Rep. Greg Walden (R-Ore.), May 15, 2013

Thank you, Bill Johnson, for that kind introduction. Bill, you do a fine job running the Tennessee Valley Authority. Now, it’s no Bonneville Power Administration, which we are very proud of in the Pacific Northwest, but, well, it’s close.

As a Congressman, it’s always a privilege and a bit humbling to be invited to speak before a large crowd on a subject that the audience knows vastly more about than I do. I’m neither a nuclear engineer nor did I sleep in a Holiday Inn Express last night. In fact, the fuel I know the most about is coffee… that’s how I’m able to stand before you and give this speech at 8 am.  

All kidding aside, I am a strong advocate for nuclear energy and a firm believer that we need to preserve that energy source for future generations. I appreciate the opportunity to speak to you today and to outline our priorities and activities on the Energy and Commerce Committee. I’m going to start by quickly outlining our high-level policy objectives as a backdrop before getting into the nuclear issues which are your forte, and then concluding with the issue of cyber security.

At Energy and Commerce, we pursue an open, “all of the above” policy when it comes to energy: nuclear, coal, natural gas, hydro, and renewables. Each source has its own benefits and drawbacks, but together they provide our nation with a secure supply of clean, affordable, and reliable energy which is imperative for our economic vitality. The foundation for our “all of the above” approach is our concern for how energy policy impacts the consumer. At the end of the month, energy policy arrives in an envelope on millions of doorsteps; American families and businesses pay for this policy with a check to their local electricity company. We constantly remind ourselves - and our colleagues across the aisle - of that fact.

Nuclear energy has made an indispensable contribution to our base load electricity needs and will for years to come. Coal has as well. The contribution of natural gas is growing and will continue to grow for some time. Since these three sources provide the vast majority of our power, there is natural competition among them in the marketplace.

Competition is important. It drives efficiency and innovation. However, the energy sector isn’t driven solely by competition in the market, but also by regulations. Major regulatory changes in a capital-intensive industry like yours carry consequences— expensive consequences often borne by consumers.

Let me offer an example: as of May 2013, over 41,000 MW of coal-fired generation have retired or announced retirement, due, in large part, to EPA regulations. The loss of this affordable, reliable power will increase rates for consumers. It has forced workers into unemployment lines. It may also give rise to reliability concerns given the operational challenges associated with maintaining reliability when thousands of megawatts of generation will retire or require retrofits over the next 3 to 4 years.

 As a committee, we constantly wrestle with the impact that burdensome regulations and federal interference have on energy costs and economic growth. While this dynamic has been particularly pronounced in what we call the “War On Coal”, neither nuclear nor natural gas are immune to EPA’s regulatory expansion. Two good examples of this are EPA’s pending cooling tower regulation and EPA’s drive to regulate hydraulic-fracturing.

Through these and other regulatory actions, EPA has essentially been setting the nation’s energy policy and making decisions that will have profound impacts on the nation’s electricity generation portfolio. The Obama administration is regulating where it has been unable to legislate. While the reach of the Nuclear Regulatory Commission (NRC) is much more limited, we have also observed trends from that agency that warrant our close attention.

Long before he picked up the gavel, Chairman Upton conducted oversight of the NRC to ensure its adherence to disciplined processes and cost-effective regulation. As you are all so acutely aware, a stable regulatory environment is essential to preserve the viability of nuclear energy both now and in the future.

Since the Fukushima accident two years ago, the NRC has devoted significant attention and resources to understanding and responding to that accident. Implementation of several top-priority, post-Fukushima actions are underway and I have supported that progress. But BEFORE the Fukushima accident, the NRC wasn’t idle. It was busy implementing regulatory changes in several areas.  

All of us want the nuclear industry to operate at the highest levels of safety, but the scope of regulatory change confronting the nuclear industry is considerable, but -- you know that. I want to assure you that it has our attention. I want to share with you a slide from our February hearing.
 
I’d like to call your attention to the little black box in the lower right-hand corner. It says:
 
“Note: Fukushima Response Tier 2 and 3 Actions have yet to be established and scheduled, including the Station Blackout Rulemaking.”
 
We were unable during our hearing to ascertain from the commissioners exactly how many items are embodied in Tiers 2 and 3.

My reaction to a slide like this is: “If everything is a priority, then nothing is a priority.” Each of these items carries a safety benefit, some more significant than others. It seems to me that the best approach would be to focus resources to implementing those items with the greatest safety benefit. I understand that at least one NRC commissioner has recommended re-integrating the stand-alone Fukushima Steering Committee back into the agency’s program offices. It is my hope that such a re-integration effort would also include an integrated prioritization of pending regulatory changes, both pre-Fukushima and post-Fukushima actions, based on their safety significance. 

With any regulatory change, the safety benefits should be significant enough to outweigh the additional costs. As I mentioned earlier, the costs of regulatory changes are ultimately paid by consumers and businesses. When they open that electricity bill at the end of the month, we need to make sure they’ve gotten greatest safety gains for their money.

Cost-benefit analysis and performance-based regulation are invaluable tools to do just that. This is one reason I believe it is crucial that the NRC adhere to its disciplined processes and rigorous technical analysis. However, what we observed recently with the Commission’s consideration of Additional Requirements for Containment Venting Systems - also known as filtered vents - gave us pause.

The NRC’s Near-term Task Force Report included a cautionary comment regarding lessons learned from the Three Mile Island accident: “…some of the actions taken by the NRC after Three Mile Island were not subjected to a STRUCTURED review and were subsequently not found to be of substantial safety benefit and were removed.” In her vote on Containment Venting Systems, Commissioner Svinicki noted how this history seems to be repeating itself:

“The need to re-evaluate the requirements contained in this order less than one year after its issuance presents a troubling parallel with NRC issuance and subsequent modification or revocation of some requirements after the accident at Three Mile Island.”
 
Her concern resonates with me. Earlier in the year, the committee learned how the agency staff had recommended that the Commission mandate filtered vents without a performance-based approach and in spite of failing a cost-benefit analysis. The benefits had NOT outweighed the costs so the staff had relied on other “qualitative factors.” Ultimately, the Commission chose the performance-based approach. However, this situation highlighted for our committee the potential for erosion of the NRC’s traditionally disciplined processes. In exercising oversight of the NRC, I believe it is incumbent upon us as members to remind the NRC of its duty to scrutinize the costs and benefits of any changes it may impose. As such, I expect our committee to focus a bit more on the NRC’s use of cost-benefit analysis in the future.

I think many of us on the committee have grown more attuned to this situation given the early retirements of two nuclear plants and rumors of others likely to come. I realize that these premature closures were not the result of the NRC’s regulatory burden. However, they are a reminder to me that if strong economic headwinds force the early retirement of some nuclear plants, increased regulatory burden will likely increase that number. What motivates the committee’s efforts in this area is the desire to preserve nuclear energy’s economic vitality and its contribution to our energy security that motivates our efforts in this area.

On a more positive note, that desire for nuclear energy to have a bright future also motivates my support for small reactor development. Being from Oregon, I’m a proponent of NuScale, our homegrown 45MW design. I’m optimistic that small reactors – by design – may alleviate some of the regulatory burden that has weighed down traditional reactors.

Whether reactors are big or small, there is one issue that must be resolved for nuclear energy to grow: a repository for spent nuclear fuel. Yucca Mountain has always received strong bipartisan support in the Energy and Commerce Committee and in the House of Representatives. That tradition continues under Chairman Upton and Chairman Shimkus’ leadership. We strongly believe that Yucca Mountain remains the industry’s best option to solve the waste issue and this is crucial for the future of nuclear energy. Last summer, 326 out of 435 House members showed their agreement when they voted to increase funding for the Yucca Mountain project license review.

Electricity consumers and taxpayers have spent 30 years and $15 billion dollars to find a permanent home for spent nuclear fuel. They deserve to know what the NRC concluded in its safety review. It stands to reason that the NRC’s conclusions were probably positive or Sen. Reid wouldn’t have pulled so many strings to shut down the project and prevent the release of the NRC’s report.

I recognize there are those who favor interim storage as a complement to repository development. Yucca Mountain opponents see interim storage as THE ALTERNATIVE which gives me pause as I would hope it does many of you. The struggle behind the considerable progress at Yucca Mountain has been just that: a long struggle, punctuated with successes and setbacks. Interim storage carries the appeal of hope for an easier, faster outcome.

Either facility will require transporting the spent nuclear fuel which will provoke strong public concern. People will want to know why spent fuel is being transported through our communities. Members of Congress will need to have good answers and in the case of interim storage, the justification for transporting it twice.

We can’t say it will be safer or more secure than existing dry cask storage because interim storage would be subject to the same regulations. Can we say it will consolidate spent fuel in one location? Yes and no. Yes, 10 permanently decommissioned sites could finally move their spent fuel and release their sites for reuse. But spent fuel will continue to be stored at operating plants and a few additional dry cask storage facilities will be built so we actually would end up with nearly the same total number of dry cask storage facilities, likely for a few decades.

Would interim storage save money? Not necessarily for the electricity consumers because we would be adding to the number of facilities they must pay for. And I have my doubts about whether it would reduce the taxpayers’ burden of paying for DOE’s liability. The non-partisan Government Accountability Office reported their conclusion that it would be faster to finish Yucca Mountain, thus reducing the taxpayers’ liability sooner, than to start from scratch with interim storage. In an effort to get more clarity on the potential costs, Chairmen Upton and Shimkus have tasked GAO with more closely analyzing a range of scenarios.

This debate began long before I became a Member of Congress, but I hope to see progress on it during my tenure. I’m not convinced that starting from scratch with interim storage would be progress. I’m concerned that interim storage will divert attention and resources away from the permanent solution: Yucca Mountain. To that end, I will support Chairmen Upton and Shimkus as they carry this issue forward.

The last topic I’d like to touch on today is cyber security. We continue to oversee the cyber security protection and mitigation efforts of those sectors within the committee’s jurisdiction. This includes oil and gas pipelines, the electric grid, nuclear energy, chemical facilities, sewer and water, and telecommunications. As part of our efforts, we have asked several industries to provide briefings describing their cyber protections for our staff. The nuclear industry recently provided just such a briefing. Thank you.

Having begun in 2002, the nuclear industry’s cyber security regime is one of the most mature regulatory frameworks and shows us how cyber security can work. For example, it addresses the unique cyber security aspects of a nuclear plant by incorporating cyber protections into the physical protection regime.

Critical infrastructure that has reached this level of protection and has a cyber security “clean bill of health” should not be swept into a new regulatory scheme, much less subjected to dual regulation. A one-size-fits-all approach that sidelines an expert regulator in favor of a national security agency that lacks institutional knowledge is a step in the wrong direction.

The feedback we’ve received from the private sector is loud and clear: the best approach to improving cyber security is for existing regulators to work with industry stakeholders, and for robust information sharing between government and stakeholders. Owners and operators know best how to protect their own systems, and it is nearly impossible for the speed of bureaucracy to keep pace with ever changing threats --regulations will become obsolete before the ink is dry . Your resources are better spent investing in the protection of your systems; not wasting those limited resources on paperwork and compliance checklists.

For all these reasons, our committee once again supported Intelligence Committee Chairman Mike Rogers’s information sharing legislation, which passed the House last month. We will also continue to oppose a one-size-fits-all, command-and-control regulatory approach centralized at the Department of Homeland Security and to closely monitor implementation of the President’s Cyber Executive Order.
 
In Conclusion
As we move forward toward achieving these goals, we want to hear from you. We want to be helpful. If there are impediments hindering your ability to provide reliable, safe and affordable power to your customers, we want to know about it and we want to work with you to develop commonsense solutions to the nation’s energy challenges.
 
We believe it is important to ensure that each energy source is able to develop and compete in the market. We can’t have energy security without energy diversity. THAT’s why we say “ALL of the above”: each energy source plays a critical role in providing clean, affordable, safe and reliable energy to power our country and its citizens.