Background and Staff Guidance on Performance-Based Regulation

As its name implies, performance-based regulation (PBR) is a regulatory approach that focuses on performance, as well as the desired results and outcomes. As such, PBR differs from the traditional, prescriptive regulatory approach in that it emphasizes what must be achieved, rather than how the desired results and outcomes must be obtained. To be effective, regulatory decision-makers using a PBR approach must give careful thought to the following questions:

• Which results are most desirable?
• Which activities (including monitoring) are most likely to yield the desired results?

The answers developed for these questions at each level of the regulatory framework significantly affect the focus of regulatory attention to licensees' activities. Consequently, to provide the necessary foundation, this page provides the following information:

• Background Information
• Staff Guidance
  • The Performance-Based Regulatory Process
  • The Reactor Oversight Process: A Working Example of Performance-Based Regulation

Background Information

In its Strategic Plan (NUREG-1614, Vol. 3), the NRC defined performance-based regulation as "an approach to regulatory practice that establishes performance and results as the primary bases for decision-making. The Strategic Plan further explained that performance-based regulations have the following attributes:

• Measurable, calculable, or objectively observable parameters exist or can be developed to monitor performance.
• Objective criteria exist or can be developed to assess performance.
• Licensees have flexibility to determine how to meet the established performance criteria in ways that encourage and reward improved outcomes.
• A framework exists (or can be developed), in which the failure to meet a performance criterion, while undesirable, will not in and of itself constitute or result in an immediate safety concern.

Given these attributes, the effectiveness of the NRC's regulatory efforts is demonstrated by evidence (from operating experience) that the desired results and outcomes have been -- and continue to be -- realized.

Staff Guidance

Using the Commission's definition of performance-based regulation (above), the NRC developed Guidance for Performance-Based Regulation (NUREG/BR-0303) to promote its implementation in the agency's rulemaking, licensing, and oversight activities. These activities are most effective when the agency's regulatory practices result in licensee actions and behaviors that promote safety, and hence, ensure that the desired results are achieved. Safety is most likely to be ensured when sufficient safety margins are established and maintained throughout an activity that could have consequences adverse to safety. Hence, NUREG/BR-0303 emphasizes the importance of safety margins in implementing the Commission's definition of PBR. Specifically, NUREG/BR-0303 offers the following five-step process:

1. Define the regulatory issue, its context, and its goals and objectives.
2. Identify the safety functions and systems that directly or indirectly affect the regulatory issue.
3. Identify and evaluate the safety margins, as well as the qualitative and quantitative parameters needed to satisfy the defined objectives.
4. Select observable performance parameters and objective qualitative and quantitative criteria to satisfy the established guidelines.
5. Formulate the performance-based alternative, and determine its appropriate implementation within the regulatory framework.

The NRC anticipates that these five steps will suffice for most issues that the staff routinely handles. More complex issues may require a "decision theoretic approach," which is also described in NUREG/BR-0303.

The Performance-Based Regulatory Process

Performance-based regulation is usually considered appropriate when regulatory decision-making focuses on effectiveness and efficiency. The following figure illustrates the larger process within which a PBR approach can be implemented. As the process explicitly emphasizes making observations and applying decision criteria, it is consistent with the high priority that the Commission has placed (in the Strategic Plan) on using sound science and state-of-the-art methods to establish risk-informed and, where appropriate, performance-based regulation.

The Reactor Oversight Process: A Working Example of Performance-Based Regulation

A working example of PBR is the NRC's Reactor Oversight Process (ROP), which incorporates the principles expressed in the Commission's definition of performance-based regulation. As described in the Reactor Oversight Process (NUREG-1649), the ROP helps the NRC accomplish its mission of protecting the health and safety of the public in the operation of commercial nuclear power plants by focusing on the following three performance areas:

1. Safeguards
2. Reactor Safety
3. Radiation Safety

At the next level of detail, these objectives have been refined into the following seven cornerstones of safety:

1. Initiating Events
2. Mitigating Systems
3. Integrity of Barriers to Release of Radioactivity
4. Emergency Preparedness
5. Occupational Radiation Safety
6. Public Radiation Safety
7. Physical Protection

The NRC routinely monitors and observes licensees' activities to gain confidence that they are achieving acceptable results in each of these cornerstones of safety.