NUREG-1530

Reassessment of NRC's DollarPer Person-Rem ConversionFactor Policy

U.S. Nuclear Regulatory Commission

Office of Nuclear Regulatory Research

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NUREG-1530

Reassessment of NRC's DollarPer Person-Rem ConversionFactor Policy

Manuscript Completed: December 1995Date Published: December 1995

Division of Regulatory ApplicationsOffice of Nuclear Regulatory ResearchU.S. Nuclear Regulatory CommissionWashington, DC 20555-0001

ABSTRACT

The Nuclear Regulatory Commission hascompleted a review and analysis of its dollar perperson-rem conversion factor policy. As a resultof this review, the NRC has decided to adopt a$2000 per person-rem conversion factor, subject itto present worth considerations, and limit itsscope solely to health effects. This is in contrastto the previous policy and staff practice of using

an undiscounted $1000 per person-remconversion factor that served as a surrogate for alloffsite consequences (health and offsite property).This policy shift has been incorporated in"Regulatory Analysis Guidelines of the U.S.Nuclear Regulatory Commission,"NUREG/BR-0058, Revision 2, November 1995.

iii In NUREG-1530

CONTENTS

Page

A B STR A C T ............................................................................. iii

A BBREV IATIO N S ....................................................................... vii

1 BA CK G R O U ND ..................................................................... 1

2 HISTORICAL DEVELOPMENT ...................................................... 1

3 REGULATORY APPLICATIONS ..................................................... 3

3.1 Routine Emissions from Nuclear Power Plants ....................................... 4

312 A ccidental Releases ............................................................... 4

3.3 Part 20 ALARA Program .......................................................... 4

4 TECHNICAL STUDIES AND REVIEWS .............................................. 5

5 SCOPE OF DOLLAR PER PERSON-REM VALUE .................................... 6

6 APPROACHES TO VALUING THE HEALTH DETRIMENT ........................... 7

6.1 Human Capital Method .................................................. 7

6.2 W illingness-to-Pay M ethod ........................................................ 8

6.3 Values Implied by Government Agency Expenditures ................................. 10

6.4 Values Implied by Regulatory Requirements Imposed by Government Agencies ......... 10

6.5 Values Based on Radiation Protection Activities in Other Countries .................... 10

6.6 Representative Value of a Statistical Life ............................................ 11

7 RISK COEFFICIENTS FOR STOCHASTIC HEALTH EFFECTS ........................ 11

8 DOLLAR PER PERSON-REM CONVERSION FACTOR ............................... 12

9 IMPLICATIONS OF REVISED CONVERSION FACTOR POLICY ...................... 13

10 PROCESS TO INCORPORATE THE REVISED DOLLAR PER PERSON-REMVALUE AS NRC POLICY ............................................................ 14

v NUREG-1530

ABBREVIATIONS

ALARA as low as reasonably achievableBEIR V Committee on the Biological

Effects of Ionizing Radiation

BNL Brookhaven National Laboratory

CPSC Consumer Product SafetyCommission

DOT Department of Transportation

EPA Environmental Protection Agency

GDP gross domestic product

GESSAR General Electric Standard SafetyAnalysis Report

GI generic issueHECOM Health Effects Cost Model

ICRP International Commission onRadiation Protection

MACCS MELCOR Accident ConsequenceCode System

NCRP

NEPA

NRC

OMB

OSHA

PNL

PRA

SAMDA

TMI

UNSCEAR

USI

WTP

National Council on RadiationProtection

National Environmental Policy Act

Nuclear Regulatory Commission

Office of Management and Budget

Occupational Safety and HealthAdministration

Pacific Northwest Laboratory

probablistic risk assessment

Severe Accident Mitigation DesignAlternative

Three Mile Island

United Nations ScientificCommittee on the Effects ofAtomic Radiation

unresolved safety issues

Willingness-to-Pay

vii NUREG-1530

1. BACKGROUND

For approximately the last two decades, the U.S.Nuclear Regulatory Commission (NRC) and itspredecessor agency, the Atomic EnergyCommission, have used a conversion factor of$1000 per person-rem1 as the monetary valuationof the consequences associated with radiologicalexposure. That is, an increase or decrease inperson-rem is valued at $1000 per person-rem inorder to allow a quantitative comparison of thevalues and impacts associated with a proposedregulatory decision.

This value has been used as a reference point inNRC regulatory analyses2 including thoseinvolving (a) routine emissions, (b) accidentalreleases, and (c) 10 CFR Part 20 as low asreasonably achievable (ALARA) programs.

The NRC prepares regulatory analyses forproposed actions imposing requirements onlicensees. The analyses include an examination ofthe values and impacts associated with alternativeapproaches to meeting the particular regulatoryobjectives. The conclusions andrecommendations included in a regulatoryanalysis are neither final nor binding, but ratherare intended to enhance the soundness ofdecisions made by NRC managers and theCommission. Regulatory actions needed to ensureadequate protection of the health and safety ofthe public [see section 182(a) of the AtomicEnergy Act and 10 CFR 50.109(a)(4)(ii)] from theoperation of production and utilization facilitiesdo not require a regulatory analysis. Thus the$1000 per person-rem conversion factor does notapply to these actions, except in assessing possiblealternative approaches to achieve the necessarylevel of adequate protection.

Over the years, the NRC has become increasinglyaware of alternative estimates and methodological

'In order to be consistent with the Commission's policy onmetrication, the conversion factor should be expressed in dollarsper person-centisievert with the value in English units followingparenthetically. Note that a sievert is equal to 100 rems.Therefore, for example, $1000 per person-rem is equal to $1000per person cSv. However, for purposes of continuity and tofacilitate review, dollars per person-rem shall be the unit usedthroughout this report.

2 Guidance for the preparation of NRC's regulatory analyses is inRegulatory Analysis Guidelines of the US. Nuclear RegulatoryCommission, NUREG/BR-0058, Rev. 2.

approaches for arriving at a conversion factor. Inaddition, questions have surfaced on thecontinued validity of the $1000 per person-remconversion factor because basic parameters suchas the value of the dollar and risk factors (e.g.,latent cancer fatality estimates per person-rem)have changed considerably over this period. Suchfactors have potentially significant effects on theappropriateness of the $1000 per person-remconversion factor. In the NRC's view, a thoroughreassessment of the dollar per person-rem valueand its application in NRC regulatorydecisionmaking is needed.

The NRC's revision is based on a relatively simpleand straightforward logic in which the new dollarper person-rem conversion factor attempts tocapture the dollar value of the health detrimentresulting from radiation exposure. As such, theproposed formulation considers the dollar valueof the health detriment, and a risk factor thatestablishes the nominal probability for stochostichealth effects attributable to radiologicalexposure. The latter term takes into account fataland non-fatal cancers, and hereditary effects. Itneeds to be emphasized that the resulting dollarper person-rem conversion factor is not applicableto deterministic health effects, including earlyfatalities, which could result from very high dosesto particular individuals. In this way, theconversion factor is compatible with theCommission's Safety Goal Policy wherein theCommission made clear that no death will ever be"acceptable" in the sense that the Commissionwould regard it as a routine or permissible event.

2. HISTORICAL DEVELOPMENT

The issue of assigning a monetary value toradiation dose in regulatory decisionmaking arosein 1974 during the hearing for a rulemakingaddressing routine emissions from nuclear powerreactors (the rule subsequently issued appears at10 CFR Part 50, Appendix I).J In adopting designcriteria for limiting routine emissions from powerplants, the Commission argued for a cost-benefittest. The Commission felt that "such acost-benefit analysis requires that both the costs3U.S. Nuclear Regulatory Commission, Numerical Guides for

Design Objectives and Limiting Conditions for Operating to Meetthe Criterion 'As Low as is Reasonably Achievable" forRadioactive Material in Light-Water-Cooled Nuclear PowerReactor Effluents, Opinion of the Commission, April 30, 1975.

1 NUREG-1530

and the benefits from the reduction in dose levelsto the population be expressed in commensurateunits, and it seems sound that these units be unitsof money. Accordingly, to accomplish thecost-benefit balancing, it is necessary that theworth of a decrease of a person-rem be assignedmonetary values." 4

The Commission stated that "the record, in ourview, does not provide an adequate basis tochoose a specific dollar value for the worth ofdecreasing the population dose by a man-rem."Published studies at that time that werementioned in the record of the rulemaking, gavevalues ranging from $10 to $980 per person-rem.The Commission concluded that "there is noconsensus in this record or otherwise regardingthe proper value for the worth of a manrem," andthat "we also recognize that Selection of suchvalues is difficult since it involves, in addition toactuarial considerations that are commonlyreduced to financial terms, aesthetic, moral, andhuman values that are difficult to quantify."5 Thefinal outcome was a Commission decision toadopt as an interim measure, the value of $1000per person-rem for cost-benefit evaluations.6

Two Executive Orders issued during the Fordadministration (E.O. 11821 and E.O. 11949)encouraged Federal agencies to performvalue-impact type evaluations of proposedregulatory requirements to demonstrate adequatejustification for new requirements. The NRCbecame committed to this type of evaluation, andissued Value-Impact Guidelines in December 1977(SECY-77-388A). This document referred to thetechniques and detailed consequence analysesused in the Reactor Safety Study, WASH-1400, andrecommended that the person-rem averted fromproposed changes be multiplied..."by $1000 perman-rem (or other agreed upon value)," in orderto place the benefit (value) in the same units ascost (impact).

In 1977, Congress added Section 210 to theEnergy Reorganization Act of 1974, directing theNRC to develop a plan for the identification andanalysis of unresolved safety issues (USI) relatingto nuclear reactors. In response, the NRCdeveloped a program for the identification,

4Federal Register, May 5, 1975 (40 FR 19439), page 19439.5Ibid.6Ibid.

prioritization, and resolution of USI's and genericissues (GI). Guidance relating to the assignmentof priorities was issued in 1982, with thepublication of 'A Prioritization of Generic SafetyIssues," NUREG-0933. The guidance includedthe use of the $1000 per person-rem value insetting the priority of USIs and GIs. Issuesidentified as high priority were then subject toresolution via a more detailed value-impactanalysis that also utilized the $1000 perperson-rem value. In both these contexts, the$1000 per person-rem value has been used as afigure of merit and as one factor in the respectiveassessments.

In January and December 1983, the NRCpublished NUREG/BR-0058, "RegulatoryAnalysis Guidelines of the U.S. NuclearRegulatory Commission" (Guidelines), andNUREG/CR-3568, 'A Handbook forValue-Impact Assessment" ("1983 Handbook"),respectively. These documents were issued toformalize NRC's policies and procedures foranalyzing the values and impacts of proposedregulatory requirements. The $1000 perperson-rem figure was not mentioned in the 1983Guidelines or in Revision 1 to the Guidelinesissued in May 1984, but the accompanying 1983Handbook recommended that the analyst use arange of values, one of which should be $1000 perperson-rem.7 Since the 1983 Handbook providesthe implementation guidance for performing NRCregulatory analyses, it became standard practiceof the NRC staff to apply this guidance whenevera quantitative regulatory analysis or value-impactanalysis was performed.

The NRC requires a regulatory analysis for abroad range of regulatory actions. In general, allmechanisms used by the staff to establish orcommunicate generic requirements, requests, orstaff positions, that would affect a change in theuse of resources by its licensees will include anaccompanying regtilatory analysis. Thesemechanisms include rules, bulletins, genericletters, regulatory guides, orders, standard reviewplans, branch technical positions, and standardtechnical specifications. Thus, staff guidance onvalue-impact and regulatory analyses hasprovided the NRC with a mechanism to consider$1000 per person-rem as a figure of merit in most

7S. W Heaberlin, et al., 'A Handbook for Value-ImpactAssessment," NUREG/CR-3568. Section 3.2.2., 1983.

NUREG-1530 2

regulatory decisions affecting power reactor aswell as nonpower-reactor licensees. In practice,however, a number of regulatory analyses did notquantify the person-rem averted and thus did notuse a dollar per person-rem value.

In 1983, the NRC issued an interim PolicyStatement on Safety Goals for the Operation ofNuclear Power Plants for use during a 2-year trialperiod.8 In this statement, the Commissionadopted qualitative and quantitative design goalsfor limiting individual and societal mortality risksfrom severe accidents. Also in this Statement, theCommission stated that the benefit of anincremental reduction of societal mortality risksshould be compared with the associated costs onthe basis of $1000 per person-rem averted as oneconsideration in decisions on safetyimprovements. The value proposed was in 1983dollars and was to be modified to reflect generalinflation in the future. At the end of the 2-yearinterim period, a number of comments werereceived on this value. Widely different valueswere suggested ranging from about $100 perperson-rem to values in excess of $1000 perperson-rem. Respondents who believed the $1000value was too low did not provide anothernumber, but merely indicated that the valueshould be raised. Discussion of $1000 perperson-rem, and any proposed use, were deletedin the Final Policy Statement on Safety Goalswhen published in August 1986 (51 FR 30028),following completion of the 2-year trial period. 9

In 1985, the NRC staff revisited the $1000 perperson-rem valuation and its use in regulatoryanalyses of nuclear power plant improvementsdesigned to enhance safety. Although themonetary value of averted person-rem of radiationexposure up to that time referred only to avertedhealth effects, (for example, averted latent cancerfatalities), the use of $1000 per person-rem wasevaluated and subsequently defined at that timeas a surrogate for all averted offsite losses, healthas well as property. The basis for thisdetermination is in an October 23, 1985,memorandum from NRC's Executive Director for

8U.S. Nuclear Regulatory Commission, "Safety Goals for NuclearPower Plant Operation," NUREG-0880, Rev. 1, May 1983.

9The $1000 per person-rem value was mentioned in the separateviews of Commissioner Bernthal (51 FR 30033).

Operations to the Commissioners. 10 Thisinterpretation was subsequently adopted in allNRC regulatory analyses and value-impactanalyses in which offsite radioactive releases weresubject to monetary valuation.

In February 1982, as part of the Three Mile Island(TMI) Action Plan, the Commission promulgated10 CFR 50.34(f)(1)(i) that required certain nuclearpower plant license applicants to prepareplant-specific probabilistic risk assessments(PRAs) to identify possible design alternatives fornuclear power plants. As a result of this rule,value-impact analyses were prepared in 1985 forthe GESSAR (General Electric Standard SafetyAnalysis Report) design. Eighty design-specificenhancements were analyzed with $1000 perperson-rem used as the screening criterion. PRAsare now used for existing operating nuclear powerplants (as a result of NRC Generic Letter 88-20)and for future reactor designs.

In February 1989, the U.S. Court of Appealsdirected the NRC to consider Severe AccidentMitigation Design Alternatives (SAMDA) as partof the NRC's environmental review process underthe National Environmental Policy Act (NEPA)before granting a full power license to owners ofnuclear power plants.11 The staff subsequentlyperformed SAMDA analyses for the Limerick andComanche Peak nuclear power plants. ASAMDA analysis was also prepared for the"Draft Generic Environmental Impact Statementfor License Renewal of Nuclear Plants"(NUREG-1437). In all these cases, the staff usedthe $1000 per person-rem value as a screen tocompare values and impacts. If designs werewithin an order of magnitude of being justified,they were analyzed further. No design changeswere deemed necessary as a result of theseSAMDA analyses.

3. REGULATORY APPLICATIONS

The $1000 per person-rem conversion factor hasbeen applied by the NRC in a variety ofregulatory applications including the evaluation of(1) routine emissions from nuclear power plants,

10Memorandum, W J. Dircks to Commission, "Basis forQuantifying Off-Site Property Losses," October 23, 1985.

1"Limerick Ecology Action, Inc., v NRC, 869 F2d 719 (3d Cir.1989).

3 NUREG-1530

(2) accidental releases, and (3) radiationprotection practices.

3.1 Routine Emissions from Nuclear PowerPlants

The only place the $1000 per person-rem valuecurrently appears in the NRC's regulations is at10 CFR Part 50, App. I (Sec. II)(D) in aparagraph relating to items to be included in alicense applicant's radwaste system. Essentially, indesigning the radwaste system, the licensee is notrequired to install additional effluent controls toreduce routine emissions below 3 millirem peryear for water effluents and 5 millirem per yearfor airborne effluents if the cost of the resultantreduction in the exposure of the population within50 miles is greater than $1000 per total bodyperson-rem or $1000 per person-rem to thethyroid.

The $1000 per person-rem criterion has served asa significant decision factor in NRC's radwastedesign approval decisions for nuclear powerplants. Guidance for performing the dosecalculation and resulting dollar valuation iscontained in the NRC's Regulatory Guides 1.109and 1.110, respectively. Procedurally, applicantsfor a nuclear plant license are to use $1000 perperson-rem in a cost-benefit analysis in order tojustify their radwaste system design. The designis then subject to NRC approval and, dependingupon the outcome of this review, possible revision.Essentially, all nuclear power plant operatinglicenses issued after 1975 have followed thisprocedure. Although NRC's regulations onlyspeak to the use of the $1000 per person-remvalue in consideration of the radwaste systemdesign, the staff believes that to some extent it hasalso influenced licensees' design considerationsfor radwaste storage facilities.

From a procedural standpoint, use of the $1000per person-rem value as a determinant indecisions involving radwaste systems has generallyworked well. The decision criterion is well definedand effective staff procedures and licenseeguidance are in place. However, from a practicalperspective the $1000 per person-rem valueappears to have had relatively little effect on theradwaste system designs proposed by applicantsand ultimately approved by the NRC. The reasonis that system designs are relatively insensitive toan increase, within an order of magnitude, in the

$1000 per person-rem criterion because of therelatively high cost of the design alternatives.

3.2 Accidental Releases

A frequent use of the $1000 per person-remvaluation has involved NRC programs, reviews,and decisions in which accidental radiologicalreleases are a consideration. This is becausesafety enhancement regulatory actions constitute amajor NRC initiative, and accidental releases tendto be a dominant factor in these regulatorydecisions.

From a procedural standpoint, the $1000conversion factor has also appeared to function asa useful guide in regulatory decisions in whichaccidental radiological releases are aconsideration. As noted in Section 2 of thisreport, since 1985, the $1000 value has beeninterpreted by the NRC to include an allowancefor all offsite property consequences of a nuclearpower plant accident. This broaderinterpretation can be problematic for the reasonsnoted in Section 5 of this report.

3.3 Part 20 ALARA Program

The regulation 10 CFR Part 20 establishesstandards for protection against radiation hazardsarising out of activities under licenses issued bythe NRC. A guiding principle for Part 20(codified at 10 CFR 20.1101(b)) is for licensees tomake every reasonable effort to maintain.radiation exposures, and releases of radioactivematerials, as low as is reasonably achievable. Part20 applies to all NRC licensees (power reactor,nonpower reactor, fuel cycle facilities andradioactive source and materials licensees) andconcerns the release of radioactive material andassociated occupational and public dose incurredas a result of normal licensee activities.

ALARA is defined at 10 CFR 20.1003 as makingevery reasonable effort to maintain exposures toradiation as far below the Part 20 dose limits as ispractical, taking into account the state oftechnology, the economics of improvements inrelation to benefits to the health and safety of thepublic and occupational workers, other societaland socioeconomic considerations, and theutilization of nuclear energy in the public interest.Given this definition, it would appear that adollar value per person-rem should play a pivotalrole in cost-benefit tradeoffs used in establishing

NUREG-1530 4

reasonableness under the Part 20 ALARAprogram. However, Part 20 itself does notaddress the use of the $1000 per person-rem valuealthough one regulatory guide12 (RegulatoryGuide 8.37) suggests its use. In this regard, theNRC is aware that current industry practice,particularly in the power reactor arena, is to valuean averted person-rem at a higher dollar valueowing to manpower constraints and other laborcost considerations that are integral to thelicensees' cost-benefit tradeoffs. Licensees areencouraged to continue to use such higher valuesfor their own ALARA determinations.

Regulatory Guide 8.37 advises materials licenseesthat they should consider engineering options toachieve ALARA goals in the release of effluentsand that modifications should be implementedunless an analysis indicates that a substantialreduction in collective dose would not result orthe costs are considered unreasonable. One basisfor reasonableness identified in this regulatoryguide is a quantitative cost-benefit analysis whichrequires the use of a dollar value per unit doseaverted. The Regulatory Guide indicates that$1000 per person-rem is an acceptable value forthis purpose.

In 1992 for an enhanced participatory rulemakingon radiological criteria for decommissioning, theNRC issued a notice (57 FR 58727) that identifiedissues to be discussed at forthcoming workshopson the proposed rulemaking. One subissuedealing with ALARA considerations asked: "... ifa cost versus benefit analysis were used, whatmonetary value per averted collective dose (i.e.,dollar/person-rem) should the Commission use asa basis for making the determination?" Inresponding to the subissue, only two commentersmentioned specific values. One recommended avalue of $50,000 per person-rem for general publicdose reduction. Another stated that even in 1993dollars, the $1000 value is still higher than mostassessments of the dollar value placed on healthimpacts based on real safety or medical policydecisions. Neither commenter provided a basisfor their recommendations.

12Regulatory Guide 8.37, 'ALARA Levels for Effluents fromMaterials Facilities," July 1993.

4. TECHNICAL STUDIES ANDREVIEWS

As part of the NRC's overall reassessment effortof an appropriate dollar per person-remconversion value, the Brookhaven NationalLaboratory (BNL) completed two studies for theNRC that addressed dollar per person-remvaluation. The first, entitled "Cost-BenefitConsiderations in Regulatory Analysis," by VMubayi, et al.,13 assessed the continued validity ofthe $1000 per person-rem value. In addition, thisstudy re-evaluated the dollar per person-rem valuebased on the more recent state of knowledgeincluding reports issued by the InternationalCommission on Radiation Protection (ICRP), theNational Council on Radiation Protection andMeasurements (NCRP), the United NationsScientific Committee on the Effects of AtomicRadiation (UNSCEAR), and the Committee onthe Biological Effects of Ionizing Radiation (BEIRV) of the National Research Council.

The second BNL study is entitled "Value of PublicHealth and Safety Actions and Radiation DoseAvoided," by John W Baum. 14 This reportincorporates and builds upon the literature reviewcontained in the Mubayi work with a focus onrecent literature on the value of a statistical lifethat can serve as a representative measure of thedollar value of the health detriment. In addition,the report includes related values of dose avoidedin radiation protection, and agencies andorganizations in several countries were contactedby Baum to obtain information on the valuesbeing used or considered by them.

Baum's review identified a wide range ofreferences and estimates that were categorizedinto 11 broad subject areas. The 11 subject areasand corresponding median values for the value ofsaving a statistical life are as follows:

* transportation safety, $0.26 million

* health care actions, $0.37 million13V Mubayi, G. Anandalingam, L Neymotin, and V. Sailor,

"Cost-Benefit Considerations in Regulatory Analysis,"NUREG/CR-6349, Brookhaven National Laboratory, Upton,New York, October 1995.

14J. W Baum, "Value of Public Health and Safety Actions andRadiation Dose Avoided," NUREG/CR-6212, BrookhavenNational Laboratory, Upton, New York, May 1994.

5 NUREG-1530

" consumer products safety, $0.49 million

* values employed by U. S. Government agencies, $1.5million

* consumer choices, $2.2 million

* wage/risk compensation, $2.5 million

* willingness-to-pay surveys, $2.7 million

" chemical carcinogen regulation, $2.9 million

* risk reducing regulations, $6.1 million

* occupational safety, $9 million

* radiation related activities, $15 million.

The median value of saving a statistical life forthese 11 subject areas was $2.5 million, while themean was $3.9 million.

Mubayi's report is somewhat more ambitious inthat it also translates the value of a statistical lifeto a dollar per person-rem value. There ishowever a noticeable difference between Mubayi'sconversion and that considered by the NRC inthis paper. Mubayi's translation explicitlyincludes present worth considerations whereas inthe NRC's formulation presented herein, thedollar per person-rem value appears on anundiscounted basis. However, when used in anyparticular regulatory application, NRC valueimpact guidance would require it, too, to besubject to present worth considerations. Thedifference is largely perceived as proceduralalthough in comparing the staff's and Mubayi'sdollar per person-rem results, the staff's estimateappears to be significantly larger than Mubayi'sresult.

Readers interested in a more detailedunderstanding of the data and issues underlyingthis report are encouraged to review the Mubayiand Baum reports. The Baum and Mubayireports have been published as NUREG/CR-6212,and as NUREG/CR-6349.

5. SCOPE OF DOLLAR PERPERSON-REM VALUE

The NRC acknowledges that the dollar conversionfactor of a person-rem is a highly complex issueand that a myriad of factors can logically be taken

into account in deriving such a value. The NRCalso recognizes that there is a wide divergence inviews, some of which are highly philosophical innature, and thus there is unlikely to be one clearlypreferable choice that will please all interestedparties. Furthermore, the NRC recognizes thatsimplicity, ease of calculation, and providing areadily understandable approach with practicalapplication to a wide range of regulatory issues isdesirable if the dollar per person-rem value is tobe effectively employed. Overall, the NRC believesthat a reasonable or representative valueapproach is best suited for NRC regulatorydecisionmaking. The NRC emphasizes that sucha value serves as only one input to thedecisionmaker and in fact is unlikely to be a soledeterminant to that decision. The most commonapplication of dollar per person-rem conversionvalues is as a screening tool in value-impactanalyses where "close" calls would be subject tomore detailed follow-up analysis, and morecareful scrutiny by NRC management.

In terms of scope, and specifically whether thedollar per person-rem value should cover bothhealth effects and all other offsite consequences15

of exposure or contamination, the NRC proposesthat the dollar per person-rem value serve only asa dollar proxy for the health effects associatedwith a person-rem of dose, and should not beused as a surrogate for these other consequencesthat could be attributable to radiologicalexposure. To the extent other considerations exist,these should be calculated separately andincorporated into the overall value-impactassessment.

Thus, for example, under this approach, for issuesinvolving severe power reactor accidents, offsiteproperty consequences will be estimated based onresults from the MELCOR AccidentConsequence Code System (MACCS). Thiscomputer code was developed for the NRC at theSandia National Laboratories and represents asignificant advancement in the development ofsevere accident analysis methods, and results inimproved offsite economic cost estimates relativeto earlier consequence code results (CRAC andCRAC2). MACCS' economic parameters are inthe process of being updated. When completed,

15Offsite consequences could include such items as lost wages,relocation expenses of the evacuated population, decontaminationcosts, denial of property areas, interdiction of foods or drink, andlimitations on hunting and fishing.

NUJREG-15306 6

representative values for a spectrum of severepower reactor accidents will be developed andincorporated in NUREG/BR-0184, "RegulatoryAnalysis Technical Evaluation Handbook." Forgeneric requirements, these estimates shouldprovide an acceptable and relatively easy way toincorporate direct and explicit consideration ofoffsite property consequences. As notedpreviously, this would be a departure from thecurrent NRC practice where the dollar perperson-rem value is assumed to include anallowance for offsite property losses.

Three fundamental considerations underly anapproach that separately values the health andother consequences of radiological exposure:

(1) Offsite property consequences can varydramatically depending on the nature, timing,location, and magnitude of the radiologicalrelease. For example, in the case of the ThreeMile Island Unit 2 (TM1-2) accident in 1979,offsite property damage was almost nonexistent. 16

Alternatively, if a Chernobyl-type release occurredin the United States and led to the same physicalconsequences as actually happened in theenvirons of Chernobyl, the offsite damage costs(not including health-related costs) would likely bein the billions of dollars. Thus, the dollarquantification needs to take into account the fullspectrum of potential accidents.

(2) Combining health- and nonhealth-relatedconsequences together would overstate the dollarvaluation of radiation exposure in certainapplications such as occupational doses, routineemissions, doses from contaminated sites, andnonpower reactor accidental releases where offsiteproperty losses are not an expected outcome.

(3) The sole purpose of the dollar per person-remvalue is to allow the values and the impacts froma change in radioactive exposure to be comparedto other factors in commensurate units, that is,dollars. There is consequently no need to includeother impacts such as offsite property or the valueof destroyed foodstuffs in the dollar perperson-rem conversion factor since these itemscan be and are normally expressed directly indollars. Similarly, to the extent that occupational

16U.S. Nuclear Regulatory Commission, Special Inquiry Group,"Three Mile Island, A Report to the Commissioners and thePublic," NUREG/CR-1250, Vol. II, Part 2.

exposures involve labor cost considerations, theseimpacts would be addressed as a separateadditive element in the value-impact analysis.The intent, therefore, is to provide arepresentative dollar per person-rem thresholdvalue, tied exclusively to health risks, that can beused in all NRC regulatory applications.

6. APPROACHES TO VALUING THEHEALTH DETRIMENT

In this proposed formulation, computation of theupdated dollar per person-rem valuation requiresconsideration of (1) the dollar value of the healthdetriment and (2) a risk factor that establishes thenominal probability for stochastic health effects17

attributable to radiological exposure. Theproduct of these two elements is the dollar perperson-rem conversion factor.

With respect to the dollar value of the healthdetriment, the NRC has reviewed the literature onthe value of a statistical life. As discussedpreviously, the literature is highly diverse anddollar estimates vary dramatically. Based on thevarious methodological approaches and individualcase results reported in the two BNL studies, it isapparent that varying degrees of justification existover a very wide range of values. A review of themore common and relevant approaches tovaluation of a statistical life follows.

6.1 Human Capital Method

The value of a life saved has often been estimatedusing purely economic considerations. Thesimplest of these is the human capital approachin which health effects and life shortening aretypically estimated in terms of lost productionand a dollar allowance for medical care. Theproduction loss, which is the dominant dollarconsideration, is often calculated based on theexpected lifetime earnings of the individual whoselife is prematurely ended. For unidentifiableindividuals in the general public, this calculationis sometimes based on per capita gross domesticproduct (GDP), or per capita income. This model17Stochastic health effects, i.e., cancer and heredity disorders, result

from cells being modified rather than killed as a result of a lowdose of radiation. The probability of a cancer resulting fromradiation increases with increments of dose, probably with nothreshold. ICRP Publication 60, "1990 Recommendations of theInternational Commission on Radiological Protection," Vol. 21,No. 1-3, published for the ICRP by Pergamon Press, Oxford,U.K., p. 69, 1991.

7 NUREG-1530

does not directly attribute a monetary burden tophysical and psychological suffering.

According to Baum, per capita income in 1990was about $50 per calendar day. The averagevalue of a statistical life saved can then beestimated from the average life-span shorteningexpected if the risk is not avoided. Forradiation-induced cancers, this averages about 15years, 18 yielding a value of statistical life saved ofabout 15 yr x 365 day/yr x $50/day = $270,000.Adding costs of medical treatment would increasethis by about 20 percent, whereas discountingfuture earnings and costs using a representativediscount rate would approximately halve the valueof a statistical life on a present worth basis.

Mubayi's report includes discussion ofNRC-sponsored research conducted by the PacificNorthwest Laboratory (PNL). PNL developed the"Health Effects Cost Model" (HECOM), whichutilizes the health effect incidence estimates fromaccident consequence models to calculate thediscounted sum of the economic costs associatedwith population exposure to ionizing radiation. 19

Direct costs include expenses for medicaltreatment for specific acute injuries, and delayedsomatic and genetic effects. Indirect costs areevaluated in terms of "loss of human capital" (i.e.,the productivity loss to society as a result ofillness and premature death). Productivity loss ismeasured in terms of wages, modified to includenonwage-earning labor (household services).HECOM does not directly attribute a monetaryburden to physical and psychological suffering.

Estimates of the value of avoided dose were madeby Mubayi using the HECOM model.Calculations were based on 20- and 30-year oldmale and female populations, and future medicalcosts and the loss of future earnings were subjectto present worth considerations based on 3percent and 7 percent real discount rates.Mubayi's results were updated to 1990 dollarsusing the inflation data from the medical costsand consumer price indices over this period.Based on Mubayi's adjustments to the HECOMmodel, exclusive of any adjustments to account for

18lCRP, op. cit., p. 134.

19L A. Nieves and J. J. "Ihwil, "The Economic Costs ofRadiation-Induced Health Effects: Estimated and Simulation,"NUREG/CR-481 1:PNL-6097, Pacific Northwest Laboratory,August 1988.

pain and suffering, a best-estimate for the value ofa statistical life is on the order of about $500,000.

The human capital approach reduces the value ofhuman life to only economic considerations, andas such, has many recognized shortcomings.2°This approach typically ignores pain andsuffering, lost enjoyment of life, and the value tofamily and community that is not reflected inGDP. It also has an implicit assumption thatnonproductive individuals, (e.g., retired,unemployed) have minimal value. A reportprepared for the Administrative Conference of theUnited States concluded that by 1988, use of thehuman capital method to value a statistical life inregulatory situations had lost whatever adherentsit formally had.21

Interestingly, note that in 1993, the Health PhysicsSociety issued a policy statement that linked thedollar valuation of a person-rem to the portion ofgross domestic product currently being spent onextending life expectancy. 22 Computationally, thisvaluation is very similar to the human capitalapproach although its intention is not to assign avalue to human life, but rather to optimize the useof limited resources for improving life expectancyand health benefits, when all risks are considered.This approach produces recommended valuesranging from $40 to $200 per person-rem.

6.2 Willingness-to-Pay Method

The value society (i.e., an average person) placeson improving safety is frequently based on the"willingness-to-pay" (WTP) approach. In theory,if there were a market for "buying" safety, thenthis approach would yield the price that theaverage "consumer" would be willing to pay toreduce the probability of death or what theywould accept to have that probability increased.By using such an approach, the valuation of riskreduction is believed to reflect societalpreferences and when applied in a cost-benefitframework will, in theory, reflect correct publicallocation decisions. Quantification can, however,20A. Bequele, 'The Cost and Benefits of Protecting and Saving

Lives at Work: Some Issues." International Labour Review, Vol.123, No. 1, January-February 1984.

21C. P. Gilette and T. D. Hopkins, Federal Agency Valuations ofHuman Life," p. 53, July 1988.

22Health Physics Society, "Position Satement on Radiation DoseLimits for the General Public, Part II," March 1993.

NUREG-1530 8

be very difficult and the method is criticizedbecause of*the large uncertainties in derivedvalues. Nevertheless, many believe that such anapproach is preferred to alternatives forestimating the value of a statistical life,particularly the human capital approach. TheWTP approach is recommended by the Office ofManagement and Budget (OMB) as the preferredmethodology for monetizing changes in the risk offatalities. In addition, Recommendation No.88-7 of the Administrative Conference of theUnited States states that "WTP provides the mostinclusive analysis currently available forevaluating the benefits derived from regulatoryreduction of fatalities."

WTP studies related to valuing a statistical lifecan be grouped into three categories: consumermarket studies, wage-risk studies, and contingentvaluation studies.24

The first category of WTP studies involvessociety's WTP based on actual consumer marketstudies. Such studies typically examine thetradeoffs between risk and benefits that peoplemake in their consumptive decisions (e.g., seatbelts, medical diagnostic tests, etc.). Based ontheir cost and probability of saving life, the costof saving a life could be viewed as a proxy for thevalue of a life saved. In reality, however, many ofthese safety features reflect highly cost-effectiveways to save lives and may understate whatsociety is willing to spend to avert death. As aresult, although such estimates provide aninteresting and important perspective (i.e., whatsociety is spending to save life), the upper endvalues of $2.2 to $3.4 million from Baum'sconsumer market review appear to moreappropriately reflect the value of an averteddeath. This is because the dollar conversionfactor of concern to the NRC is a threshold valuethat reflects how much society is or would bewilling to spend to avoid a statistical death. Thefact that, for certain risks, life can be saved

23Office of Management and Budget, "Regulatory Impact AnalysisGuidance," Appendix V, p. 634, in "Regulatory Program of theUnited States Government: April 1, 1992 - March 31, 1993,"Document No. S/N 041-001-00388-6, U.S. Government PrintingOffice, Washington, DC.

24A Fisher, L G. Chestnut, and D. M. Violette, "The Value of

Reducing Risks of Death: A Note of New Evidence," Journal ofPolicy Analysis and Management, Vol. 8, No. 1, pp 89, 1989.

relatively inexpensively should have little bearingon this consideration.

A second WTP approach involves wage-riskcompensation. This is one of the most thoroughlystudied approaches and presumes that the valuethat workers place on their lives is measurablebased on observed wage differentials inoccupations of varying risks. An advantage ofthis approach is that quantification is relativelyeasy because it is based on situations where realmarkets actually exist. Limitations of thewage-risk approach include workers (1) that maynot know the extent of risk in particularoccupations; (2) that may not be able to changeoccupations freely where risks are of concern; and(3) that may not incorporate the pain andsuffering of friends and relatives, some of whommay be economically dependent on the worker, intheir decisionmaking. Further it has been arguedthat, in many instances, wages and job-relatedfatalities seem to be inversely related sincelow-wage occupations tend to have a higherfatality rate than high-wage occupations. TheBaum report identifies over 30 individual wagerisk studies. For many of these studies,adjustments were made to try and make thestudies as comparable and consistent as possible.On this basis, Baum reports value of statisticallife estimates in 1990 dollars in a relatively narrowrange ($1.2 million to $3.7 million) and a medianvalue of $2.5 million.

The third WTP approach, contingent valuationstudies, involves survey techniques to elicitresponses to questions that postulate hypotheticalmarket choices. The respondents are presentedfactual information, often during a personalinterview. This information includes a detaileddescription of the goods being valued and thecircumstances under which they are being madeavailable. Respondents are queried on the pricethey would be willing to pay for the goods, as wellas the respondent's own personal characteristics(e.g., age and income). The questions arecarefully designed to minimize bias, and varioustechniques are used to randomize the sample andeliminate "poor" quality data. Although in theorythis approach should most closely define society'sprice for buying safety, it is also the most difficultto quantify. Moreover, the public's perception ofrisk is not always consistent with the resultsobtained from analytical studies. Also, the meansor approaches to measure the public's perceptions

9 NUREG-1530

are often open to a variety of interpretations,resulting in answers that are inconsistent orinappropriate because of differing and undefinedassumptions. Given these considerations andlimitations, Baum reports value of statistical lifeestimates in 1990 dollars ranging from a low of$0.1 million to a high of $15.6 million, with amedian value of $3.1 million.

6.3 Values Implied by Government AgencyExpenditures

The Baum report summarizes studies where thevalue of saving a statistical life can be implied bythe expenditures of Government agencies in theUnited States. Baum groups these studies intoexpenditures on health care, traffic safety, andprograms to reduce radiation exposure. Thestudies imply values of saving a statistical life overa wide dollar range: all amounts are in 1990dollars.

The health care expenditures data imply a valueof a statistical life ranging from $12,000 forscoliosis and neuromuscular disease to $2.6million for kidney dialysis. The traffic safety dataimply values ranging from $85,000 for regulatoryand warning signs to $710,000 for clearingroadside recovery areas. Implied values fromgovernment expenditures to reduce radiationexposure range as high as $490 million to reduceexposure in the defense high-level radioactivewaste program. The comparable figure for thecivilian radioactive waste program is $44 million.

6.4 Values Implied by RegulatoryRequirements Imposed by GovernmentAgencies

Baum also includes a number of examples in hisreport where a value of a statistical life can beinferred from the costs associated withimplementing safety-related regulations. Hisreport reviews data published by Travis, et al.25on the costs and risk reduction of 11 regulationsissued by Federal agencies involving chemicalcarcinogenic products. Values (in 1990 dollars)per fatal-cancer avoided range from $0.04 millionfor chromium to $25 million for chlorobenzilate.The median value is $2.9 million (Baum, Table 8).

25C. C. Travis, S. R. Pack, and A. Fisher, "Cost-Effectiveness as aFactor in Cancer Risk Management," Environmental International,Vol. 13, pp. 469-474, 1987.

Travis, et al. concluded that when lifetime cancerrisk exceeds about 4 x 10-3, chemicals wereregulated regardless of cost. Alternatively, if thelifetime risk ranged from 10-6 to 4 x 10-3,regulations were only implemented if the value ofa statistical life was less than $2 million. Thus,the relevance of relatively high dollar estimates ofthe value of a statistical life derived from previousregulatory decisions is uncertain or unclear, sinceit is most likely that in these instances thedecision was not based on a cost-benefit analysisbut rather was based solely on the unacceptabilityof the risk.

Baum cites examples of other regulatory actionstaken by the Department of Transportation(DOT), the Environmental Protection Agency(EPA), the Occupational Safety and HealthAdministration (OSHA), and the ConsumerProduct Safety Commission (CPSC) where theimplied value of a statistical life in 1990 dollarsranges from $130,000 to $91 billion. Recent workby Van Houtven and Cropper suggests that theimplied value of a statistical life used by EPA inregulating asbestos under the Toxic SubstancesControl Act and pesticides under the FederalInsecticide, Fungicide, and Rodenticide Act fallsbetween $49 and $52 million (measured in 1989dollars). 26 OMB has compiled a list of a largenumber of Federal agency actions where the costof a premature death averted (in 1990 dollars) asa result of an agency's regulatory actions rangesfrom $.1 to $5,700,000 million. 27

6.5 Values Based on Radiation ProtectionActivities in Other Countries

Baum's review included contacting other countriesto obtain information on their cost-benefitguidance in dealing with radiation protectionissues. In the United Kingdom (UK), the NationalRadiological Protection Board (NRPB) hasconsidered both the human capital and WTPapproaches in estimating an appropriate value ofa statistical life. Up until about 1990, the NRPBresisted using values based on WTP because of, intheir view, the paucity of reliable WTP data.Recently, the NRPB has cited with approval arecommendation for a value of statistical life inthe range of about $3 million to $4.5 million, and26G. L Van Houlven and M. L Cropper, "When is a Life Too

Costly to Save? The Evidence from Environmental Regulations,"Resources, Resources for the Future, p. 6, Winter 1994.

27 0MB, op. cit., p. 28.

NUREG-1530 10

a study28 indicating a value of statistical life onthe order of $2.4 million in 1990 dollars.

It is interesting to note that the UK also looked atthe value of statistical life in ddaling withtransportation safety issues. In 1988, a reportsponsored by the UK Department of Transportproposed that the then current reliance on thehuman capital approach be abandoned in favor ofthe WTP approach and that the value of life beset at about $1.0 million (in 1990 U.S. dollars). In1989, the UK sponsored a WTP survey involvingover 1000 respondents and professionalinterviewers. This study concluded that residentsin the UK were prepared to spend $3.2 million forcertain highway improvements to save a life.

6.6 Representative Value of a StatisticalLife

As noted earlier, the variation in the value ofstatistical life as estimated and used for a numberof applications is tremendously broad (less than$100,000 to billions of dollars). However, whenviewed critically, it appears that median values fora realistic value of a statistical life tend to rangefrom a low of about $1.3 million to a high slightlyover $3 million. Both higher and lower estimateswere identified and evaluated; however, higherestimates seem to result from decisions basedprimarily on motivations other than the WTPconcept, and lower estimates seem to reflect morethe cost of saving a life rather than the value oflife. The NRC also chose to dismiss the humancapital approach for estimating the value of astatistical life because it understates value by onlyaddressing one aspect of human life.

The NRC contends that the dollar per person-remconversion factor should be reasonable andrepresentative, and thus should be consistent withthe preponderance of the estimates. A value of astatistical life of $3 million seems to best matchthese objectives. This value (1) is consistent withresults from the WTP approach, which isrecommended by OMB and the AdministrativeConference of the United States, and is mostfavored in the literature; (2) reflects median valuesof a statistical life estimated in many studies; (3)

28D. Ives, D. Thieme, and R. Kemp, 'The Statistical Value of Lifeand Safety Investment," Reseach Report No. 13, EnvironmentalRisk Assessment Unit, Unversity of East Anglis, Norwich, UK,1993.

is representative of values used by other Federalagencies responsible for public health and safety;(4) is in general agreement with values used forregulatory decisionmaking in other countries; and5) is specifically cited by OMB as a "bestestimate" for the value of a statistical life usingthe WTP approach.29

A representative value of a statistical life and notan upper bound is appropriate for severalreasons. First, the value will influence nationalenergy-related decisions, and realistic safety-costtradeoffs help to ensure an equitable treatment ofall energy sources or options. Second, a valuethat is in reasonable agreement with values usedby other Federal agencies involved in health andsafety will help ensure risk harmonization andthat decisions throughout the FederalGovernment reflect an efficient and properallocation of society's resources. Third, if toohigh a value is chosen, money that wouldotherwise be available to society to save liveswould not be available, and a regulatoryrequirement could have the perverse effect ofincreasing overall mortality risk.30 Finally, arepresentative value is a useful guide in makingdecisions on "worthwhile" regulatory initiativesand reflects one reference point. NRC'sregulatory decisions are ultimately based onnumerous considerations of which the results of aregulatory analysis are but one input. Also, itbears repeating that the dollar value ultimatelyattached to averted dose will have no effect onactions deemed necessary by the NRC to ensureadequate protection to the health and safety ofthe public.

7. RISK COEFFICIENTS FORSTOCHASTIC HEALTH EFFECTS

Once an appropriate value of statistical life hasbeen estimated, the parameter needed to convertthat value to a dollar per person-rem figure is therisk coefficient that establishes the nominalprobability for stochastic health effectsattributable to radiological exposure. Thenational and international bodies (NCRP, ICRP)responsible for evaluating and recommending

29OMB, op. cit., p. 27.300MB, op, cit., This concept, referred to by OMB as

"health-health analysis," is discussed at pages 19-30 of OMB,"Regulatory Program of the United States Government"document.

11 NUREG-1530

such a value are in close agreement. The NRCproposes to use the latest recommendations of theICRP as presented in their Publication No. 60. Ingeneral, for doses to the general population, theirrecommendation is a risk coefficient of 7.3 x 10-4per rem.31 This coefficient accounts for theprobability of occurrence of a harmful healtheffect and a judgement of the severity of theeffect. The coefficient includes allowances forfatal and nonfatal cancers and for severehereditary effects. The nonfatal cancers andhereditary effects are translated into loss-of-lifemeasures based on a perceived relationshipbetween quality of life and loss of life. In thisway, the value of statistical life is applicableacross all contributors to the total health riskcoefficient. For NRC regulatory applications, it isproposed that the risk coefficient be reduced toone significant digit to better reflect the level ofaccuracy inherent in its derivation. The riskcoefficient of 7.0 x 10-4 per person-rem can thanbe used with the value of a statistical life to derivea dollar conversion factor per person-rem. Usingthe risk coefficient in this manner has the effect ofattributing proportional risks to very small doseseven though there is no convincing evidence ofproportional risks at background levels. However,in the absence of such evidence, scientificorganizations such as ICRP and NCRP haveconcluded that it is prudent to assume a linearrelationship for the purpose of planning andimplementing radiation protection programs.

8. DOLLAR PER PERSON-REMCONVERSION FACTOR

The dollar per person-rem conversion factor forhealth effects can now be calculated as theproduct of the value of a statistical life and therisk coefficient. Based on the precedingrecommendations concerning the value of astatistical life ($3 million) and the risk coefficientfor stochastic health effects (7.0 x 10-4), the dollarconversion factor for health effects would equal$2100 per person-rem. Given the largeuncertainties already inherent in this approach, itwould appear reasonable to adopt a dollarconversion factor rounded to the nearest thousanddollars. Thus, the NRC proposes that $2000 perperson-rem be used for routine emissions,

accidental releases, and 10 CFR Part 20 ALARAprograms (i.e., occupational exposures).Pertaining to occupational exposures, the NRCacknowledges that, for ALARA determinations,many licensees employ conversion factors inexcess of $2000 per person-rem. This isparticularly true in nondesign ALARAdeterminations where licensees consider trade offsbetween occupational dose and alternativetechnologies and procedures (e.g., additionalshielding, remote or robotic tools). These highervalues are typically influenced by utility-specificmanpower constraints and other labor costconsiderations. These are valid utilityconsiderations in evaluating occupationalexposures, and licensees are expected to continueto use these higher conversion factors. Further,such values are not necessarily inconsistent withthe NRC's $2000 value that only captures healtheffects, as other impacts such as labor costconsiderations can be treated as additive elementsin the NRC's value-impact analysis.

The NRC acknowledges that there may be uniquecircumstances where other dollar conversionfactors may warrant consideration. For example,doses to a population whose age distribution isnot representative of the general population couldbe subject to a different risk coefficient becausehealth risks are directly related to the agedistribution of the affected population. Further,recognizing the uncertainties inherent inestablishing a representative conversion factor,alternative values to capture the uncertainties maybe warranted. Thus, it would be reasonable toexpect an analyst to include alternative valuationsin regulatory analyses in order to show thedecision maker the sensitivities of the proposedaction to relevant considerations. However, thebase case computations in a regulatory analysiswill normally use the recommended dollarconversion factor of $2000 per person-rem.

The dollar per person-rem conversion factor is forstochastic effects only and is not to be applied todeterministic effects..2 It should also not beapplied to any individual dose that could result inan early fatality. These omissions are consistentwith NRC's view that the monetizing of mortality32Deterministic health effects in humans can result from general or

localized tissue irradiation causing an amount of cell killing thatcannot be compensated for by the proliferation of viable cells.The resulting loss of cells can cause severe and clinicallydetectable impairment of function in a tissue or organ. ICRP, op.cit., p. 99.

31ICRP op. cit., p. 70.

NUREG-1530 12

effects as it relates to the value of any singleindividual's life is not appropriate. Rather, its useis as an estimate of the value of small reductionsin the probability of death for a given population.From a practical perspective, the NRC believesthat regulatory issues involving deterministiceffects and or early fatalities would be very rare,and can be addressed on a case-specific basis, asthe need arises.

9. IMPLICATIONS OF REVISEDCONVERSION FACTOR POLICY

The $2000 per person-rem conversion factordiscussed in this report reflects a two-foldincrease from the $1000 per person-remconversion factor that has historically been usedby the NRC. However, as discussed in Revision 2of the NRC's Regulatory Analysis Guidelines, anyincrease in the dollar value of health effects willnow be subject to present worth considerationsthat will decrease the apparent effect of a new,higher dollar per person-rem conversion factor.

For most regulatory applications, the net effect ofthese two changes is a wash. For example, thetotal dollar value of averting one person-rem peryear over a 20-year timeframe is $20,000 based onan undiscounted $1000 conversion factor policy.Applying a $2000 conversion factor and assumingthe Guidelines recommendation of a 7-percentreal discount rate results in a total dollar value of$21,200.

Another change in NRC's conversion factor policyinvolves separate quantification of offsite propertyconsequences. The NRC recognizes that separatequantification of offsite property will have limitedapplication in regulatory decision making. This isbecause offsite property consequences are not anexpected outcome for most radiological releases.This is true for occupational doses, routineemissions, doses from contaminated sites, andmost accidental releases from nonpower reactors.However, in those regulatory applicationsinvolving severe power reactor accident scenarios,the difference in total dollar value could beimportant. For example, applying the sameassumptions just stated, but this time including a$3000 per person-rem allowance for offsiteproperty consequences, the total dollar value ofaverting one person-rem per year over 20 years

would increase from $20,000 to $53,000, anincrease of about a factor of 2.5. Further, underunique circumstances the differential could be farmore significant. For example, consider aproposed regulatory re4uirement that reduces theprobability of severe power reactor accidents inwhich there is typically a long delay in offsiterelease. Since interdiction measures can be veryeffective in such cases, the public health andsafety benefit based solely on person-rem avertedwould be very small. This however, wouldcompletely omit the large offsite propertyconsequences associated with the interdictioneffort.

As part of the NRC's overall reassessment of anappropriate dollar per person-rem conversionfactor, the NRC considered the potential impactof any change in the $1000 per person-rem factoron current regulations and past regulatorydecisions. In the introductory sections of thisreport, the NRC attempted to characterize therole that the $1000 per person-rem played, and isexpected to exert in future NRC regulatorydecisions. First, with regard to regulatorydecisions concerning radwaste system designalternatives for nuclear power plants (10 CFRPart 50, Appendix I), the NRC staff involved inthose assessments have indicated that increases inthe conversion factor of at least an order ofmagnitude would be necessary to justify anyreassessment of these decisions. Thus, thechanges in the conversion factor policy asconsidered in this report would not bring intoquestion these past decisions. Second, for allother regulatory applications where $1000 perperson-rem has been used by the NRC, the NRCis not proposing that previous decisions bereviewed or updated based on this revisedconversion factor policy because in mostregulatory applications the difference in totaldollar valuation is minimal between these twooptions. Furthermore, even for regulatorydecisions involving safety enhancements for severepower reactor accidents where the potentialdifference in total dollar valuation could be large,the NRC does not propose revisiting these pastregulatory decisions unless, on a case-specificbasis, an unanticipated need to do so arises.There are several reasons for this position. First,the $1000 per person-rem value has been used bythe NRC as a figure of merit, and as one inputamong many in the regulatory decision. Second,

13 NUREG-1530

in recognition of the uncertainties inherent insuch a figure of merit, NRC staff anddecisionmakers would typically rely more heavilyon other considerations when the break-evenconversion factor was close (within a factor of 5)to the $1000 per person-rem guide. Finally, it isvery likely that the cost of making animprovement to a licensed facility to reduce theprobability of radiation exposure has increasedcommensurately with the increase in dollarvaluation that would result from the changes inconversion factor policy under consideration inthis report.

10. PROCESS TO INCORPORATETHE REVISED DOLLAR PERPERSON-REM VALUE AS NRCPOLICY

The $2000 per person-rem conversion factor andrelated changes in NRC's conversion factor policyhave been incorporated in "Regulatory AnalysisGuidelines of the U.S. Nuclear RegulatoryCommission," NUREG/BR-0058, Revision 2,November 1995. In addition, the NRC intends toprovide more detailed guidance on implementingthis policy in NRC's "Regulatory AnalysisTechnical Evaluation Handbook" (Handbook),which is scheduled to be published in 1996.

The deletion of all references to the present $1000per person-rem value in existing regulations andguidance will be considered. The only referencein the Code of Federal Regulations to the,$1000per person-rem value is in 10 CFR Part 50,

Appendix I (Sec.II)(D) that concerns routineemissions for radwaste system designs at powerreactors. Regulatory Guide 1.109 containsguidance on performing dose calculations and theuse of $1000 per person-rem for the dollarvaluation for radwaste system design alternativesfor power reactors. Also, Regulatory Guide 8.37suggests the use of $1000 per person-rem indetermining ALARA levels for radiologicaleffluent from materials facilities. NUREG-0933,'A Prioritization of Generic Safety Issues" utilizes$1000 per person-rem in assigning priorities andresolving generic safety issues. In other regulatoryapplications [e.g., regulatory analyses, backfitanalyses, SAMDA analyses, and analyses inresponse to 10 CFR 50.34(f)(1)(i)], the NRCcurrently draws upon the 1983 "Handbook forValue-Impact Assessment" as the basis for itsvaluation of radiological dose and willcorrespondingly draw upon the revised Handbookwhen it is issued in final form.

The NRC recognizes that updating the dollar perperson-rem conversion factor may be appropriatein the future. Consequently, the NRC intendsthat the dollar per person-rem conversion factorbe subject to periodic review. The dollar perperson-rem conversion factor would only beadjusted if changes in the underlying parameterscause the base conversion factor (when roundedto the nearest thousand dollars) to shift up ordown by a thousand dollars or more. The NRC'supdate will consider such factors as changes inthe value of the dollar, new research addressingthe appropriate value of a statistical life ingovernmental decisionmaking, or a change inrecommended radiation risk coefficients.

NUREG-1530 14

NRC FORM 335 U.S. NUCLEAR REGULATORY COMMISSION 1. REPORT NUMBER(2-89) (Assigned by NRC, Add Vol.,NRCM 1102, Supp., Rev., and Addendum Num-3201, 3202 BIBLIOGRAPHIC DATA SHEET bers, if any.)

(See Instructions on the reverse) NUREG-1530

2. TITLE AND SUBTITLE

Reassessment of NRC's Dollar Per Person-Rem Conversion Factor Policy 3. DATE REPORT PUBLISHED

MONTH I YEAR

December 19954. FIN OR GRANT NUMBER

5. AUTHOR(S) 6. TYPE OF REPORT

Technical

7. PERIOD COVERED (Inclusive Dates)

8. PERFORMING ORGANIZATION - NAME AND ADDRESS (If NRC, provide Division, Office or Region, U.S. Nuclear Regulatory Commission, and

mailing address; If contractor, provide name and mailing address.)

Division of Regulatory ApplicationsOffice of Nuclear Regulatory ResearchU.S. Nuclear Regulatory CommissionWashington, DC 20555-0001

9. SPONSORING ORGANIZATION - NAME AND ADDRESS (If NRC, type "Same as above"; if contractor, provide NRC Division, Office or Region,U.S. Nuclear Regulatory Commission, and mailing address.)

Same as item #8

10. SUPPLEMENTARY NOTES

11. ABSTRACT (200 words or less)

The U.S. Nuclear Regulatory Commission (NRC) has completed a review and analysis of its dollar per person-remconversion factor policy. As a result of this review, the NRC has decided to adopt a $2000 per person-remconversion factor, subject it to present worth considerations, and limit its scope solely to health effects. This is incontrast to the previous policy and staff practice of using an undiscounted $1000 per person-rem conversion factorthat served as a surrogate for all offsite consequences (health and offsite property). The policy shift has beenincorporated in "Regulatory Analysis Guidelines of the U.S. Nuclear Regulatory Commission," NUREG/BR-0058,Revision 2, November 1995.

12. KEY WORDS/DESCRIPTORS (List words or phrases that will assist researchers in locating the report.) 13. AVAILABILITY STATEMENT

Unlimited

Value-Impact Analysis 14. SECURITY CLASSIFICATION

Regulatory Analysis (This Page)

Radiological Exposure UnclassifiedDollar Per Person-rem Conversion Factor (This Report)

Value of Statistical Life UnclassifiedHealth and Safety Benefit 15. NUMBER OF PAGES

16. PRICE

NRC FORM 335 (2-89)

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