Public Policy

On behalf of the nuclear energy industry, I thank you for your support of a comprehensive long-term solution to our energy needs, including the Department of Energy’s nuclear technology-related programs. I also commend you for your continued oversight of the Nuclear Regulatory Commission for fiscal 2005. My statement for the record addresses three key points:

1. The industry urges continued support for DOE’s nuclear energy programs. NEI recommends funding the DOE’s Office of Nuclear Energy at its request of $503 million. We recommend restoration of the Nuclear Energy Plant Optimizaton program at $10 million. The industry also encourages DOE to increase Next Generation Nuclear Plant funds by $30 million to $75 million and University Fuel and Support program funds by $8 million to $32 million. To support basic science, we recommend funding the Nuclear Energy Research Initiative at $10 million.
2. Congress should provide secure, environmentally responsible management of used nuclear fuel by fully funding the Yucca Mountain project. NEI recommends that the program be funded at the president’s request of $651.4 million, absent reclassification of the Nuclear Waste Fund. With fund reclassification, the program should receive funding of $750 million—the amount the federal government collects each year from electricity consumers specifically for the program.
3. The NRC’s budget of $701.7 million should be reassessed.This is essential in view of the higher appropriations of the agency, allocation of increased industry resources on plant security upgrades and reduced demands on its budget in fiscal 2005 owing to delays in Yucca Mountain licensing. The NRC must be ready to revise its Yucca Mountain regulations in the second half of fiscal 2005 and fiscal 2006.

I also will discuss briefly several important programs that the nuclear energy industry supports.

The Nuclear Energy Institute is responsible for developing policy for the U.S. nuclear energy industry. NEI’s 250 corporate and other members represent a broad spectrum of interests, including every U.S. energy 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. The industry is providing electricity for one of every five U.S. homes and businesses and is taking steps to develop energy resources for the future. Nuclear energy is a clean, reliable and sustainable source generated here in the United States. We urge Chairman Hobson, Ranking Member Visclosky and members of this committee to recognize nuclear energy as an important part of a diverse, comprehensive, long-term energy policy for America for generations to come.

Research and Development Necessary for New Nuclear Energy Systems
The industry supports increased funding for fiscal 2006 for DOE’s R&D programs for new nuclear energy systems. The nuclear energy industry urges the committee to approve $56 million for the Nuclear Energy 2010 program. Within the program, funding should be allocated for demonstrating NRC regulatory processes for new nuclear plants, including those for early site permits and the combined construction and operating license. The industry remains fully committed to these initiatives. DOE should support deployment of proven Generation III-plus technology for this program.

The industry believes that the government has an early role in bringing advanced reactor concepts, known as Generation IV reactors, to the marketplace. NEI urges the committee’s support for the development of a next-generation nuclear plant at the new Idaho National Laboratory, funded through the Generation IV Nuclear Energy Systems Initiative program at $75 million. The industry also supports the Nuclear Hydrogen Initiative at $20 million.

Although DOE continues to fund the International Nuclear Energy Research Initiative (I-NERI), the domestic version of this program, NERI, has been superseded by a new initiative that continues the basic science of NERI under other nuclear energy programs at DOE. The industry believes a collaborative basic science program between national laboratories, industry and universities like NERI should be continued at $10 million for fiscal 2006.

The administration originally recommended another R&D initiative—the Nuclear Energy Plant Optimization (NEPO) program—to produce additional electricity from America’s 103 commercial reactors. Through NEPO, the Energy Department has been working with the nuclear industry and the department’s national laboratories to apply new technology to nuclear and non-nuclear equipment.  The industry encourages the committee to allocate $10 million for the NEPO program to help fund important research on materials science and materials management issues at nuclear power plants. This research would focus on improving the availability of and maintenance at nuclear plants, developing technology to predict and measure the extent of materials degradation from plant aging, and introducing new materials to mitigate materials effects. DOE proposed no funding for the program in fiscal 2006, despite the benefits that the national laboratories can bring to bear on these issues.

The industry also requests $32 million for DOE’s University Support Program, which provides for vital research and educational programs in nuclear science at the nation’s colleges and universities. With nuclear plant license renewal continuing at a brisk pace and the industry developing plans for new nuclear plants, demand for highly educated and trained professionals will continue. NEI encourages the committee to consider a new $2 million program within the Office of Nuclear Energy, Science and Technology to support universities that have undergraduate and graduate programs in health physics. The industry’s most recent human resources survey reveals an increasing demand for health physics professionals. This need will become acute in the next few years as many of today’s nuclear professionals retire.

Industry Supports Budget Request of $651.4 Million for Yucca Mountain
Congress has approved Yucca Mountain, a remote desert site in Nevada about 90 miles northwest of Las Vegas, as suitable for a national repository for used nuclear fuel currently stored at nuclear plant sites around the country. Under a federal government plan, used nuclear fuel will be shipped to Yucca Mountain in highly engineered, federally approved containers.

The industry greatly appreciates the support of this committee for funding the federal used nuclear fuel disposal program. NEI recognizes the difficult challenge that the committee faced in fiscal 2005, in view of assumptions included in the budget request regarding the treatment of the Nuclear Waste Fund. This year, the administration has requested nearly $80 million more than was appropriated for fiscal 2005, including a significant increase in funds for transportation-related activities. However, there is still a funding shortfall that affects the schedule for developing a repository. Absent sufficient funding in fiscal 2006, the industry does not believe the program will meet key milestones for used fuel acceptance. These potential delays will result in higher costs for the program and increased liabilities to the federal government resulting from breach of contracts with energy companies.

Although the repository program is the keystone of our national policy for managing used nuclear fuel, the industry also recognizes the value in researching emerging technology for used fuel treatment and management. Such farsighted programs will allow our nation to remain the world leader in nuclear technologies. However, technologies such as transmutation—the conversion of used nuclear fuel into a smaller volume of less toxic materials—still require a federal repository for disposal of the radioactive byproducts generated from the process.

Congress Should Reclassify the Nuclear Waste Fund
The industry urges Congress to reclassify the Nuclear Waste Fund this year, consistent with the president’s fiscal 2006 budget recommendation. For each year of delay in the Yucca Mountain program, the federal government accrues another $1 billion in costs relating to disposal of defense nuclear materials and failure to meet contractual obligations to move commercial used fuel. Last year, the House Energy and Commerce Committee passed H.R. 3981 to resolve this issue, but it was not approved by the House.

Congressional action is required in the context of the fiscal 2006 budget resolution and reconciliation process to enact the necessary legislation in a timely manner for the fiscal 2007 budget and appropriations. The Nuclear Waste Fund has three unique characteristics that justify modifying the current budget rules governing its use:

• The federal government is obligated by law and contracts signed with electric companies that operate nuclear power plants to implement the used fuel management program.
• The Nuclear Waste Fund is intended to cover the entire cost of the federal government’s commercial used fuel management program over several decades.
• The disposal of used nuclear fuel from commercial reactors is financed entirely through a fee established by federal law and paid by consumers of electricity generated at nuclear power plants.

NRC Budget and Staffing Should Be Reassessed
The NRC’s proposed fiscal 2006 budget totals $701.7 million, an increase of $32 million from the fiscal 2005 budget, and the highest ever for this agency. Five years ago, the NRC’s budget was $488 million. Fiscal year 2006 is an appropriate time for the NRC to review its budget and resource allocations in light of current demands, and the other resources available.

In accordance with a 2004 federal appeals court ruling, the Environmental Protection Agency must review and reconsider its Yucca Mountain radiation standard. This action by EPA may require the NRC to begin revising its Yucca Mountain regulations. Promulgation of the new final NRC rules and related regulatory guidance must not stand in the way of reviewing DOE’s Yucca Mountain license application.

The NRC’s budget for fiscal 2006 shows that approximately $61 million is for the purpose of regulating security at nuclear plants. The nuclear industry believes that much of this funding is for the purpose of providing for the national defense and should not be included in the NRC’s fees, of which 90 percent are reimbursed by the industry. The Senate expressed concern over this issue by including a provision in the energy bill indicating that security funding should not be included in user fees.

America’s nuclear power plants were the most secure industrial facilities in the United States before the Sept. 11, 2001, terrorist attacks, and are even more secure today. Over the past three years, the industry has invested an additional $1.2 billion in security-related improvements and added one-third more security officers. Security at commercial nuclear facilities is unmatched by any other private sector or area of the critical infrastructure. The industry should not be expected to solely fund efforts to provide for the national defense.

Industry Support for Additional Activities

Nuclear Nonproliferation: The industry supports the disposal of excess weapons-grade nuclear materials through the use of mixed-oxide fuel in U.S. and Russian reactors.

Low-Dose Radiation Health Effects Research: The industry supports continued funding for DOE’s low-dose radiation research program.

Nuclear Research Facilities: The industry is concerned with the declining number of nuclear research facilities. We urge the committee to fully fund the new DOE lead lab in Idaho for nuclear energy research and development.

Uranium Facility Decontamination and Decommissioning: The industry fully supports cleanup of the gaseous diffusion plants at Paducah, Ky.; Portsmouth, Ohio; and Oak Ridge, Tenn. Commercial nuclear power plants contribute more than $150 million to the Decontamination and Decommissioning Fund for government-managed uranium enrichment plants each year. Other important environmental, safety and/or health activities at these facilities should be funded from general revenues.

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

Medical Isotopes Infrastructure: The nuclear industry supports the administration’s program for the production of medical and research isotopes.