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Frank L. "Skip" Bowman
President and CEO
Nuclear Energy Institute

U.S. House of Representatives
Appropriations Subcommittee on Energy and Water Development

Washington, D.C.
March 16, 2006

Testimony for the Record

On behalf of the nuclear energy industry, thank you for your oversight of the federal government’s used nuclear fuel management program and funding for the Department of Energy’s nuclear technology-related programs. My statement for the record addresses three key points:
  1. Congress should fully fund the Yucca Mountain program to provide secure, environmentally responsible management of used nuclear fuel. NEI recommends that the program be funded at the president’s request of $544.5 million to enable DOE to submit a license application for Yucca Mountain to the Nuclear Regulatory Commission next year.
  2. The industry urges continued support for DOE’s nuclear energy programs at $560 million. NEI supports higher funding for DOE’s Office of Nuclear Energy, Science and Technology to support the new Global Nuclear Energy Partnership and to sustain existing programs. To achieve its objectives, DOE must have additional funding for Nuclear Power 2010, Generation IV reactor programs and the Nuclear Hydrogen Initiative. We strongly recommend full restoration of the University Infrastructure and Assistance Program, along with continued funding of the Nuclear Energy Research Initiative, and initiating the Nuclear Energy Systems Support Program.
  3. The NRC’s budget request of $777 million should be reviewed for efficiencies. NEI urges Congress to thoroughly examine the NRC’s increased budget request to ensure proper resource allocation and to recognize reduced demands due to delays in Yucca Mountain licensing.
The Nuclear Energy Institute is responsible for developing policy for the U.S. nuclear energy industry. NEI’s 250 corporate and other members represent a broad spectrum of interests, including every U.S. utility that operates a nuclear power plant. NEI’s membership also includes nuclear fuel cycle companies, suppliers, engineering and consulting firms, national research laboratories, manufacturers of radiopharmaceuticals, universities, labor unions and law firms.

The nuclear industry generates electricity for one of every five U.S. homes and businesses, and is taking steps to develop affordable, reliable and clean electricity for the future. Nuclear energy is a vital component of a diverse energy portfolio that enhances America’s energy security and fuels economic growth. We applaud the efforts and actions of Chairman Hobson, Ranking Member Visclosky and members of this committee in recognizing nuclear energy as an important part of a diverse, competitive and secure energy policy for generations to come.

Industry Supports Budget Request of $544.5 Million for Yucca Mountain
The nuclear industry appreciates the strong support and leadership that this committee has provided on the Yucca Mountain repository program. The federal government already is eight years behind on its commitment to start moving used nuclear fuel from temporary storage at nuclear power plants across the nation to a federal repository. Under the most optimistic scenario, it will be several more years before the repository is licensed and operating. Since 1983, consumers of electricity from nuclear power plants have committed nearly $23 billion in fees and interest to cover the costs of this program, and the Nuclear Waste Fund balance is more than $20 billion.

The federal government taking title for and moving used fuel away from reactor sites, along with quantifiable progress on Yucca Mountain, are top priorities for the nuclear industry. Continued progress toward a used fuel management solution is important for building new nuclear plants that will maintain nuclear energy as a key component of our nation’s energy production mix throughout the 21st century.

DOE recently completed a thorough review of the Yucca Mountain program and has outlined needed improvements in the program. The agency’s recent reorganization and lead laboratory designation are steps in that direction. We are encouraged that the department’s leadership now has the necessary focus to move the program forward. The program shift toward a new fuel handling approach has promise to better facilitate licensing and operation of the facility.

The Secretary of Energy recently testified before your subcommittee that the agency this summer will provide a schedule for submitting a license application for Yucca Mountain to the Nuclear Regulatory Commission, and for repository construction and operation. The industry strongly believes that it is critical that DOE meet this commitment. In particular, it is imperative that a high-quality license application be submitted as soon as practicable to demonstrate measurable progress on this critical program. There will be ample opportunity going forward for additional detail to be provided by DOE.

In order for this progress to be accomplished, we fully support the administration’s $544.5 million request for the Office of Civilian Radioactive Waste Management. This funding level is necessary for DOE to complete a high-quality license application and prepare to defend it in the NRC licensing process, to improve existing Yucca Mountain site infrastructure and develop new infrastructure, and for repository facilities design. We also welcome Secretary Bodman’s statement before your subcommittee that he reserves the right to adjust the funding request in light of the program schedule plan that will be completed over the next few months.

The industry also supports legislative action by Congress to address regulatory, long-term funding and other issues to allow the department to move forward with this project. We look forward to working with the committee when the administration forwards its legislative recommendations to Congress.

The nuclear industry has consistently supported, including in testimony before this committee, research and development of advanced fuel-cycle technologies incorporated in the Advanced Fuel Cycle Initiative (AFCI). In anticipation of a major expansion of nuclear power in the United States and globally, it is appropriate to accelerate activities in this program. The renaissance in development of nuclear energy requires advanced fuel cycles in the future.

President Bush has presented a compelling vision for a global nuclear renaissance through the Global Nuclear Energy Partnership (GNEP). This initiative provides an important framework to address challenges for nuclear power development related to fuel supply, long-term radioactive waste management and proliferation concerns.

We recognize that Congress has important questions regarding this program. The industry believes that the near-term focus for GNEP is for DOE to determine, by 2008, how to proceed with demonstration of advanced recycling technologies and other technological challenges. Consequently, the industry fully supports increased funding for the Advanced Fuel Cycle Initiative in FY2007. However, neither AFCI nor GNEP reduces the immediate near-term imperative of progress on Yucca Mountain.

Research and Development Necessary for New Nuclear Energy
The nation needs new electricity capacity. The Energy Information Agency forecasts that demand for electricity will grow by more than 40 percent over the next 25 years. DOE and the industry are working on cost-shared programs that will ready new nuclear energy technology for the marketplace midway through the next decade. Within the Nuclear Power 2010 program, funding should be allocated for demonstrating NRC licensing processes for new nuclear plants, including those for early site permits and the combined construction and operating license. The industry remains fully committed to this initiative and strongly recommends increasing funding to $90 million to meet the schedule for completion.

The industry believes that the government has a limited, early role in bringing advanced reactor concepts—Generation IV reactors—to the marketplace. NEI urges the committee’s support for the development of a next-generation nuclear plant at the Idaho National Laboratory, funded through the Generation IV Nuclear Energy Systems Initiative program at $100 million. The industry also supports the Nuclear Hydrogen Initiative at $30 million.

Although DOE continues to fund the International Nuclear Energy Research Initiative (I-NERI), the domestic version of this program (NERI) has been superseded by a new initiative that continues the basic science of NERI under other DOE nuclear energy programs. The industry believes a collaborative basic science program between national laboratories, industry and universities like NERI should be continued in FY2007.

Congress authorized the Nuclear Energy Systems Support program as part of the Energy Policy Act of 2005, but DOE proposed no funding for the program in FY2007. The industry supports this new program and suggests $15 million to fund an analysis of high performance fuel at the Idaho National Laboratory. Future budgets for this program could focus on developing technology to predict and measure the effect of aging on plant systems and components, and introducing new metals and other materials to assure the safety of key systems and components.

The industry also strongly recommends restoration of DOE’s University Infrastructure and Assistance Program, which provides for vital research and educational programs in nuclear science at the nation’s colleges and universities. The global nuclear renaissance will demand highly educated and trained professionals in the engineering sciences. NEI also encourages the committee to consider supporting a new program within the Office of Science that encourages support for undergraduate and graduate programs in health physics, radiochemistry and other disciplines important to medical, energy and other applications of commercial nuclear technology.

NRC Budget and Staffing Should Be Reviewed
The NRC’s proposed fiscal 2007 budget totals $777 million, an increase of $35 million from the fiscal 2006 budget, and the highest ever for this agency. Six years ago, the NRC’s budget was $488 million. This is an appropriate time for Congress to review the budget request and resource allocations in light of current demands and the other resources available.

The NRC’s fiscal 2006 budget request of $702 million was increased by $41 million by Congress for two purposes. The commission was allocated an additional $20 million to fund an investment “over two years” to support the preparatory activities and pre-application consultations for the expected combined construction and operating license applications beginning in fiscal 2008. The NRC also was provided $21 million to be used to conduct “site-specific assessments of spent fuel pools at each of the nuclear reactor sites.” Although Congress clearly established a limited period for funding in these two categories, the NRC has incorporated these amounts into its budget baseline.

As a result of the significant increases in the NRC’s budget, licensee fees have increased dramatically. Generic licensee fees for each reactor will increase from $3.1 million to more than $3.6 million. When other NRC fee increases specific to each reactor are included for licensees, NRC fees for power reactors will increase by more than 20 percent in one year.

The NRC’s fiscal 2007 budget request includes $35.3 million for generic homeland security costs. Section 637 of the Energy Policy Act of 2005 modified the NRC’s user fee to exclude the costs of generic homeland security from fees recovered from licensees, except reimbursable costs of fingerprinting and background checks and the costs of conducting security inspections. The NRC’s budget proposal includes more than $70 million for homeland security functions. Section 637 requires that only a portion of the NRC’s budget for this function be supported by general funds. The industry agrees that certain NRC security functions are for the common defense of the nation and should be funded from general funds.

America’s nuclear power plants were the most secure U.S. industrial facilities before the Sept. 11, 2001, terrorist attacks, and are even more secure today. Over the past five years, the nuclear industry has made significant improvements in security at nuclear power plants. The NRC substantially upgraded its security requirements in 2002 and again in 2004. The industry has invested more than $1.2 billion in security-related improvements and has increased its security guard forces from about 5,000 to more than 7,000. Security at commercial nuclear facilities is unmatched by any other private sector or area of the critical infrastructure, and the nuclear industry has been a leader in working with the Department of Homeland Security and other federal and state resources on security issues.

Industry Support for Additional Activities

Nuclear Nonproliferation: The industry urges the committee to support the president’s request for the MOX project, which is a vital element of U.S. nonproliferation activities. This year is particularly crucial to the project because construction is scheduled to begin.

Low-Dose Radiation Health Effects Research: The industry supports continued funding for the DOE’s low-dose radiation research program.

Nuclear Research Facilities: The industry is concerned about the declining number of nuclear research facilities, and urges the committee to fully fund DOE’s lead laboratory in Idaho for nuclear energy research and development.

Uranium Facility Decontamination and Decommissioning: The industry fully supports cleanup of the gaseous diffusion plants at Paducah, Ky.; Portsmouth, Ohio; and Oak Ridge, Tenn. Commercial nuclear power plants contribute more than $150 million each year to the Decontamination and Decommissioning Fund for government-managed uranium enrichment plants. Other important environmental, safety and/or health activities at these facilities should be funded from general revenues.

International Nuclear Safety Program and Nuclear Energy Agency: NEI supports the funding requested for the DOE and NRC international nuclear safety programs. They are programs aimed at improving the safe commercial use of nuclear energy worldwide.
Medical Isotopes Infrastructure: The nuclear industry supports the administration’s program for the production of medical and research isotopes.