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Joe F. Colvin
President and CEO, Nuclear Energy Institute

U.S. Senate
Committee on Appropriations
Subcommittee on Energy and Water Development

Washington, D.C.
April 30, 2001

Testimony for the Record
On behalf of the Nuclear Energy Institute, I would like to commend you, Mr. Chairman and the members of this subcommittee, for focusing your attention on the value of nuclear technology-related programs in the Energy Department and Nuclear Regulatory Commission budget proposals for fiscal year 2002.

The Nuclear Energy Institute (NEI) coordinates public policy for the U.S. nuclear industry.  NEI represents 270 members with a broad spectrum of interests, including every U.S. electric company 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.

Today, America’s 103 nuclear power plants are the safest, most efficient and reliable in the world.  Nuclear energy is the largest source of emission-free electricity generation in the United States, and the industry last year reached record levels for efficiency and electricity production.

The industry thanks Senator Pete Domenici for his leadership in supporting the major U.S. source of emission-free electricity.  The nuclear energy legislation introduced by Senator Domenici in March provides concrete steps to set our nation on a sound energy course for decades to come, including an appropriate robust role for nuclear energy in our nation’s electricity portfolio.

Federal Disposal of Used Nuclear Fuel
The federal government’s responsibility for deep geologic disposal of used nuclear fuel and the byproducts of defense-related activities is long established U.S. national policy. In 1982, the Nuclear Waste Policy Act codified federal policy for developing a repository for long-term stewardship of used nuclear fuel. In 1987, after environmental assessments were conducted at five sites, Congress focused the repository study on Yucca Mountain, Nev. DOE is committed to forward a formal decision on the site suitability of Yucca Mountain to the president this year.

DOE’s 1998 viability assessment, 1999 draft environmental impact statement (EIS) and additional scientific evaluations support preliminary findings that the proposed repository at the remote, desert ridge at Yucca Mountain can protect public health and safety far into the future. DOE’s science consistently predicts that peak radiation releases over 10,000 years, due to the repository, would be less than 1 percent of naturally occurring background radiation at that location, or less radiation than received by traveling on a transcontinental airplane flight.

DOE must start meeting its contractual and statutory obligations to begin removing used nuclear fuel from nuclear power plant sites, national laboratories and defense facilities in approximately 150 communities in 40 states. The industry thanks the committee for its commitment to rectify DOE’s 1998 default on this obligation by sufficiently funding the repository program. We urge the committee to continue to hold DOE accountable for making a decision on a formal Yucca Mountain site recommendation to the president by the end of this year.

Since 1983, American electricity consumers have committed $16.8 billion to the Nuclear Waste Fund, specifically to finance the federal management of used nuclear fuel. Federal taxpayers have paid an additional $1.4 billion for disposal of waste from defense-related nuclear programs. The Nuclear Waste Fund has a balance of $10.1 billion, which must be made available for repository construction and operation.

The nuclear energy industry strongly supports the Department of Energy’s FY-2002 funding request of $445 million for the Civilian Radioactive Waste Management program. At this critical juncture, an increase in DOE’s appropriation is warranted to continue the scientific study of Yucca Mountain. Electricity consumers this year will pay more than $700 million into the Nuclear Waste Fund.

Although the repository program is the foundation of our national policy for managing used nuclear fuel, the nuclear industry also recognizes the value in researching future used fuel management technologies. Farsighted research and development programs allow our nation to remain the world leader in nuclear technologies. However, it is important to note that even technologies like transmutation—the conversion of used nuclear fuel into less toxic materials—require a repository for disposal of the radioactive byproducts generated from the process.
Nuclear Energy Research & Development
For the United States to remain the world leader in nuclear safety and technology, it is crucial that industry and government continue to invest in nuclear technology research and development.

U.S. electricity demand grew by 2.3 percent a year on average during the 1990s, and by 2.6 percent in 2000.  Even if electricity demand grows by a modest 1.8 percent annually over the next two decades, the nation will need nearly 400,000 megawatts of new electric generating capacity, including replacement of retired capacity, according to the U.S. Energy Information Administration. This capacity is the equivalent of building about 40 new mid-size (500-megawatt) power plants—20,000 megawatts—every year for the next 20 years.

The industry is disappointed that DOE has requested less funding for its FY-2002 nuclear energy research and development programs than last year, and urges the committee to approve $433 million in FY-2002 for DOE’s Office of Nuclear Energy, Science and Technology—twice the current budget.

This funding level is consistent with recommendations in legislation recently introduced authorizing increases in nuclear energy R&D programs. Funding increases also have been suggested in recent years by the President’s Committee of Advisors on Science and Technology (PCAST), the Secretary of Energy’s Nuclear Energy Research Advisory Committee and DOE’s Near-Term Deployment Group.

The Nuclear Energy Research Initiative (NERI)—which seeks to expand America’s nuclear energy program in the 21st century—fills a vital need identified in a 1997 PCAST report. PCAST recommended an R&D program to address potential barriers to nuclear energy’s long-term use and to maintain America’s nuclear science and technology leadership. PCAST also recommended another R&D initiative—the Nuclear Energy Plant Optimization (NEPO) program—to generate more low-cost energy from America’s nuclear power plants.

A blue ribbon panel of seven experts appointed by the Nuclear Energy Research Advisory Committee has offered recommendations on how DOE can support university nuclear engineering programs, help to maintain university research and training reactors and promote collaboration between universities and DOE laboratories. DOE’s Near-Term Deployment Group is developing recommendations on agency actions needed in FY-2002 and FY-2003 to facilitate the NRC review of early site permit applications for new nuclear power plants.

Also, authorizing legislation introduced this year in the U.S. Senate and House of Representatives would expand funding in these areas as well as provide incentives to increase electricity generation at nuclear power plants.

The nuclear energy industry urges the committee to approve $60 million in FY-2002 for the NERI program, which is paving the way for the expanded use of nuclear energy and maintaining U.S. leadership in nuclear plant technology and safety. In FY-2001, NERI received $22.5 million—less than one-half of the $50 million annual appropriation recommended by PCAST in its 1997 report. Beginning in FY-2002, PCAST recommended NERI funding be increased to $100 million a year. Although current funding has been sufficient to continue projects initiated in previous fiscal years, it leaves little funding for new R&D projects.

The nuclear energy industry also encourages the committee to allocate $15 million for the NEPO program, which improves efficiency and reliability while maintaining outstanding safety at U.S. nuclear power plants. This public-private partnership is helping to facilitate America’s economic growth and prosperity—and improving our nation’s air quality. NEPO received $5 million in FY-2000 and FY-2001—half the annual funding recommended by PCAST.

DOE has launched a project to prepare a technology roadmap for developing and deploying “next generation” nuclear plants, called Generation IV. As a part of this effort, DOE is preparing a report on near-term deployment activities needed to have new nuclear plants in operation by 2010 or sooner, while longer term technologies are being developed.

DOE is coordinating with NEI’s Executive Task Force on New Nuclear Plants. In the interim, DOE is preparing recommendations on activities requiring immediate attention and is expected to released them in the near future. To support completion of the DOE technology roadmapping effort and to begin implementing these near-term recommendations, NEI urges the committee to approve $42 million in FY-2002 for the Nuclear Energy Technology Development program.

The industry also requests $34.2 million for DOE’s University Support Program, which enhances vital research and educational programs in nuclear science at the nation’s colleges and universities. The number of college programs in nuclear engineering and science is dwindling. To maintain our nation’s position as the international leader in nuclear technology, it is vital that this trend be reversed and that our nation’s best and brightest technical minds be attracted to the nuclear technologies. We urge Congress to adequately fund student recruitment, teaching facilities, fuel and other reactor equipment, and instructors to educate a new generation of American nuclear specialists.

Finally, the industry supports the new initiatives included in authorization legislation introduced this year. One such initiative is the Production Incentive Programs, which the industry believes should be funded at $15 million.

Nuclear Regulatory Commission
The industry commends Congress for important changes to the nuclear industry user fee assessments supporting NRC activities that are unrelated to industry activities. That legislation requires that the proportion of the NRC's budget derived from user fees be decreased by 2 percent each year through 2005. In that year, licensees will support 90 percent of the NRC's budget, but not activities that are not directly related to regulating the industry.

As industry and national energy supply priorities change, sound public management and budgeting principles dictate that the NRC reassess its allocation of resources and make appropriate budget and staffing changes. In that regard, this committee asked for a comprehensive five-year plan as part of the NRC's FY-2001 budget request. Last year, the NRC issued a strategic plan for fiscal years 2000-2005. In addition, the agency submitted a FY-2001-2005 resource information document in response to requests from Congress.

The industry urges the NRC to review its budget in the context of those documents and the changing needs of the agency. In particular, the agency should carefully review its organizational structure and employment levels. The NRC, in its resource information document, has acknowledged that additional organizational changes may be desirable. Although the NRC has reduced its staffing levels during the 1990s, its projections reveal that it may begin increasing those levels over the next few years. The industry believes there are a number of opportunities for reallocating resources that should be explored before additional resources are authorized. These include: reevaluating NRC’s regional structure in light of the results of the reactor oversight process; eliminating research efforts of questionable value, such as human performance and organizational effectiveness; limiting the role of the Advisory Committee on Reactor Safety (ACRS) to technical matters; and streamlining the differing professional opinion process to minimize its impact on issue resolution and management time.

The NRC will be facing several issues in the near future that will challenge its management flexibility. The possibility of early site permitting and new reactor licensing, for example, will raise issues that have not been considered by the NRC for many years. It may not be possible to simply reassign current staff due to the levels of specialized expertise that may be required. The industry urges the committee to request a detailed explanation of how the NRC's proposed budget will address this important issue as well as the impact that license renewal may have on this and future NRC budgets and resource allocation.

The industry thanks the committee for its continued oversight of the NRC and support for the agency’s new reactor oversight process, which is designed to make regulation of the industry more focused on areas significant to safety. The industry and other stakeholders are working with the NRC to incorporate lessons learned during initial implementation of the process in 2000 and to enhance the efficacy of the oversight process.

The industry believes that the majority of U.S. nuclear power reactors will be relicensed for an additional 20 years. The first two electric companies seeking 20-year license extensions for a total of five reactors received regulatory approval within 24 months. The industry expects future license renewal applications to be streamlined as the NRC applies lessons learned from the initial applications. The committee’s continued oversight of license renewal is greatly appreciated.

Other programs supported by the industry include:
Nuclear Nonproliferation: The industry supports the disposal of excess weapons grade nuclear materials through the use of mixed-oxide fuel in reactors in the United States and Russia.

Low-Dose Radiation Research: The industry strongly supports continued funding for the DOE’s low-dose radiation research program. This program will produce a better understanding of low-dose radiation effects to ensure that public and private resources are applied in a manner that protects public health and safety without imposing unacceptable risks or unreasonable costs on society.

Nuclear Research Facilities: The industry is concerned with the declining number of nuclear research facilities. We urge the committee to request that DOE provide it with a long-term plan for using existing nuclear research facilities as well as for development of new research facilities.

Uranium Facility Decontamination and Decommissioning: The industry fully supports cleanup of the gaseous diffusion plants at Paducah, Ky., Portsmouth, Ohio; and Oak Ridge, Tenn. Each year, commercial nuclear power plants contribute more than $150 million to the government-managed uranium enrichment plant Decontamination and Decommissioning Fund. NEI urges the committee to ensure that these monies are spent on decontamination and decommissioning activities at these facilities. Other important environmental, safety and/or health activities at these facilities should be paid for out of the general fund.

International Nuclear Safety Program & Nuclear Energy Agency: NEI supports the funding requested for the international nuclear safety programs of both the DOE and NRC. They are programs aimed at the safe commercial use of nuclear energy.

Medical Isotopes : The nuclear industry supports the administration’s program for the production of medical and research isotopes.  We support continued funding for the Advanced Nuclear Medicine Initiative to fill the gap where other funding sources, such as the National Institutes of Health, have been either unable or unwilling to provide support for radioisotope production.