and that have "someimpact" on safe facility operations, worker orpublic safety and health, or public/businessinterests. Five occurrences were categorized as SC3 occurrences, which are those occurrences that arenot Operational Emergencies and that have "minor-impact" on safe facility operations, worker orpublic safety and health, regulatory compliance, orpublic/business interests. Six occurrences werecategorized as SC 2 occurrences, which are thoseoccurrences that are not Operational Emergenciesand that have a "moderate impact" on safe facilityoperations, worker or public safety and health,regulatory compliance, or public/business interests.There were no higher significance level occurrencesidentified at PORTS. Four occurrences involved apotential NCS deficiency. The majority of theoccurrences were the result of equipment ormaterial problems, personnel errors, managementconcerns, and communications issues. AppendixB 2 summarizes the reportable occurrences-atPORTS for FY 2004.

During FY, 2004, three reports were enteredinto the DOE Noncompliance Tracking System aspotential noncompliances with PAAA regulations.These reports were based on occurrences ORO-BJC-PORTENVRES-2003-0024, ORO-BJC-PORTENVRES-2003-0023, and ORO-BJC-PORTENVRES-2004-0009. These occurrencesrepresented potential noncompliances with 10 CFR830, Subpart A, "Quality AssuranceRequirements," and Subpart B, "Safety BasisRequirements." (See Appendix B.2, OccurrenceNos. 1, 2, and 9.)

5.2.14 Overall Portsmouth Summary

DOE accomplishments and initiatives toenhance and improve ES&H conditions at PORTSduring FY 2004 include, but are not limited to, thefollowing:

Commenced activities .to perforn a partialclosure of the X-7725 Hazardous Waste

* Storage areas under the site's RCRA Part BPermit to support the USEC CLC

Demonstration Project..(See Section 3.2.)

" Continued safe storage of approximately20,700 DUF 6 cylinders, including 1,876cylinders shipped to PORTS from ETTPduring FY 2004. (See Section 5.2.3.)

" Issued two SERs approving the DSAs andTSRs for the DUF 6 cylinder storage yardswhich are Category 2 Nuclear Facilities andfor the seven remaining Category 2 and 3Nuclear Facilities at PORTS. (See Section5.2.6.)

Constructed a new groundwater pump andtreatment facility, the X-627 facility, toreplace a temporary facility. (See Section5.2.7.)

" Completed the five-year review of the X-740Phytoremediation Project. (See Section 5.2.7.)-

" Completed a groundwater investigative studyon the south boundary of the plant, whichinvolved installation of eight new permanentmonitoring wells (four on-site and four off-site) and injection of a hydrogen releasecompound in 183 different locations to breakdown volatile organic concentrations ingroundwater. (See Section 5.2.7.)

Commenced design activities for the X-701BSWMU cleanup remedy that utilizes in-situchemical oxidant injection with recirculationof the groundwater and selective removal Ofsoils and capping of the X-701B Holding*Pond and retention basins. The 50% designpackage was provided to Ohio EPA on July30, 2004, and the 95% design is on scheduleto be submitted to Ohio EPA by December15, 2004. (See Section 5.2.7.)

Disposed of approximately 10,800 containersof waste. (See Section 5.2.8.)

* Recycled 47,464 pounds of aluminum cans,toner cartridges, paper, batteries, light bulbs

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and cardboard. (See Section 5.2.8.)

• Shipped approximately 3,030 containers ofDMSA waste for disposal. (See Section 5.2.9.)

6. COMPLIANCEWITHAPPLICABLE LAWS

During FY 2004, PGDP and PORTS receivedNOVs as discussed in Sections 5.1.9, 5.1.12,5.2.10 and in Appendix B. In all these instances,actions were taken to notify appropriate authorities,identify the causes of the alleged violation, andimplement corrective measures. In addition, AgreedOrders were entered, settling all identifiedoutstanding enforcement and compliance issues atPGDP, as discussed in Sections 4.1.1, 5.1.3,5.1.6.2, 5.1.7, and 5.1.8.

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ENDNOTES

1. 42 U.S.C. § 2297(h).

2. With the creation of USEC Inc.; the private corporation, on July 28, 1998, the United States Enrichment Corporation, thegovernment corporation, ceased to exist. USEC Inc., through its subsidiary, United States Enrichment Corporation or USEC,continues to operate PGDP today. Therefore, when the term "USEC" is used in this report in reference to events that took placebefore July 28, 1998, the term refers to USEC, the government corporation. When "USEC" is used in this report in relation toevents that occurred and continue to occur after July 28, 1998, the term refers to USEC, the subsidiary of USEC Inc.

3. With the signing of the USEC Privatization Act, the liability of the United States and the Secretary of Energy was modified.The United States assumed responsibility for liabilities arising out of the operation of USEC until the date of privatization[unless otherwise provided in a Memorandum of Agreement (MOA)]. The disposal of depleted uranium (DU) generated byUSEC between July 1, 1993, and the date of privatization is the responsibility of the Secretary of Energy. Pursuant to a June30, 1998, MOA and a June 17, 2002, Agreement between DOE and USEC, DOE agreed to accept additional DU generated byUSEC after privatization. (See Sections 1.2 and 5.1.3.)

4. For additional discussion of this regulatory responsibility, see USEC and DOE Agreement for Disposition of UraniumEnriched to Ten (10) Percent or Greater Assay at the Portsmouth Gaseous Diffusion Plant (PORTS), dated January 8, 1999,and in letter dated March 14, 2000, from S. A. Toelle (USEC) to Randall M. DeVault (DOE), Response to Department ofEnergy Letter Regarding Holdup of Uranium Enriched to Greater than or Equal to 10 Weight Percent 235 U in ProcessEquipment.

5. The DOE-prepared plans are titled Plan for Achieving Compliance with NRC Regulations at the Paducah Gaseous Plant andPlan for Achieving Compliance with NRC Regulations at the Portsmouth Gaseous Diffusion Plant. In July 2003, USECreported that NRC had closed all Compliance Plan issues.

6. In January 1999, NRC issued the first renewal of the Certificates of Compliance to USEC.

7. Operations at PORTS that are addressed in the Agreement include the following: (I) USEC will maintain leased andpersonal property (other than the property subject to the cold standby contract) in a condition that will permit its considerationas a candidate site for USEC's deployment of advanced uranium enrichment technology; (2) USEC will not unreasonablywithhold its agreement for DOE to allow private entities to access and utilize nonleased real and personal property for actiyitiesnot associatedwith enrichment of uranium so long as any such use will not have a material adverse impact on USEC'sadvanced enrichment technology program; and (3) USEC agrees, as further described in Article 4 of the Agreement, to operatethe Shipping and Transfer facilities for 15 months following the execution of the Agreement to remove the contaminants from aportion of its Affected Inventory to meet American Society for Testing and Materials (ASTM) C-787-90 or to produce materialacceptable to USEC for use as feed material in its enrichment facility.

8. This Policy canceled DOE Policy 450. 1, Environment, Safety and Health Policy for the Department of Energy Complex,dated June 15, 1995, and DOE Policy 450.6, Secretarial Policy Statement Environment, Safety and Health, dated April 14,1998.

9. DOE Directives are official communications of'policies, requirements and procedures. These include Policies, Orders,Manuals, Notices, Guides, Headquarters Directives, Secretary of Energy Notices, and Orders and Rules of interest to DNFSB.A current listing of DOE Directives is located at http://www.directives.doe.gov/cgi-bin/currentchecklist.

10. See Integrated Safety Management System Description, BJC-GM-1400, Revision 6, September 2004.

11. The NRC Certificates of Compliance for PGDP and PORTS limit USEC's possession of enriched uranium. At each site,possession of uranium enriched to 20% or greater in "5U, is limited to less than 1,000 grams; possession of uranium enrichedto 10% or greater, but less than 20%, in "sU, is limited to less than 10,000 grams. During FY 2004, no equipment, containers,or material containing uranium enriched to 10% or greater were discovered in USEC-leased areas at PORTS that requiredstorage in DOE nonleased areas and DOE regulatory oversight.

12. Pub. L. No. 105-245, October 7, 1998.

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13. 42 U.S.C. § 2201(k).

14. See Appendix B to Exhibit D of the Lease, "Enforcement Process."

15. In December 2002, the RO Manager and an RO staff member performed a special inspection at PORTS relating to anemployee allegation involving the training and testing of SPOs. While no.evidence was found to substantiate the allegation,DOE decided that future inspections conducted by DOE will incorporate additional attention to the training and testing ofSPOs.

16. This inspection occurred as scheduled at PGDP on October 18-22, 2004.

17. See endnote 24.

18. See Letter dated March 16, 2004, from J. Dale. Jackson (DOE) to Steven A. Toelle (USEC Inc.) transmitting the revision tothe ROA, Portsmouth Gaseous Diffusion Plant - Centrifuge Lead Cascade Regulatory Oversight Agreement.

19. See Exhibit D to the Lease Agreement Between the United States Departmetit of Energy and the United States EnrichmentCorporation, dated July 1, 1993.

20. See Letter dated February 2, 2004, from William D. Magwood, IV (DOE) to J. Morris Brown (USEC).

21. See Letter dated January 30, 2004, from Beverly A. Cook (DOE) to Ron Green (USEC Inc.) and J. Morris Brown (USEC).

22. See Letter dated May 26, 2004, from Randall M. DeVault (DOERO Manager) to Steven A. Toelle (USEC Inc.),Portsmouth Gaseous Diffusion Plant-It0 CFR 830 Quality Assurance Requirements Open Items and Quality AssuranceProgram (QAP), transmitting approval of the USEC QAP and indicating resolution of the eight open items related to the USECQAP.

23. See Condition 2 to the 10 CFR 835 exemption criteria.

24. This MOU is available online at http://www.nrc.gov/materials/fuel-cvclc-fac/mou.html.

25. The USEC Inc. 10 CFR 70 license (SNM-7003) to possess and use source and special nuclear material in the CLC becomeseffective only after NRC determines that USEC Inc.'s CLC management measures', facility construction, and pre-operationalactivities are acceptable, but before the introduction of UF 6 into the CLC facilities.

26. These other DOE/NRC agreements include the Agreement Defining Security Responsibilities at the Paducah 'andPortsmouth Gaseous Diffusion Plants Between the Department of Energy's Office of Safeguards and Security and the Nuclear

Regulatory, Commission's Division of Security, dated March 10, 1995, and the Memorandum of Understanding betveen theNuclear Regulatory Commission and Department ofEnergy on Cooperation Regarding the Gaseous Diffusion Plants, datedOctober 28, 1997.

27. USEC contested the violation involving lack of documentation of internally contaminated equipment stating they werefollowing procedure and had not reached the point in the disposal process where the documentation was required.

28. See Letter dated April 29, 2004, from Gerald G. Boyd (DOE) to William D. Magwood, IV (DOE) transmitting theAssessment of 10 CFR 830 Exemption Criteria for USEC American Centrifuge Demonstration Facility.

29. See Letter dated April 29, 2004, from Gerald G. Boyd (DOE) to DOE Headquarters, Office of the Assistant Secretary,Environment, Safety, and Health transmitting the Assessment of 10 CFR 835 Exemption Criteriafor USEC AmericanCentrifuge Demonstration Facility.

30. See endnote 21.

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31. See Letter dated August 27, 2004, from William D. Magwood IV (DOE) to Ron Green (USEC) regarding the 10 CFR 830exemption and letter. dated August 13, 2004, from John Shaw (DOE) to Ron Green (USEC Inc.) and Morris Brown (USEC)regarding the 10 CFR 835 exemption.

32. On May 11, 2001, USEC terminated uranium enrichment operations at PORTS.

33. The DOE IG audit report, Cold Standby Program at the Portsmouth Gaseous Diffusion Plant (DOE,/IG-0634) datedDecember 22, 2003, recommended (1) re-evaluation of the program mission need, (2) consolidation of program activities undera single DOE entity, (3) evaluation of services provided under existing USEC agreements, (4) negotiation of a performance-based contract with cost ceilings, and (5) establishing a programmatic baseline.

34. USEC also continues to lease the LEU enrichment cells and is responsible for surveillance and maintenance related to thesecells.

35. See endnote 7.

36. Attachment I to the February 17, 2004, Agreement outlines the phased approach, identifying both the facility and the datethat the lease of this facility to USEC is proposed to be effective. These effective dates can be modified by agreement of USECand the DOE Lease Administrator. According to this Attachment, DOE is scheduled to complete the transition all five facilitiesno later than January 1, 2005.

37. See Memorandum dated May 26, 2004, signed by Randall M. DeVault for J. Dale Jackson (DOE) to William E. Murphie(DOE) in which Mr..Murphie was notified that "'[a] revision to the Lease is underway for the Portsmouth Gaseous DiffusionPlant that entails the return of seven facilities or areas to the Department of Energy (DOE)." Also, see Letter dated August 13,2004, from J. Dale Jackson (DOE) to J. Morris Brown (USEC) in which DOE acknowledged USEC's request to "de-lease" "aportion of Building X-700, bounded essentially by columns AlIto D5.

38. See Letter dated August 3, 2004, from Randall M. DeVault (DOE) to Yawar H. Faraz (NRC). DOE also notified theOccupational Safety and Health Administration (OSHA) office in Cincinnati, Ohio, about its decision to.enter into (1) atemporary arrangement with USEC to lease the five former GCEP facilities to USEC and (2) two temporary agreements withUSEC for the de-leasing of the X-747J Storage.Pad.and the X-745G-1 (West Half Cylinder Storage Yard. See Letter datedAugust 3, 2004, from Randall M. DeVault (DOE) to Richard Gilgrist (OSHA).

39. See Letter dated August 13,•2004, from J. Dale Jackson (DOE) to J. Morris Brown (USEC). According to this Letter, theeffective date of this Lease change was August 20, 2004.

40. See Letter dated August 6, 2004, signed by Randall M. DeVault for J. Dale Jackson (DOE) to J. Morris Brown (USEC).

41. The Agreed Orders, Commonwealth of Kentucky File Nos. DWM-31434-042 and DWM-32434-030, were signed onSeptember 29, 2003, by Kentucky, on September 30, 2003, by DOE and entered as Final Orders on October 2, 2003.

42. File No. DWM-31434-042, the ER Agreed Order, addressed environmental and WM issues to be resolved at PGDP. FileNo. DWM-32434-030 addressed issues related to the DUF 6 Cylinder Management Program and is briefly discussed in Section5.1.3.

43. For a discussion of the LOI see Department of Energy Annual Report on the Status of Environmental,. Safety, and HealthConditions at the Paducah and Portsmouth Gaseous Diffusion Plants for Fiscal Year 2003, September 2004, DOE/ORO-2158.

44. This is the same facility that is referred to in Section 5.1 as the C-746-U Solid Waste Contained Landfill.

45. These interim actions included the installation of X-23 1B extraction wells; construction of the X-625 Passive GroundwaterTreatment Facility; installation of the X-701B interceptor trenches; relocation of Big Run Creek at Peter Kiewit Landfill;construction of the X-749 groundwater containment wall; and remediation of Well 6B.

46. During.FY 2004, the DOE IG conducted an audit of the GCEP cleanup project at PORTS. The resulting report (DOE/IG-0678) was issued in March 2005.

53

47. DOL is responsible for adjudicating and administering claims filed under the Act. DOLis also responsible for providingcompensation for approved claims. DOE provides information and data (e.g., verification of employment, radiation doserecords) to DOL and NIOSH in support of the Compensation Program. NIOSH conducts dose reconstructions in order toestimate worker exposure to radiation. DOJ administers RECA, which provides compensation benefits for uranium miners andmillers, as well as to "down-winders" from atmospheric tests of nuclear weapons. RECA applicants are eligible for additionalbenefits under the Compensation Program.

48. The Paducah Resource Center is located at Barkley Center, Unit 125, 125 Memorial Drive, Paducah, Kentucky 42001,(270) 534-0599; fax (270) 534-8723. Its toll free number is (866) 534-0599. An email address for the Paducah Resource Centeris also available:. paducah.center@rrohio.com.

49. The Portsmouth Resource Center moved to a new Iocation in FY 2004 and has established a toll free number for betteraccessibility and convenience to current and former workers and their families. The new address is 1200 Gay Street,Portsmouth, Ohio 45662. The toll free number is (866) 363-6993. An email address for the Portsmouth Resource Center is alsoavailable: portsmouth.center@rrohio.com.

50. This investigation was initiated as a result of discovery of information pertaining to weapons support work at PGDP and thediscovery of trace elements not normally associated with GDP operations. The conclusions of the investigation are documentedin a report titled Report on the Paducah Gaseous Diffusion Plant "Work for Others Program" Including Weapons Support andDisposition that was issued in December 2000. Data on beryllium use in the WFO Program at PGDP were included in thisreport..

51. Beryllium is a lightweight metal that is used to strengthen. other metals.

52. Ten samples of the more than 550 surface-wipe samples taken exceeded the limit for release to the general lpublic set by 10CFR 850, Chronic Beryllium Disease Prevention Program.

53. PORTS has experienced incidences of diagnosed beryllium sensitivity and cases of chronic beryllium disease in current andformer workers. As of September 30, 2004, 16 current or former workers with chronic beryllium disease and eight workerswith beryllium sensitization have been awarded EEOICPA compensation and/or medical coverage for diagnosis of beryllium-related disease states. These health screening findings were unexpected since the PORTS site did not have a known prior.mission or WFO Program activity that involved use of the metal.

54. Some former workers in the DOE Weapons Complex have tested positive for chronic beryllium disease and have been"compensated by the federal government.

55. Transparency measures are those measures employed by DOE to provide confidence to the United States that thedownblending of Russian HEU is occurring in accordance with the Agreement titled Agreement Between the Government of theUnited States and the Government of the Russian Federation Concerning the Disposition of Highly Enriched UraniumExtracted from Nuclear Weapons (February 1993).

56. A 30B cylinder can contain a maximum net weight of approximately 2.3 metric tons of UF6.

57. Most commercial contracts for the sale of LEU used to fuel commercial nuclear power plants are called toll enrichingcontracts. In a toll enriching contract, the customer buys the natural uranium and supplies it to the enrichment plant. The plantthen enriches the uranium and charges the customer for the cost of the separative work content in the enriched uranium, but notfor the original feed material. When a customer buys Russian LEU, the customer may have purchased the feed material from -

another source; in this case, the feed portion of the Russian LEU is not.sold to the customer, and the enrichment plant Willreturn the feed material to Russia upon request.

58. A 48Y cylinder has a nominal diameter of 48 inches and can contain a maximum net weight of approximately 12.5 metrictons of UF 6.

59. A 48X cylinder has a nominal diameter of 48 inches and can contain a maximum net weight-of approximately 9.5 metrictons of UF 6.

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60. Final Environmental Impact Statement for Construction and Operation of a Depleted Uranium Hexafluoride ConversionFacility at the Paducah, Kentucky, Site (FEIS) (DOEiEIS-0359,) and Final Environmental Impact Statementfor Constructionand Operation of a Depleted Uranium Hexafluoride Conversion Faciliiv at the Portsmouth, Ohio, Site (FEIS) (DOEIEIS-0360).

61. See 69 FR 34161.

62. Identification of a specific disposal facility and any additional environmental impacts related to disposal of the wasteproducts at the disposal facility will be addressed in additional NEPA documentation, as appropriate.

63. See 69 FR 44654 for the PGDP conversion facility ROD; see 69 FR 44649 for the PORTS conversion facility ROD.

64. The Site Management Plan Paducah Gaseous Diffusion Plant Paducah, Kentucky, DOE/OR/07-1849&D2RI, is availableat http://www.bechteliacobs.com/pdf/pad/SMP 04-12-04 F[NAL.pdf

65. U.S. General Accounting Office, Nuclear Waste Cleanup. DOE's Paducah Plan Faces Uncertainties and Excludes CostlyCleanup Activities, GAO/RCED-00-96 (Washington, D.C.: Apr. 28, 2000).

66. U.S. General Accounting Office, GAO-04-457, is available online at www.gao.gov/cgi-bin/getrpt?GAO-04-457.

67. See Letter dated March 12, 2004, from Jessie Hill Roberson, to Ms. Robin M. Nazzaro, attachment to GAO-04-457.

68. The CAB web site is located at http://www.oro.doe.2ovlppdpssab.

69. Infrastructure removal involves removal of utilities such as piping, wiring, tanks, etc., elements that are not part of the mainstructure (i.e., walls, roof, floor, etc.). Surveillance and maintenance continues, as the structure of the Complex remains inplace.

70. These tanks are approximately 9 feet in diameter and 26 feet long.

71. The Site Treatment Plan and associated Agreed Order, Commonwealth of Kentucky, File No. DWM-30039-042, was issuedSeptember 10, 1997. . ..

72. The original TSCA FFCA, its modifications, and its associated USEPA concurrences are located athttp://www.ohio.doe.pov/ppyo sebiation/refdoc rem pad.html.

73. Implementation Plan for U.S. Department ofEnergy Order 435. 1, DOE ORO, Oak Ridge, Tennessee, DOE/OR/01-1879.

74. The powder-like absorbent material is a non-radiological material that is added to the waste overpack containers to absorbnatural condensation. Free liquids such as natural condensation inside waste containers are not permitted for disposal at NTS.

75. This CAP was still in development at the end of FY 2004.

76. See Letter dated August 31, 2004, from Judith S. Wilson (DOE) to Michael C. Hughes (Bechtel Jacobs Company LLC), inwhich DOE also noted that it was "considering other impacts ... to determine if any additional fee will be reduced relative tothese incidents." As of the end of FY 2004, DOE was still evaluating whether costs related to the problems would bedisallowed.

77. This causal analysis also reviewed several other waste packaging and transportation incidents. As of the end of FY 2004,the causal analysis was ongoing.

78. The priority "A" DMSAs are those believed to pose the greatest potential risk to piant workers and the environment.

79. Costs associated with Qui Tam actions are not allbwable costs.

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80. As of the end of FY 2003, DOE and the Commonwealth of Kentucky had agreed to settle this matter. For further details,see Section 4.1.1.

81. See http://eh.doe.gov/paa/oesummarv/.

82. These budget figures include funding for receipt of DUF 6 cylinders from ETTP, but do not include DUF6 conversion plantfunding.

83. Final Programmatic Environmental Assessment for the U.S. Department of Energy,. Oak Ridge Operations Implementationof a Comprehensive Management Program for the Storage, Transportation and Disposition of Potentially Reusable UraniumMaterials, DOE/EA-1393.

84. The Fiscal Year 2063 Portsmouth Integrated Safety Management System (ISMS) Performance Sustainability Plan wasissued in December 2002.

85. Thirteen of the original 44 DMSAs have been emptied; however, DOE continues to use these emptiedDMSAs as requiredfor WM projects.

86. The 540 other wells on site are not required to be routinely monitored.

87. U.S. Department of Energy Portsmouth Annual Environmental Report for 2003, Piketon, Ohio, DOE/OR/1 1-3152&DI.

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APPENDICES

% l% :i U

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A. SUMMARY OF DOE REGULATORY OVERSIGHTPROGRAM INSPECTION REPORTS

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SUMMARY OF DOE REGULATORY OVERSIGHTPROGRAM INSPECTION REPORTS

Inspection Areas Examined ResultsReport No.

70-7003-2004-01' Three CLC ROA functional areas No violations of the requirements of the(Organization Plan, Management CLC ROA were identified. TheControl and Oversight, and Training Organization Plan functional area wasand Qualification) at PORTS. found acceptable; One Inspection Follow-

Up Item (IFI) was established in theManagement Control and. Oversightfunctional area: IFI 70-7003-2004-01-01,"Independent Safety Review Process." TheTraining and Qualification functional areawas found acceptable.

70-7003-2004-022 Two CLC ROA functional areas No violations of the requirements of the(Operations and Engineering/ CLC ROA were identified. Two InspectionConstruction) at PORTS. Follow-Up Items were established: IFI 70-

7003-2004-02-01, "Completion ofManagement Self-assessment," and IFI-70-

7003-2004-02-02, "Provision of PlantChange Reviews to DOE Site Office."

70-7003-2004-033 One CLC ROA functional area No violations of the requirements of the(Security) at PORTS. CLC ROA were identified. Six Inspection

Follow-Up Items were established: IFI 70-7003-2004-03-01, -02, -03, -04, -05, and -06.

70-7003-2004-044 One open item (Completion of No violations of the requirements of theManagement Self-assessment), one CLC ROA were identified.-One InspectionCLC ROA functional area (QA), Follow-Up Item was established: IFI 70-and USEC/USEC Inc. 7003-2004-04-01, "Inadequateorganizational staffing at PORTS. Surveillance." One open item was closed:

Inspection Follow-Up Item 70-7003-2004-02-01, "Completion of Management Self--assessment." The inspectors also noted thatDOE previously reported thatorganizational staffing and personneltraining would be reviewed in futurefunctional inspections. During the June 21-25 Training and Qualification inspection,personnel training was reviewed and foundacceptable.

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SUMMARY OF DOE REGULATORY OVERSIGHT: PROGRAM INSPECTION REPORTS (Cont.)

Inspection Areas Examined ResultsReport No.

70-7003-2004-04 During this inspection, organizationalcont. staffing was reviewed, and the inspectors

noted that while USEC/USEC Inc. hasmade considerable progress, USEC Inc.lacks a manager for the QA Program.

70-7003-2004-05' One open item (Independent Safety Several activities were identified as being inReview Process) and one CLC violation of the requirements of the CLCROA functional area (Radiation ROA. Because of the prompt and thoroughProtection) at PORTS. corrective actions, no NOVs were issued.

Four non-cited violations (NCVs) wereestablished: NCV 70-7003-2004-05-01,"Radiological Postings and Barriers;" NCV70-7003-2004-05-02, "Documentation ofPotential Internally ContaminatedEquipment Destined for Off-siteShipment;" NCV 70-7003-2004-05-03,"Implementation of the OccupationalHealth Program;" and NCV 70-7003-2004-05-04, "Occurrence Reporting Criteria."6

One open item was closed: InspectionFollow-Up Item 70-7003-2004-01-01,

I_ I "Independent Safety Review Process."

1. Inspection conducted June 21, 2004, through. June 25, 2004.

2. Inspection conducted July 19, 2004, through July 22, 2004.

3. Inspection conducted August 2, 2004, through August 6, 2004.

4. Inspection conducted August.23, 2004, through August 26, 2004.

5. Inspection conducted September 13, 2004, through September 16, 2004.

6. NCV 70-7003-2004-05-04, "Occurrence Reporting Criteria," was forwarded to DOE OE.

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B. SUMMARY OF REPORTABLE OCCURRENCES IN DOENONLEASED AREAS AT THE GASEOUS DIFFUSION PLANTS

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1. PADUCAH GASEOUS DIFFUSION PLANT

1. Rupture of Pressurized CO2 Fire Extinguisher by Scrap Metal Shear Results in Near-Miss Accident[October 13, 2003, ORO--BJC-PGDPENVRES-2003-0016, Off-Normal]. While moving debris in theC-746-P Scrap Yard as part of the Scrap Metal Removal Project, an excavator accidentally ruptured apressurized fire extinguisher, which had been believed to be empty. The rupture caused rapiddepressurization of the extinguisher's gas. cylinder. The force of the depressurization propelled thelower section of the cylinder upward and across a roadway into another scrap yard.. The, cylinder.landed approximately 60 feet from two subcontractor employees. Workers had previously encounteredmany other gas cylinders all of which were found drilled and/or with valves or pressure relief devicesremoved. The subcontractor suspended operations in the C-746-P Scrap Yard. Before resuming work,project personnel conducted a safety stand-down to evaluate the incident and to walk down the scrapyards to identify potential hazards. Special training for recognition and safe handling of compressedgas cylinders was conducted. The root cause was identified, and corrective actions were implemented.There was no identified impact on the environment, safety, or health.

2. Personnel Contamination Event in C-746-C Scrap Yard [October 23, 2003, ORO--BJC-PGDPENVRES-2003-0017, Off-Normal]. During work on the Scrap Metal Removal Project in the C-746-C Scrap Yard, a heavy equipment operator left the cab of a material handlerto point out suspectmaterials to an NCS inspector. While attempting to expose a specific piece of metal, the operator'sgl6ve contacted a contaminated piece of metal. As the operator walked back to his equipment, hestepped on a piece of wood, inadvertently causing water from a nearby puddle to splash onto the leftpant leg and left shoulder of his company-issued work clothing. When the operator brushed the waterfrom his pants and shirt with his glove, he transferred contamination from his glove to his clothing.Recognizing that his clothing might be contaminated, the operator returned to the boundary controlstation and informed the Radiological Control organization. When monitored at the boundary controlstation, the operator's clothing indicated detectable radiological beta/gamma contamination. No alphacontamination was detected above established limits, and no skin contamination was detected upon.removal of the clothing. However, the operator had violated the radiation work permit for his assignedtask because he touched the contaminated scrap metal without wearing the personal protectiveequipment required for touching or moving scrap metal by hand. A radiological survey of theequipment cab detected no contamination above established limits. Contamination was confined to theclothing of the heavy equipment operator. No contamination was spread outside the controlled area.The root cause was identified, and corrective actions were implemented. There was no identified impacton the environment, safety, or health.

3. Fixed Contamination Above 10 CFR -835 Limits Discovered Outside the C-410 Complex (ROLLUP)[October 23, 2003, ORO--BJC-PGDPENVRES-2003-0018, Off-Normal]. On October 23, 2003, aradiological control technician (RCT) detected radiological contamination on paint chips that appearedto have flaked off building vent stacks on the north side of the C-410 Feed Plant, an inactive facility inthe D&D program. The area was not posted for radiological contamination. Tomeet safety and healthrequirements, health physics personnel posted this area as a contamination area. On November 3,2003, in a second occurrence, an RCT detected radiological contamination on dirt/sand debris to thenorth of the C-410 facility. This area also was not posted for radiological contamination. Healthphysics personnel extended the posted contamination area to include the newly identified contaminatedarea. Both of these occurrences resulted from legacy contamination that was discovered whileconducting radiological surveys as part of the ongoing Radiation Protection Program. The root causewas identified, and corrective actions were implemented. There was no identified impact on the

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environment, safety, or health.

4. Potential Inadequate Safety Analysis Related to Trap Mix Discovery Issue [November 10, 2003,ORO--BJC-PGDPENVRES-2003-0019, Unusual]. An SB violation was noted when site personneldetermined that enriched uranium in trap mix containers in the C-746-B facility exceeded SB limitsunder the site's NCS Program. An examination of 24 containers (out of 178 containers) revealed that10 containers had average enrichments in excess of I% and an estimated total . 35U mass of 1,333grams (plus or minus 417 grams). However, the SB document stated that the facility has less than 700gof 35U at enrichment levels in excess of 1%. Also, the Hazards Assessment Document for the facilitystated that only two containers, having a total quantity of less than 17 grams of .35U at enrichmentlevels over 1%, are present. NCS personnel assessed the situation and determined that compliance withthe double contingency principle still exists and that no credible criticality accident scenario existed.Movement of trap mix containers was stopped. Also, NDA efforts were continued in order to determinethe mass and average enrichment levels of the remaining 154 containers. The root cause was identified,and corrective actions were implemented. There was no identified impact on the environment, safety, orhealth.

5. Radiological Contamination Exceeding 10 CFR 835 Limits Discovered in C- 746-P Scrap Yard[December 08, 2003, ORO--BJC-PGDPENVRES-2003-0020, Category 4]. While surveying scrapmetal at the C-746-P Scrap Yard, an RCT detected fixed and removable contamination on a metalpipe. The C-746-P Scrap Yard is posted as a Radioactive Materials Area/Fixed Contamination Area.There was no removable contamination on the outside of the pipe. A survey of adjacent scrap metaldetected no removable contamination. Work was suspended. After the open ends of the pipe werebagged, the pipe was tagged as radiological material and moved to an adjacent contamination area inthe C-746-,P Scrap Yard. Immediate corrective actions were implemented. There was no identifiedimpact on the environment, safety, or health.

6. Removable Contamination Exceeding 10 CFR 835 Limits Discovered in C- 746-P Scrap Yard[December 31, 2003, ORO--BJC-PGDPENVRES-2004-0001, Category 4]. While surveying scrapmetal in the C-746-P Scrap Yard, RCTs detected fixed and removable contamination on an expansionjoint. The C-746-P Scrap Yard is posted as a Radioactive Materials Area/Fixed Contamination Area.A survey of accessible adjacent scrap metal revealed no removable contamination. Work wassuspended. The item was moved to an adjacent contamination area in the C-746-P Scrap Yard.Immediate corrective actions were implemented. There was no identified impact on the environment,safety, or health.

7. Heavy Equipment Damages Insulation on Overhead Steam Line [March 2, 2004, ORO--BJC-PGDPENVRES-2004-0002, Category 4]. While enroute to where a subcontractor field team waspreparing to load intermodal containers onto flatbed trailers for the DMSA Project, an employee drovea lift truck under a steam line that was located above the road. The telescoping boom of the lift truckcontacted the insulation on the steam line. While the contact did not damagethe steam piping, it didcause insulation to be scraped from the bottom of the line. Because the insulation potentially containedasbestos materials, work was suspended. The insulation was cleaned up. Immediate corrective actionswere implemented. There was no identified impact on the environmentý safety, or health.

8. Potential InadequateSafety Basis (PISB) for the C-410 Tank Farm [March 4, 2004, ORO--BJC-PGDPENVRES-2004-0003, Category 4]. The SB documents in effect for the tank farm portion of theC-4 10 Feed Plant Complex, which is undergoing D&D, were developed using Preliminary Hazard

B-4

Screenings (PHS) based on investigations of the tanks in the 1990s. The PHSs assessed the tanks asempty. During demolition of the tank farm in FY 2004, it was determined that the tanks actuallycontained significant quantities of sediment. Analysis .indicated the presence of radiological materialquantities in excess of the SB limits. Subcontractors-suspended work involving the removal of thesediment, pending completion of corrective actions. The M&I Contractor completed an UnreviewedChange Determination (UCD). The UCD concluded that the margins of safety for the tank farm hadbeen reduced and that the condition represented an Unreviewed Change. A revision of the PHSs for thetank farm was initiated to address the quantities of radiological material in the tank farm. New 10 CFR830 SB documents, consisting of a DSA and TSR, have been developed for the entire C-410 Complex,including the tank farm, but have not yet been implemented. Based on the potential radionuclideinventory in the C-410 Complex, these SB documents, which have been approved by DOE, upgrade thenuclear hazard categorization of the C-410 Complex to a Hazard Category 2 Nuclear Facility.Immediate corrective actions were implemented. There was no identified impact on the environment,safety, or health.

9. Error in Calculation of Fluorine Cell Electrolyte Constituents in the C-410 DS.A Results in PotentialUnreviewed Safety Question (USQ) [April 12, 2004, ORO--BJC-PGDPENVRES-2004-0004,Category 3]. The SB documents for the C-410 Feed Plant Complex were based on the supporting AAcalculation. Both the DSA and the supporting AA calculation report the hazardous material inventoryfor the C-410 Complex, which includes the hazardous chemical inventory in the fluorine cells. TheseSB documents determine the potential source term and consequences for a release of the inventory intothe atmosphere. The DSA and AA include calculations of the hydrofluoric acid inventory associatedwith the make-up solution of the fluorine cell electrolyte. An erroneous assumption was used in thesecalculations. This assumption resulted in a lower calculated source term and consequences for theevaluated design basis events involving the fluorine cells within the C-4 10 Complex. While thecorrected source term and consequences are slightly higher than those reported in the DSA and AA, therecalculated consequences did not affect the risk level associated with eventsinvolving the fluorinecells. Therefore, no compensatory measures or additional controls are required due to this calculationerror. The as-found condition at the C-410 Complex represents a potential USQ in relation to theC-410 Complex DSA, which has not yet been implemented.

Additionally, the C-752-A Environmental Restoration Waste Storage Facility, a radiological facility,contains thirteen fluorine cells similar to those in the C-41 0 Complex. The same inventory informationfor the electrolyte used in the DSA for the C-410 Complex, including the erroneous assumption, wasused in the. development of the C-752-A PHS. No consequences were calculated for the fluorine cellinventory in the PHS. The C-752-A facility was classified, based solely on the facility inventory, as aHigh, non-radiological, hazard facility when compared to Process Safety Management of HighlyHazardous Chemicals (29 CFR 1910.119) Threshold Quantities. Based on this information, nuclearsafety personnel initiated an UCD for the fluorine cells in the C-752-A facility. Preliminary review ofthe data indicated that the UCD would be negative because the increase in hydrogen fluoride inventoryfor the facility does not increase the non-radiological classification of the facility or reduce the marginof safety beyond that identified in the current PHS. Therefore, based on this preliminary review, nocompensatory measures or additional controls will be required in the C-752-A facility. Immediatecorrective actions were implemented. There was no identified impact on the environment, safety, orhealth.

10. Suspect/Counterfeit Bolts Discovered During Preparation for Off-site Waste Shipment [May 3, 2004,ORO--BJC-PGDPENVRES-2004-0005, Category 4]. An M&I Contractor waste certification official

B-5

identified suspect/counterfeit bolts in three nylon ratchet straps that were being used to secure B-25radioactive waste containers to a trailer for transport to the local truck loading area. A check ofidentical straps that were being used to provide supplemental restraint of the B-25 container lids duringshipment showed that the bolts on these straps were not suspect/counterfeit. However, twenty-oneadditional ratchet straps with suspect/counterfeit bolts were found in a work van at the job site. Thesestraps had ,never been used andwere still in the vendor-supplied packaging. No receipt inspection wasperformed on the nylon ratchet straps when they were purchased. The three in-service nylon straps withsuspected counterfeit bolts were immediately removed from service and replaced with nylon strapscontaining approved bolts. The straps with suspected bolts were returned to the vendor and replacedwith straps that contained no suspect bolts. The potential existed that other projects at PGDP hadpurchased similar ratchet straps from the local vendor, therefore, other projects were notified of the.suspect/counterfeit bolts and instructed to check all nylon tie-down straps in their areas for similarproblems. New straps will be examined for counterfeit bolts during receipt inspection. Immediate.corrective actions were implemented. There was no identified impact on the environment, safety, orhealth.

11. Notice of Violation for Alleged Exceedance of Acute Toxicity Limits at KPDES Permitted Outfall 017[May 24, 2004, ORO--BJC-PGDPENVRES-2004-0006, Category 4]. KDOW issued an NOV toDOE and the M&I Contractor in which KDOW alleged a violation of the acute Whole EffluentToxicity (WET) limits at KPDES Outfall 017 at PGDP. KPDES Outfall 017 is an intermittent surfacewater runoff outfall that receives runoff from the DOE DUF6 cylinder -storage areason the south sideof the PGDP site. Sampling is conducted quarterly at this outfall in accordance with the permitrequirement. The NOV cited the April 2004 bio-monitoring report which stated that an acute WET testthat month exceeded the KPDES permit limit and therefore, failed. The retest conducted later in April•also showed an exceedance of the permit limit. The acute toxicity. exceedances were for bothPimephales promelas (fathead minnows) and Ceriodaphnia dubia (water fleas) on the first Aprilsampling, and for Ceriodaphnia dubia only on the subsequent sample. DOE and the. M&I. Contractorsubmitted a TRUE Plan to KDOW, as required by the terms of the NOV. Implementation of this TRI/EPlan will determine the extent of any effects on the environment. The 'plan and implementation schedulespecified the method and timeframe to achieve compliance with the WET permit limits. In addition,DOE and the M&I Contractor implemented monthly WET testing as required by the permit due to theacute toxicity failure. Immediate corrective actions were implemented.. There was no identified impacton safety and health.

12. Near Miss - Forklift Operator Contacts Overhead Line with Forklift Mast [May 24, 2004,ORO--B)C-PGDPENVRES-2004-0007, Category 3]. A forklift operator employed by the M&IContractor inadvertently contacted an overhead electrical line with the forklift mast while transportinga waste material container to a loading pad. The operator remained in the cab until it was deemed safeby plant power operations to exit. Plant electricians tested the line and found it to be de-energized. Theoverhead line connected the telephone and public address system for three plant facilities. The operatorstated that this route was not normally used to transport waste containers, but was selected on thisoccasion to avoid UF6 cylinder hauler traffic and construction traffic near the normal route. The forkliftwas being used for the first time having replaced a smaller forklift with a shorter mast. The wastecontainer was being. transported as low as poss-ible. A safety stand-down was conducted with the scrapmetal crew to review forklift operations and overhead obstructions. To avoid the potential for forkliftcontact with overhead obstructions during waste container movement, project management relocatedthe loading operation staging area. A causal analysis was performed, and corrective actions wereimplemented. A lessons learned report was issued. There was no identified impact on the environment,

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safety, or health.

13. Paducah Cylinder Yard TSR Violation [June 14, 2004, ORO--BJC-PGDPENVRES-2004-0008,Category 2]. While mowing in the C-745-D .DUF6 Cylinder Storage Yard, a subcontractor left a tractorand bush hog unattended within the cylinder storage yard during a lunch break. Members of thecylinder operations crew recognizing that equipment left unattended within a specified proximity ofUF6 cylinders potentially violated the Combustible Material Control Program element of the TSR forthe DOE C-745 Cylinder Storage Yards, stayed with the equipment. This incident was determined to bea violation of the facility TSR since the Combustible Material Control Program had not established asafe standoff distance for this type of equipment. A causal analysis was performed, and correctiveactions were implemented. There was no identified impact on the environment, safety, or health. Thisoccurrence was a basis for Noncompliance Tracking System (NTS) Report No. NTS-ORO-BJC-PGDPENVRES-2004-0001, Paducah UF 6 Cylinder Yard TSR Violation.

14. Hydraulic Oil Spill Above State Reportable Quantity During Landfill Operations [June 11, 2004,ORO--BJC-PGDPENVRES-2004-0009, Category 4]. While a track hoe was being used within theoperating cell of the C-746-U Solid Waste Contained Landfill, a hydraulic line on the track hoeruptured. The operator noticed the hydraulic leak and immediately shut down the equipment. Theequipment was restarted long enough to lower the boom to where it could be accessed and to move thetrack hoe out of the way in order to facilitate closing the working face of the cell. The leak was locatedin a main hydraulic line on the top of the boom. Most of the spilled oil was scraped into the disposalhole within the operating cell of the landfill. Maintenance repaired the ruptured line and cleaned thesurface of the track hoe where the oil had spilled onto the equipment. The contaminated soil wascollected and disposed of in the working face of the landfill. When the hydraulic reservoir was refilled,it was determined that approximately 30 gallons of oil was spilled, exceeding the State ReportableQuantity of 25 gallons. Upon determining that a reportable quantity of oil had been spilled, the M&IContractor made appropriate notifications. Immediate corrective actions were implemented. There wasno identified impact on the environment, safety, or health.

15. C-746-U Landfill Forklift Accident [July 12, 2004, ORPP-PPPO-BJC-PGDPENVRES-2004-0010,Category 3]. During disposal operations at the C-746-U Landfill, a near-miss occurred when thebrakes on a forklift that was being used to transport "B-25" waste boxes weighing approximately 8,000pounds failed. The forklift traveled approximately 20 feet down a steep incline into the landfill stoppingon the landfill's working face. The operator suffered only minor skin abrasions and was transported toa- local medical facility, given an over-the-counter pain medication, and released without medicalrestrictions. Work was stopped and landfill disposal operations were suspended pending the outcome ofan investigation. A causal analysis was performed, and corrective actions were implemented. Therewas no other impact on the environment, safety, or health.

16. Legacy Contamination Outside C-746-B Facility [July 26, 2004, ORO--BJC-PGDPENVRES-2004-'0011, Category 4]. During a survey of a bundle tube cart near the C-746-B facility, an RCT foundlegacy contamination. The maximum level of contamination was 283,992 dpm/100 cm2 beta-gamma.The cart was discovered within a radiological controlled area but not within a posted radioactivematerial area (RMA), as required by procedure. Subsequently, the cart was wrapped and tagged asradioactive material, and the area was re-posted as an RMA. Immediate corrective actions wereimplemented. There was no identified impact on the environment, safety, or Health.

17. Material Discovered on Truck Bed During In-Transport Inspection of UF4 T-Hopper Shipments

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[August 15, 2004, ORO--BJC-PGDPENVRES-2004-0012, Category 3]. While transporting T-hoppercontainers from PGDP to the NTS in five tractor-trailer trucks, four drivers observed a white,'granularsolid and a clear, gel-like material on the beds of their trailers on August 15, 2004. Each T-hoppercontainer was holding approximately five tons of depleted uranium tetrafluoride. The T-hoppercontainers were overpacked inside of sealed Sealand containers. The drivers of the trucks wereinstructed to remain at their locations parked along public roadways. Subsequently, three RadiologicalAssistance Program (RAP) teams were deployed from various sites, to the trucks. All three RAP teamsconfirmed that there was no radiological contamination on any of the trucks. Later, the truck driverswere authorized to apply caulking sealant to their truck beds in order to contain this material and tocontinue their journey to NTS. NTS personnel were requested to perform a thorough inspection of thecontainers upon arrival at NTS. The T-hopper shipments arrived at NTS on August 16 and 17, 2004.Subsequent discussions with NTS personnel revealed that a similar incident was identified in a wasteshipment from the PGDP DMSA Project that arrived at NTS on August 16, 2004. No radioactivematerial was released in either the T-hopper or the DMSA waste shipments, and NTS accepted bothshipments for disposal. A team is conducting an analysis of the cause of adverse trends relative towaste shipments. A corrective action plan will be developed to address causes and to remedydeficiencies in order to preclude recurrence of shipment incidents. There was no identified impact onthe environment, safety, or health. This occurrence was a basis for NTS Report No. NTS-ORO-BJC-PGDPENVRES-2004-0002, Adverse Trend in Waste Packaging and Transportation Incidents atPaducah.

18. Legacy Fixed Contamination Discovered Outside Posted Area on Concrete Driveway [August 19,2004, ORO--BJC-PGDPENVRES-2004-0_013, Category 4]. During a routine survey, an RCT foundlegacy contamination on theconcrete apron that opened to a gravel access road leading to the C-745-CCylinder Storage Yard. The concrete apron is located within a controlled area. The maximum levels offixed contamination were 422,989 dpm/100 cm2 beta-gamma and 333 dpm/100 cm 2 alpha. Noremovable contamination was found. Subsequently, the concrete apron area was roped off and postedas a "Contamination Area." Immediate corrective-actions were implemented. There was no identifiedimpact on the environment, safety, or health.

19. Free Liquids Discovered in Waste Containers Shipped to Envirocare of Utah [August 27, 2004,.ORO--BJC-PGDPENVRES-2004-0014, Category 3]. During receipt inspection of PGDP PCB wastecontainers at the Envirocare mixed-waste disposal facility, three containers or drums of flume sludgewere determined to have unacceptable volumes of free liquid (estimated at less than a quart per drum)present in the waste. Envirocare's permit requires that any PCB shipments arriving with free liquidsmust be rejected and the Notice to Transport must be withdrawn for that particular waste profile.Subsequently,. shipments from the affected PGDP profile were suspended, pending corrective action. Ateam is conducting an analysis of the cause of adverse trends relative to waste shipments. A correctiveaction plan will be developed to address causes and to remedy deficiencies in order to precluderecurrence of shipment incidents. There was no identified impact on the environment, safety, or health.This occurrence was a basis for NTS Report No. NTS-ORO-BJC-PGDPENVRES-2004-0002,Adverse Trend in Waste Packaging and Transportation Incidents at Paducah.

20. Notice of Violation (NOV)for Alleged Acute Toxicity Exceedance from May 2004 Sampling Event atOutfall 017 [September 16, 2004, ORO--BJC-PGDPENVRES-2004-0015, Category 4]. KDOWissued an NOV to DOE regarding an alleged violation of the acute WET limits at KPDES Outfall 017,an intermittent surface water runoff outfall at PGDP that receives ruinoff.from the DUF6 cylinderstorage areas. The NOV referenced sampling results from May 2004 that indicated an acute toxicity

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unit (TUa) level of 4.00, exceeding the KPDES WET limit of 1.00 TUa. The NOV requires the acutetoxicity testing frequency to be increased from quarterly to monthly and a TRE Plan to be submitted.Immediate corrective actions were implemented. There was no identified impact on safety and health.

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2. PORTSMOUTH GASEOUS DIFFUSION PLANT

1. Inaudible Criticality Accident Alarm Systems at the X-7745R Pad, X-7725, and X-345 [October 23,2003, ORO--BJC-PORTENVRES-2003-0023, Unusual]. During a meeting on October.23, 2003, todiscuss comments on a DSA for PORTS nonleased Category 2 Nuclear Facilities (i.e., the non-cylinderstorage yard facilities), the nuclear safety lead recognized that the Immediate Evacuation Zone (IEZ)for the X-7745R Pad extends beyond parts of Grebe Avenue and Rush Streets. Because there was nodocumentation confirming that the CAAS alarms would beaudible at these locations, a PotentialInadequate Safety Analysis existed. There was already an identified CAAS audibility concern for theX-7745R Pad which required radios for access to the pad, but the radio' requirements did not extendbeyond the pad. The "as found" condition was evaluated and determined to be a positive USQ. The X-7745R Pad was placed in a Limiting Condition of Operation (LCO) until a Justification for ContinuedOperation (JCO) was issued by the M&I Contractor to DOE. During evaluation of other facilitiescovered by this DSA, CAAS audibility issues were discovered in the southern portion of the mainpersonnel change-out locker room and two unmanned maintenance rooms in the X-7725 facility, aswell as within the IEZ extending 200 feet from the X-345 facility outer walls. LCOs were entered totest the CAAS clusters in these areas. The CAAS and building evacuation homs are designed, installed,tested and operated by USEC under the provisions of the lease agreement with DOE. Compensatorymeasures were put into place restricting access to these areas. All movement of fissile material wassuspended on the X-7745R Pad and within the X-345 facility. The root cause was identified, andcorrective actions were implemented. USEC installed a new CAAS cluster horn to cover the X-7745RPad and conducted an audibility test on February 25, 2004. An additional corrective actionrequiresUSEC to modify the CAAS and conduct an audibility test for theentire X-345 facility IEZ. A lessonslearned was prepared. There was no identified impact on the environment, safety or health. Thisoccurrence was a basis for NTS Report No. NTS-ORO-BJC-PORTENVRES-2004-0001, CriticalityAccident Alarm System (CAAS) Audibility and Detection Issues.

2. X-345 Limiting Condition for Operation (LCO) Change Documentation Overdue [November 24,2003, ORO--BJC-PORTENVRES-2003-0024, Category 2]. As part of the corrective actions initiatedon October 23, 2003, for Occurrence Report ORO--BJC-PORTENVRES-2003-0023, an evaluationwas conducted of all CAAS associated with nonleased facilities at PORTS. A potential audibility issuewas identified with the CAAS in the X-345 facility. Pending completion of the CAAS audibility testingwithin the IEZ extending 200 feet from the facility, the X-345 facility was entered into a LCO. Asrequired by the TSR, if the CAAS coverage (i.e., detection and alarm capability with at least one fixedCAAS cluster/alarm) cannot be restored within two weeks for the area applicable to this LCO, then thefacility must be placed in the safest operating condition in accordance with a second LCO. The duedate for the change in LCOs was November 21, 2003. The LCO change was not actually performeduntil November 24, 2003. However, the facility had been placed in its safest operating condition..Therefore, no new action was required to change LCOs. However, the documentation of the LCOchange was not completed within the two-week timeframe required by the LCO in the TSR. The CAASaudibility testing on the exterior of the X-345 facility was completed on November 25, 2003. Uponevaluation, the test showed that the CAAS audibility for:the facility was inadequate. Therefore, the X-345 facility was placed in a standby mode on November 25, 2003, and all material movements in thefacility were suspended. A causal analysis was performed, and corrective actions were implemented.There was no identified impact on the environment, safety, or health. This occurrence was a basis forNTS Report No. NTS-ORO-BJC-PORTENVRES-2003-0001, X-345 Limiting Condition ofOperation (LCO) Time Limit and Documentation Missed.

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3. Fire Damages'Unoccupied Field Office Trailer on North Side of the X-623 Facility [January 4, 2004,ORO--BJC-PORTENVRES-2004-0001, Category 4]. On January 4, 2004, a subcontractor reportedsmoke coming from the southeast corner of a vacant and unoccupied 10 ft. by 40 ft. field office trailerlocated on the north side of the X-623 Groundwater Pump and Treat Facility. The trailer had not beenin use for approximately one week and had been locked by the facility manager. Theplant firedepartment was dispatched, and the fire was immediately extinguished. The trailer sustained heavy firedamage. Boundary controls were established around the trailer, and an investigation was initiated todetermine the cause of the fire. The fire department's initial determination suggested that the cause wasa faulty fluorescent light ballast. The M&I Contractor safety and facility managers initiated planning toconduct walk-throughs of all remaining trailers to assess potential ignition sources, especially portableheater use. Immediate corrective actions were implemented. There was no identified impact on theenvironment, safety, or health..

4. Bobcat Front Glass Window Shattered by Single Piece of Scrcap Metal [February 4, 2004, ORO--BJC-PORTENVRES-2004-0003, Category 2]. As part of the Scrap Metal Removal Project, scrapmetal from the X-747H Scrap Yard must be radiologically characterized before it is packaged forshipment. To protect the scrap metal from the weather as well as allow safe access to it, the material isseparated and laid out on the floor of the X-752 Warehouse. The scrap metal is routinely transportedinto and out of the X-752 Warehouse with a forklift, Trackcat or Bobcat skid steer loader. OnFebruary 4, 2004, the Trackcat operator placed an L-shaped piece of scrap metal, weighingapproximately 300 lbs. into the Bobcat bucket-on topof other scrap metal. The short end of the scrappiece was placed in the bucket with the long end leaning toward the Bobcat cab. When the metal wasreleased from the Trackcat jaw, the top of the L-shaped piece of scrap metal slowly 'leaned toward theBobcat windshield and hit the bottom of the windshield just below the wiper assembly. The contactcaused the safety glass to shatter into approximately 3/8-inch square pieces. Work was suspended. TheBobcat operator was not injured. A causal, analysis was performed, and corrective actions wereimplemented. This-event was classified as a near miss, and a lessons learned was prepared. There wasno identified impact to the environment, safety, or health.

5. Notice of Violation Received for Storing Batteries Longer than One Year [February 9, 2004, ORO--BJC-PORTENVRES-2004-0004, Category 4]. On June 10 and 11, 2003, representatives of theUSEPA and Ohio EPA inspected DOE facilities at PORTS to evaluate compliance with certainprovisions of the RCRA, specifically those regulations related to the generation, treatment and storage'of hazardous waste. During the records review portion of this inspection, the inspectors reviewed aJanuary 22, 2002, Bill of Lading for a shipment of three drums of nonspiliable batteries and 37containers of acid filled batteries. Also during the inspection, it appeared that certain lead acid batterieshad been stored for greater than one year, since the last shipment on January 22, 2002. A letter fromUSEPA, dated February 9, 2004, alleged that this was in violation of the OAC 3745-273-35 (A) and(B) and 40 CFR 273.35 (a) and (b). The M&I Contractor had storage information to refute the USEPANOV. The USEPA inspection was in June 2003. Prior to this inspection, accumulation of batteries wasstarted in January 2003, and subsequently, shipment of these batteries -took place in December 2003.Therefore, the batteries were in storage approximately six months at the time of the USEPA inspectionand were shipped less than one yearfrom the time of the start of accumulation. A follow up with..USEPA was scheduled'to further discuss documentation and request a retraction of the NOV.However, USEPA did not retract the NOV. There was no identified impact to the environment, safety,or health.

6. Notice of Violation Received.for Overdue Personnel Training and hnproper Battery Labeling

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[February 26, 2004, ORO--BJC-PORTENVRES-2004-0005, Category 4].On February 10 and 11,2004, Ohio EPA inspected DOE's hazardous waste storage facilities at PORTS to evaluate compliancewith Ohio's hazardous waste laws, the site's RCRA Part B hazardous waste permit,, and the OhioEPA's DFFOs for the Site Treatment Plan. During the inspection, Ohio EPA cited violations of OACRule 3745-54-16 (C),, which states that facility personnel shall take part in an annual review of theinitial training as required by this rule, and OAC Rule 3745-50-58 (A), which requires compliance withall terms and conditions of the permit. Two employees were 10 to 21 days overdue for the annualRCRA Part B Contingency Training and were in violation of these OAC Rules. In addition, theinspectors cited violation of OAC Rule 3745-273-34 (A), which states that universal waste batteries, ora container or tank in which the batteries are contained, shall be labeled or marked clearly with any oneof the following phrases: "universal waste battery(ies)," "waste battery(ies)," or "used battery(ies)."During the inspection, the inspectors observed that the universal waste batteries were tidily stacked ona wooden pallet and secured to the pallet with duct tape. The storage date was written on the duct tape.Two signs were posted in front of the pallet with "Recyclable Battery Storage Area" and "Universal.Waste Batteries" written on the signs. In addition, a sign designating the pallet as storage for recycledbatteries was in- place. However, since the batteries were not individually labeled or contained in acontainer, the inspectors cited this as a violation of OAC Rule 3745-273-34 (A). Immediatelyfollowing the inspection, the M&I Contractor placed the batteries in a labeled container and submittedphotographs to Ohio EPA to document a return to compliance with the rule. Immediate correctiveactions were implemented. There was no identified impact to the environment, safety, or health.

7. Employee Breaks Ankle [April 14, 2004, ORO--BJC-PORTENVRES-2004-0007, Category 3]. OnApril 8, 2004, at approximately 1050 hours, an M&I Contractor employee twisted his left ankle andfell when he stepped from the X-747H don/doff trailer onto the metal platform/stairway landing. Spotwelds holding the expanded metal platform surface to the angle iron trim had failed, causing theexpanded metal platform to give way approximately 1/4 inch which, in turn, caused the employee'sankle to toll. The employee was taken to the hospital for evaluation. After x-raying the injury, theinitial diagnosis was a severe sprain. This diagnosis also noted a bone fragment. A weld repair of theplatform was completed at approximately 1300 hours on April 8, 2004. After further inspection,bracing and welds were added to improve the strength and durability of the don/doff trailer metalplatforms and stairs. On April 14, 2004, a doctor from the hospital, while discussing the employee'sdiagnosis with the M&I Contractor ES&H Manager told the Manager that the employee had sustaineda fracture to his left ankle. This information resulted in the initiation of this occurrence report. A causalanalysis was performed, and corrective actions were implemented. A lessons learned was prepared.

8. Subcontractor Employee Drives Truck Over X-749 Barrier Wall [April 21, 2004, ORO--BJC-PORTENVRES-2004-0008, Category 3]. On April 21, 2004, a subcontractor employee drove a truckthat was equipped with a direct push hydraulic drilling attachment over the X-749 Barrier Wall locatedsouth of Perimeter Road. The truck and attached equipment were being used in a project that involvedinjections of a reductive dechlorination compound (HRC-X) to treat contaminated groundwater. Thebarrier wall has a grass covered mound of earth approximately five feet in height and 20 feet wide.This particular truck was being used because of limited space between the barrier wall and the siteboundary fence and because it was lighter and would leave fewer ruts on the wet ground. The truckwas not equipped with outriggers. When the truck began to slip because of the wet soil conditions andthe pressure exerted on the push rods, a decision was made to use a larger, more powerful truckequipped with outriggers. In exiting the area, the operator turned the wheels and slowly drove over themound on top of the barrier wall instead of following verbal direction and hand signals to proceedforward to the end of the barrier' wall. The truck leaned heavily to the side but did not lose traction or

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tip over. When questioned as to why he drove over the barrier wall, the driver responded that he wasconfident the four-wheel drive truck could make it over the wall, and he did not want to create moreruts at the end of the barrier wall. He later stated that he didnot hear the spotter's verbal directions dueto high noise levels from the operating equipment. However, the supervisor believed that adequateverbal and hand communications were provided. Work was suspended. A causal analysis wasperformed, and a corrective action was implemented. There was no identified impact on theenvironment, safety, or health.

9. Safety Evaluation Report (SER) Non-Compliance atthe X-7745R Pad [May 11, 2004, ORO--BJC-PORTENVRES-2004-0009, Category 3]. On May 8, 2004, containers on the X-7745R Waste StoragePad, a Hazard Category 2 Nuclear Facility, were moved closer to the X-7725 facility so they would becovered by the CAAS. A final Justification for Continued Operations (JCO) had been approved for usein directing movement of 37 containers on the X-7745R Pad. This final JCO had very specificrequirements'for placement of containers. On May 10, 2004, while DOE personnel were verifying theposition of the containers in accordance with the final, approved JCO, they discovered that sevencontainers were not in the correct positions. They also discovered that the work was performed using a

• preliminary version of.the JCO, instead of the final, approved JCO. Although both were identified asRevision 2, the difference between the preliminary and final versions of the JCO was that the containermovement sequence had been revised in the final, approved JCO. Because the final, approved JCO wasnot used, a different movement sequence was used.. This movement sequence had not been approved bythe NCS Engineer or the Facility Manager. The move was not in verbatim compliance withithe SER

which required that the containers be moved in accordance with the sequence. Identified in the JCO and,in the event that the movement sequence cannot be performed as identified in the JCO, a revisedsequence must be approved by the NCS program and facility management. A causal analysis wasperformed,, and corrective actions were implemented. A lessons learned was prepared. There was noidentified impact to the environment, safety, or health. This occurrence was a basis for NTS ReportNo. NTS-ORO-BJC-PORTENVRES-2004-0002,. Safety. Evaluation Report (SER) Noncompliance atthe X-7745R Waste Storage Pad.

10. Employee Inadvertently Placed Bleach in Right Eye [May 27, 2004, ORO--BJC-PORTENVRES-2004-0010, Category 2]. On May 27, 2004, a subcontractor employee inadvertently used a smallplastic dropper bottle filled with bleach to moisten his right eye. The bottle, which had a handwrittenlabel "Bleach,'" was the same type bottle as the subcontractor employee's saline solution bottle that heoccasionally used for moistening his eyes. Thebottle of bleach was brought onsite to sanitize drinkingwater dispensers. The employee had the bottles of bleach and saline solution in different pockets,however, in using the bottled solutions, he used the wrong bottle. The employee took immediate actionto flush the eye with water. He was taken to a local hospital for further treatment. A causal analysiswas performed, and corrective actions were implemented. A lessons learned was prepared.

11. Material Shipped with Incomplete Readiness Review [June 8, 2004, ORO--BJC-PORTENVRES-2004-0011, Category 3].. While disposing of empty PCB-contaminated containers on June 2-3, 2004,as part of two separate waste disposition projects at PORTS (SCN-305, P- 11 and SCN-405, P-I 1A), the SCN-405 containers were inadvertently shipped off-site with the SCN-305 shipments.Before shipping the SCN-405, P-l I IA containers, the SCN-405 project personnel failed to completeSite Operations Review Committee.(SORC) start-up requirements. These start-up requirements wereidentified in a SORC Review Evaluation Determination dated March 24, 2004. Prior to shipment, thecontainers for the two projects were located and flagged according to which project they belonged butwere not segregated from each other. The inventory lists were not compared to the load sheets that

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identified which Requests for Disposal were to be loaded for shipment. There was no violation of DOTrequirements. Additional shipments of SCN-405, P-I I IA empty containers were suspended until thereadiness review was completed. A causal analysis was performed, and corrective actions wereimplemented. There was no identified impact to the environment, safety, or health.

12. Mower Loses Drive Control [June 8, 2004, ORO--BJC-PORTENVRES-2004-0012, Category 3]. Alaborer was operating a Hustler 4-wheeled mower when the mower lost drive control. The operatorcould not steer the mower. Because it operated as if in neutral gear, the mower began to coastbackward and run downhill. The operator was able to unbuckle his seat belt and safely get off themower. This action deactivated the mower. The mower then coasted down the hill and came to rest in acreek. There was no injury to the operator. The mower was removed from the creek to prevent anyenvironmental release and tagged out of service. Mowing with 4-wheeled mowers was stopped pendingevaluation of all 4-wheeled mowers. A causal analysis was performed, and corrective actions wereimplemented. There was no identified impact. to the environment, safety, or health.

13. Near Miss Intermodal Lid Falls [June 8, 2004,. ORO--BJC-PORTENVRES-2004-0013, Category 2].On June 8, 2004, while two employees were opening the lid on an intermodal container at the X-747HScrap Yard, the lid pivot trolley ran past its safety stop. This caused one side of the lid to fall to theground. The lid measured approximately 14 ft. 6 in. by 7 ft. 7 in. and was estimated to weigh about300 lbs. When the lid fell to the ground, it narrowly missed the two employees. There were no injuries.Work was suspended pending further evaluation of opening the intermodal container lids. A causalanalysis was performed, and corrective actions were implemented. A lessons learned was prepared.There was no identified impact to the environment, safety, or health.

14. Vendor Operating Manlifit Without Fall Protection [June 29, 2004, ORO--BJC-PORTENVRES-2004-0014, Category 2]. On June 29, 2004, a DOE facility representative observed the vendor of aportable manlift operating the manlift approximately 20 feet in the air in the X-3002 facility withoutproper fall protection (i.e., a safety harness anchored to the operator cage). The vendor was operatingthe manlift to troubleshoot and-repair an operating problem with the portable manlift. Thesubcontractor's ES&H personnel were contacted and advised of the situation. After the subcontractor'sES&H personnel instructed the vendor that it was the subcontractor's and the manufacturer's policy towear a safety harness while inside the operator cage, the vendor was escorted offsite. A causal analysiswas performed, and corrective actions were implemented. There was no identified impact to theenvironment, safety, or health.

15. Track Shear Track Tilts off Ground [August 10, 2004, ORO--BJC-PORTENVRES-2004-0015,Category 4]. While moving a sheet of plate steel at the X-747H Scrap Yard Contamination Area, the200 Track Shear tilted off one of its tracks. The operatorimmediately lowered the plate to realign theTrack Shear, which returned the track to the ground and correctly repositioned the equipment. TrackShear lifting work was suspended. There were no injuries. Immediate corrective actions wereimplemented. There was no identified impact to the environment, safety or health.

16. Radiation Warning Lights Not On Monitored A/C Power Circuit [August 11, 2004, ORO--BJC-PORTENVRES-2004-0016, Category 2]. USEC issued a Problem Report documenting a deficiency.regarding a lack of monitoring of the power circuit for the building radiation warning lights for DOEHazard Category 2 Nuclear Facilities. The Problem Report indicated that the Plant Control Facilitydoes not get an alarm when loss of power for the building radiation warning lights occurs, as it doeswhen the CAAS cluster horns and detection hardware lose power. A USQ Determination was initiated

to determine if this "as-found" condition is a positive USQ. The "as-found" condition does not impactthe current TSR description or requirements of the CAAS. The CAAS is leased by DOE to USECwho, in turn, is responsible for design, operations, maintenance, and surveillance of the system. Theoccurrence was re-categorized on August 19, 2004 as a Significance Category 2 occurrence because apositive USQ revealed an existing inadequacy in the SAR. On September 1, 2004, the Plant ShiftSuperintendent instructed USEC to revise USEC Procedure XP2-CO-CA2030 for the CAASoperations to declare an LCO if the X-7725 or X-345 facilities' and associated slave facilities' buildingevacuation homs and radiation warning lights are discovered to be out of service. This action ensuresthat an LCO will be entered if power to the building radiation warning lights is lost. A causal analysiswas performed, and corrective actions were implemented. A lessons learned was prepared. There wasno identified impact to the environment, safety, or health.

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