Chairman Barton, Ranking Member Boucher and distinguished members of the subcommittee.

On behalf of NEI, I commend you for focusing the 108th Congress today on legislation to implement comprehensive national energy policy.

The committee is to be commended for its leadership last year in supporting the president’s decision on the Yucca Mountain repository site—a tremendous step forward in energy policy matters.

Today I will discuss a few key points related to the proposed energy legislation . . . but I would be remiss if I did not first comment on the security and readiness of our nuclear power plants, because it is a concern to many.

The nuclear industry had extensive and robust security prior to the tragic events of September 11. Since then, the NRC has imposed additional requirements. And during the past 18 months, the nuclear industry has invested an additional $370 million in security-related improvements—including hiring about one-third more security officers, bringing the total to about 7,000. 

In addition to the NRC actions, a recent independent study by the Center for Strategic and International Studies recognized the effectiveness of nuclear plant security—and acknowledged our plants as the best-protected industrial facilities in the country.

The legislation passed in the last congress by this committee, and reintroduced in the draft bill this year, contains a number of provisions directed at studies and programs the NRC should implement to improve security at commercial nuclear plants.

Given both the enhanced security requirements imposed by the NRC since September 11, and the extensive requirements for threat and vulnerability analyses contained in the legislation creating the Dept. of Homeland Security, we conclude that these provisions in section 4012 are no longer necessary and respectfully suggest that they be deleted from the draft legislation.

We will continue to implement every sensible, sound approach so our country—drawing on industry resources, law enforcement agencies and national defense forces—can seamlessly integrate a response to potential terrorist threats.

Energy drives our nation’s economy. Economic growth and an improved standard of living are possible only where there is a stable, reliable and affordable supply of energy. Nuclear energy meets all these criteria—and it is environmentally sound as well. It is a major part of our nation’s energy diversity, providing electricity for one in every five homes and businesses.

The industry’s average capacity factor last year was a record 91.5 percent—the most efficient among all types of power plants.

And when all the data are in, we estimate that total electricity production from nuclear energy last year will reach 778 billion kilowatt-hours—another record. That’s more electricity than is used in total by all but three other countries in the world.

America’s nuclear power plants are essential to meeting our air quality policy goals. Nuclear energy produces no air pollution and, in fact, will be play a major role in helping meet the president’s goals for greenhouse gas reduction.

A comprehensive national energy policy should take full advantage of the benefits of nuclear energy. To accomplish this, several legislative policies are needed:

1. Congress should, as soon as possible, renew the Price-Anderson Act indefinitely. It is a proven framework that has worked for over 45 years.
2. Congress should amend the Atomic Energy Act to remove statutory requirements that are no longer necessary, including those mandating that the NRC conduct antitrust reviews of applications to build new nuclear plants, and statutory prohibition on foreign ownership of U.S. commercial nuclear power.
3. The secretary of energy should be authorized to provide financial incentives—loans that would be paid back, loan guarantees and lines of credit—to a limited number of new nuclear projects.
4. Congress should continue to support nuclear energy research and development programs at DOE, including the Nuclear Energy Research Initiative and the Nuclear Energy Plant Optimization programs, Nuclear Power 2010 and the university program.
5. Updated tax treatment should reflect today’s business environment. As such, reform of the treatment of decommissioning funds, as proposed in the House version of H.R. 4 that passed last year, also should be enacted. And in order to stimulate continued investment in our critical energy infrastructure, the depreciation period for nuclear plants and other large, energy-related capital projects should be made equitable with that for other industrial investments.
6. And Congress must ensure that money paid into the Nuclear Waste Fund by American consumers is fully available to support the Yucca Mountain program. We encourage the committee to support the administration’s proposal to adjust the Nuclear Waste Fund’s discretionary spending cap and to work with the Administration on a longer-term, permanent fix.

In conclusion … America’s economic strength depends on a strong, reliable energy supply. Nuclear energy is a vital component of that supply. Any prudent national energy policy must include provisions for expansion of the nuclear energy industry for the benefit of all Americans.

Thank you.