Public Policy

The Nuclear Energy Institute (NEI), on behalf of the nuclear technologies industry, appreciates the opportunity to provide this testimony for the record on the role of nuclear energy in U.S. energy policy, on the value of our 103 operating nuclear power plants and on the strategic importance of building new nuclear power plants in the years ahead.

NEI is responsible for developing policy for the U.S. nuclear industry. Our organization’s 250 member companies 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.

America’s nuclear power plants are the most efficient and reliable in the world. Nuclear energy is the largest source of emission-free electricity in the United States and our nation’s second largest source of electricity after coal. Nuclear power plants in 31 states provide electricity for one of every five U.S. homes and businesses. More than eight out of 10 Americans believe nuclear energy should play an important role in the country’s energy future.¹

Given these facts and the strategic importance of nuclear energy to our nation’s energy security and economic growth, NEI encourages Congress to maintain policies that ensure continued operation of our nation’s nuclear plants, and to provide the impetus required to expand emission-free nuclear energy as a vital part of our nation’s diverse energy mix.

NEI’s testimony for the record will address two major areas:

• The strategic value of America’s nuclear power plants as a source of safe, reliable, clean electricity at stable prices, and industry initiatives to ensure continued operation of today’s nuclear plants at sustained, high levels of performance, and to prepare for construction of new nuclear power plants.
• The critical importance of stable and efficient regulation of the industry in sustaining safe operation of today’s nuclear plant fleet and in building the investor confidence needed to support the next generation of nuclear power plants.

I. The Strategic Value of Nuclear Energy
The United States has 103 nuclear reactors operating today. Nuclear power represented 20 percent of U.S. electricity supply 10 years ago, and it represents 20 percent of our electricity supply today, even though we have six fewer reactors than a decade ago and total U.S. electricity supply has increased by 25 percent in the period.

Nuclear power has maintained its market share thanks to dramatic improvements in plant reliability, safety, productivity and management. Today’s reactors routinely operate at a 90 percent average capacity factor. Improved productivity at U.S. nuclear plants satisfied 20 percent of the growth in electricity demand over the last decade.

Increased output from U.S. nuclear plants in the past 10 years—from 640 billion kilowatt-hours in 1994 to 789 billion kilowatt-hours in 2004—is approximately equivalent to bringing 18 new 1,000-megawatt power plants into service.

Nuclear energy provides several important national benefits.

First, nuclear power plants contribute to the fuel and technology diversity that is the core strength of the U.S. electric supply system. This diversity is at risk because today’s business environment and electricity sector market conditions make investment in large, capital-intensive technologies difficult, particularly in advanced nuclear power plants and advanced coal-fired power plants best-suited to supply baseload electricity. More than 90 percent of all new electric generating capacity added over the past five years is fueled with natural gas. Natural gas has many desirable characteristics and should be part of our fuel mix, but over-reliance on any one fuel source leaves consumers vulnerable to price spikes and supply disruptions.

Second, nuclear power plants provide price stability that is not available from electric generating plants fueled with natural gas. Intense volatility in natural gas prices over the last several years is likely to continue, largely because of unsustainable demand for natural gas from the electric sector. Such price volatility also subjects the U.S. economy to potential damage. The operating costs of nuclear power plants are stable and can dampen volatility of consumer costs in the electricity market.

Third, nuclear plants reduce pressure on natural gas supply, thereby reducing costs for other users of natural gas that have no alternative fuel source.

Fourth, nuclear power plants play a strategic role in meeting U.S. clean-air goals and the nation’s goal of reducing greenhouse gas emissions. Nuclear power plants produce electricity that otherwise would be supplied by gas- or coal-fired generating capacity. They therefore prevent the emissions that fossil-fuel fired plants would otherwise produce.

The emissions prevented by U.S. nuclear power plants are essential in meeting clean-air regulations. In 2003, they prevented the emission of about 3.4 million tons of sulfur dioxide (SO2) and about 1.2 million tons of nitrogen oxide (NOX). To put these numbers in perspective, requirements imposed by the 1990 Clean Air Act amendments reduced SO₂ emissions from the electric power sector between 1990 and 2001 by about 5 million tons per year and NO_X emissions by about 2 million tons year.² Thus, in a single year, nuclear power plants avoid emissions nearly equivalent to those reduced over an 11-year period by other sources.

The NO_X emissions prevented by U.S. nuclear plants are equivalent to eliminating NO_X emissions from six out of 10 passenger cars in the United States. The carbon emissions prevented by nuclear power plants are equivalent to eliminating the carbon emissions from nine out of 10 passenger cars in the United States. Without nuclear energy, greenhouse gas emissions from the electric power sector would be approximately 30 percent higher. This is significant, since the electricity sector is responsible for approximately one-third of U.S. greenhouse gas emissions.

Finally, nuclear energy is a secure source of energy, and the United States is not alone in recognizing nuclear energy’s importance to its energy security, and therefore, national security. The decision to use nuclear power as a major energy source in countries such as France and Japan was based on energy security. The governments of both countries recognized in the 1970s that nuclear energy protects their nations’ energy supplies from disruptions caused by political instability and protects consumers from price fluctuations caused by market volatility. France depends on 59 reactors to meet more than three-quarters of its electricity demand, while one-quarter of Japan's comes from its 54 reactors.

Despite strong international commitment to nuclear power, evidenced by the 26 nuclear reactors under construction today around the world, the U.S. nuclear energy sector remains by far the world’s largest in terms of electricity production—larger than the nuclear sectors of France and Japan combined.

In summary, nuclear energy represents a unique value proposition. Nuclear power plants provide a tremendous supply of baseload electricity—cleanly, reliably and safely. They provide low-cost electricity for consumers and business today, and serve as a hedge against price and supply volatility. Nuclear plants have valuable environmental attributes, and they help preserve our nation’s energy security. These characteristics demonstrate why nuclear energy has strategic importance in U.S. energy policy.

Public support for nuclear energy is at an all-time high due in part to excellent plant safety and performance and growing awareness of nuclear energy’s benefits, The industry has monitored public opinion closely since the early 1980s, and two key trends are clear: First, public favorability to nuclear energy has never been higher. Second, there is a 3 to 1 ratio between those who strongly support the use of nuclear energy and those strongly opposed, and that ratio is widening.

A May 2005 survey revealed that 70 percent of Americans favor the use of nuclear energy—the highest level to date. More than eight in 10 Americans think nuclear power is important for our energy future. Nearly three-quarters of the respondents favor keeping the option to build more nuclear power plants. More than three-quarters said that “electric utilities should prepare now so that new nuclear power plants could be built if needed in the next decade.” Six in 10 agree that the United States should definitely build more nuclear plants.³

Industry Initiatives to Increase Nuclear Energy Production And Prepare for New Nuclear Power Plant Construction
Nuclear plants are such valuable electric generating assets that virtually all companies are planning to apply to the Nuclear Regulatory Commission for 20-year extensions to their operating licenses. Companies have renewed the licenses for 32 reactors, formally applied for extensions at 16 reactors and have indicated their intension to file for license renewal at 28 additional reactors. The industry believes that virtually all U.S. nuclear plants will renew their licenses and operate for an additional 20 years.

In order to maintain safety and reliability, and to prepare the plants for an additional 20 years of operation, the industry is investing in large capital improvement projects, including the installation of new steam generators, new reactor vessel heads and other modifications to increase plant generating capacity.

These capital improvement projects position the plants for many years of operation and demonstrate the industry’s commitment to making the capital investments necessary to maintain safety and reliability.

Although it has not yet started to build new nuclear plants, the industry continues to achieve small but steady increases in generating capacity—either through power uprates or refurbishing nuclear capacity that has been shut down. An uprate increases the flow of steam from the nuclear reactor to the turbine-generator so that the plant can produce more electricity. Uprates can increase a plant’s capacity up to 20 percent, depending on plant design and how much capital a company is prepared to invest.

Over the past several years, the NRC has authorized power uprates that represent approximately 2,000 megawatts (MW) of additional generating capacity. Over the next five years, the NRC anticipates that companies will apply for approximately 30 power uprates, which could add an additional 2,000 MW of new capacity.

In addition, the Tennessee Valley Authority is refurbishing a reactor at its Browns Ferry site in northern Alabama. This is a very complex project—fully as challenging as building a new nuclear plant—and it is on schedule and within budget at the midpoint of the project.

However, there are obviously limits on how much additional electricity output the existing nuclear power plants can produce. The Department of Energy projects that by 2025 U.S. electricity demand will increase by 50 percent.⁴ Meeting this rising demand will require construction of many new nuclear power plants in the years ahead.

The factors that make operating nuclear power plants a strategic national asset also justify a systematic, disciplined program to build new nuclear power plants in the years ahead to help meet growth in electricity demand, particularly the need for new baseload power plants. In addition to nuclear energy’s other benefits, new nuclear plant construction would create thousands of skilled, high-tech jobs—to design and build the plants, manufacture the equipment and fuel, and operate the plants when built. A program of new nuclear plant construction would maintain U.S. technological leadership in this high-tech field.

The nuclear energy industry and DOE launched the Nuclear Power 2010 program several years ago that will aid the industry in building new nuclear capacity when needed, by creating the business conditions under which companies can order new nuclear plants. This is a comprehensive program designed to address the business issues—including licensing and regulatory issues, development of new plant designs, and financing—that could be roadblocks to new nuclear plant construction.

The NRC has developed a new licensing process created as a result the 1992 Energy Policy Act. Under this process, a company or other entity can obtain all necessary regulatory approvals from the NRC before it commits significant capital to a new nuclear power plant. The process allows for advanced site approval, as well as early reactor design approval. And new nuclear plants will receive a single license for construction and operation—not the separate proceedings that created excessive delay in the period between construction and operation of many of today’s plants.

This approach should help limit the regulatory risks that delayed construction and licensing in the past. This process also allows meaningful input from the public and other stakeholders, before plant construction, at a time when such input can influence plant design and licensing issues. This should also avoid the costly delays common to the old way of licensing a nuclear plant. Because the old licensing process was a two-step process and did not require all the design and engineering to be complete when the construction permit was issued, it often resulted in lengthy and costly hearings after the plant was built and before it was allowed to operate.

The industry is validating this new licensing process. In 2003, Dominion, Exelon and Entergy initiated a three-year effort to obtain NRC approval for early site permits. If approved, the permits will allow the companies to “bank” those sites for possible future use, deferring their decision to build reactors until later.

Three industry consortia, consisting of 16 leading energy companies, construction firms, architect/engineers, fuel companies and equipment suppliers, have announced they will demonstrate the process for obtaining a combined construction/operating license (COL). The companies, in partnership with DOE, will test the COL process, which will provide a more effective and efficient means of licensing a new nuclear power plant. DOE will share the demonstration costs—obtaining a COL will require a substantial investment of design and engineering work on new nuclear reactor designs. The NuStart Energy consortium last week announced the following locations from which it will select two sites where it will demonstrate the COL licensing process:

• Bellefonte Nuclear Plant in Northeast Alabama, owned by the Tennessee Valley Authority
• Grand Gulf Nuclear Station, Port Gibson, Miss., owned by Entergy Nuclear
• River Bend Nuclear Station, St. Francisville, La., also owned by Entergy
• Savannah River Site, a Department of Energy facility near Aiken, S.C.
• Calvert Cliffs Nuclear Power Plant in Lusby, Md., owned by Constellation Energy
• Nine Mile Point Nuclear Station in Scriba, N.Y., owned by Constellation Energy

The design, engineering and licensing work required before a company orders or builds new nuclear plants represents a substantial investment. Projected costs to complete the licensing demonstrations and the first-of-a-kind design and engineering for one reactor design range from $400 million to $500 million. The industry would expect to share that cost with the federal government under DOE’s Nuclear Power 2010 program. The private sector would therefore commit the equivalent of $200 million to $250 million to the effort. To carry two new designs forward would require twice that amount from the private sector. Government funding for the DOE Nuclear Power 2010 program is therefore critically important.

The Environment and Public Works Committee has a critical role to play in ensuring that the NRC manages the new licensing processes in a disciplined and efficient manner. This committee can also verify that the NRC provides appropriate guidance to its licensing boards so that any hearing after issuance of the COL but before commercial operation meet the high threshold included in the agency’s underlying statute.

The overall objective for this industry initiative is to ensure new nuclear plants can be operational between 2010 and 2020. This will require an aggressive program to complete design, engineering and licensing work before companies can place orders and invest in construction.

At that time, three factors—growth in electricity demand, increasingly stringent environmental controls on coal-fired and gas-fired generating capacity, and continued pressure on natural gas supply and prices—will make construction of new nuclear generation an imperative.

II. The Importance of a Stable and Efficient Regulatory Environment
Only through a sustained focus on the necessary programs and policies will the industry meet the demand for new emission-free baseload nuclear plants in the 2010 to 2020 time frame.

As it has in the past, strong congressional oversight will be necessary to ensure certainty and efficiency in the Nuclear Regulatory Commission regulations, ensure effective and efficient implementation of the federal government’s nuclear energy programs, and maintain America’s leadership in nuclear technology development and its influence over important diplomatic initiatives like nonproliferation.

Continued progress toward a federal used nuclear fuel repository at Yucca Mountain, Nev., is necessary to support nuclear energy’s vital role in a comprehensive national energy policy and to support the remediation of DOE defense sites. Since enactment of the 1982 Nuclear Waste Policy Act, DOE’s federal repository program has repeatedly overcome challenges, and challenges remain before the Yucca Mountain facility can begin operation. But as DOE addresses these issues, it is important to keep the overall progress of the program in context.

The consensus of the international scientific community is that a deep geologic repository as envisioned at Yucca Mountain is the best solution for long-term disposition of used military and commercial nuclear power plant fuel and high-level radioactive byproducts. The Bush administration and Congress, with bipartisan support, affirmed the suitability of Yucca Mountain in 2002. Over the past three years, the Energy Department and its contractors have made considerable progress toward providing yet greater confirmation that this federal approach is correct and that Yucca Mountain is an appropriate site for a national repository.

During the past year, federal courts have rejected significant legal challenges by the state of Nevada and others to the Nuclear Waste Policy Act and the 2002 Yucca Mountain site suitability determination. These challenges questioned the constitutionality of the Yucca Mountain Development Act and DOE’s repository system, which incorporates both natural and engineered barriers to safely contain radioactive material.

In the coming year, Congress will play an essential role in keeping this program on schedule, by taking the steps necessary to provide increased funding for the project in fiscal 2006 and in future years. Meeting DOE’s schedule for initial repository operation requires certainty in program funding. This is particularly critical in view of projected annual expenditures that will exceed $1 billion beginning in fiscal 2007.

The industry also believes that it is appropriate and necessary to consider an alternative perspective on the Yucca Mountain project. This alternative would include an extended period for monitoring operation of the repository for up to 300 years after used fuel is first placed underground. The industry believes that this enhanced repository concept would provide ongoing safety assurance and greater confidence that the repository is performing as designed, and it would ensure the protection of the public and the environment. It would also allow DOE to apply evolving innovative technologies at the repository.

Through this approach, a scientific monitoring program would identify additional scientific information to apply in repository performance models. DOE then could update the repository models, and modify design and operations as appropriate.

The industry fully supports the fundamental need for a repository so that used nuclear fuel and the byproducts of the nation’s nuclear weapons program are securely managed in an underground, specially designed facility. World-class science by some 3,000 scientists and engineers has demonstrated that Yucca Mountain is the best site for that facility. A public works project of this magnitude will inevitably face challenges. Yet, none is insurmountable. DOE and its contractors have made significant progress on the project as it enters the licensing phase.

The process of licensing the Yucca Mountain facility will require discipline.  We encourage the Committee to exercise its oversight responsibility to ensure that the NRC is appropriately staffed and organized, and to ensure that the commission is providing appropriate policy guidance to its staff and hearing boards to conduct an effective and disciplined licensing review.

The radiation standard for the Yucca Mountain project is critical to moving forward. The Environmental Protection Agency’s standard was remanded last year by a court ruling. Oversight of EPA by the Committee on Environment and Public Works will be important to ensure that EPA addresses the issues raised by the Court in a responsible manner, consistent with the way our nation regulates other hazardous materials.

If EPA’s standard-setting process becomes unduly protracted and threatens significant delays in progress on the Yucca Mountain project, Congress may need to step in to provide guidance and resolve the issue through legislation.

The NRC Reactor Oversight Process Has Proven Successful
Congressional oversight performs an important role in maintaining and encouraging the certainty of the NRC’s regulatory process. Such certainty is essential for today’s nuclear power facilities and equally critical in licensing new nuclear power facilities. Several years ago, the committee helped encourage the NRC to move toward a new reactor oversight process for the nation’s nuclear plants, a process based on quantitative performance indicators and safety significance. Today’s reactor oversight process is designed to focus industry and NRC resources on equipment, components and operational issues that have the greatest importance to, and impact on, safety.

The NRC now has five years of experience with this revised reactor oversight process. The new approach is successful in improving the transparency, objectivity and efficiency of regulatory oversight. It is an enormous improvement over the agency’s previous approach to evaluating nuclear plant safety.

The reactor oversight process combines the results of performance indicators in 18 key areas and findings from about 2,500 hours of NRC inspections per reactor to determine the appropriate allocation of inspection resources across all operating plants. The most recent results, after the fourth quarter of 2004, are as follows:

• 78 reactors had all green (best level) performance indicators and inspection findings and will receive the baseline level of NRC inspection (approximately 2,500 hours per year).
• 21 reactors had a single white (second best level) performance indicator or inspection finding and will receive supplemental inspection beyond the baseline effort.
• 3 reactors had more than one single white indicator or finding in a performance area or had white indicators or findings in different performance areas and will receive more in-depth inspection.

Although an internal NRC report expressed concern about the declining number of “non-green” performance indicators, the industry views this trend as achieving success and a strong example of the soundness of a safety-focused performance-based approach to regulation.

We believe the NRC, the industry and other stakeholders would benefit if the intent of the Reactor Oversight Process were codified through an NRC Policy Statement, drafted by commissioners who provided the policy guidance that established the process. This will be particularly important as changes occur within the NRC staff over the next several years.

The Need for Continued Progress Toward Safety-Focused, Performance-based regulation
The industry needs greater certainty both in regulatory processes for today’s plants and in licensing. When the NRC first implemented its new reactor oversight process, few believed that safety-focused regulatory concepts would work. Today, not only do these concepts work, but our plants are safer and more efficient than ever.

During the past two years, NRC Chairman Nils Diaz has articulated a sound approach to the future regulatory structure of our industry. He said, “21st century nuclear regulation needs to be anchored in realistic conservatism or conservative realism if we are to avoid the twin pitfalls of underregulation and overregulation.” Such an approach would recognize conservative defense-in-depth regulation informed by science, engineering and nearly 10,000 reactor years of experience worldwide. But achieving a fair, predictable regulatory environment requires the same predictability and realism in plant security and emergency preparedness.

The NRC has begun to incorporate safety-focused insights into federal regulation. In November 2004, the agency issued 10 CFR 50.69, a new rule that will allow the use of probabilistic risk assessment insights to determine a safety-focused scope of plant components governed by NRC requirements (e.g., quality assurance, monitoring, environmental qualification). In March, a proposed rule was forwarded to the commission that would redefine the limiting pipe-break size used in plant design analyses, based on industry operating experience. When final, this rule would provide both safety and operational benefits.

The commission should be commended for its progress with these initiatives. These rulemakings will not only improve the safety focus of regulations. They will also aid in making the agency’s reactor oversight process more consistent with the regulations, resulting in a more efficient and effective regulatory process.

As the NRC moves to ensure that its regulations are safety-focused and performance-based, the industry sees an urgent need for the NRC to develop an integrated rulemaking plan that shows the committee, and other stakeholders, its plan to transform the existing deterministic regulations into a more effective, safety-focused regime. Such an integrated plan would avoid unnecessary near-term actions that would not be required in a more safety-focused process.

Congress Should Review NRC Budget and Staffing Levels
The NRC’s budget continues to increase significantly. Its fiscal 2006 budget request of $702 million is the highest ever for this agency—a 44 percent increase from its $488 million budget just five years ago. The number of full-time-equivalent (FTE) positions at the NRC has increased by more than 13 percent, from 2,785 to 3,154 during the same period. The vast expansion of the agency’s security division and increased staffing for license renewal is largely responsible for this increase.

The NRC’s security division has increased from approximately 30 FTEs to approximately 180 FTEs in just a few years. That increase, in part, was required by a full review of security at nuclear power plants after Sept. 11, 2001, and the subsequent review of plant security plans. Most of those efforts have been completed. In addition, the industry is concerned that the NRC is performing threat analysis and other functions that are duplicative of those funded at the Department of Homeland Security.

The nuclear energy industry acknowledges that budget and staffing increases may be necessary for certain functions at the NRC, as well as to addressing impending work force issues. However, the industry believes that the NRC can be both an effective and efficient regulator, while increasing public safety. For example, the performance demonstrated in the reactor oversight process should provide an opportunity for the NRC to reallocate existing resources. The NRC also should continue to review its regional structure to determine if changes are needed to respond to the continued consolidation in the nuclear industry.

As such, we urge that the committee review the NRC’s structure and management. The industry believes that the NRC would benefit from an independent management assessment of the agency’s needs and plans to meet its organizational and work force challenges.

The NRC’s budget request also included a proposal to extend the agency’s authority to collect user fees from licensees to fund 90 percent of its annual budget. As the committee is aware, that proposal is an extension of current law. In 2000, this committee passed legislation (S. 1627) that removed up to 12 percent of the NRC’s budget from the user fee base to address the fair and equitable assessment of the NRC’s fee structure.

As was the case five years ago, the NRC continues to provide governmental functions that are related only indirectly to services that are provided to its licensees. As such, it is appropriate that the agency fund a portion of its budget from general revenues. The industry urges the committee to review the appropriate percentage to be recovered from user fees. Also, the industry appreciates the committee’s efforts to allow some of the NRC’s security functions to be supported by general funds. Functions that are for the common defense of our nation should be funded through general revenues, not a user fee on a specific industry.

The industry further urges the committee to review the current fee structure and identify improvements to be implemented by the NRC. For example, the industry believes that the NRC should directly link activities to fees. We believe it is inappropriate to categorize about 75 percent of the agency’s budget in one “general” account, as is the case today.

Finally, the NRC’s budget needs to be more transparent and needs to provide more accessible and understandable data. This year’s NRC budget, for example, does not provide historical data on overall funding or the number of positions at the NRC. Also, although the NRC budget measures the amount of resources allocated for security, it fails to provide budgetary details on its security division. Without greater transparency and additional data, it is difficult for Congress and stakeholders to analyze how the agency is utilizing its resources.

The Industry Recommends Changes to the Atomic Energy Act
As in previous years, the industry supports changes to the Atomic Energy Act that will facilitate reform of the NRC and its regulatory processes to ensure the effective and efficient regulation of the industry.

If the committee reauthorizes the NRC to recover user fees to offset a portion of its budget, it should remove an appropriate amount for NRC functions that should be supported with general revenues. Those functions, as noted above, should include services that do not directly regulate industry licensees as well as security functions that are the responsibility of the government in providing for the common defense of our nation.

The industry also recommends the following changes to the Atomic Energy Act:

• Congress should repeal Sections 203, 204 and 205 of the Atomic Energy Act to provide the commission with the flexibility and discretion to manage and organize the NRC in the most appropriate manner.
• Congress should remove the restriction on foreign ownership of commercial nuclear facilities.
• When the NRC issues a combined construction and operating license is issued by the NRC for a new nuclear power plant, Congress should clarify that the license term begins when the plant commences operation rather than when the license is issued.
• Congress should remove the requirement that the NRC conduct antitrust reviews as other federal agencies—notably the Securities and Exchange Commission, the Federal Trade Commission, the Justice Department, and the Federal Energy Regulatory Commission—conduct such reviews.

Noting our reservations regarding the proper offset for the user fee, NEI endorses and supports the provisions included in S. 858, as introduced by Chairman James Inhofe and Sen. George Voinovich. Some of those provisions overlap the above suggestions made on behalf of the nuclear energy industry.

In addition, the industry supports S. 865, also introduced by Chairman Inhofe and Sen. Voinovich. The industry fully supports the 20-year extension of the Price-Anderson Act included in that bill, but given almost 50 years of experience with the Act, and the ongoing oversight authority of the committee, we believe the act should be renewed indefinitely. In addition, we urge the committee to clarify that punitive damages are not available in liability actions covered by the Price-Anderson Act.

The Price-Anderson Act guarantees immediate insurance coverage of more than $10 billion for the public in the case of an extraordinary nuclear occurrence, and this insurance is fully funded by the industry. Taxpayers and the federal government pay nothing for this coverage. The Price-Anderson Act has provided effective coverage since 1957, and it has been extended by Congress four times.

The Price-Anderson Act has served as a model for legislation in other areas, ranging from vaccine compensation and medical malpractice to chemical waste cleanup. In addition, DOE and the NRC both support extending the Price-Anderson Act. Without extension of the law, no new nuclear power plants could be built to meet growing electricity demand while protecting the nation’s air quality.

Radiation Protection Policy Must Be Science-Based and Consistent
As the industry works to increase energy production, it remains committed to maintaining the highest priority on safety. To achieve this goal, it is necessary for the federal government to have a uniform radiation protection policy. The policy should be based on the best available science and should be applied equitably and consistently by all federal agencies.

Duplicative and conflicting regulation by different federal agencies, using different criteria, must be eliminated. In this area, federal radiation protection policy falls short. Sen. Pete Domenici requested in 2000 that what is now the Government Accountability Office (GAO) produce a report on this issue. The report, “Radiation Standards: Scientific Basis Inconclusive, and the EPA and NRC Disagreement Continues” (GAO/RCED-00-152), concluded that U.S. radiation protection standards “lack a conclusively verified scientific basis,” involve “differing exposure limits” because of policy disagreements between federal agencies, and “raise questions of inefficient, conflicting dual regulation.” A troubling conclusion of the GAO report is that the costs related to complying with such standards “will be immense, likely in the hundreds of billions of dollars” of private and public funds.

This situation has persisted for years, without substantial resolution. For example, former Sen. John Glenn, as chairman of the Senate Governmental Affairs Committee, asked the GAO to report on this issue in 1994. The GAO report, “Nuclear Health and Safety: Consensus on Acceptable Radiation Risk to the Public Is Lacking” (GAO/RCED-94-190), concluded that “differences exist in the limits on human exposure to radiation set by federal agencies, raising questions about the precision, credibility and overall effectiveness of federal radiation standards and guidelines affecting public health.”

What is particularly troubling is that the 2000 GAO report found that the situation remained essentially unchanged in the six years since GAO reported on the issue to Sen. Glenn. Now, five years later, the nuclear energy industry notes little substantive progress in resolving the issue of duplicative and conflicting radiation standards.

This situation undermines public confidence in regulatory activities related to radiation and also creates significant uncertainties in projecting costs and schedules of licensing and building new plants, decommissioning of facilities that have closed, and disposal of used nuclear fuel and low-level radioactive byproducts.

Federal radiation protection policy must provide a foundation to protect public health and safety, make the best use of public funding and resources, and help build public trust and confidence in federal decisions. The current conflicting radiation standards and duplicative regulation work against those principles.

The NRC and Environmental Protection Agency have pursued initiatives to help resolve duplication and conflict in their regulatory programs for radiation safety. The NRC and EPA have agreed on a communication process that addresses their conflicting standards for decommissioning site cleanups. Also, the agencies are coordinating efforts to create a more integrated framework for regulating the safe disposition of low-activity radioactive material and mixed (radiological and chemical) waste.

However, the greatest impediment to resolving issues of duplicative authority and conflicting standards are the various laws that mandate the respective agencies’ regulatory programs. Continued oversight will be necessary to ensure that the agencies are achieving consistent radiation protection policy. Ultimately, Congress may be required to resolve through legislation the policy issues that the agencies cannot resolve on their own.

U.S. Nuclear Power Plants Were the Most Secure Industrial Facilities Before 9/11 and Are Even More Secure Today
The need for regulatory stability in nuclear plant security is particularly important. The NRC and the industry have significantly enhanced security at nuclear power plants. In the three-and-a-half years since the Sept. 11 terrorist attacks, the NRC has issued a series of requirements to increase security and enhance training for security programs. The industry has complied—fully and rapidly.

Even prior to September 2001, nuclear power plants were the most secure industrial facilities in the United States. They were built to withstand extreme natural events, such as earthquakes and hurricanes, and the NRC has for more than 20 years required that private security forces defend against an attacking force of saboteurs intent on causing a release of radiation. The facilities are even more secure today, with voluntary and NRC-required security and emergency response enhancements implemented since 2001.

A copy of an NEI fact sheet entitled “Post-Sept. 11 Improvements in Nuclear Plant Security Set U. S. Industry Standard” is attached. It provides additional detail regarding the many security changes that have been made at our plants since September 2001.

In analyzing this changing global environment, the nuclear industry started with the firm knowledge that nuclear power plants—although strongly built, heavily guarded and extremely difficult targets to penetrate—nonetheless are considered by some to be potential terrorist targets. However, as former NRC Chairman Richard Meserve said in 2002:

It should be recognized that nuclear power plants are massive structures with thick exterior walls and interior barriers of reinforced concrete. The plants are designed to withstand tornadoes, hurricanes, fires, floods and earthquakes. As a result, the structures inherently afford a measure of protection against deliberate aircraft impacts. In addition, the defense-in-depth philosophy used in nuclear facility design means that plants have redundant and separated systems in order to ensure safety. That is, active components, such as pumps, have backups as part of the basic design philosophy. This provides a capability to respond to a variety of events, including aircraft attack.

Meserve noted that the industry’s defense-in-depth philosophy includes protection by well-trained, heavily armed security officers; fortified perimeters; and sophisticated intruder detection systems. The industry also assumes that potential attackers may attempt to achieve the help of a sympathetic “insider,” so the companies that operate nuclear plants conduct extensive background checks before hiring employees. Even then, to be conservative, our security plans assume that attackers are successful in obtaining insider help.

The nuclear industry has cooperated with the NRC to review nuclear plant security completely, and many improvements have been implemented as a result. Changes include measures to provide additional protection against vehicle bombs, as well as additional protective measures against water- and land-based assaults. The industry has increased security patrols, augmented security forces, added more security posts, increased vehicle standoff distances, tightened access controls and enhanced coordination with state and local law enforcement. The industry is also cooperating fully with the Department of Homeland Security in its efforts to better protect our critical infrastructure.

In April 2003, the NRC issued new security requirements that revised the agency’s “design basis threat,” which defines the characteristics of the threat against which the industry must defend and is the foundation for the industry’s security programs. Every nuclear power plant submitted a new security plan to comply with the new design basis threat and was required to demonstrate compliance with that plan last October.

In response to considerable congressional concern, the industry has worked with the NRC to develop a revised program to test security at our facilities. This program includes “force-on-force” drills using advanced equipment. Although the tests were suspended for several months after Sept. 11, they are now being conducted at plants nationwide. The NRC observes and evaluates approximately two sets of force-on-force drills per month. At this rate, every plant will conduct NRC-evaluated force-on-force exercises at least once every three years, in addition to security exercises conducted by nuclear plants multiple times each year.

The industry has reviewed the recently released study by the National Academy of Sciences (NAS), “Safety and Security of Spent Nuclear Fuel Storage.” In response to the NRC actions and the NAS report, nuclear plants are systematically assessing potential augmentation of already redundant safety systems for used fuel pools. The intent is to provide yet greater assurance in the ability to cool used fuel in pools. While the NRC’s response to the study indicated that the NRC considers the likelihood of releasing large amounts of radiation to the environment from a spent fuel pool to be “extremely low,” the NRC is initiating an independent, site-specific assessment of used fuel pools.

Today, the industry is at the practical limit of what private industry can do to secure our facilities against the terrorist threat. NRC Chairman Nils Diaz and other commissioners have said that the industry has achieved just about everything that can be reasonably achieved by a civilian force. On March 14, Diaz said “both nuclear security and safety are better than they have ever been and both are getting better. What we have done in the last three and a half years is to make it very difficult for anyone to find ways to attempt acts of radiological sabotage, even more difficult to succeed in doing real harm, and to be very prepared to protect our people in the very unlikely event of radiological release.”⁵

The industry believes that the focus of security enhancements should be on those that increase our coordination with DHS and state and local response entities. Security enhancements should also focus on the effective implementation of on-site changes to our security infrastructure and ensure we fully integrate our new security procedures into plant operations. We must ensure they are not interfering with our commitment to safety—our highest priority.

The Industry Supports the Nuclear Safety and Security Act of 2005, S. 864
The Nuclear Safety and Security Act of 2005 (S. 864), introduced by Chairman Inhofe and Sen. Voinovich, includes several provisions regarding nuclear plant security. NEI supports those proposals and urges the committee to move the bill to the full Senate for further consideration.

Section 4 of S. 864 is particularly important because it will allow some companies to utilize weaponry that may not be allowed by various state laws. The industry asks that the committee include language to clarify the use of deadly force by nuclear power plant security officers if necessary to protect the plant against terrorist threats. In addition, the industry urges the committee to review and consider legislation that will allow the industry, or the NRC, to have greater access to various federal data bases.

Conclusion
America’s nuclear power plants are a critical element of our energy portfolio and a driver of economic growth. Nuclear energy also is vital to our energy security, environmental protection and clean-air goals. The industry continues to operate nuclear plants at exceptional levels of safety and efficiency, and nuclear power plants also are the most secure industrial facilities in the country.

The nuclear industry has significantly increased the amount of electricity that it generates over the past two decades through efficiency improvements and power uprates. But for the nuclear industry to continue generating three-quarters of our nation’s emission-free electricity, new nuclear plants must be built. The industry has made great strides to set the stage for new nuclear plant construction and is committed to achieving this objective in the near term.

Nothing is more important to the industry than ensuring that the NRC is an effective and credible regulator. In this regard, the NRC plays an important role in the nuclear energy sector. Achieving the goal of new plant construction depends on a stable regulatory environment, one that assures the safe operation of today’s plants and the efficient licensing of new facilities. The NRC has made significant progress toward this end, yet more must be done. Continued oversight by this committee to ensure that the NRC has the appropriate resources, priorities and focus will be critical to achieving these ends.
 

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¹ Bisconti Research Inc./NOP World, May 2005, 1,000 U.S. adults

² “EPA Acid Rain Program: 2001 Progress Report,” U.S. Environmental Protection Agency, November 2002.

³ Bisconti Research Inc./NOP World, May 2005, 1,000 U.S. adults.

⁴ “Annual Energy Outlook 2005,” Energy Information Administration.

⁵ NRC Chairman Nils Diaz, National Press Club briefing as reported by Agence France-Presse news agency, March 14, 2005.