A change in thinking is taking place throughout the federal regulatory arena, and it is a change for the better. Regulatory reform is not reform of the regulatory authority only. It cuts both ways. When we in regulation have done everything we can to expedite our processes, remove needless regulatory burdens and widen our perspective to account for all the effects of our decisions, only half the battle, or less than half, will be won.

If the nuclear industry does not do its part, no amount of regulatory reform will save it from the consequences of its own failures to achieve the quality of construction and plant operations it must have for its own well-being and for the safety of the public it serves.

Some utilities fall short of protecting their own best interests and meeting the high standards expected for nuclear power. Their deficiencies in quality assurance are inexcusable. There have been lapses of many kinds--in design analyses, resulting in built-in design errors; in poor construction practices; in falsified documents; in harassment of quality control personnel; and in inadequate training of reactor operators. These practices must change if true regulatory reform is to take place.

I have no doubt that nuclear power plants are safer now than they were before the Three Mile Island accident. Nuclear Regulator Commission requirements and inspections, as well as industry initiatives, have a great deal to do with that. But I also believe that our safety priorities have not been made clear, and that our demands on utilities' resources have sometimes been excessive and ill-coordinated. The nuclear industry maintains, with some justification, that the sheer volume of new safety requirements constitutes a safety concern in itself.

We intend to sharpen our requirements, reduce them to manageable dimensions and establish reasonable timetables for implementation. In return we expect a full and prompt compliance by the licensees. Just as the regulator should avoid unnecessary demands on licensees, so must the licensee avoid a superficial compliance that falls short of the intended increment in safety.

It is also important to me--and, I would hope, to all of you--to see some real progress soon in developing the means to finance and carry out an expeditious and complete cleanup of Three Mile Island Unit 2. Conditions persisting on that site since the accident took place in March 1979 can only be regarded as very serious. Most disturbing is the uncertainty about the availability of resources to continue and complete the job of decontamination. Progress has been agonizingly slow thus far. The prospect of its becoming slower still, or even of its grinding to a halt because of lack of funds is, quite simply, unacceptable.

We are also trying to formulate an overall safety goal for nuclear operations. The project is an ambitious undertaking, requiring a painstaking examination of the views of a great many individuals and organizations. That takes time, but the benefit to us and to our licensees, as well as to the general public, should be considerable. I sense that we can now see the light at the end of the tunnel for this endeavor.

Industry has the key role in the construction and safe operation of nuclear power plants. That is the fact. Not only public health and safety considerations, but economic imperatives dictate the highest professional standards in building and operating a nuclear plant. When construction or operation falls below the highest standards, the entire industry is hurt.

During my first five months as NRC chairman, a number of deficiencies at some plants have come to my attention that show a surprising lack of professionalism in the construction and preparation for operation of nuclear facilities. The responsibility for such deficiencies rests squarely on the shoulders of management.

I don't mean to absolve the NRC of its portion ofits portion of responsibility at all. In a sense, every deficiency that finds its way into a plant or its operation can be viewed as an NRC failure as well as an industry failure. I intend that the NRC examine regulatory policies toward quality assurance. And I suggest that, just as all utilities have certified independent financial audits of their fiscal activities, so should they have certified independent performance audits of their quality-assurance activities.

The Nuclear Regulatory Commission, like the nuclear industry, has come through a stormy period since the Three Mile Island accident. It has been a period of searching analysis, fact-finding, and--inevitably--fault-finding. The industry and the NRC have suffered a loss of credibility that can only be regained over te.

I believe that credibility will be regained if the future brings safe and economic nuclear power, along with elimination of shoddy workmanship and poor practices. But that kind of stable nuclear operation is not the result of actions that can be taken only by the regulator. It is time now to move to a shared understanding of what has to be done.

We in regulation are trying to get our act together. You in industry need to grab hold firmly of those aspects of your operation that are in trouble, and straighten them out. An all-out effort for reform on both our parts will confirm our common interest in our nation's future and the crucial role of nuclear energy in that future.