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Nuclear Energy Institute
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Department of Energy's Budget Request Focuses Nuclear Support on Next Gen Plants

WASHINGTON, D.C.— The U.S. Department of Energy today released a fiscal year 2010 budget request that increases funding for developing next-generation nuclear power plants and used nuclear fuel recycling, but does little to support construction of reactors that are expected to be built over the next two decades.
The FY10 budget proposal -- the first released by the Obama Administration -- also cuts funding for DOE’s used nuclear fuel management program to $196.8 million, only $98.4 million of it from the federal Nuclear Waste Fund. The fund, established in 1983 to finance the federal government’s program to manage used nuclear fuel, is paid for by users of nuclear-generated electricity through a monthly surcharge on their electric bills. The $196.8 million request is only one-fifth of the interest that accrues annually on the $22 billion fund.
The Nuclear Power 2010 program – a cost-shared, industry-government partnership designed to reduce the technical and regulatory uncertainties associated with construction of advanced nuclear power plant designs – would receive only $20 million in the fiscal year that begins Oct. 1. The program receives $177 million in the current year, a sum matched by industry. The industry intends to invest $121 million in the program in FY10 and had expected DOE to match that commitment, which would complete the program.
Funding for next-generation (Generation IV) nuclear plants would rise to $191 million, a 6 percent increase from the current year. Nuclear fuel cycle research and development would receive $192 million, a 32 percent increase from the current year.
The 2010 budget envisions $200 million in revenues from the nuclear industry through reinstatement of the federal fund established to decommission Department of Energy uranium enrichment facilities in three states. This would mark the third time that the industry has been required to contribute to this effort, even though it met its $2 billion-plus obligation under a 1992 statute. Conversely, the federal government has yet to meet its initial funding requirements for this program.
“This budget rightly includes support for the commercial nuclear technologies that have long since proven their worth to the American people and economy,” said Nuclear Energy Institute President and CEO Marvin Fertel. “It is pleasing to see the federal investment in next-generation nuclear plants as recognition of nuclear energy’s long-term role as a clean electricity source. At the same time, the budget leaves significant opportunities for improvement with regard to other nuclear energy priorities.”
The funding reduction for DOE’s used fuel management program -- a manifestation of the administration’s decision not to develop a nuclear waste repository at Yucca Mountain, Nev. -- obviates the need for consumers of electricity from nuclear energy facilities to continue paying into the Nuclear Waste Fund, Fertel said.
“While the Energy Department is obligated by law and by contract to dispose of used nuclear fuel and should continue to seek to license the Yucca Mountain facility as required by law, it is only fair that the financial burden of supporting this program be lifted from consumers. There is ample money in the Nuclear Waste Fund to finance this program at the level reflected in this budget proposal.”
Fertel noted that the budget includes $5 million for establishment of a blue-ribbon commission that would evaluate used fuel management alternatives. He urged Secretary of Energy Steven Chu to name the panel expeditiously and have it complete its work in a professional, productive manner.
“Every year of delay in moving used nuclear fuel from nuclear plant sites increases the cost to taxpayers of paying damage awards in lawsuits that are the direct result of the government’s failure to meet its obligations under the Nuclear Waste Policy Act,” Fertel said.
He expressed disappointment that the funding request for Nuclear Power 2010 is only one-sixth of the amount needed to successfully complete the partnership program, which would help expedite expansion of the electric sector’s leading clean-air technology amid global concerns about emissions of greenhouse gases linked to the threat of climate change. Seventeen applications for as many as 26 new reactors that would be built over the next 10 to 20 years are pending before the U.S. Nuclear Regulatory Commission.
“Federal investment in nuclear energy has proven its worth many times over, as evidenced by the records set throughout this decade in electricity production and nuclear plant efficiency. Each new reactor will create as many as 2,400 construction jobs and 500 or more permanent jobs, making this an ideal ‘green jobs’ energy technology. Successful completion of the Nuclear Power 2010 program can help make this potential a reality that much sooner.”
Fertel similarly expressed disappointment that the FY10 budget does not seek additional funding for loan guarantees for low-carbon energy technologies that qualify under the clean-energy loan guarantee program authorized in the Energy Policy Act of 2005.
“As the Secretary of Energy proceeds to negotiate loan guarantee contracts for new nuclear plants over the course of this year, Congress should provide the loan volume needed to support these projects,” he said.
The industry strongly supports the safety goal but nonetheless is “appalled,” Fertel said, that DOE seeks to reinstate the Uranium Enrichment Decontamination and Decommissioning (D&D) Fund related to the environmental cleanup of facilities that the government built decades ago in Kentucky, Ohio and Tennessee to enrich uranium for post-World War II defense programs. Commercial nuclear power plants subsequently entered into agreements with the government to buy enrichment services for uranium fuel used to generate electricity. The Kentucky plant still operates.
Under the Energy Policy Act of 1992, the nuclear industry was required to contribute $2.25 billion (adjusted for inflation) over 15 years to the decommissioning fund, with other monies to come from the federal government. This levy was put in place even though the contracts governing the purchase of enrichment services prior to 1992 were required by law to include all costs, which included D&D costs. While the government has not provided its full share, the nuclear energy industry met its obligation under the 1992 statute.
“While I absolutely believe that there is an obligation to be good environmental stewards at these sites, it is outrageous for DOE to seek to impose costs for this program for a third time—costs that ultimately would be borne by consumers—when the government itself has yet to meet its financial obligations under the 1992 statute,” Fertel said.