Testimony for the Record, Marv Fertel, House Appropriations Subcommittee on Energy and Water, April 11, 2014
Testimony for the Record
Marvin S. Fertel
President and Chief Executive Officer
Nuclear Energy Institute
Appropriations Subcommittee on Energy and Water Development
U.S. House of Representatives
April 11, 2014
The Nuclear Energy Institute (NEI) appreciates the opportunity to provide testimony on DOE and NRC programs to the House Appropriations Subcommittee on Energy and Water Development.
In general, NEI believes the federal government should have an efficient and cost-conscious regulator and a robust, results-focused nuclear energy research and development program.
In fiscal year 2015, the NRC needs to significantly improve the efficiency and transparency of its regulatory processes consistent with its own principles of good regulation. Regulatory activities and rulemakings need to be prioritized based on these principles, which will result in the deferral or cessation of numerous activities and rulemakings. Importantly, the NRC’s resources and staff levels should be reduced concordant to the reduction in the number of operating reactors and material licensees from fiscal year 2014.
In regard to R&D, DOE should focus on (1) developing technologies and other solutions that can improve the reliability, sustain the safety, and extend the life of current reactors; (2) developing small modular reactors and new reactor designs that will enable nuclear energy to help meet the nation’s energy and environmental goals; (3) developing a sustainable used fuel management program; and (4) minimizing the risks of nuclear proliferation.
Specifically, the nuclear energy industry:
Opposes reinstating a tax on nuclear power plant operators to pay the cost of decontaminating and decommissioning the federal government’s uranium enrichment plants;
Recommends a reduction from the request for the NRC budget to be implemented by freezing its budget and licensee fees at the fiscal year 2013 level;
Recommends adequate funding for the DOE and NRC to complete the licensing of the proposed Yucca Mountain repository;
Supports a robust and sustainable strategy for used nuclear fuel management;
Supports funding for the DOE Office of Nuclear Energy, including the small modular reactor program;
Supports completion of the Mixed Oxide (MOX) Fuel Facility;
Supports the timely and efficient cleanup of all DOE defense-related facilities, and
Supports the loan guarantee program for clean energy technologies, including advanced nuclear power plants.
Uranium Enrichment D&D Tax
NEI strongly opposes any plan to reinstate the uranium enrichment decontamination and decommissioning tax. Neither the consumers nor the generators should be forced to bear the additional financial stress of this unwarranted tax. Despite its negative impact, the Obama administration continues to propose reinstatement of this tax as a means of raising revenue. The three uranium enrichment plants in question operated for 25 years as defense facilities and were irretrievably contaminated long before any sales of enrichment services to the commercial industry. The industry has twice paid its share of the funds necessary to clean-up these facilities – first, payment was received as part of the price for DOE uranium enrichment services from the facilities, and again under the Energy Policy Act of 1992. Under the 1992 law, the tax on electric utilities was to end after 15 years or the collection of $2.25 billion, adjusted for inflation. The industry paid this amount in full. The industry appreciates the support of the subcommittee in previous years to reject this proposal and again encourages members to continue to oppose this unjust tax on consumers.
Nuclear Regulatory Commission
The level of specificity provided in the NRC budget justifications has declined in recent years making detailed analysis and recommendations difficult. However, it appears the budget request would provide funding for the NRC to continue approximately 53 high priority and three medium priority rulemakings currently underway. All other rulemakings are left in a state of limbo: neither important enough (and presumably sufficiently safety-related) to proceed, nor deferred or canceled. The industry encourages the committee to direct the Commission to prioritize and conclude regulatory matters and more effectively manage its internal processes.
While the number of operating reactors and materials licensees has declined, the NRC budget, staff, and fees billed to licensees are again proposed to increase; with hourly rates for NRC staff proposed to exceed the $272/hour charged in 2013 and fees proposed to increase in excess of 20 percent. To begin to realign the NRC with its own principles of good regulation, the industry recommends the NRC budget be frozen at the fiscal year 2013 level as detailed in the Commission’s final fee rule for fiscal year 2013 pursuant to 10 CFR Parts 170 and 171 that provided for total budget authority of $985.6 million with the collection of $864.0 million in off-setting receipts collected via fees on licensees. Such a reduction from the fiscal year 2015 request would require the NRC to reallocate resources from its proposed level of funding, and the industry would support language directing that such a reallocation be done in a manner that is transparent to all stakeholders.
Used Nuclear Fuel Management
First, consistent with current law, The Nuclear Waste Policy Act (NWPA), Congress should provide sufficient funds to the Department of Energy and the Nuclear Regulatory Commission to complete the licensing of the proposed Yucca Mountain repository.
Second, NEI continues to support the recommendations of the Blue Ribbon Commission on America’s Nuclear Future (BRC). Specifically, the industry supports comprehensive reform for the federal program with the establishment of a new organization dedicated solely to implementing the nuclear waste management program and empowered with the authority and resources to succeed. This new management entity should have direct access to future revenues from Nuclear Waste Fees and access to the balance of the Nuclear Waste Fund. The entity should pursue one or more consolidated storage facilities for used nuclear fuel while making substantial progress toward developing a repository for fuel disposal. Recognizing that comprehensive reform is unlikely this year, NEI requests inclusion of the following proposals for incremental advancement of the federal program:
Fund and direct DOE to design and certify a rail car or cars for use with licensed and anticipated transportation casks.
Fund DOE to perform an analysis of the current state of the Yucca Mountain project including the status of land withdrawals, water rights, and other necessary permits and approvals that are required before either the construction authorization is granted and construction begins.
Fund DOE to design a consolidated storage facility for all used fuel and greater-than-class-c waste from decommissioned sites without an operating reactor.
Fund DOE to define a process for siting a consolidated storage facility using a consent-based siting process and to execute the first phase of this process which must be an educational phase.
Delays in the government program to manage and dispose of used fuel have resulted in extended use of dry cask storage systems at commercial nuclear reactor sites. The DOE’s high-burnup used fuel dry storage demonstration effort will provide technical data to support the continued dry storage of high-burnup used fuel as well as its eventual transportation to a repository or consolidated storage facility. The industry fully supports this important project, and NEI further recommends that DOE be funded to develop the capability to open a commercial dry transportation cask for detailed fuel examination in a hot cell facility. Such a facility will support DOE’s ongoing effort by providing vital data that cannot otherwise be obtained and become a valuable part of the country’s R&D infrastructure.
Small Modular Reactors (SMRs)
NEI and the industry strongly support the SMR program and believe that this program should continue to be funded and is instrumental in the eventual deployment of SMR’s in the United States and internationally. The program is off to a promising start. To date, B&W’s Generation mPower joint venture has invested $400 million in developing its mPower design; NuScale approximately $200 million in its design. These companies have made those investments knowing they will not see revenue for approximately 10 years. That is laudable for a private company, but, in order to prepare SMRs for early deployment in the United States and to ensure U.S. leadership worldwide, an investment by the federal government as a cost-sharing partner is both necessary and prudent.
Developing this technology now will help U.S. companies claim a large portion of the international market when the demand for smaller, more grid-appropriate, carbon-free energy sources materializes. In the United States, despite the very slow growth in electricity demand, the electricity generation sector is undergoing significant changes: the expansion of wind, solar, and natural gas generation; the reduction of coal; market structure challenges; and new EPA regulations. With all of the changes that are occurring, a role for zero carbon emission SMR nuclear generation capacity in future electricity generation portfolios is guaranteed as a complement to new, large, advanced, light-water reactors. Given the benefits to domestic job creation, export value and domestic clean electricity supply, the development of SMR technology today is an investment in tomorrow. It is an investment that will begin seeing dividends around 2022-25 when the utilities begin deploying more generation capacity and begin replacing older generation capacity. The subcommittee should ensure that this program is provided sufficient funds and certainty in funding – at a minimum the $452 million, six-year program currently proposed by DOE. Doing so will help ensure the energy future of the United States and the international competitiveness of the domestic industry.
Advanced Reactor and Fuel Cycle Technologies
NEI supports programs managed by DOE’s Office of Nuclear Energy that seek to accelerate commercial deployment of new reactor technologies, sustain safe operation of the reactors that provide one-fifth of America’s electricity and two-thirds of our nation’s emission-free electricity, and develop advanced fuel cycles to manage used nuclear fuel.
Completion of the MOX Fuel Facility
NEI supports completion of the MOX fuel fabrication facility (MFFF) at the Savannah River Site in South Carolina. Construction of the MOX facility is 60 percent complete, employs 1,800 people directly and utilizes more than 4,000 American contractors and suppliers in 43 states. Under the Plutonium Management Disposition Agreement, the United States committed to transform 34 metric tons of U.S. weapons-grade plutonium (enough plutonium for 17,000 nuclear weapons) into nuclear fuel for civilian power reactors. The MFFF is a key component to achieving this critical, national security mission. We are concerned that reducing funding for the MOX project or placing it in “cold stand-by,” as the administration proposes, could be viewed as a retreat from our international commitments.
To cancel, suspend or simply reduce funding for the project will, validate those critics of the government and DOE who claim it simply cannot complete complex projects, particularly those concerning nuclear materials disposition. To help control costs, we have encouraged DOE to develop a project completion optimization plan that identifies the optimum annual funding level through completion. NEI views the MOX project as an investment in the nation’s future. The facility, once operational, will operate for more than a decade to complete its original mission. During that time, additional missions for the facility will likely be found and may include the transformation of additional U.S. weapons-grade plutonium, a worthy nonproliferation and disarmament goal.
 NEI is responsible for establishing nuclear industry policy on matters affecting the nuclear energy industry, including regulatory, financial, technical and legislative issues. NEI members include all companies licensed to operate commercial nuclear power plants in the United States, nuclear plant designers, engineering/construction firms, fuel facilities, and other organizations and individuals involved in the nuclear energy industry.