Public Policy

On behalf of the Nuclear Energy Institute, I would like to commend you, Chairman Domenici, Ranking Member Reid and the members of this subcommittee for focusing your attention on the value of nuclear-related programs contained in the Energy Department and Nuclear Regulatory Commission budget proposals for fiscal year 2000.

Before I proceed, let me say a word about the Nuclear Energy Institute. NEI sets policy for the U.S. nuclear energy industry and represents over 275 members with a broad spectrum of interests, including every U.S. utility that operates a nuclear power plant. NEI's members also include nuclear fuel cycle companies, suppliers, engineering firms, research laboratories, radiopharmaceutical companies, universities, labor unions and law firms.

In large measure, your continued support of nuclear-related programs will ensure a strong legacy of nuclear energy, science and security for our children and for generations to come. The programs outlined in my testimony will further U.S. advances in nuclear medicine and technology; help guard against international threats to our energy security and nuclear safety; and encourage growth of the nation's largest source of emission-free electricity.

Today, nuclear energy generates 20 percent of the nation's electricity—enough for 65 million homes. More than 100 nuclear units contribute to the stability of the nation's power grid and are the greatest source of emission-free energy in the country. Policymakers who recognize the nexus between energy and environmental policy cannot ignore nuclear energy's unique value in mitigating emissions to meet U.S. clear air regulations and international carbon abatement goals. To capitalize on these benefits, comprehensive reform of the nuclear regulatory process must be a priority in fiscal year 2000 appropriations legislation.

Nuclear Regulatory Commission
Safety is the nuclear energy industry's top priority, and we recognize the unique responsibility that the Nuclear Regulatory Commission has to assure adequate protection of public health and safety. The NRC's $465.4 million funding request should be devoted to implementing regulations that have a direct bearing on safety. One of the single most important challenges facing the nuclear energy industry is a regulatory process that consumes licensee and NRC resources on issues that have little or no safety significance, and that produce inconsistency in assessment and enforcement.

Mr. Chairman, I cannot overstate the importance of this subcommittee's role, which has been instrumental in encouraging the NRC commissioners and staff to complete work on many long-standing reform issues. The NRC has a number of promising regulatory reform initiatives underway. However, Congress should continue to guide regulatory reform.

The Omnibus Budget and Reconciliation Act of 1990, as amended, requires that the agency recover approximately 100 percent of its budget authority by assessing licensees annual fees consistent with the regulatory benefits derived. Most of those fees are collected as a generic assessment levied on NRC licensees, creating, in effect, a "miscellaneous" category to encompass nearly 80 percent of its budget. This practice is contrary to sound and accountable budgeting. The industry supports legislation to modify the fee structure so that licensees are assessed only for NRC programs necessary to regulate them. Unrelated agency expenditures, such as international activities and regulatory support to agreement states or other federal agencies, should not be included in nuclear plant licensee user fees, but should be included in a specific line item on the NRC's budget, subject to the authorization and appropriations process. Additionally, the agency's ability to collect user fees should be authorized annually by Congress until the commission completes its regulatory reform initiatives.

We strongly urge the subcommittee to reaffirm its recommendation last year to eliminate agency expenditures in FY 2000 that do not benefit licensees so that user fees are fairly and equitably assessed.

In the area of reform, the subcommittee should encourage the NRC to develop and implement a long-term strategic plan as well as to focus on activities that can be completed in the near term. The NRC's long-range strategy should include these principles:

• a safety-focused regulatory framework that incorporates risk insights;
• a more efficient and accountable regulator;
• an integrated NRC strategy for achieving the objectives of regulatory reform;
• a specific timetable and milestones to ensure the NRC's long-range plan is implemented on schedule; and staff resources and a fully accountable budget that supports fundamental NRC reform.
  

The nuclear energy industry believes that rather than increase the NRC budget—and user fees—the commission can better focus its programs and regulations on safety-based performance standards. Such an emphasis on performance standards would free NRC resources for license renewal of nuclear power plants and other discrete licensing actions without increasing the agency's overall budget.

The nuclear energy industry fully supports approval of the funding requested by NRC from the Nuclear Waste Fund. These funds will allow the NRC to continue its oversight of the Yucca Mountain project as the Department of Energy prepares its license application for the repository. The NRC's oversight activities are a crucial step toward timely implementation of the integrated used fuel management program.

On another front, this subcommittee can help resolve the long-standing impasse regarding overlapping regulatory authority between the NRC and the Environmental Protection Agency. This overlap authority exists in many areas, but is most immediately apparent in establishing radiation standards for a national repository for used nuclear fuel. As the subcommittee with jurisdiction over the Energy Department, the industry respectfully urges you to clarify the matter of setting radiation standards for Yucca Mountain. The NRC's regulations have proven effective in protecting public health and safety as well as worker safety at nuclear facilities. Conversely, EPA has little direct experience in regulating the use of radioactive materials and relies on a regulatory philosophy that lacks a scientific underpinning. The industry encourages this subcommittee to take actions necessary to eliminate dual regulation of nuclear facilities. For the reasons stated, EPA's standard setting authority should be ceded to the NRC, an independent agency with scientific and technical expertise.

Nuclear Energy Research and Development
Mr. Chairman, continued investment in nuclear energy research and development will ensure the U.S. position as a world leader in nuclear safety and technology. Through its FY 2000 recommendations, this subcommittee also can continue to capitalize on nuclear energy's ability to avoid atmospheric emissions amid stronger Clean Air Act controls and international air quality goals. In fact, DOE states that without nuclear generation, the resulting increase in carbon emissions would be five times greater than utility reduction goals for 2000 under the agency's Climate Challenge Program.

A comparison of electricity generating sources reveals that nuclear energy is the most economical federal research and development investment. For example, in 1997, the federal government spent 5 cents for every kilowatt hour generated at nuclear power plants. The cost per kilowatt-hour of research and development in wind energy for that period was $4,769; for photovoltaics, $17,006; for natural gas, 41 cents and for coal, 5 cents.

The nuclear energy industry encourages the subcommittee to support a $40 million appropriation for the Nuclear Energy Research Initiative , which funds research and development at universities, national laboratories and industry to advance nuclear power technology, pave the way for the expanded use of emission-free nuclear energy and maintain U.S. leadership in nuclear technology and safety abroad. During its first year, NERI's review board received an impressive 300 grant applications. In light of this enthusiastic commitment, the proposed $40 million would permit NERI to grow yet remain manageable. The Energy Department's $25 million request would support continuation of first-year projects, but permit little, if any, expansion.

In addition to NERI, DOE's request for the Nuclear Energy Plant Optimization program would allocate $5 million to research and development projects that enhance the efficiency and reliability of our 103 nuclear power plants. The industry strongly supports a $10 million program in keeping with recommendations of the President's Committee of Advisors on Science and Technology. This initiative is particularly important as utilities deal with uncertainties associated with electric industry restructuring. NEPO seeks to work with industry to improve plant economics, reliability, availability and plant aging while maintaining a high level of safety.

Finally, the industry recommends $17 million for University Support programs at universities and colleges to enhance research and education in nuclear sciences by helping to sustain university reactor and engineering programs. While DOE requested $11.3 million, the nuclear energy industry believes additional funds are needed to expand the Nuclear Energy Education Research initiative and recruitment of future nuclear engineers and scientists.

In addition to these efforts, the industry strongly encourages the subcommittee to restore $20 million for electrometallurgical research at Argonne National Laboratories. This research would focus on devising technology to treat used fuel that powered the Argonne reactor, EBR-II. Research on the treatment of this metal fuel's unique composition could be applied to the treatment and disposal of other reactor fuels with unique characteristics.

Federal Storage and Disposal of Used Nuclear Fuel
A key component that ensures the continued benefits of nuclear energy is the federal acceptance and disposal of used nuclear fuel. Since 1982, the Energy Department has been siting and developing a deep geologic repository for the disposal of used nuclear fuel. In recent years, however, the agency has failed to advance an important aspect of the program—the acceptance and removal of used fuel. A little more than a year ago, the Energy Department was scheduled to start accepting used fuel from national laboratories, nuclear power plants and defense facilities at more than 100 locations in 40 states. The agency missed its deadline in violation of its clear statutory duty under the Nuclear Waste Policy Act of 1982. The law requires disposal at a single, federally monitored location.

The Energy Department in December 1998 released a report ordered by Congress supporting the continued scientific study of Yucca Mountain, Nevada, as the site for a permanent repository for used nuclear fuel.

The report concluded that "DOE believes that Yucca Mountain remains a promising site for a geologic repository." Despite the sound scientific basis for the viability assessment, the Administration still refuses to move used nuclear fuel. A recent plan from Energy Secretary Bill Richardson to take title of used nuclear fuel would leave used fuel where it is today and would pay for the program through the Nuclear Waste Fund. Although this proposal does not work as a stand-alone concept, the industry recognizes the valuable opportunity that Secretary Richardson has posed to industry stakeholders through the promise of continued dialogue focused on immediate receipt of used nuclear fuel. The industry welcomes that opportunity.

However, this country needs an immediate solution to central storage and disposal of its used nuclear fuel. The industry urges the subcommittee to support the Nuclear Waste Policy Act of 1999, S. 608, which would ensure funding for central storage and a geologic repository by altering the funding mechanism of the program. Without the budget modification in S. 608, DOE would fall short of funding needs now that it appears that a more realistic date for the agency to open a repository may be 2020, not 2010.

Despite the Energy Department's default, scientific and technical activities must continue if the agency is to able to determine if the permanent repository site is suitable. The agency's $409 million FY 2000 request for the Office of Civilian Radioactive Waste Management is necessary to ensure the office continues to meet deadlines for data collection and study at the proposed Yucca Mountain, Nev., repository. All of these projects further DOE's effort to prepare a draft environmental impact statement and license application for the repository. From the industry's perspective, the FY 2000 request assures timely scientific study and analysis at Yucca Mountain.

The administration's budget for Yucca Mountain activities includes $39 million from funds previously appropriated in 1996 for interim storage. Congress set those funds aside for an interim storage facility and an associated transportation framework pending passage of an authorization bill. This subcommittee should prevent the diversion of previously appropriated funds so that the money can be held for its intended purpose. However, as stated above, the agency's $409 million request is necessary to ensure the agency continues to meet its deadlines.

The nuclear energy industry believes that Nevada's use of federal grants by the state university system and counties has been wise and has resulted in useful contributions to the repository project. These efforts should continue to be funded. However, the nuclear energy industry continues to support strong oversight of all expenditure for the federal used nuclear fuel management program. Through this subcommittee's vigilance, recent appropriations acts have precluded Nevada from using grant funds for lobbying, litigation and certain multistate activities . Until the subcommittee is satisfied that DOE-administered funds provided to the state are properly spent, any further funds should be withheld from grant recipients shown to have misspent past federal grant money.

Several other programs warrant industry support at the recommended funding:

Low-Dose Radiation Research: The nuclear energy industry supports the Energy Department's request of $10 million to study how cells react to low radiation doses and to better understand biological responses to radiation that would further enhance occupational radiation protection. This research has garnered the support of the Health Physics Society, as the attached Health Physics Society policy statement notes.

Uranium Decontamination and Decommissioning: The industry believes the federal government has a responsibility for site cleanup and decommissioning. DOE's FY 2000 request for appropriations from the fund includes $242 million for activities at the government-owned gaseous diffusion plants and $35 million for uranium/thorium tailings cleanup.

Surplus Weapons Material Disposition: The nuclear energy industry supports the Energy Department's $200 million request for the disposal of surplus weapons fissile materials so that the United States and Russia can continue a parallel path to dispose of excess weapons-grade material. The nuclear energy industry and federal agencies also must continue efforts to use mixed oxide fuel at U.S. reactors.

International Nuclear Safety Program and Nuclear Energy Agency: DOE's International Nuclear Safety Program is essential to improving operational safety at Soviet-designed nuclear power plants. Potential weaknesses in reactor safety abroad may pose threats to public health and the environment and erode public confidence in the entire industry. The Institute also supports continued funding for U.S. membership in OECD's Nuclear Energy Agency. The industry also supports expansion of DOE's nuclear nonproliferation program, including the nuclear cities initiative with Russia.

Medical Isotopes: The industry supports DOE' radioisotope program and encourages the enhanced and continued supply of isotopes for the purpose of medical research. Such isotopes are not readily available in the commercial sector and the Energy Department has a historical mandate from the Atomic Energy Act of 1954 to provide medical isotopes.

DOE Radiation Standards: An area of major concern to the industry is overlapping authority on development of radiation standards for safe cleanup and restoration of DOE's decommissioned facilities. We urge the subcommittee to support the Energy Department in finalizing standards in order to enhance a safe, economic and timely conclusion to the agency's extensive environmental restoration program. Close involvement between DOE and the NRC ensures early identification of potential concerns that otherwise would require more costly long-term review.

Conclusion
By funding the Energy Department's nuclear energy research and development initiatives, the subcommittee would reaffirm nuclear energy's valuable contribution toward achieving clean air compliance and continue research to further enhance productivity of U.S. nuclear power plants. As the nation's second largest electricity source, nuclear energy is well-positioned to meet future energy demand in a manner that preserves and improves our air quality.

The nuclear energy industry urges the subcommittee to consider the equity of the Nuclear Regulatory Commission's user fee. Licensees should not be assessed 100 percent user fees for commission activities that do not affect the regulation of licensees, but that have broader, national or international application.

Finally, although the Department of Energy has failed to meet statutory and court-affirmed deadlines for disposal of used nuclear fuel, Congress should support the agency's continued scientific and technical work at the proposed Yucca Mountain repository to avoid further delays. Even as Congress considers separate legislation to reform the federal nuclear waste management program, the subcommittee must ensure that activities progress to support the repository project. I would like to thank the subcommittee for the opportunity to share the industry's perspective on issues vital to the nuclear energy industry.