Testimony for the Record
Marvin S. Fertel
President and Chief Executive Officer
Nuclear Energy Institute
Appropriations Subcommittee on Energy and Water Development
U.S. House of Representatives
March 30, 2012
The Nuclear Energy Institute1
(NEI) supports the Administration’s request for Fiscal Year 2013 (FY13) funding for the Nuclear Regulatory Commission (NRC) ($1.053 billion), the DOE National Nuclear Security Administration (NNSA) Fissile Materials Disposition program ($921 million), and the DOE Office of Environmental Management ($5.7 billion). NEI recommends $117 million more for the DOE Office of Nuclear Energy ($792 million), and an increase of $1 million to restore the NNSA Export Control Review and Compliance program to $12.5 million.
Uranium Enrichment D&D Fund Tax Undue Burden on Electricity Consumers
The Administration’s FY13 budget proposes to reinstate the uranium enrichment decontamination and decommissioning fund, with a tax on electric consumers of $200 million a year until 2022. Electric utilities have already paid twice for decontamination and decommissioning at uranium enrichment plants that were originally operated by the Department of Energy—first as part of the price for uranium enrichment services from the facilities and again under 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. Because the industry has fully met its obligation for the cleanup of the government facilities twice already, NEI strongly opposes the Administration’s proposal. The industry appreciates the support of the subcommittee in rejecting this proposal in prior years and encourages you to continue to oppose this proposal. Ensuring a Strong Nuclear Regulatory Commission
An independent, credible regulatory agency is required for public confidence in commercial nuclear energy facilities. During the next couple of years, the NRC must continue its inspection and licensing activities at America’s nuclear energy facilities while implementing safety recommendations of the agency’s task force based on lessons learned from the Fukushima Daiichi accident. Effectiveness of the five-member commission is essential to ensure NRC staff and licensees alike have clear policy guidance. 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 FY13 funding at the NRC’s requested level of $1.053 billion, an increase of $15 million above its FY12 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 3,927 staff proposed in FY13, and from $487 million in FY01 to more than $1 billion proposed in FY13. The industry is aware that the agency has $32 million in unobligated balances from prior years’ appropriations. The NRC chairman has suggested that the additional Fukushima-related work would amount to nearly $30 million in new spending. If the agency does not plan to allocate these funds in this manner, the industry believes that the unobligated balances should be used to reduce licensee fees in future years.
The industry applauds the oversight of the NRC by Congress to ensure the agency effectively prioritizes its activities and achieves closure on open issues in a timely and appropriate manner. The agency 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 taxpayers in appropriated funds. In any one year, the NRC should ensure that these programs are funded at the entire 10 percent of available funds. A firewall should exist between fee-based 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 industry-specific activities.
Once again, the Administration has proposed terminating the Integrated University Program, which supports the nation’s universities and community colleges. This program supports important nuclear science and engineering research and workforce training. Given that more than half of America’s green jobs in the electric sector are at nuclear energy facilities, it is vital that Congress provide financial support for students and junior faculty. The NRC 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 FY13 and recommends that NRC fund the program at that level.Adopting the Recommendations of the Blue Ribbon Commission on America’s Nuclear Future
NEI supports the general policy recommendations of the Blue Ribbon Commission (BRC) on managing used nuclear fuel and high-level radioactive waste. A DOE task force is scheduled to provide a plan on implementing the recommendations to Congress by the end of July, and industry believes that report should provide a basis for the FY13 budget. The following programs deserve support and represent the highest priorities for the nuclear energy industry:
- Fuel Cycle Research and Development - $191 million (an increase of $16 million)
- Used Nuclear Fuel Disposition (the BRC recommendations) - $60 million
- Advanced Fuel Research and Development - $60 million (+$20 million)
NEI also supports the request of $10 million derived from the Nuclear Waste Fund to use on used fuel storage and disposal programs at DOE. NEI urges the subcommittee to support the following initiatives using $10 million from the Nuclear Waste Fund in FY 13. DOE should:
- Work closely with utilities, and based on work performed by the Department in FY12, develop timelines, specifications and estimated costs for the development, licensing, construction, and operation of a consolidated storage facility for spent nuclear fuel and high level waste;
- Work closely with affected states, Indian Tribes, and utilities to develop detailed transportation plans for moving spent nuclear fuel from the sites of nuclear power plants that have ceased operation to a consolidated storage facility;
- Work closely with affected states, Indian Tribes, and utilities, to develop and implement a plan for training first responders in preparation for transportation under section 180c of the Nuclear Waste Policy Act of 1982 (42 U.S.C. 10101); and,
- Identify communities potentially interested in hosting a consolidated storage facility; and,
- Forward to the appropriate committees of the Senate and House of Representatives a budget and authorizing legislation for recommendations from DOE.
Within the DOE Fuel Cycle R&D program, $5 million should be used in FY13 to collect data on the aging characteristics of used nuclear fuel in dry cask storage systems, to support the extended use of these systems, and ensure their transportability after periods of extended storage. The Advanced Fuel R&D program will focus on the Accident Tolerant Fuel Initiative which is important to long-term light water reactor fuel development and should receive $60 million in FY13.
The nuclear industry remains concerned about the termination of the Yucca Mountain project. The project should proceed and be funded so the technical review of the license application can be completed. 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. We urge the committee to request a specific plan, including the resources required for completing the Yucca Mountain licensing process, assuming the courts rule the application cannot be withdrawn.Development of Advanced Reactor and Fuel Technologies
The proposed DOE Office of Nuclear Energy FY13 budget is 12 percent lower than FY12 while other DOE non-nuclear programs are funded at much higher levels. Funding was reduced by 17 percent in research and development programs that are vital to the nation’s interest in nuclear energy, science and technology. These cuts in DOE programs hinder the nation’s ability to manage used nuclear fuel and promote key research in innovative reactor concepts. The following programs deserve support and represent the highest priorities for the nuclear energy industry:
- Small Modular Reactor Licensing Technical Support - $95 million (+$30 million)
- Light Water Reactor Sustainability Program - $25 million (+$4 million)
- Energy Innovation Hub for Modeling & Simulation - $25 million
- Integrated University Program - $5 million (+$5 million)
- Next Generation Nuclear Plant - $41.5 million (+$20 million)
The Secretary of Energy strongly supports the small modular reactor licensing program and has proposed a five-year, $452-million program. Unfortunately, the DOE FY13 request of $65 million falls well short of that obligation, and the industry requests that funding be increased to $95 million. DOE made a similar five-year $250 million commitment for the Modeling and Simulation Hub and it is vitally important that this program receive the funding necessary to succeed. In addition, the Light Water Reactor Sustainability program that is cost-shared with industry should receive $4 million more than the DOE FY 13 request to implement research to extend the licenses of the nation’s operating reactors.
Industry Supports the 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 the subcommittee to maintain the appropriated funds for projects under development for FY13.
There is no cost to taxpayers for nuclear energy project loan guarantees, but there is significant benefit to consumers. 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. However, the clean energy loan guarantee program, although essential, is not yet a workable financing platform. NEI 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 Cleanup and National Security
DOE’s budget for the Environmental Management Office should be kept at level funding to ensure DOE meets its FY13 enforceable environmental compliance milestones. NEI remains concerned about NNSA’s Part 810 export control rulemaking. The industry has identified several issues that will impact the implementation of the program in FY13. The NEI urges the subcommittee to consider the impact to the U.S. industry as a result of the inadequate funding of $11.4 million proposed for FY13 for review of export licenses, about $1 million less than last year. NEI supports the Administration’s request of $921 million for the Fissile Materials Disposition program.
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.