Public Policy

The Nuclear Energy Institute¹ (NEI) supports the Administration’s request for Fiscal Year 2012 (FY12) funding for the Nuclear Regulatory Commission ($1.038 billion) and the following Department of Energy programs:

• LWR Small Modular Reactor Licensing Technical Support - $67 million
• Fuel Cycle Research and Development - $155 million
• Light Water Reactor Sustainability Program -$21.3 million
• Nuclear Energy Enabling Technologies - $97 million
• Integrated University Program - $45 million
• Next Generation Nuclear Plant - $49.5 million
• Innovative Technology Loan Guarantee Program Office - $36 billion in new loan guarantee authority for nuclear power projects

In addition, the nuclear energy industry strongly opposes legislation to impose a proposed tax on electric consumers for the uranium enrichment facility decontamination and decommissioning fund.

Ensuring a Strong Nuclear Regulatory Commission

An independent, credible regulatory agency is required for public confidence in commercial nuclear energy facilities. During the next few years, the NRC will be challenged to continue its inspection and licensing activities while analyzing the Fukushima Daiichi nuclear accident and determine what changes, if any, may be necessary in NRC requirements. Continuity and stability of the five-member commission during this critical time will be essential to ensure NRC staff and licensees have clear guidance on implementation of the lessons learned. The Commission functions most effectively when it has a full complement of five commissioners, and the nuclear energy industry believes Congress’ highest priority should be ensuring that vacancies on the Commission do not occur.

The industry supports FY 12 funding at the NRC’s requested level of $1.038 billion, which is a $28.7 million decrease below its FY10 funding levels. The industry remains concerned, however, at the steep escalation in agency budgets and staffing levels over the last decade, from 2,763 staff in FY01 to 3,981 staff proposed in FY12, and from $487 million in FY01 to more than $1 billion proposed in FY12. The industry recommends, therefore, that any additional Fukushima-related work be funded by re-allocating resources and achieving greater efficiencies, without compromising safety oversight of existing plants and ongoing licensing activities on license renewal, power uprates, reactor design certifications, combined construction and operating licenses and small modular reactor licensing issues. The industry believes the NRC can absorb additional analysis of the Fukushima accident without diverting resources from other programs. If the NRC is cannot do so, the commission should explicitly provide the subcommittee with the specific resource needs and what the agency can do to accommodate new activities within its current budget.

The industry applauds the continued oversight of the NRC by Congress to prioritize agency actions. The agency has made some progress, but should continue to achieve greater transparency in its budgeting to reveal planned staffing and resource needs by individual divisions. This is particularly true concerning the defense and national interest programs funded by the taxpayer in appropriated funds. In any one year, the NRC should ensure that these programs are funded at the entire 10% of available funds. A firewall should exist between fee and fee-relief sources of funds so the user fee is not used as an additional source of funding for appropriated programs. This would demonstrate to Congress, the public and the industry, which pays 90 percent of the NRC’s budget, that the budget fairly reflects those activities that are licensee-specific.

Once again, the Administration has proposed terminating the Integrated University Program, which supports the nation’s universities and community colleges. This program is unique in supporting important nuclear science and engineering research and workforce training. It is a vital program that provides financial support for students and junior faculty. The program is managed jointly with DOE’s Office of Nuclear Energy and DOE’s National Nuclear Security Administration and has been authorized by Congress. NEI supports $15 million for NRC to continue its participation in the program in FY12 and recommends that NRC fund the program at that level, not at the $11.5 million it has proposed for FY11.

Development of Advanced Reactor Technologies

The DOE Office of Nuclear Energy FY12 budget as proposed by the Administration is lower than what was appropriated in FY10. NEI supports the FY12 budget as it continues the new initiatives for the Office of Nuclear Energy requested in FY11. NEI believes that the following programs deserve support and represent the highest priorities for the nuclear energy industry:

• Light Water Reactor Sustainability Program—$21.3 millio
• LWR Small Modular Reactor Licensing Technical Support—$67 million
• Nuclear Energy Enabling Technologies—$97 million
• Integrated University Program—$45 million
• Next Generation Nuclear Plant—$49.5 million

The Idaho National Laboratory (INL) is designated as the lead lab for nuclear energy. INL maintains an extensive research infrastructure and workforce that will become even more vital for post-accident analysis and response to the radiological clean-up at Fukushima Daiichi.

Uranium Enrichment D&D Fund Tax Undue Burden on Consumers

The Administration’s FY12 budget calls for legislation to reinstate the uranium enrichment decontamination and decommissioning fund, with a proposed tax on electric consumers of $200 million a year for 10 years. Electric utilities have already paid twice for decommissioning and decontamination at uranium enrichment plants that were originally operated by the Energy Department—first as part of the price for uranium enrichment services from the facilities and again under provisions of the Energy Policy Act of 1992. Under the 1992 law, the tax on utilities was to end after 15 years or the collection of $2.25 billion, adjusted for inflation. The utilities paid this amount in full as specified by law. NEI will continue to oppose this proposal in legislation and appreciates the support of the Subcommittee in rejecting this proposal in FY10 and FY11.

Integrated Used Fuel Management Program

The government has an obligation under the Nuclear Waste Policy Act to dispose of used nuclear fuel from commercial reactors and defense applications. The industry believes licensing should be completed. Also, numerous state and local governments and the National Association of Regulatory Utility Commissioners are actively opposing DOE’s withdrawal of the application for the Yucca Mountain repository at the NRC and in the courts. The project should proceed and be funded so that the technical review of the license application is completed. The industry opposes the FY12 budget request by the NRC to terminate the licensing proceeding. We urge the Committee to request a specific plan and resources required for continuing the Yucca Mountain licensing process, assuming the courts rule the application cannot be withdrawn.

Given that it has been terminated, consumer payments into the Federal Nuclear Waste Fund should be suspended for the period of time for which there is no waste management program against which to assess costs. The industry supports a three-part integrated used fuel management strategy that includes: 1) on-site storage at reactor sites and development of centralized storage at volunteer locations; 2) research, development and demonstration of advanced fuel cycle technologies; and 3) development of a permanent repository. NEI supports the work of the Blue Ribbon Commission on America’s Nuclear Future to develop recommendations on how the nation should manage used nuclear fuel and high-level radioactive waste and looks forward to reviewing the draft report scheduled for release this summer. Given the importance of this report, the subcommittee should encourage the commission to complete its work as soon as possible.

The nuclear energy industry consistently has supported research and development of the advanced fuel cycle technologies proposed in the Fuel Cycle Research and Development program ($155 million). DOE’s plans should be adjusted based on its review of the recommendations of the Blue Ribbon Commission that Congress accepts.

Industry Supports $36 Billion for DOE Innovative Technologies Loan Guarantee Program

The nuclear industry appreciates the support provided by the subcommittee for the DOE loan guarantee program for nuclear energy plants and uranium fuel cycle facilities. NEI urges members to maintain the appropriated funds for projects under development for FY11. The Administration has requested an additional $36 billion in loan volume in FY12. This would provide sufficient loan volume for projects already in due diligence at DOE, and would provide certainty to other projects in the development pipeline that financing support will be available. Absent some certainty that financing will be available, companies may slow development of these projects.

Loan guarantees for nuclear energy projects are not a subsidy and there is no cost to the taxpayer. The use of loan guarantees will lower the overall cost of nuclear energy projects, ultimately reducing the cost of electricity to consumers. Companies granted loan guarantees by DOE for nuclear energy projects must pay a premium for use of the program, plus cover all administrative costs.

Budget scoring is not required for nuclear energy loan guarantees, because simply approving loan “volume” is not an appropriation. It simply authorizes the agency to issue loan guarantees up to that amount. For most loan guarantee programs, in which the federal government pays the cost of the loan guarantee, the 1990 Federal Credit Reform Act requires authorization of loan volume in an appropriations bill. However, the Government Accountability Office determined that the clean energy loan guarantee program authorized by the 2005 Energy Policy Act should not be subject to this FCRA requirement, because the companies receiving the loan guarantee pay the cost to the federal government of providing that guarantee—not taxpayers.

NEI continues to believe that the clean energy loan guarantee program, although essential, is not yet a workable financing platform, and urges the Subcommittee to exercise its oversight responsibilities on implementation by the Executive branch, particularly on the issues of the credit subsidy cost that project sponsors are expected to pay.

Environmental Clean Up

NEI supports DOE’s budget request of $6 billion for the Environmental Management Office.
                                                                                                                                    
* This same testimony was submitted for the record to the United States House of Representatives Appropriations Subcommittee on Energy and Water Development on April 15, 2011.

¹ The Nuclear Energy Institute is the industry’s policy organization, whose broad mission is to foster the beneficial uses of nuclear technology in its many commercial forms. Its membership, more than 350 corporate members in 17 countries, includes every U.S. utility that operates a nuclear power plant as well as international utilities, plant designers, architect and engineering firms, uranium mining and milling companies, nuclear service providers, universities, manufacturers of radiopharmaceuticals, universities, labor unions and law firms.