Watts Bar Nuclear Plant Unit 2 Completion Project. Quarterly Update to the Estimate to Complete August October 2012

Transcription

1 Watts Bar Nuclear Plant Unit 2 Completion Project Quarterly Update to the Estimate to Complete August October 2012 Published December 2012

2 Table of Contents Section Title Page Number 1 Executive Summary 3 2 Overview Background Quarterly Performance Summary Quarterly Highlights Project Risks 3 Quarterly Estimate to Complete Results by Category Safety Quality Cost Risk Management Schedule Commodity Quantity Analysis Unit Rate Analysis 4 Project Oversight Nuclear Construction Review Board Project Assurance TVA Office of Inspector General 5 Project Organizational Health Organizational Health Index Results Improvement Initiatives Safety Culture 6 Going Forward Transition to System Completion Multi-System and Complex Work Packages Electrical Conduit and Cable Completion Schedule Logic Work Document Closure

3 Section 1 - Executive Summary On April 26, 2012, the TVA Board of Directors approved continuing to proceed with the completion and startup of Watts Bar Unit 2 in accordance with a revised Estimate to Complete (ETC). As part of that process, the WBN2 team committed to performing a quarterly update to the ETC in order to maintain the integrity of the estimate, as well as to provide transparency into project performance. This is the second quarterly update developed since the initial ETC. The results of this review indicate: The WBN2 project performance continues to be consistent with the ETC plan. Project performance, as measured by Schedule Performance Index (SPI) and Cost Performance Index (CPI), is meeting target. The project team continues to actively work on further performance improvement initiatives. The WBN2 project continues to be within budget and is currently meeting the schedule. Safety performance continues to be excellent. Quality performance has remained high as measured by the Quality Control (QC) Acceptance Rate and as evidenced by Nuclear Regulatory Commission (NRC) inspection results. Major project challenges have been identified and are being addressed to ensure project impacts are avoided. There are no new short-term risks identified that compromise project completion. Project risks due to budget and schedule have not changed at this point. The use of the project risk reserve has been relatively low. Some risk exists for future changes in projected cash flow due to deliberate measures to slow hiring and bring the project to full craft staffing. Regulatory and licensing issues remain the primary risks for the project; however, there is no change in short-term project risk due to licensing since Board approval in April Performance has improved in licensing and compliance based on inspection results and feedback received from the NRC. The WBN2 project organization health has improved and will support and sustain project completion. Section 2 - Overview Background The TVA Board of Directors approved the restart of construction for completion of WBN2 in August During the ensuing four years of project duration, WBN2 did not meet performance expectations for schedule or budget. 3

4 In August 2011, a new management team began being formed for WBN2. The new team performed a root cause analysis of the issues responsible for the performance problems, and in parallel began to develop a new ETC for the project. Details of the cause analysis and the process used to develop the new ETC can be found in the Executive Final Report on the Estimate to Complete: The Watts Bar 2 ETC is based on a range of values for schedule and budget. The range of values was developed using the risks associated with meeting expectations. The project s approved budget and schedule are: Quarterly Performance Summary The project metrics that were developed as a part of the WBN2 improvement plan continue to be implemented and refined. These metrics are used to monitor project performance and guide further improvements. Below is the WBN2 Executive Dashboard, which is snapshot of current project performance. The Executive Dashboard is comprised of a subset of the set of overall project metrics and is provided monthly to the Senior Vice President of Nuclear Construction, the TVA President and Chief Executive Officer, and the Board of Directors. 4

5 WBN2 Executive Dashboard October 2012 Performance Measure Project To Date (PTD) FY Forecast Budget Actual Variance Budget Forecast Variance SPI WBN % % CPI WBN % % As can be seen from the chart above, the project is currently meeting Project-To-Date cost and schedule targets and is expected to meet the FY 2013 forecasts. Additional details on project performance are provided in the following sections of this report. Quarterly Highlights In addition to overall performance meeting targets, the project achieved a number of milestones: The project safely worked over 17 million hours without a lost-time incident. NRC inspection support of construction activities continues to progress effectively. One Notice of Violation involving the use of Heinemann Breakers was closed. The NRC closed 13 Inspection Planning and Scheduling items during the quarter. The project continues to improve efficiency in work performance by performing work in bulk in accordance with the project schedule. The management team continues to be strengthened by the addition of senior managers who are experienced in nuclear construction. The WBN2 organizational culture continues to improve as evidenced by a 10-point improvement in the Nuclear Construction Organizational Health Index (OHI) to 70, which is top quartile performance. The Employee Concerns Program (ECP) survey of contract personnel yielded similar results. Corrective Action Program (CAP) backlog actions continued to be worked down. Progress on backlog actions for October slightly missed the target. However, the backlog has been reduced from the 1700 level in April when the effort began to the 252 level at the end of October. The remaining actions are tied to efforts that are more job-hour-intensive or are constrained by other project activities. The monthly work package closure rates improved continuously in the last quarter, from 135 in July to 410 in October, and the metrics that were implemented continue to ensure adequate focus on progress. The project Change Control Board (CCB) continues to provide senior management level approval of scope changes to the project and a structure for managing costs related to those changes. Executive meetings are held to review project performance, strengthen relationships, and develop any needed corrective action plans. 5

6 WBN2 outage activities performed during the WBN1 refueling outage were accomplished without impacting the outage schedule. In addition, WBN2 provided parts, materials, craft, and non-manual labor in direct support of WBN1 refueling outage. Project Risks Schedule Risk - The Fiscal Year (FY) 2012 and project-to-date SPI are over 1.0, indicating that the work is being performed as expected. Additionally, the project earned 16,303 more work hours than planned from the time the ETC was issued through the end of FY Therefore, schedule performance is such that minimal schedule risk is noted. Budget Risk - The FY 2012 and project-to-date CPI are over 1.0, indicating tasks are being performed for the estimates assumed in the ETC. The cost-related risks that were added to the project budget remain acceptable. Only about 9 percent of the project cost risk contingency has been allocated. During FY 2012, craft staffing was held below plan in order to ensure adequate planning was complete and productivity met goals. Therefore, spending during FY 2012 and the first month of FY 2013 has been less than planned. An increase in project cash flow is possible assuming that today s under runs are realized in the future. Fukushima Risk - The regulatory impacts of Fukushima and related seismic and hydrology issues will be significant for WBN2. WBN2 has submitted the required documents to the NRC. The final regulatory framework for the industry response has not yet been developed. In the interim, the project is developing a number of alternatives based on the regulatory framework to date. However, until the framework is completed by the NRC, the risk due to the response to the Fukushima event remains at the same level as in the ETC. Plans and detailed schedules have been developed by teaming with a variety of organizations within TVA, and activities are underway to address the events at Fukushima including the following: Two dams have been analyzed and engineering is in progress to determine necessary modifications. Eighteen additional dams are being analyzed with walk downs complete on three of the eighteen. Proposals have been received for the engineering for the permanent fix of the temporary flood barriers at four dams. Design engineering is in progress for the design and installation of Flexible Coping Strategies (FLEX) equipment, spent fuel pool level instrumentation, a qualified building, and hardening of the condensate storage tank. Proposals have been received and are being evaluated to select the vendor for the required seismic Probabilistic Risk Analysis (PRA). Design engineering is in progress for the new communications equipment. Waste Confidence Ruling Risk - In response to a court decision vacating the NRC s 2010 update of its Waste Confidence Decision rulemaking, NRC is in the process of reissuing the vacated rule based on additional generic analyses addressing the deficiencies identified by the court. The Commission required NRC Staff to conduct site-specific analyses only in 6

7 rare circumstances of compelling need that would not impact the generic analyses. This decision has the potential to impact the final licensing process for the project, but it is not expected to impact the project in the short term. The indeterminate nature of this rulemaking must be considered an additional long-term risk for the WBN2 project. The project team continues to closely follow the issue, and has developed an alternate sitespecific approach to address the matter. Licensing Strategy Implementation Risk - A WBN2 licensing strategy has been developed that provides structure to the myriad of regulatory and licensing issues that must be addressed prior to operation of WBN2. Included in this strategy are action plans to improve the quality and timely completion of licensing documents. This regulatory interface is critical to the completion of the project and has been a major focus in this quarter. The NRC is drafting two new rules that could impact WBN2. The first involves a nuclear plant s ability to deal with a station black-out or loss of electrical power. The second is also an industry-wide issue dealing with nuclear fuel cladding. Both of these issues are being closely followed by WBN2, and alternatives have been developed to deal with the issues as they arise. Work Document Closure Risk - Construction of a nuclear power plant requires a significant amount of documentation to show that work is completed to meet all regulatory and design requirements. Over time, the completion of construction work has outpaced the performance of the final documentation verification and the creation of an acceptable document package. The project has developed a plan to close the gap between construction completion and document closure. During the quarter, the project team has focused on implementing that plan, staffed the required positions, and is using metrics that guide performance improvement. As a result of this additional focus, work package quality and monthly closure rates have continuously improved in the last quarter from 135 in July to 410 in October and are currently on track to reach the project goal of closing 600 work orders per month by January The metrics that were implemented ensure adequate focus on additional progress improvements. 7

8 Section 3 - Quarterly ETC Results by Category Safety During this quarter, the project exceeded 17 million work hours without a lost-time incident. Additionally, the Recordable Incident Rate performance is better than goal, as shown in the indicator below. The safety performance for WBN2 is excellent and is the result of a number of activities: Interventions - WBN2 workers intervene to protect teammates from unsafe activities. The safety intervention program was developed by the Tri-lateral Safety Alliance (TLSA). During this quarter interventions have consistently met or exceeded the goal and the number of interventions shows a rising trend. Peer-to-peer coaching and interventions are powerful tools in preventing safety incidents. Use of pre-job briefs - Workers start the day by reviewing the work to be performed. Hazards are identified and steps are planned to ensure the work can be performed safely and without incident. Having a group discussion about the tasks and the safety steps ensures workers are engaged in performing work safely and that people can work together to make sure safe behaviors are demonstrated. Continued management focus - Management keeps safety as a core value. Expectations are clear, training is performed, and management performs observations of work to ensure safe practices are followed. Plan of the Day meetings begin with a safety message and a discussion of industry safety operating experience. WBN2 TVA senior management routinely attend site TLSA monthly meetings and TVA corporate TLSA meetings. Focus areas for continued safety performance improvement include: Continuing support of co-worker interventions Aggressive elimination of workplace hazards. 8

9 Quality Quality performance at WBN2 remains high. This is an indicator of positive worker training, as well as the level of involvement by the QC workers in day-to-day activities of the project. The primary measure of project construction quality is the QC acceptance rate. It measures the percentage of work that has passed the QC inspection process during installation Overall Acceptance Rate (%) of QC Inspections October 2011 thru October 2012 Good 50 Oct Nov Dec Jan Fed Mar April May June July Aug Sep Oct Total Recent key activities in Quality Assurance (QA) include: American Society of Mechanical Engineers (ASME) Surveys of Bechtel Power Corporation and Bechtel Construction Operations Incorporated were successfully completed during the quarter with satisfactory results. TVA QA staff completed a Design Control and Procurement Document Control QA Program Verification Audit. During this period, QA also issued a quarterly report summarizing the results of QA assessments in the following areas: Bechtel oversight CAP Construction completion Corrective Action Programs and Special Programs Turnover process Start-up testing Pre-service inspection. 9

10 There were no quality issues of significance identified in the QA quarterly report during the period. However, QA will continue to monitor the following issues identified in the previous period: Use of vendor information, primarily in the area of work order planning. QA oversight identified the absence of vendor manual recommendations in preventative maintenance documents. Corrective action has been taken, and QA will continue to monitor to ensure actions have been effective. Loose fasteners continue to be identified on some completed work in areas such as flexible conduit fittings, one-hole clamp supports, and wedge bolt nuts. An extent of cause review is in progress and increased construction supervision involvement in field completion activities has been initiated in the interim. Quality performance is also evidenced by the results of NRC inspections conducted during this period. Cost Cost performance met expectations for the quarter. An important measure of cost performance is the CPI - an indicator of how efficiently work is being performed against the plan. CPI measures whether construction workers are able to complete tasks within the work hours originally planned for the task when the ETC was developed. Therefore, CPI is a good measure of the project s ability to complete construction craft activities within the project budget. CPI performance is as indicated below: The FY 2012 CPI and the project-to-date CPI were 1.03, indicating tasks are being performed for the estimates assumed in the ETC. The project is focused on maintaining performance in CPI and is taking the following actions: 10

11 Continuing to increase the amount of time supervisors are in the field by eliminating collateral duties from their jobs Assigning additional Design Engineers to the planning group to simplify and improve the constructability of work packages Assigning additional Field Engineers and reducing their collateral responsibilities in order to support the craft and minimize delays. Risk Management A goal of the Quarterly ETC Update is to understand how the project is tracking against risk contingency. When the ETC was developed, project risks were identified and categorized. The project has implemented a risk management program. Plans were put in place to be able to address those risks. Each of those risks has a budget assigned in the ETC. The amount of funding used on those risk projects indicates whether the ETC project risk assumptions are valid or whether the risks are likely to cause a cost overrun. The chart below depicts the current status of the risk reserve and the changes since the previous ETC update. Some of the risk reserve has been allocated through the CCB process to projects. The overall risk reserve is currently at 91 percent. This is well within the range expected and planned in the ETC. This analysis, therefore, concludes that allocation of risk reserves does not currently indicate a risk to the overall cost of the project as compared to the ETC. 11

12 During the quarter, project craft staffing did not meet plan. This was a deliberate decision based on a number of factors: A number of craft and non-manual workers were assigned from WBN2 to provide support for the WBN1 refueling outage and the Sequoyah 2 Steam Generator Replacement Project The project must have the ability to reach productivity goals at existing staffing levels prior to increasing staff The project was making the work plan with fewer staff. The project considered these factors and determined that it was not feasible to fully staff to planned levels. As a result, cost underruns were experienced. There is a risk that these cost underruns will need to be spent in later quarters to meet milestones, thus increasing needed cash flow. While this cash flow projection is a risk, it is not yet certain whether a shift in cost to later years will be necessary. It should be noted that the project has not identified an increase in the overall project budget; rather, it is a potential risk of the timing of the expenses. Schedule Schedule performance met expectations for the quarter. An important measure of schedule performance is the SPI - an indicator of the effectiveness of executing the schedule. SPI, which tells whether the schedule is being worked as planned, is measured by comparing the hours completed for a task versus the hours scheduled for a task. Therefore, SPI is a good measure of the project s ability to complete construction within the specified timeframe. SPI performance is as indicated below: 12

13 The FY 2012 and project-to-date SPI are 1.01, indicating that the work is being performed as expected. The project is focused on keeping schedule performance at or above target. Actions to improve schedule performance include: Conducting daily schedule compliance meetings to identify and remove barriers, and to ensure accountability Incrementally increasing schedule loading to higher craft staffing levels Maintaining an aggressive schedule target An important element of the quarterly ETC update is to understand how the project is progressing toward schedule completion compared to the estimates in the ETC. When the schedule was developed, not all work orders had been planned and scheduled. Also, with a mega-project of this size and complexity, estimates must be made to deal with equipment that does not perform as planned or additions to the scope of the work that must be accommodated. Therefore, the ETC contains estimates for each of these categories that could impact the project schedule, and, ultimately, the project completion date. The project keeps track of the baseline work hours without reserves and makes a comparison against the total work hours in the ETC. The purpose of tracking this metric is to make sure that the project is not exceeding the overall ETC estimate. This metric is reflected below: Currently, the schedule is on track to meet project completion milestones. Challenges in the future involve a smooth transition from bulk work to the system completion window. 13

14 Commodity Quantity Analysis The project team is conducting quarterly quantity reviews in an effort to increase the confidence level of the ETC (see summary table below). A bottoms-up approach is being used to perform these reviews. An estimate for all planned work is derived from the commodity database, which includes identification of the commodity by work order and unique identifier. An estimate for any unplanned work is prepared using engineering and construction input. Commodity quantity analyses that have been presented to and approved by the CCB have resulted in the reduction of quantities for some of the major commodities. These commodities include miscellaneous steel, conduit, conduit supports, small bore valves and tubing supports. In summary, the overall pace of commodity installation during this period is currently on track to meet scheduled project completion milestones. Evaluations will continue on a quarterly basis and recommended adjustments will be presented to the CCB for approval. Commodity Quantity Analysis Commodity Description UOM Board Approved Remaining Misc Steel LB 109,855 60,726 LB Pipe Weld EA LB Hanger EA LB Hanger Remove EA LB Hanger Modify EA SB Pipe LF 2, SB Weld EA 2,959 1,688 SB Hanger EA SB Hanger Remove EA SB Hanger Modify EA LB Valve EA SB Valve EA Conduit LF 43,992 25,639 Conduit Support EA 7,386 2,102 Cable LF 311, ,797 Cable Terms EA 33,386 28,539 Instruments Mechanical EA 1,941 1,107 Tubing LF 22,932 15,337 Rework LF 20,556 15,126 Instr SB Pipe LF 10,967 6,106 Instr SB Pipe Weld EA 4,443 2,565 Tubing Support EA 3,965 2,721 Instr SB Pipe Support EA 2,589 1,801 Duct Mods EA

15 Unit Rate Analysis As part of the ongoing effort to increase the confidence level of the ETC, the project team performed a unit rate analysis for the major commodities. Unit rates have been evaluated by comparing the actual unit rates achieved during FY 2012 with the ETC estimated unit rates. These assessments were presented to the project CCB and have resulted in an adjustment of several unit rates to better align with actual field experience. Additional unit rate adjustments have resulted from a cascading effect of the CCB approved quantity adjustments discussed above. The ETC unit rates are composite rates that were developed based on difficulty of installation, taking into account different building complexity and congestion, and, therefore, are weighted by a quantity-to-building ratio. As quantities increase or decrease through CCB action, the commodity-to-building ratio will change and change the target composite unit rate. Unit rate performance varies between commodities. The overall CPI continues to meet expectations, which is a reflection of the relative magnitude of work performed in each commodity group. However, as work proceeds from the current bulk construction mode into a system completion mode, achieving unit rates will be a challenge. In general, the remaining construction work will be more difficult to do due to more interferences; smaller, less efficient work package scope as quantities are reduced; and the execution of very specific work activities to meet system logic requirements. Therefore, actual unit rates are expected to degrade over time. This impact to work efficiency was built into the ETC estimate by using average composite unit rates, discussed above, and including an execution reserve. The forecast using actual unit rates indicates these reserves are currently adequate and within plan. However, the project will continue to aggressively pursue productivity improvements to keep unit rates low. Some actions taken to date to improve productivity include: Productivity improvement studies Improved management of craft worker start and break time adherence Work order simplification Focused project schedule compliance accountability meetings Improved installation efficiency measures (example: complex HVAC supports) Additional craft field support to accelerate problem resolution In summary, overall actual unit rates appear to be in line with ETC estimated unit rates. Evaluations will continue on a quarterly basis and recommended adjustments will be presented to the CCB for approval. 15

16 Section 4 - Project Oversight Nuclear Construction Review Board (NCRB) The Nuclear Construction Review Board (NCRB) is an independent committee comprised of industry experts who routinely review TVA s nuclear construction project performance and provide their insight to the Senior Vice President of Nuclear Construction. The NCRB is independent of WBN2 management to ensure that reviews are not biased and that project performance is on track. The most recent NCRB made a number of observations which include: The WBN2 project has made progress toward completion and alignment has improved among work groups The commitment of workers to industrial safety was at industry best practice level Corrective actions taken at Watts Bar 2 have been effective in addressing identified issues. The NCRB also reviewed several recommendations that the project team will follow up on, including better communicating overall project completion metrics, refining details of the sequence of work orders for milestones, and reducing the reliance on spare parts from WBN2 for WBN1. Project Assurance The Project Assurance (PA) group is an organization within NC that reports directly to the Senior Vice President of Nuclear Construction. It is independent of the WBN2 project organization. PA has several full-time members whose jobs are to continually assess all facets of project performance and provide those reports to the Senior Vice President of Nuclear Construction. During this quarter, the PA group issued three reports that contained the following recommendations: Consider developing a one page dashboard communication to summarize daily and/or weekly project performance against ETC commitments for cost and schedule performance To provide a more accurate indication of ETC schedule performance, management should calculate project SPI based on ETC required staffing/earned man-hours Formally track and trend the reasons activities fail to start or finish as scheduled such that timely corrective actions can be developed to improve performance Revise procedure GPP-0000-N1216, Work Control Forms, to be consistent with the requirements of GPP-0000-N1206, Work Order Processing, for completing Attachment E, Work Order Planning and Revision Checklist. WBN2 management has provided responses to PA for the recommendations identified above. Progress to completion is being tracked by the WBN2 management team. TVA Office of Inspector General (OIG) During the previous quarter, the project received the final report from the TVA Office of Inspector General (OIG) regarding its comprehensive project audit. The OIG s report was 16

17 consistent with the root cause analysis performed by the project and offered insights into project elements such as project planning, project execution, transparency, and organizational health. WBN2 has developed an action plan to address the OIG findings and a status is provided below: OIG Recommendations Develop contingencies for obtaining the ASME certifications for future projects as applicable. Address aging nuclear workforce issues by developing a program for transferring knowledge. Current Status Nuclear Construction performed cost benefit analysis to consider TVA. Model determined best option (Bellefonte) was to contact N-stamp with NSS supplier and provide flexibility with selection or changing of construction provider. This action is considered complete. Nuclear Construction Human Resources is developing a plan to address knowledge retention. Due Date: February Develop a consistent and thorough WBN2 utilizes Bechtel procedure N1206 for the planning and approach for planning and estimating estimating of remaining work. TVA issued TVA-SPP-34 series nuclear construction projects including procedures to standardize and formalize Project Management but not limited to, a range of estimates fundamentals (planning, estimating, risks and contingencies) and with probabilities, key risk assumptions, these are being used for Bellefonte. This action is considered and contingency amounts. complete. Develop contingencies for supplementing contractors' expertise in case they are unable to provide qualified resources. Require design engineering to be substantially complete before starting construction on nuclear projects. Establish controls over the development and reporting of project performance data and provide for independent verification of the data. Assess the cultural climate to determine if the actions of certain, former key management have affected the organizational culture. Additionally, provide an opportunity for WBN Unit 2 employees to voice their concerns about the culture that exists currently and views about what should be done to create a more transparent culture. Several staff-augmentation contracts have been put in place for WBN2 and Bechtel contract was supplemented to allow staff-augmentation in lead/key positions. This allows for a wider range of experience as a contingency if needed. This action is considered complete. TVA issued TVA-SPP-34 series procedures to standardize and formalize Project Management fundamentals, including phased and gated approach to project progress. These are being used for Bellefonte and the Project Execution Plan (PEP) has been approved requiring design to be complete prior to initiation of construction. This action is considered complete. Project Controls develops the metrics independent of Construction. Nuclear Construction Project Assurance, TVA Compliance Group, Nuclear Construction Review Board (NCRB) and other outside independent groups provide independent verification. This action is considered complete. OHI survey conducted, and results reflect improvement in culture after management change. In addition, exit surveys are conducted by Employee Concerns to identify any generic issues. An improvement plan is being implemented to improve the communication and alignment at WBN2. A Cultural Risk Assessment is planned for Jan An MOU has been developed by a working group and is being finalized to support the assessment. Due Date: February

18 Section 5 - Project Organizational Health Organizational Health Index (OHI) Results The WBN2 organizational culture continues to improve as evidenced by an improvement in the Nuclear Construction Organizational Health Index (OHI) of 10 points to a score of 70, which is top quartile performance. The Employee Concerns Program (ECP) survey of contract personnel yielded similar results. Improvement Initiatives One of the Rules of Engagement in WBN2 LEADERSHIP TEAM ALIGNMENT commits that the management team will find, analyze and correct Issues which adversely affect performance. The WBN2 management team is actively engaged in identifying opportunities for further project performance improvements. As a performance issue is identified and prioritized as a Top Project Initiative, a team is established. The fundamental process for engagement is to assign a team lead and a management sponsor, assemble a team, document the gap in performance, establish a charter, prepare an action plan and identify the metrics that will be used to monitor progress. There are currently eight active improvement initiatives that have been designated as top priority project initiatives for WBN2. The following changes were made to the top initiatives listing during the previous quarter: Work Planning Process initiative was removed as a top initiative. All plan actions have been completed and the gap closure criteria met. These criteria included 3 consecutive months of adding 120,000 work hours of planned work orders to the library, and maintaining an available work backlog for each construction discipline. Change Paper Tracking moved from white and steady to white and declining. This is due to the challenge associated with identifying the work implementing documents for gaps identified during change paper review. A plan is being drafted for review/approval to address the gaps in systems required for Open Vessel Testing (OVT) as a priority. Integrated Flush/Hydro moved from yellow and declining to yellow and steady. Dedicated staffing has been returned to the initiative and scheduling logic has been established which includes windows for clean verification. Project Controls moved from yellow and declining to yellow and improving. Financial Services and Project Controls have agreed to a joint reporting partnership which combines data from both groups into a comprehensive financial and project management report. Additionally, new initiatives were approved during this period and specific action plans developed. These included an initiative to improve the electrical conduit/cable completion schedule logic which addresses the challenge of final cable installation, and an initiative to improve WBN2 alignment and engagement which addresses improvements in culture, problem identification, worker engagement and communication. 18

19 Safety Culture The construction of a nuclear power plant involves recognizing and adhering to many special and unique requirements. Because nuclear safety is our overriding priority, the project must maintain an open environment that allows and encourages individuals to express concerns about nuclear safety and quality. Management encourages employees to bring safety concerns directly to the management team for action. Employees also have additional avenues to express concerns that are independent of management through the Employee Concerns Program (ECP), the TVA OIG, and the NRC. A measure of organizational health is the number and the nature of concerns raised outside the management team via these independent avenues. Employee concerns to the ECP spiked between June and November of 2011, but have since declined. Regarding concerns raised to the NRC, while the overall numbers are low, the trend is similar to the ECP trend, as shown below. Number of Allegations NRC Concerns On Site NRC Allegations 0 Fiscal Year 2012 The trends in ECP and NRC allegations continue to be indications of an improving safety culture. While the trend remains positive, it is important to note that employees are encouraged to raise concerns and take any avenue available to them to raise nuclear safety concerns when appropriate. The results seen in FY 2012 indicate that the project continues to provide an environment that fosters a strong safety culture. A team, including members from PA, OIG and Training, Development and Organizational Health, is actively planning a detailed Culture Risk Assessment (CRA) for WBN2. The team will finalize preparations and conduct a pilot session during November and December. The CRAs with the workforce will be conducted during January

20 Section 6 - Going Forward For the upcoming quarter, the project focus will remain on completing bulk work in construction and to improve the timing and quality of work documents. In addition, new challenges must also be addressed in order to complete the project as scheduled. The top four focus areas for the upcoming quarter are: Transition to System Completion - The project team has begun to focus on optimizing the processes used to transition to system completion. This is accomplished by selecting OVT as a project-wide milestone. OVT tests those systems that inject water into the reactor vessel. OVT was selected as a milestone to validate equipment performance, exercise completion processes and drive significant safety and support systems to testing. Two systems were selected as pilots to test the process, identify road blocks early, align the organization, and reduce project risks. Multi-System and Complex Work Packages - The WBN2 project team has determined that complex work packages are impeding progress to system completion. Both design and construction work packages are complex in that they contain large scope, multiple systems, and/or multiple commodities. The structure and process challenge the effective release for testing and overall resource management. The project team is developing a plan to improve the processes necessary to support simplifying these complete work packages by prudently unbundling them. This will reduce confusion during implementation and closure and allow systems to be tested earlier. Electrical Conduit and Cable Completion Schedule Logic - The WBN2 project team has identified the need for detailed schedule logic for conduit and cable completion for each system prior to transitioning to system completion and OVT. Determining this logic requires the following: o Review and development of Cable Tree drawings (roadmap for field implementation) o Reviewing all work documents for completion of conduit installation o Determining the number and location of existing installed cables that will require pulling back and reinstalled with new cables. The project team has assigned a dedicated project manager to develop the necessary electrical conduit and cable schedule logic. An action plan has been developed and is being currently implemented in conjunction with the pilot systems discussed above. 20

21 Work Document Closure - The WBN2 project team has developed and implemented a plan to address the large quantity of old, complex work documents that require closure. These documents contain large numbers of changes and cross-references between documents. The age of the documents increases the difficulty to close them and complexity increases the possibility for human error. Historically, work document closure has had a low priority and until closed there is some risk for new discovery. 21