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Nuclear Energy Institute
FOR IMMEDIATE RELEASE: April 10, 2013
Contact: media@nei.org, 202.739.8000 or 703.644.8805 (after hours and weekends)

NEI Comments on Federal Budget Request for Fiscal 2014

NEI Pans Federal Budget's Inclusion of D&D Tax, Absence of Waste Legislation

WASHINGTON, D.C.—President Obama today released a fiscal 2014 budget request that reinstates a 10-year collection totaling $2.2 billion in fees on electric utilities; dramatically cuts an important nonproliferation program that reduces plutonium from the nation’s stockpile; significantly reduces funding for the Office of Nuclear Energy research and development programs; and fails to provide legislation to support its strategy on used nuclear fuel.

“We recognize that the federal government is under significant budget pressures, but reinstating unjustified taxes, stretching out programs and incurring the resulting cost increases, and failing to propose legislation to resolve a serious liability issue, just doesn’t make a lot of sense,” said Alex Flint, the Nuclear Energy Institute’s senior vice president for governmental affairs. “We will immediately begin to work with Congress to propose budget levels and programs that will better meet our energy and nonproliferation priorities.”

The budget request for the fiscal year that begins Oct. 1 seeks to reinstate a $200 million annual tax on consumers of electricity in 33 states for the Uranium Enrichment Decontamination and Decommissioning (D&D) fund. The fund, which has a balance of $4.7 billion, will pay for the cleanup of the department’s uranium enrichment facilities. This would mark the third period of time that the industry has been taxed for this effort, even though it met its $2.6 billion obligation under a 1992 law, Flint said.

Mixed Oxide Fuel
The nuclear industry is alarmed that the administration recommends reduced funding for the Department of Energy fissile materials disposition program, including a cut of $183 million from the construction budget for the mixed oxide fuel (MOX) plant under construction in South Carolina. The facility is about 60 percent complete.

Construction and operation of the MOX plant is the result of years of work and commitments with the Russian Federation, the state of South Carolina, and thousands of workers at the site and across the country. Each of those parties made commitments on the assumption that the U.S. government is a credible partner capable of fulfilling its arms control and nonproliferation commitments, Flint said.

“To reduce funding for completing the project at this time will validate again those critics of the government, and DOE in particular, who claim it simply cannot complete complex projects; particularly those concerning nuclear materials. The result will undermine whatever credibility DOE hopes to maintain or restore and create a self-fulfilling prophecy in which DOE will be unable to obtain the commitments it will require from partners to undertake future, complex projects,” Flint said.

The department should work as expeditiously as possible to fulfill its commitments regarding the MOX program while being a strong steward of taxpayer fund, he said.

“NEI is disappointed that DOE’s budget for the Office of Nuclear Energy is $35 million less for nuclear energy programs ($735 million) and cuts areas that have significant support from industry.”

Highlights of DOE Office of Nuclear Energy Funding

Small Modular Reactors
While DOE continues its support for small, scalable reactors, the request of $70 million is less than what was anticipated by industry for a five-year $452 million program to help develop advanced designs for reactors with 300 megawatts or less of electric generating capacity under a cost-shared, public-private partnership.

“Given the benefits to job creation, export value, domestic clean electricity supply, and industry’s willingness to contribute more than 50 percent of the cost, we encourage Congress to increase the funding to ensure that this program is effectively and expeditiously implemented. Accelerated, near-term deployment is critical to ensure the international competitiveness of U.S. small reactors,” Flint said.

“NEI encourages DOE this year to complete a second round of competition for selecting a design expeditiously and urges the department to complete the procurement process by September 2013, so that fiscal 2014 funds can support early deployment of these reactors.”

Research
The budget request does not fund university nuclear energy programs at either the Department of Energy or the U.S. Nuclear Regulatory Commission. It also reduces funding for technology innovation, lowering overall R&D programs from $389 million under the continuing budget resolution to $300 million next year. DOE sheds funding for reactor concepts research and development by $46 million (to $73 million), used fuel R&D by $25 million (to $165 million) and nuclear energy enabling technologies by $13 million (to $62 million). At a time when the government is encouraging science, technology, engineering and mathematics disciplines, the cuts in the university programs will result in the loss of approximately $20 million in scholarships and fellowships from DOE and NRC for nuclear engineering, science and technology beginning this August.

Used Nuclear Fuel
While DOE’s budget request would provide $24 million from the federal Nuclear Waste Fund to support staff and continue evaluating the used nuclear fuel management recommendations made by the Blue Ribbon Commission on America’s Nuclear Future (BRC), NEI is disappointed that the Executive Branch has not proposed legislation to implement these recommendations, Flint said.

He applauded the administration for its emphasis on providing access to the annual collections and corpus of the Nuclear Waste Fund.

“I am pleased that the administration will support mandatory appropriations in addition to the discretionary funding to begin in 2017 to fund the balance of a 10-year, approximately $5.6 billion program. The budget assumes the construction and operation of a pilot interim waste storage facility within the next 10 years as well as progress on both full-scale interim storage and long-term permanent geologic disposal,” Flint said.

One BRC recommendation that was not referenced in the administration’s budget was a proposal to establish a new organization dedicated solely to implementing the nuclear waste management program and empowered with the authority and resources to succeed.

“A new management entity with the responsibility and authority to implement the nation’s used fuel program should be a high priority,” Flint said.