[Senate Hearing 110-1252]
[From the U.S. Government Publishing Office]





                                                       S. Hrg. 110-1252
 
                    NUCLEAR REGULATORY COMMISSION'S
                   LICENSING AND RELICENSING PROCESS
                           FOR NUCLEAR PLANTS

=======================================================================

                                HEARING

                               before the

                       SUBCOMMITTEE ON CLEAN AIR 
                           AND NUCLEAR SAFETY

                                 of the

               COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS
                          UNITED STATES SENATE

                       ONE HUNDRED TENTH CONGRESS

                             SECOND SESSION

                               __________

                             JULY 16, 2008

                               __________

  Printed for the use of the Committee on Environment and Public Works
  
  
  
  
  
  
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               COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS

                       ONE HUNDRED TENTH CONGRESS
                             SECOND SESSION

                  BARBARA BOXER, California, Chairman
MAX BAUCUS, Montana                  JAMES M. INHOFE, Oklahoma
JOSEPH I. LIEBERMAN, Connecticut     JOHN W. WARNER, Virginia
THOMAS R. CARPER, Delaware           GEORGE V. VOINOVICH, Ohio
HILLARY RODHAM CLINTON, New York     JOHNNY ISAKSON, Georgia
FRANK R. LAUTENBERG, New Jersey      DAVID VITTER, Louisiana
BENJAMIN L. CARDIN, Maryland         JOHN BARRASSO, Wyoming
BERNARD SANDERS, Vermont             LARRY E. CRAIG, Idaho
AMY KLOBUCHAR, Minnesota             LAMAR ALEXANDER, Tennessee
SHELDON WHITEHOUSE, Rhode Island     CHRISTOPHER S. BOND, Missouri

       Bettina Poirier, Majority Staff Director and Chief Counsel
                Andrew Wheeler, Minority Staff Director
                              ----------                              

              Subcommittee on Clean Air and Nuclear Safety

                  THOMAS R. CARPER, Delaware, Chairman
JOSEPH I. LIEBERMAN, Connecticut     GEORGE V. VOINOVICH, Ohio
HILLARY RODHAM CLINTON, New York     JOHNNY ISAKSON, Georgia
BERNARD SANDERS, Vermont             LAMAR ALEXANDER, Tennessee
BARBARA BOXER, California (ex        JAMES M. INHOFE, Oklahoma (ex 
    officio)                             officio)
                            C O N T E N T S

                              ----------                              
                                                                   Page

                             JULY 16, 2008
                           OPENING STATEMENTS

Carper, Hon. Thomas R., U.S. Senator from the State of Delaware..     1
Voinovich, Hon. George, V., U.S. Senator from the State of Ohio..     4
Lautenberg, Hon. Frank R., U.S. Senator from the State of New 
  Jersey.........................................................     5
Craig, Hon. Larry E., U.S. Senator from the State of Idaho.......     6
Sanders, Hon. Bernard, U.S. Senator from the State of Vermont....     9
Inhofe, Hon. James M., U.S. Senator from the State of Oklahoma...    11
Johnny, Isakson, Hon., U.S. Senator from the State of Georgia....    14
Alaxander, Lamar, Hon., U.S. Senator from the State of Tennessee.   220

                               WITNESSES

Klein, Hon. Dale E., Chairman, Nuclear Regulatory Commission.....    20
    Prepared statement...........................................    22
    Responses to additional questions from Senator Boxer.........    32
    Response to an additional question from Senator Carper.......    40
    Responses to additional questions from Senator Inhofe........    42
Jaczko, Hon. Gregory B., Commissioner, Nuclear Regulatory 
  Commission.....................................................    86
    Responses to additional questions from Senator Boxer.........    88
Lyons, Hon. Peter B., Commissioner, Nuclear Regulatory Commission    92

Svinicki, Hon. Kristine L., Commissioner, Nuclear Regulatory 
  Commission.....................................................    93

Bell, Hon. Hubert T., Inspector General, Nuclear Regulatory 
  Commission Accompanied By: Anthony Lipuma, Deputy Assistant 
  Inspector General For Audits Mulley, George, Senior Level 
  Assistant For Investigative Operations.........................   114
    Prepared statement...........................................   117
    Responses to additional questions from Senator Boxer.........   129
    Response to an additional question from Senator Carper.......   130
    Response to an additional question from Senator Inhofe.......   130
Christian, David A., President And Chief Nuclear Officer, 
  Dominion Nuclear...............................................   131
    Prepared statement...........................................   133
    Responses to additional questions from Senator Inhofe........   143
Pietrangelo, Anthony R., Vice President, Nuclear Energy Institute   144
    Prepared statement...........................................   146
    Responses to additional questions from Senator Boxer.........   158
    Response to an additional question from Senator Carper.......   159
    Responses to additional questions from Senator Inhofe........   159
Webster, Richard, Legal Director, Eastern Environmental Law 
  Center.........................................................   165
    Prepared statement...........................................   169
    Responses to additional questions from Senator Boxer.........   176
    Response to an additional question from Senator Carper.......   178
Romm, Joseph, Senior Fellow, Center For American Progress Action 
  Fund...........................................................   187
    Prepared statement...........................................   189
    Responses to additional questions from Senator Boxer.........   201
Gilbertson, H. John, Jr., Managing Director, Goldman, Sachs and 
  Company........................................................   205
    Prepared statement...........................................   207
    Response to an additional question from Senator Boxer........   210

                          ADDITIONAL MATERIAL

Statement of Eastern Environmental Law Center....................   221

 
                    NUCLEAR REGULATORY COMMISSION'S 
                  LICENSING AND RELICENSING PROCESSES 
                           FOR NUCLEAR PLANTS

                              ----------                              


                        Wednesday, July 16, 2008

                               U.S. Senate,
         Committee on Environment and Public Works,
               Subcommittee on Clean Air and Nuclear Safety
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 10 a.m. in 
room 406 Dirksen Senate Building, Hon. Thomas R. Carper 
(chairman of the committee) presiding.
    Present: Senators Carper, Voinovich, Inhofe, Lautenberg, 
Cardin, Sanders, Isakson, Craig

              STATEMENT OF HON. THOMAS R. CARPER, 
             U.S. SENATOR ROM THE STATE OF DELAWARE

    Senator Carper. The Subcommittee will come to order.
    Senator Voinovich and I are pleased to welcome all of you 
this morning, particularly our first panel of witnesses. Thank 
you for joining us.
    Today's hearing provides oversight on the Nuclear 
Regulatory Commission's licensing and relicensing processes for 
nuclear plants. Senators are going to have roughly 5 minutes 
for opening statements, then we will recognize the Chairman of 
the Nuclear Regulatory Commission and each of our commissioners 
to offer their statements to our Committee.
    Chairman Klein is prepared to give us a statement about 5 
minutes in duration, and our commissioners, Commissioner 
Jaczko, Commissioner Lyons and Commissioner Svinicki will each 
have about 2 minutes to offer any additional thoughts that you 
might have.
    Following the commissioners' statements, we will have two 
rounds of questions, and then we will ask our second panel of 
witnesses to come forward and present and respond to our 
questions as well.
    A number of you, at least three of our witnesses on this 
first panel, Senator Voinovich, Senator Craig, have been before 
us any number of times. One of them looks, I don't recall 
seeing one of the commissioners on the other side of this table 
before, but I know that she is somebody that you have worked 
with for a long, long time, and we welcome you and thank you 
for joining us today.
    As Americans face tough issues like global warming, like 
air pollution, a sluggish economy and high energy costs, I 
believe our hearing today on nuclear energy is more than 
timely. By creating a strong nuclear industry we can help 
reduce our growing reliance on foreign oil and unchain our 
economy from the whims of hostile governments. We can also 
reduce air pollution that damages our environment, harms our 
health and contributes to global warming.
    Nuclear power provides reliable power, and provides it 
cleanly. Unlike fossil fuel power plants, nuclear power plants 
do not emit sulfur dioxide, do not emit nitrogen oxide, do not 
emit mercury, nor do they emit carbon dioxide. Over the past 12 
years, the current nuclear fleet has prevented emissions into 
our air something like 8.7 metric tons of carbon dioxide, 47.2 
million tons of sulfur dioxide, and 18.9 million tons of 
nitrogen oxide. These air pollution reductions equal lives 
saved.
    A recent statement by the U.S. Department of Energy says 
that by the year 2030, America's demand for electricity will 
grow by some 25 percent. Nuclear energy is a viable, carbon-
free option to help meet our growing electricity needs. In 
these times of increasing unemployment, it is important to 
remember that the nuclear industry provides good jobs for a 
highly skilled American work force.
    A recent Clean and Safe Energy report projected that a 
nuclear renaissance would create about 38,000 nuclear 
manufacturing jobs in the United States. These will be good-
paying jobs that could be filled by our soldiers coming back 
home from Iraq and from Afghanistan, or by Americans who have 
been recently laid off in our auto industry. In short, our 
Country needs nuclear power. And luckily, new nuclear power is 
on the way.
    Over the past few years, my colleague and friend from Ohio, 
Senator Voinovich--who just celebrated a birthday yesterday--
Senator Voinovich and I have worked closely, and he doesn't 
look any the worse for wear, I would say.
    [Laughter.]
    Senator Carper. We have worked closely together in this 
Subcommittee to make the nuclear renaissance a reality, and a 
lot of other people worked with us. I believe we have made 
significant progress. Every day, we are getting closer to 
seeing a new generation of nuclear power in America.
    The Nuclear Regulatory Commission, or the NRC, is now to 
receive nine license applications for the first reactors to be 
built in this Country, I believe in more than 30 years. And the 
Commission expects several more this year. It is expected that 
34 new nuclear units may be built in the next 10 to 15 years.
    In addition to these facilities, the current nuclear fleet 
has increased its capacity and is extending its lifetime 
through the Commission's renewable license process. Out of the 
104 nuclear facilities currently in operation, the NRC has 
granted roughly half of them an operating extension of 20 
years. The other half are expected to request similar 
extensions.
    However, for the nuclear industry to be truly successful, 
one word is key. I know the commissioners can tell us what that 
word is, and that word is safety. Without a safe nuclear 
industry, there will be no nuclear industry. There will not be 
the reductions in SOx, NOx and mercury and CO2 that I talked 
about. There will not be the 38,000 plus manufacturing jobs 
that I talked about. There will not be the reduction in our 
dependence on foreign oil that we discussed, or other fossil 
fuels.
    We are only as strong as our weakest link. That is why 
today's examination of the Nuclear Regulatory Commission is so 
important.
    We called this hearing to discuss the NRC's licensing and 
relicensing processes for both old and new nuclear power 
plants. We want to make certain that the NRC has the resources 
as well as the right tools and structures in place to continue 
to ensure nuclear safety. This includes making certain the NRC 
does not focus on one process and forget the other. Getting 
these processes right is crucial for the nuclear industry to 
move forward.
    Having said that, I look forward to working with my 
colleagues, certainly Senator Voinovich, who helps to lead this 
Subcommittee and has for some time, and one of our previous 
leaders in the Subcommittee for many years, Senator Inhofe, who 
has joined us, and Senator Boxer and many others, to continue 
to ensure the safety of the nuclear industry.
    Senator Voinovich.
    [The prepared statement of Senator Carper follows:]

        Statement of Hon. Thomas Carper, U.S. Senator from the 
                           State of Delaware

    At a time when Americans are facing high food and fuel 
prices, I believe today's hearing on the Renewable Fuel 
Standard is an especially timely topic. As many of you know, 
the Renewable Fuel Standard is within the Clean Air Act--and 
therefore under the jurisdiction of this Subcommittee. Although 
this is the first hearing in the Subcommittee on this issue--I 
assure you, it will not be the last.
    First implemented in the 2005 Energy Policy Act and 
enhanced in the 2007 Energy Independence and Security Act, the 
Renewable Fuel Standard is intended to promote energy 
independence and protect the environment. The EPA must 
implement the Renewable Fuel Standard to meet both these 
objectives.
    Of course, there are several other critical issues that 
must be carefully weighed when considering the effectiveness of 
the Renewable Fuel Standard. Increasing energy prices are 
already placing a strain on families across this Nation. In 
light of growing gas prices, there are a number of things I 
believe can be done that will reduce financial burdens as well 
as provide energy security:

    1. I believe that oil and gas companies should drill for 
oil on the 68 million acres of land that Federal Government has 
provided. In addition, Congress has approved opening a 1.5 
million acre section off the Gulf of Mexico to new drilling.
    2. The lion's share of oil produced in the United States 
should stay in the United States. Most of our oil should be 
sold to Americans and consumed here, not shipped overseas.
    3. Our nation must make a stronger commitment to reducing 
our energy demands through conservation and investments in 
renewable energy alternatives. I also believe we must develop 
advanced biofuels that reduce greenhouse gas emissions and do 
not divert crops from the food stream.

    Increasing food prices have been blamed on biofuel 
mandates. From leaked reports to published studies, the impact 
of biofuel mandates and subsidies on rising commodity prices 
ranges from 3 percent to 75 percent. In truth, we don't know 
the exact impact on food costs. But we do know that technology 
is coming online that will enable us to produce the biofuels 
needed to support energy independence and reduce greenhouse gas 
emissions without impacting food prices.
    We must evaluate any unintended consequences of the 
renewable fuel provisions. As academia, government and industry 
continue to research these effects, this subcommittee will 
maintain strong oversight.
    Today, however, we will begin to review the methods the EPA 
will use to evaluate the greenhouse gas emissions of biofuels 
compared to traditional fuels. In addition, we will hear 
testimony about advancements in next generation biofuels. It is 
important that we take a close look at the State of new 
biofuels, which will be based on feed stocks of waste materials 
that are not competing with food sources.
    I am excited about the investments and advancements DuPont 
is making in renewable fuels. And look forward to hearing about 
the results of the company's current pilot programs. We need to 
ensure that facilities to manufacture new biofuels and the 
infrastructure needed to deliver the products to the public 
will be in place to meet the established target of 20 billion 
gallons of advanced biofuels by 2022. The Renewable Fuel 
Standard makes these new biofuels technologies a viable choice 
for business.
    Ultimately, the Renewable Fuel Standard must be implemented 
in a way that positively impacts the environment and economy. I 
believe this subcommittee must work together to make sure this 
happens.
    I am grateful to all the witnesses here to today, and look 
forward to hearing your testimony.

          STATEMENT OF HON. GEORGE V. VOINOVICH, U.S. 
                 SENATOR ROM THE STATE OF OHIO

    Senator Voinovich. Thank you, Mr. Chairman. I really 
enjoyed working with you and Senator Inhofe on oversight of the 
Nuclear Regulatory Commission, and really appreciate the 
cooperation that we've received from the Chairman and members 
of the Commission. We dearly care about what you're doing and 
the impact it is having on our Country.
    Mr. Chairman, I was back in Ohio over the Fourth of July 
weekend and talked with folks about high gas prices. They were 
very frustrated at the high cost of gasoline and angry that 
Congress does not seem to be doing anything about it. They told 
me about how the price of gasoline is seriously affecting their 
lives, from their ability to affordably commute to work, to 
take vacations with their family. And because energy prices are 
a form of regressive tax, it is affecting people who live on 
the financial edge the most. Our standard of living in many 
parts is going down in this Country because of the high cost of 
energy.
    A recent report by the FBR Research estimates that Ohioans 
could spend 13.5 percent of their disposable personal income on 
gasoline, electricity and home heating during the next 12 
months. Ohioans are contacting me daily with a clear message: 
increase our supply of oil and develop a comprehensive energy 
strategy. Our constituents want us to lead this Country out of 
this crisis. As a Nation, we must work to achieve energy 
independence, but we must do so in a way that balances our 
environmental objectives.
    What we need is a rational attempt to create a bridge to a 
carbon-constrained world that will give us the time we need to 
develop technologies that will lead us to a cleaner, energy-
independent future without destroying jobs and ruining our 
competitiveness during the transition. In this context, there 
is a growing realization that nuclear power must play an 
increasing role in our Country's energy mix. In his recent 
book, The Age of Turbulence, Adventures in a New World, Alan 
Greenspan writes that nuclear power is a major means to combat 
global warming, and its use should be avoided only if it 
constitutes a threat to life expectancy that outweighs the 
gains it could give us. By that criterion, he believes that we 
have significantly under-used nuclear power. I think that I 
don't have to remind folks that we do have 104 nuclear power 
plants operating today. They represent over 70 percent of the 
Nation's emission-free generation portfolio, avoiding annually 
680 million tons of carbon dioxide, compared with 13 million 
tons for wind and a half million tons for solar. That is a big, 
big reduction in carbon dioxide.
    To be sure, we must have a greater efficiency, more demand 
side management and more renewable energy, all of which play a 
role in reducing the amount of carbon we emit. But renewable 
energy sources like solar and wind are intermittent and 
unreliable. The fact of the matter is that most of us know that 
we have to do a much better job in terms of increasing nuclear 
power in this Country.
    It is interesting that the Lieberman-Warner bill, when EPA 
looked at it, said that in order to get the reductions that it 
anticipated, we would have to have a 150 percent increase in 
nuclear power by 2050. We are talking 150 new nuclear power 
plants. So what we are talking about here today is the license 
renewal process, and also the new licensing that is going to go 
on, it is so very, very important. I was very pleased to learn 
that our Committee's efforts have helped the NRC to attract and 
hire over 1,000 new employees since 2005, with a net gain of 
over 500 employees after attrition, mostly due to retirement. 
So you have looked forward to the human capital crisis that we 
have and are compensating for it.
    While the NRC's new licensing process will be a significant 
improvement over the old process, a level of health and 
skepticism remains by virtue of the fact that the new process 
has not yet been tested. We want to find out how you folks 
think that you are doing.
    Since 2003, we have had eight NRC oversight hearings and 
over a dozen meetings in my office with the NRC Chairman, and 
now Dale Klein. Senator Carper and I are continuing with these 
meetings since he took over the chairmanship of the 
Subcommittee. So I think all of you know this, that the two of 
us are dead serious about oversight. We care about what you are 
doing, every aspect of it. We had a nice meeting recently with 
Chairman Klein and laid out two or three things that the two of 
us working together can do to help you do your job better. So 
we are with you and we are anxious to hear from you.
    Senator Carper. Senator Voinovich, thank you very much.
    We are going to bounce over to the Democratic side here, 
Senator Lautenberg, followed by Senator Craig. Senator 
Lautenberg, you are recognized at this time. Welcome.

          STATEMENT OF HON. FRANK R. LAUTENBERG, U.S. 
              SENATOR ROM THE STATE OF NEW JERSEY

    Senator Lautenberg. Thanks very much, Mr. Chairman. Thank 
you for enabling me to participate in this Subcommittee 
hearing, even though I am not an official member. I am an 
official interested party, I can tell you.
    First, it is critical to understand how essential nuclear 
power is to my State. In fact, about half the energy coming 
into New Jersey's homes and businesses is nuclear. I can't help 
but think about a time not too many years ago when nuclear was 
a dirty word. Now we face up to the reality of need and 
understand that nuclear certainly has a place and a position 
that will help us in other areas of energy resource.
    But everyone understands, though nuclear is so important in 
supply in my State, safety is the largest factor. One can't 
help but think back to a time when a couple of nuclear plants 
were built with billions of dollars invested and then abandoned 
because safety couldn't be guaranteed. We don't want that to 
happen.
    So we will not trade safety for the sake of meeting our 
energy demands. And that is a, I think, in all candor, that we 
believe that these two requirements are available and should be 
pursued in the name of safety. We need to focus on the 
licensing and especially the relicensing process to make sure 
that we are not putting any plants back online that could put 
any communities in danger. The NRC, or the Nuclear Regulatory 
Commission, is tasked with overseeing this industry. 
Communities rely on the NRC to strictly enforce the rules, make 
sure that the plants are safe.
    However, the NRC is currently not doing enough to follow 
the rules designed to protect the communities nearby nuclear 
power plants. Last year, the Nuclear Regulatory Commission's 
own Inspector General concluded that the Commission was not 
performing due diligence when it came to license renewals. In 
particular, the IG could not tell whether the NRC actually did 
its job to audit, review and verify the safety applications it 
received from the companies. In fact, I quote the Assistant 
Inspector General, he said that ``The safety analysis was 
probably done, it is just that we don't have sufficient 
evidence to know whether it was or it wasn't done.''
    Mr. Chairman, probably is not good enough. The communities 
surrounding the Oyster Creek facility in New Jersey, the oldest 
operating nuclear plant in the United States, cannot rely on 
probabilities. The NRC must do better, the NRC has an 
obligation to conduct real oversight of the Nation's nuclear 
plants.
    We also need the Commission to be more responsive to the 
needs and views of the public. New Jersey's residents have been 
forced to fight just to submit their views on the relicensing 
of Oyster Creek. And no one should have to fight that hard to 
make themselves heard when there is a nuclear facility in their 
back yard.
    Mr. Chairman, energy is on everybody's minds these days. 
People are concerned about how they are going to pay for 
everything, from gas for their cars to electric bills for their 
homes. But we can't be rushed; we can't be hasty. We need for 
the NRC to do its job, put safety ahead of speed when it comes 
to licensing nuclear power plants. And we believe that the NRC 
has the capability to do that and urge it to do just that.
    Thank you, Mr. Chairman.
    Senator Carper. Thank you, Senator Lautenberg.
    Under the early bird rule, Senator Craig, you are next. 
Senator Inhofe has asked you to go ahead and speak next, and 
then we will go back to Senator Sanders and then to Senator 
Inhofe.
    Senator Craig.

            STATEMENT OF HON. LARRY E. CRAIG, U.S. 
                 SENATOR ROM THE STATE OF IDAHO

    Senator Craig. Mr. Chairman, again, thank you for holding 
this hearing and allowing me to participate in it.
    I appreciate the commissioners being with us. It is the 
first time as a commissioner that Kristine Svinicki is with us. 
She was with me a good number of years, working on these very 
issues. So she brings to the Commission a variety of talents 
that I think you commissioners are finding are a great asset to 
your deliberations.
    Mr. Chairman, I just returned from France and a week with 
the nuclear industry of France, in which a country now receives 
over 80 percent of its energy from nuclear. I went to a 
reprocessing plant, I watched a new reactor coming up out of 
the ground, literally, by construction. I went to a new fuel 
enrichment plant that is being built, a footprint of one of a 
kind that may be built in Idaho.
    While I looked at the physicalness of all around me, most 
of my questions were about public confidence. Because in France 
today there is a high level of public confidence in their 
nuclear industry and in their generating capacity. They not 
only have a clean fuel, they are able to sell a clean fuel to 
many other countries in Western Europe.
    Now, I have said that to the Chairman, I turned to the 
Commission. While I have heard the Chairman say and while I 
have heard Senator Lautenberg talk about safety, I see that as 
only one of three key ingredients to the success of a nuclear 
renaissance in this Country. Because a renaissance speaks about 
growth and revitalization, when in fact, our Country almost 
killed the nuclear industry. It was a near wipe out, prior to 
the Energy Policy Act of 2005, when we began to put in place 
procedure again that would allow the NRC to do certain things. 
And for our Country to realize, in a time when we wanted clean 
energy, that there was in fact a clean energy source out there, 
if we could do a variety of things to bring it back.
    In fact, in this very room, we have debated climate change, 
and much of that debate was based on the ability to switch to a 
clean energy source, until the Committee found out, and members 
of the Committee found out that clean energy source might not 
be available or as readily available in a timely fashion in the 
way that we expected it to be.
    Gee, we were going to build 10 or 15 plants just in the 
next few years. Not so, Mr. Chairman, not so at all. There are 
several factors if that is to happen in the next 20 years. And 
most of it, in part, rests right here with this Commission and 
these commissioners. Not only is safety a factor, but so is 
confidence. Confidence in the market, confidence in the 
financial community that what this Commission does, they do 
well, that safety is forefront. But it is also confidence that 
they can proceed in a timely fashion and deliver these plans to 
the street and these licenses to the street in a way that the 
marketplace can anticipate them with confidence.
    The other side of it is a utility having certainty, 
certainty that the design that they are going to proceed with 
has the confidence of the market and the safety of public 
acceptance. So it isn't just one factor, Mr. Chairman, in my 
opinion. It is a multiple of at least three. It is confidence, 
it is certainty and it is safety.
    How do you get confidence? Well, a major utility recently 
tried to site a new greenfield operation in Idaho. Mr. 
Chairman, a greenfield means it is not being sited near an 
existing reactor. It is a new site, a new reactor. And in my 
State of Idaho, there is reasonable confidence in the nuclear 
industry. It is probably a pretty good place to site.
    They spent millions of dollars, location, water and walked 
away. The reason they walked away, because of the time line 
they were being told it would take to bring them to license.
    Now, I understand where we are headed, and I understand the 
time it takes to re-gear, to employ, to build the confidence to 
do the right things. And I look at this chart, Mr. Chairman, 
and I see these time lines, way out to 2012 and 2013. And I 
think this represents maybe four reactor designs.
    What I hope this Committee can achieve, Mr. Chairman, 
because I am not going to be here next year, or any year 
thereafter, but I hope you work very closely with this 
Commission and you work with them not just once a year but 
maybe twice a year, that you achieve a process and a procedure 
that has the public safety in mind, but the confidence of the 
market and the certainty for the utility industry that they 
have brought about at least three or four designs that are 
there on the shelves. They have been basically licensed as a 
design. And the responsibility beyond that then is the siting. 
It is the site of integrity: is it geologically sound? Does it 
meet the criteria? Does it satisfy the public? And this should 
all be done in a very open public process. Transparency is 
absolutely critical.
    Senator Lautenberg said it, confidence, certainty, safety. 
All is a product of transparency and openness. That was the key 
thing I heard in France. When there was a question, they were 
open, they were public about all that they do over there. As a 
result, over the 20 years since we left the industry and they 
picked it up and took our technologies and moved them forward 
to where they are today, they have gained that level that we 
are now attempting to rebuild.
    It is worth doing, Mr. Chairman. It is a great source of 
energy for our Country as baseload. We are going to build a lot 
of new energies. But this is the one that will fuel the plants, 
this is the one that will turn the lights on of industry. The 
rest will simply supplement.
    So thank you for holding this hearing. I probably took a 
little too long. But I think for this Commission to understand 
our urgency, but our willingness to be duly diligent, as they 
will be in the future development of a ``renaissance'' 
industry, you have to get it right this time, and you can, and 
we know how to do it.
    Thank you.
    Senator Carper. Thank you.
    When I was, I think, a junior in high school, I took a 
driver's education course. Most of us in the room have taken a 
driver's education course. I was in Roanoke, Virginia. And we 
were coming back from our first day out with our driver's ed 
teacher, and it was one of those cars, I don't know what it was 
like for you, but my instructor sat to my right hand side, 
having a steering wheel and actually had an accelerator and 
brakes on his side of the car.
    We were coming back in, pulling back into the lane of my 
high school, the drive-up lane. It was a new high school and 
the driveway was just being constructed. It was in gravel. As 
we turned in, I was probably going a little faster than I 
should have for my first time out. And I meant to put my foot 
on the brake and instead, as I made the turn onto the gravel 
drive, I depressed the accelerator, and sheer terror for the 
other students in the back seat. Fortunately, my instructor had 
the brake, and immediately began applying the brake as I 
applied the accelerator.
    I think as we look ahead to this licensing, new licensing 
process, we have probably one foot on the accelerator but one 
foot on the brake. And we may need both of them. But we need in 
the end to get this right, so if we are going to have the kind 
of confidence that you alluded to, we will be able to move 
forward.
    Senator Bernie Sanders. Welcome, Senator Sanders, you are 
recognized.

            STATEMENT OF HON. BERNARD SANDERS, U.S. 
                SENATOR ROM THE STATE OF VERMONT

    Senator Sanders. Thank you, Mr. Chairman.
    Perhaps I want to pick up on the issue of confidence, 
Senator Craig was talking about it, and maybe expressed it in a 
little bit different light. It is clear that public safety must 
be job No. 1 when it comes to nuclear power. But I must express 
serious concerns about the aging fleet of 104 nuclear power 
plants in this Country which, in my view, need much more 
oversight than they are currently getting before we talk about 
more nuclear power plants. In other words, we have to get it 
right today.
    In fact, I would be willing to bet that most people in our 
Country would be disturbed to learn that the Federal oversight 
role of nuclear power plants in our Country is currently quite 
limited in scope. And they would be equally upset to learn that 
Federal regulators rely so heavily on information that they get 
from nuclear power plant operators as part of the whole 
deregulation effort that we have seen since Ronald Reagan. And 
some of the implications that we are seeing in some of our 
financial markets today I think apply to nuclear power as well.
    I think that many people just don't know what is going on, 
and in my view, it is not what should be going on. But let me 
use, in my State, we have one nuclear power plant located in 
the southern part of the State, in Vernon. Let me use that just 
as an example to illustrate what I consider to be a failure of 
the NRC when it comes to oversight.
    On August 21st, 2007, one of the cells of the cooling tower 
collapsed. I think we have a photograph of that somewhere, 
there it is. An interesting point is, and I don't want to alarm 
people, this was not a safety issue. This was not radioactive 
waste streaming out into a river. But that is the reality of 
what happened on August 21st, 2007.
    Question: given that reality, was Energy fined? Did they 
pay any penalty for this glaring mistake, which was on the 
front pages of papers all over the State? How much did they 
pay? To the best of my knowledge, the answer is, they did not 
pay one nickel in a fine for that mishap. In fact, as I 
understand it, a ``non-cited'' violation was issued, which is 
the lowest level of citation.
    Then on August 30th, 2007, a week later, there was an 
emergency shutdown involving stuck valves. And then just last 
Friday, just last Friday, on July 11th, there was another 
problem with the cooling towers. This time it is leaking pipes. 
I think we have another photograph here.
    Again, I don't want to suggest to people that this was 
somehow a safety emergency. It is not. But this is again what 
took place in my State just last week. And the end result of 
that is, Senator Craig talks about confidence. Do you know 
what, Senator Craig? When people see this, and they find out 
that a company like Energy gets zero fine, confidence is not 
terribly high. Because common suggests that what we understand 
in this room, and I had the privilege yesterday of talking to 
both Commissioner Chairman Klein and Commissioner Jaczko, who 
made the point, and I understand it, these are not safety 
issues. I understand that. But you tell that to people that 
when this is going on, that a quarter of a mile away, you have 
extremely toxic waste, you know what? Peoples' confidence in 
the ability of that company to run that plant is not 
particularly high. You can spend the rest of your life saying, 
hey, don't worry about it, this is not a safety issue and 
people have concerns. And you know what? I share those 
concerns. It seems to me inexplicable that there are no fines 
attached to this lack of oversight.
    As I mentioned last October, I happen to strongly believe 
that the NRC should broaden its oversight programs, whether it 
be by supplementing the reactor oversight process with 
independent assessments when called for by a State, similar to 
what I have called for in legislation S. 1008, or by some other 
means, so that we can assure the American public that the 
nuclear power plants that we have aren't being guarded by the 
foxes.
    You want confidence? Then these guys are going to have to 
have the power to assure the American people that these plants 
are absolutely safe. What my legislation would allow is a 
Governor or public utility commission to request an independent 
safety assessment if they have a nuclear power plant in their 
State. If a State is in the emergency planning zone for a 
nuclear plant in the State next door, they certainly have an 
interest in these issues as well. That is why my legislation 
will allow them to make the same request.
    Critical times at nuclear plants call for special 
inspections, both to ensure the public safety but also to boost 
public confidence. When a facility is seeing a power up-rate, 
as was recently approved for Vermont Yankee and other plants 
around the Country, that is a critical time. When a nuclear 
plant is seeking to get 20 more years of life in an aging 
facility, that is also a critical time. Or when a nuclear plant 
has had a history of safety problems, that is also a critical 
time.
    These are the circumstances under which my legislation 
would allow for an independent safety assessment. So getting 
back to Senator Craig's point, you want confidence? Those are 
some of the things. This does not provoke confidence.
    Let me just move on a little bit. Some of my friends talk 
about nuclear renaissance. I don't know, I don't know if 
anybody in this room does know what the future of nuclear power 
in this Country may or may not be. But I do know that we are 
grossly underestimating the significance of energy efficiency 
and renewable energy as we attempt to deal with the energy 
crisis that we currently face.
    I could tell you that in my State, when I was mayor, we 
installed in my city of Burlington energy efficiency. And 
today, in Burlington, 20 years later, we are not using any more 
electricity than we did back then. And frankly, we can go a lot 
further. That is more or less true throughout the State of 
Vermont. So despite economic growth, if we are serious about 
energy efficiency, we can cut back a great deal on the use of 
electricity.
    In terms of sustainable energy, I think the potential is 
just extraordinary. Just last week, I was out in Nevada looking 
at a thermal solar plant out there.
    Senator Carper. I am going to have to ask the Senator to 
wrap up. Go ahead and complete your thought.
    Senator Sanders. I would just suggest that there are people 
out there who think that within 15 years, 20 percent of the 
electricity can come from solar thermal plants alone, excluding 
photovoltaics, which also have tremendous potential.
    Thank you, Mr. Chairman.
    Senator Carper. Senator Sanders, thank you very much for 
those thoughts.
    Senator Inhofe, and then we have been joined by Senator 
Isakson.

            STATEMENT OF HON. JAMES M. INHOFE, U.S. 
               SENATOR ROM THE STATE OF OKLAHOMA

    Senator Inhofe. Thank you, Mr. Chairman. Everyone always 
starts off by thanking you for having this hearing, but this 
time, I really mean it.
    Senator Carper. You mean you didn't mean it all those other 
times you said it?
    [Laughter.]
    Senator Inhofe. To hear you talk about the needs and the 
reality of where we are today and what we are going to have to 
do, I associate myself with all of your remarks and those of 
the Ranking Member, Senator Voinovich. I didn't realize until I 
heard your opening remarks reminding me that it was over 10 
years ago that I became chairman of this Committee. I remember 
at that time we actually had Senator Voinovich, who was then 
Governor Voinovich, come down and testify. So a lot of time has 
gone by, and fortunately, some things are happening now.
    But at that time, we had not had an oversight hearing of 
the NRC in over 10 years. And I suggest to you that you can't 
let any group, any entity in Government, any bureaucracy, go 
that period of time without having oversight. That is what we 
are supposed to be doing. So immediately after that, we started 
setting deadlines and good things started happening.
    And by the way, you would think there would be a pushback 
from the bureaucracy. There wasn't. The chairman and every 
member said, we have been wanting to have oversight for a long 
period of time. Well, that time is here now.
    So anyway, the U.S. electricity demand is projected to grow 
by 30 percent by 2030. And within the next 4 years, according 
to the North American Electric Reliability Council, six regions 
of our Country may not have adequate electricity supplies to 
ensure reliability. We need to have adequate, reliable and 
diverse energy supply to power this great Nation of ours. As 
has been said by everyone talking so far, all but one, anyway, 
nuclear is going to have to fill a great part of that.
    It was one of you who mentioned that the 104 nuclear plants 
that we have that provide, it was Senator Voinovich, I guess, 
that provide 70 percent of the emission-free, as far as CO2 is 
concerned. But that is still only 20 percent of the whole mix. 
And now with the new president of France, I can say nice things 
about him, France has 80 percent. So I think a lot of good 
things are happening. We are moving in the right direction.
    Last September, the NRC began to review licenses for new 
nuclear plants. This is a function the Commission has not 
performed since the 1970's, with a revised rule that has never 
been used before. The nature of the situation makes strong 
leadership by the Commission extremely important. I am 
concerned that the Commission is not providing the policy and 
schedule guidance necessary for this process to proceed 
smoothly.
    In 2004, the hearing notice for the LES National Enrichment 
Facility included a detailed schedule with deadlines for staff 
to complete various task, and for completion of the hearing 
itself. The notice also directed the hearing boards to exclude 
certain issues from their consideration, issues that the 
Commission would address directly. Accordingly, the license was 
issued in 31 months, nearly exactly the amount of time that was 
expected in the original schedule, which was 30 months, despite 
never having previously issued a license for a uranium 
enrichment facility. With the LES review as an example of 
efficient decisionmaking, it begs the question of why the same 
approach is not being used for new plant licensing.
    Hearing notices issued for the current license applications 
are generic and provide no such guidance or schedule. The NRC 
staff vaguely indicates 1 year for having the hearing process, 
but readily admits uncertainty about the time in the future. 
Certainty is something we have been talking about in these 
opening statements. Why the Commission is reluctant to ensure 
schedule discipline for including specific milestones in a 
hearing notice, I don't know.
    Let me just say this. I really think streamlining is 
necessary. We can do a better job than we are doing now, but we 
are headed in the right direction. The other day we had what I 
thought was a rather thoughtful news conference by T. Boone 
Pickens, a person that I have been honored to know for a long 
period of time. He talks about, you have to keep in mind when 
we talk about energy, we are talking about two almost 
unassociated, but they are associated, problems. One is the 
energy crisis in America. We are going to have to have energy 
to operate this machine called America. The other is the No. 1 
issue with Americans, the price of gas at the pump.
    What he was doing was saying, by diverting, although I 
think that perhaps I would choose nuclear over the source he 
was talking about, that would free up natural gas. And with the 
technology we have right now, with liquified natural gas, with 
compressed natural gas, and the price varies from State to 
State, but the price in Oklahoma for liquified natural gas to 
run your car is 99 cents a gallon. So he is talking about the 
idea of freeing it up.
    So it just seemed to me that this is the opportunity we 
have in using nuclear to free up some of the other sources 
until some of these really good things we look for in the 
future, the renewables and other opportunities become a 
reality, we can still bring the price down and do our job here 
in running this machine that we call America.
    So I am just glad that this Committee is going to stay 
hitched on a bipartisan basis and make sure this gets done, Mr. 
Chairman.
    [The prepared statement of Senator Inhofe follows:]

        Statement of Hon. James M. Inhofe U.S. Senator from the 
                           State of Oklahoma

    I commend Senators Carper and Voinovich for holding this 
hearing today, continuing the tradition of rigorous oversight 
that I started when I assumed the Chairmanship of this 
Subcommittee over 10 years ago. Back then, the nuclear industry 
was preparing to extend existing plant licenses and was very 
concerned about significant uncertainty in the process, 
particularly the time involved and the requirements necessary 
to receive the extension. Since then, as a result of strong 
oversight by this Subcommittee, almost half the fleet has been 
approved for an additional 20 years of operation. It is our job 
to ensure that the Commission is an efficient regulator, true 
to its mission of protecting public health and safety, but also 
able to issue sound decisions in a timely fashion.
    U.S. electricity demand is projected to grow 30 percent by 
2030. Within the next 4 years, according to the North American 
Electric Reliability Council, 6 regions of our country may not 
have adequate electricity supplies to ensure reliability. We 
need an adequate, reliable, and diverse energy supply to power 
this great nation of ours and nuclear energy is a vital 
component. New nuclear plants can't be built within the next 4 
years, but we need to ensure that new plants are being 
developed promptly and safely, to meet our growing needs.
    Last September, the NRC began to review licenses for new 
nuclear plants. This is a function the Commission has not 
performed since the 70's with a revised rule that has never 
been used before. The nature of this situation makes strong 
leadership by the Commission extremely important. I am 
concerned that the Commission is not providing the policy and 
schedule guidance necessary for this process to proceed 
smoothly.
    In 2004, the hearing notice for the LES National Enrichment 
Facility included a detailed schedule with deadlines for staff 
to complete various tasks and for completion of the hearing 
itself. The notice also directed the hearing boards to exclude 
certain issues from their consideration, issues that the 
Commission would address directly. Accordingly, the license was 
issued in 31 months, nearly achieving the Commission's original 
schedule of 30 months, despite never having previously issued a 
license for a uranium enrichment facility. With the LES review 
as an example of efficient decisionmaking, it begs the question 
of why the same approach is not being used for new plant 
licensing.
    Hearing notices issued for the current license applications 
are generic and provide no such guidance or schedule. NRC staff 
vaguely indicates 1 year for the hearing process but readily 
admits uncertainty about the timeframe. Why is the Commission 
reluctant to ensure schedule discipline by including specific 
milestones in hearing notices?
    Furthermore, key policy questions remain. Will the 
Commission defer to State agencies on determinations of the 
need for power? Will the Commission require licensees to 
analyze alternative sites if they have chosen to add a new 
reactor to an existing site?
    The lack of clear schedules and resolution of key issues 
will compound the growing pains that the Commission and the 
industry must wrestle with as we end our 30-year construction 
hiatus. These are complications we simply can't afford. The 
Commission's review of licenses for new nuclear plants must be 
as efficient as possible WITHOUT compromising safety. Keeping 
the lights on is fundamental to our nation's energy security 
and the NRC will undoubtedly play a critical role.
    Senator Carper. Thank you, Senator Inhofe.
    Senator Isakson, welcome.

            STATEMENT OF HON. JOHNNY ISAKSON, U.S. 
                SENATOR ROM THE STATE OF GEORGIA

    Senator Isakson. Thank you very much, Senator Carper. I 
echo what Senator Inhofe said, thank you very much, this is a 
very important and timely hearing.
    I will be very brief in the interest of hearing from the 
commissioners, except to make one statement and pose one 
question I hope you will give us a response to in your allotted 
time.
    I am one of those that subscribes to the belief that the 
solution to America's energy problem lies in a myriad of 
products, one of which is nuclear. Others are solar, others are 
wind, others are synthetic, others are clean coal. You can't 
just pick one favorite and say it is the magic bullet.
    But there is no question in my mind that without a robust 
nuclear energy program for electric energy, we can never get to 
where we need to get in terms of reducing carbon and having 
reliable energy at an affordable rate for the people of the 
United States of America. To that end, the Nuclear Regulatory 
Commission is in the cross-hairs at an interesting time and a 
propitious time. You have received and are getting ready to 
receive a number of applications. The nuclear renaissance that 
hopefully will happen in the United States is going to be 
triggered by your actions in terms of the processing time and 
the byproduct of that processing.
    It is critical that you have the resources. So in your 
remarks, I hope you will address this question. First question, 
do you have the resources to meet the demands of these two 
processes that we see in front of us, of the pending and soon 
to come applications for licensing, No. 1 and No. 2, can you do 
it in a timely but reliable and absolutely committed to safety 
process? The questions that Senator Sanders raised with regard 
to safety are appropriate questions. And the Nuclear Regulatory 
Commission is the key to ensuring that the confidence of the 
public is absolutely 100 percent in this process, so we can 
really have a nuclear renaissance in this Country that makes a 
meaningful difference in our current energy dilemma. I will 
appreciate your addressing that in your remarks when you get a 
chance.
    Thank you, Mr. Chairman.
    Senator Carper. Thank you. And Senator Voinovich wanted to 
add a comment. Please proceed.
    Senator Voinovich. I would just like to comment in terms of 
the issue of safety. We had a real problem at Davis-Besse in 
the State of Ohio. We had several hearings on that. There were 
lessons learned for the industry and there were lessons learned 
for the Nuclear Regulatory Commission. And we have continued to 
followup on that to make sure that those lessons really were 
learned.
    I would also like to point out that the Nuclear Energy 
Institute, NEI, really is concerned about safety. Because they 
know if something happens that it is a reflection on the entire 
industry, particularly at a time when we are talking about more 
nuclear power facilities. And last but not least, the Institute 
of Nuclear Power Operations, INPO, an industry organization 
itself, from what I understand, they put each of these 
management operations through the grinder to make sure they are 
doing the job that should be done.
    So the public should know that we are spending a lot of 
time on oversight, and that some of these independent 
organizations really do care about safety and the reputation of 
the nuclear industry. Thank you.
    And I would like to introduce, if you wouldn't mind, a 
paper that was published in Nuclear News, from the American 
Nuclear Society. It is one that I put together called Making 
the Nuclear Renaissance a Reality, which gets into all the 
various things we have to do if we expect to be successful when 
launching it.
    Thank you, Mr. Chairman.
    Senator Carper. Thank you. Without objection, it will be 
entered into the record.
    [The referenced information follows:]
    
    
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    Senator Carper. We said our piece, and we will have some 
questions here in a few minutes. Chairman Klein, you are 
recognized for 5 minutes, each of your colleagues for 2 
minutes. Try to stick roughly within those time constraints.
    So far, no votes have been ordered, so it looks like for 
this panel we have clear sailing. Chairman Klein, you are 
recognized, please proceed. Your entire statement will be made 
part of the record, as you know, and you are welcome to 
summarize. Thank you.

 STATEMENT OF HON. DALE E. KLEIN, CHAIRMAN, NUCLEAR REGULATORY 
                           COMMISSION

    Mr. Klein. Good morning, Chairman Carper and Senator 
Voinovich and distinguished members of the Subcommittee. We 
thank you for inviting us here today to talk about the 
activities that we have underway on the new reactor licensing 
and the license renewal process.
    As indicated previously, I would certainly like to 
acknowledge Commissioner Svinicki as a new member of our 
Commission. We certainly welcome not only her technical 
expertise but also her knowledge of the Senate in terms of how 
it conducts its business will help our communication as well.
    I would like to thank you for your continuing support for 
the NRC's activities. Because of your leadership and support, 
the NRC has successfully made the transition from preparing for 
new reactor technical reviews to actually doing them. At the 
same time, we remain focused on our top priority, and that is 
the safety and security of our existing licensees.
    Let me begin with a few words about the power uprates and 
license renewals. As of June 2008, the NRC has approved 119 
power uprates which have added the generating capacity of about 
5 new nuclear units. In addition, over half of the current 
fleet of operating reactors have received or are in the process 
of applying for license renewals.
    As you know, a plant's initial 40-year license can be 
renewed for an additional 20 years if technical and safety 
requirements are met. An NRC Office of the Inspector General 
report issued last September examined the effectiveness of the 
NRC's license renewal safety reviews. While it was generally 
positive, the OIG identified a number of areas for improvement, 
and we are responding to those suggestions. Let me assure you, 
the continued safety and security of all the operating reactors 
in the U.S. is of utmost concern to the NRC.
    Now let me turn to the case of the new reactors. The 
Congress has provided the NRC with the resources needed to 
successfully complete significant new reactor licensing 
activities. To date, we are on schedule. However, significant 
challenges remain. One involves the streamlined licensing 
process that was established under the so-called Part 52 rule. 
This assumes that applicants will be referencing NRC-certified 
designs in their applications and that the NRC will receive 
complete and high quality COL applications.
    To date, we have received 9 COL applications for 15 units. 
But only one of these five designs currently being referenced 
is a certified design, and it is only referenced in one COL 
application. This is for the Advanced Boiling Water Reactor at 
the South Texas project.
    In addition, the design certification applications and some 
COL applications initially lacked information that the staff 
needs to complete its review, while others are modifying their 
applications. The result is that the early COL applications are 
unlikely to achieve the complete benefits that the Part 52 
process had intended.
    We are of course working with our stakeholders to overcome 
these challenges, and we hope that the streamlining that was 
envisioned in Part 52 can be realized as we complete the 
initial COLs and we finalize the design certifications of these 
reactors.
    Based on the energy information that is submitted by the 
industry, we expect to receive 11 more applications for 16 more 
units by the end of 2009. But while there are challenges, I 
want to emphasize that the NRC is strategically positioned to 
be ready for these new reactor licensings and the associated 
workload. We created the Office of New Reactors, or NRO, to 
handle the agency's activities. The office was aggressively 
staffed, and as Senator Voinovich indicated, we have hired a 
significant number of individuals. The New Reactor Office has 
over 425 individuals.
    With NRO in the lead, the NRC has taken great strides to 
prepare for the new reactor licensing challenges. In my written 
testimony, there is more detail given on these activities.
    Let me conclude by touching on two points. First, it has 
been suggested that there is not enough opportunity for public 
participation, both in the COL application and the license 
renewal process. We have provided you some handouts and we have 
provided charts that also show in fact, that there are 
significant opportunities for public participation, and we 
encourage that public participation. Not only does this occur 
at the COL stage, but it also occurs at the early site permit 
and the design certification stages, and it is also true in the 
entire license renewal process.
    Second, the GAO recently did an audit of the NRC's 
readiness to conduct the reviews of the COL applications. It 
was generally positive. It acknowledges our existing 
preparation and the quality of our plans. As I noted in a 
letter to you, Senator Carper, on December 31st, the GAO 
identified four recommendations and we are addressing those 
concerns and issues as well.
    While we are satisfied that we have in place a stable, 
efficient regulatory process, the Commission is always looking 
for ways it can improve. As we have heard Senator Carper say a 
few times, if it isn't perfect, make it better.
    I ask that my written testimony be entered into the record, 
and we look forward to the opportunity to have questions, 
keeping in mind that my general counsel is sitting behind me, 
and she reminds me that there are certain renewal activities 
that we will not be permitted to go into great detail, because 
the commissioners will be in an adjudicatory role.
    Thank you very much.
    [The prepared statement of Mr. Klein follows:]
    
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    Senator Carper. Mr. Chairman, thank you for that statement.
    I also want to thank you for using acronyms sparingly. In 
reading through the testimony, I don't know about my 
colleagues, but I came across a couple of places where there 
were as many as four acronyms in one sentence. We had a 
Commerce Committee hearing last week, I had five acronyms in 
one sentence. I am not real good on those acronyms. You guys 
know what they are, I don't always. So I would just ask that 
you continue to use those acronyms sparingly. Thank you.
    Commissioner Jaczko, has anyone ever mispronounced your 
name?
    Mr. Jaczko. I think not at this Committee.
    [Laughter.]
    Senator Carper. When we get to our last witness, I am going 
to ask Commissioner Svinicki to tell us exactly how she likes 
to pronounce her name, because I have heard it pronounced any 
number of ways. My staff was good enough to spell it out 
phonetically--wrong.
    [Laughter.]
    Senator Carper. So I am going to ask you to educate us all 
once and for all.
    Commissioner Jaczko, you are recognized.

  STATEMENT OF HON. GREGORY B. JACZKO, COMMISSIONER, NUCLEAR 
                     REGULATORY COMMISSION

    Mr. Jaczko. Thank you, Mr. Chairman. I appreciate the 
opportunity to appear before you and the other members of the 
Committee today to discuss the process for considering new 
reactor applications and the renewal of existing licenses for 
nuclear power plants.
    I agree with the Chairman that the safety and security of 
the operating reactors and the other materials licensees is the 
agency's priority. Therefore, we appreciate that the Committee 
chose to include relicensing as well as the new reactor 
discussion at this hearing.
    Deciding whether to approve or disapprove an application is 
just the first step of a process that includes oversight of 
licensees to ensure compliance with safety requirements and it 
includes taking necessary enforcement actions when violations 
occur. Long standing problems, such as implementation of fire 
protection regulations and emergency core cooling systems sump 
screen issues at existing facilities must get resolved, both 
for the benefit of those existing plants and for the NRC to be 
able to exercise the most efficient oversight of any potential 
new plants.
    I do believe that applicants have more work to do to 
improve the timeliness, quality and completeness of new reactor 
applications if the NRC is going to be able to review them in 
an efficient, and most importantly, I think, predictable 
manner. I also agree with the Chairman that the NRC is well 
prepared today to deal with the work of license reviews and if 
applications are approved, regulating additional reactors. 
Thanks to the support of this Committee and the Congress, the 
NRC has been able to accomplish a tremendous amount of work to 
buildup its own internal infrastructure and it is well-
positioned for the task ahead.
    But I believe the NRC has more work to do. While we have 
done a great deal to get ready, there are three remaining areas 
that require the agency's continued focus to ensure consistent 
oversight of any new reactors that may get built. We need 
updated regulations regarding security, aircraft impacts and 
waste confidence. I believe the staff has made progress in all 
three of these areas. And in fact, the Commission directed the 
staff to accelerate the development of the final security rule. 
The Commission has just received the rule package for 
consideration and has also made it publicly available. I intend 
to work quickly to vote on this issue and to do what I can to 
move it forward.
    As I mentioned at the hearing in February, the agency is 
still working on a final rule to require new nuclear power 
plants to be designed to withstand the impact of an aircraft 
crash. I remain hopeful that the final rule the staff provides 
to the Commission for approval this fall will ensure the 
requirements apply to any new plant built in this Country and 
that it includes clear criteria for how the NRC will determine 
compliance. Almost all of the entities that commented on the 
proposed rule supported changes in both of these areas.
    Finally, turning to the topic of license renewal 
improvements, the agency has a solid license renewal program in 
place. But I believe both the scope and the documentation of 
the process could be improved. First, because the scope of this 
program is so narrowly focused on the aging of components, 
members of the public will likely always raise substantive 
concerns about the license renewal process. I have proposed 
that the NRC include a review of emergency preparedness 
planning in relicensing, to reaffirm the safety finding 
initially made when the plant was licensed to operate. I 
believe that such a change would provide the NRC with the 
opportunity to potentially enhance safety and certainly to 
strengthen public confidence in the license renewal program.
    Second, I believe the agency should look back at a few 
completed license renewal safety evaluation reports these are 
the major documents that we use to make our safety findings to 
ensure the documentation issues raised by the Inspector General 
are easily resolved. This effort, when coupled with more 
thorough documentation of future relicensing proceedings, 
should effectively resolve what I believe is an important issue 
of public transparency in the license renewal process.
    Thank you for the opportunity to make these remarks, and I 
look forward to answering your questions.

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    Senator Carper. Commissioner Jaczko, thank you very much.
    Commissioner Lyons.

    STATEMENT OF HON. PETER B. LYONS, COMMISSIONER, NUCLEAR 
                     REGULATORY COMMISSION

    Mr. Lyons. Mr. Chairman and members of the Subcommittee, 
thank you very much for holding today's hearing to discuss 
NRC's licensing and relicensing processes for nuclear power 
plants. These are important issues. They are fundamental to 
earning the confidence of the American public in the safety of 
the Nation's nuclear power plants.
    I support Chairman Klein's testimony and I would like to 
elaborate further on just two specific points. Regarding the 
next generation nuclear plant, or NGNP, as I will refer to it, 
as the Chairman noted in his written remarks, we expect to 
deliver to Congress in August, jointly with the Department of 
Energy, our licensing strategy for the NGNP as required by the 
Energy Policy Act of 2005. This type of reactor offers specific 
potential safety enhancements over light water reactor 
technologies. It may serve to enable the use of nuclear power 
not only in electricity production with enhanced efficiency, 
but also as a source of process heat for many industrial 
applications.
    However, this advanced technology presents a set of 
licensing challenges, such as the safety performance of new 
types of fuel, to which the NRC must respond with new 
regulatory research. As we continue to implement this joint 
strategy with the DOE, the NRC will require resources that are 
appropriately matched with DOE funding on this project.
    In addition to our ongoing work on the NGNP, the NRC is 
receiving an increasing number of requests for pre-application 
meetings by potential applicants for small, so-called grid-
appropriate advanced reactor concepts, for potential sales to 
developing nations and into markets with very small grids. 
There are currently no U.S. licensees expressing serious 
interest in building such plants. That has limited our 
associated resource allocations.
    In my own view, NRC engagement and research on the safety 
aspects of these particular reactor designs is in our national 
interest in helping to assure that safe reactor designs are 
used abroad, as well as encouraging non-proliferation. I also 
believe that resources for such research should not be derived 
from fees paid by our existing licensees. Therefore, my 
suggestion would be that NRC resources for activities such as 
these grid-appropriate reactors are a matter for which I 
believe congressional guidance is needed. And if this work is 
to be endorsed by Congress, then I think specific funding in 
that area will be important to the NRC.
    I thank the Subcommittee for the opportunity to address the 
topics today and I look forward to your questions.
    Senator Carper. Dr. Lyons, thank you very much.
    Our first question for this panel will be to the last 
Commissioner, and the question is, how do you pronounce your 
name?
    [Laughter.]
    Ms. Svinicki. Mr. Chairman, similar to many Americans who 
trace their ancestry to Ellis Island, the spelling you see on 
the card before me is not reflective of the pronunciation. 
There are what I call some phantom vowels that are missing. 
There is not a unified opinion in my family, but Savenicki, so 
you would insert an A between the S and the V, and then the 
first I would become an E.
    [Laughter.]
    Ms. Svinicki. I think Commissioner Jaczko has some sympathy 
with his J.
    [Laughter.]
    Senator Carper. I have no further questions.
    [Laughter.]
    Senator Carper. You are recognized. Thanks so much, 
Commissioner Svinicki, welcome.

 STATEMENT OF HON. KRISTINE L. SVINICKI, COMMISSIONER, NUCLEAR 
                     REGULATORY COMMISSION

    Ms. Svinicki. Thank you, Mr. Chairman, Senator Voinovich 
and members of the Subcommittee.
    I would begin by taking this opportunity to thank each of 
you and your fellow Senators for supporting my confirmation and 
thereby making possible, as has already been noted, my 
inaugural appearance before you today as a Commissioner.
    Senator Craig, I may be a bit nostalgic in this moment for 
the seat I used to occupy behind you, but I thank you for your 
kind words.
    When I appeared before the full Committee at my nomination 
hearing, I pledged to each of you that if confirmed, I would 
immerse myself in the issues and challenges facing the agency 
and that I would commit myself fully to contributing to what I 
view as the continued success of the Commission. In the 
approximately 3 months since my swearing in, this has remained 
my commitment.
    Fresh from my experiences as Senate Committee staff, I was 
no stranger to long days, but since arriving at the Commission, 
I have never felt more keenly how few hours there are in any 
given day. Partly this is a result of my approach to addressing 
the ongoing work of the Commission, which is to research the 
last few years of Commission action and deliberation, and to 
try to set issues in a proper context before formulating my own 
view. I am assisted in this by an agency staff that I have 
found to be both highly skilled and highly eager to explain and 
debate its work. Their commitment to public service, as 
evidenced by their commitment to the work they do every day, 
has impressed me deeply.
    The NRC faces many challenges, already outlined by my 
colleagues, but none, in my view, are insurmountable. What 
success will require, however, is a sustained commitment to 
continual improvement in our processes and an eye always to 
safeguarding the trust that the public has resided in us. As I 
continue to develop my ``sea legs'' at the Commission, these 
two areas will be my principal focus.
    Finally, I would be remiss if I didn't take this 
opportunity to thank publicly the three gentlemen who sit 
alongside me here. To a person, my fellow Commissioners and the 
Chairman have been unfailingly gracious and supportive in 
easing my transition, which has not always been an easy one, to 
the NRC. They have welcomed me fully to their ranks. They have 
been patient with my need to research issues and come up to 
speed, and have extended every accommodation to me. I am 
grateful to each one of them.
    And Senator Isakson, just quickly, I support the Chairman's 
testimony regarding the budgetary resources. Congress, as I am 
coming to discover, has been extremely supportive of the 
agency's budget requests. But please know that I don't take for 
granted that support is ours to lose. We have to re-earn it 
continually, so although we have had good support, we need to 
continue to earn your trust and confidence.
    I thank the Subcommittee for its support of the important 
work of the NRC and this opportunity to appear. I will endeavor 
to answer any questions you may have.
    Thank you.
    Senator Carper. Commissioner Svinicki, thank you very much 
for that statement.
    I live in Wilmington, Delaware, the northern part of our 
State. As we drive south on State Route 13 or State Route 1 
down toward our beaches, you can see off to the east a couple 
of nuclear power plants. In fact, there are three of them that 
sit over there in Senator Lautenberg's territory in New Jersey, 
Salem and Hope Creek. I have lived in Delaware since 1973 when 
I got out of the Navy and moved there. But those plants have 
had a checkered past in terms of their reliability, in terms of 
their ability to really be up and operate and provide 
electricity on an ongoing basis.
    I want to say roughly four or 5 years ago, Exelon was 
invited by PSEG to come in an operate the facilities. And the 
operating performance was improved dramatically. I cite them 
today because I think they are a glowing example of what has 
happened in the industry itself. We don't have to go back all 
that many years for the ability to operate at full capability 
was probably in the 60, probably 70 percent range. Today I 
think it is a lot closer to 90.
    So my first question for the panel, and I will just start 
with you, Chairman Klein, we know there are 104 nuclear power 
plants. We know that roughly half of them have applied for, 
initially approved for 40 years, roughly half have applied for 
and been approved, I think, for 20 years. How many of the 104 
have actually been approved? How many are in process in terms 
of renewal license requests?
    Mr. Klein. We have approved 48, 17 are in process and we 
expect more to come.
    Senator Carper. All right. I spent a lot of my life in 
naval aviation. I have flown in airplanes that were in some 
cases as old as the crew members that were flying them. We have 
still flying today P-3s, which I was a part of, we have C-
130's, which a lot of us have a lot of familiarity with, some 
B-52s that are still out there flying. I know there are 
concerns that we have from time to time about the safety and 
reliability of those aircraft.
    We have nuclear power plants that are 40 years old as well. 
As we consider renewing them and letting them fly, if you will, 
for another 20 years, or operate for another 20 years, it is 
not unexpected there would be some concerns raised about how 
safe can that be, just as, how safe can it be to fly a B-52 for 
50 years or a P-3 for 40 years and so forth. The question I 
have to start off with is, talk to us about those concerns that 
we have with allowing these plants, they are large, complex and 
aging, to allow them to operate for another 20 years, at least. 
Why don't you tackle that to start off with, Chairman Klein?
    Mr. Klein. Thank you, Senator Carper.
    Obviously the issue of the operating plants and their life 
extension is something we take very seriously. As these plants 
operate, conditions change. So we have a very robust review 
process to look at aging effects. That doesn't mean for our 
employees, it means for the plants.
    Senator Carper. Although some of your employees, like us, 
are aging, I am told.
    Mr. Klein. There are a few.
    So we have a very rigorous program. I think what is 
important to understand, and I think the IG referenced this in 
their report, and you will hear from them on the second panel, 
our technical details for which we look at during these license 
renewal reviews is very robust. Where we needed to make 
improvement, and we are making improvement, is on the 
documentation. In general, we spend over 10,000 hours to look 
at a license renewal application. So it is very rigorous, we 
look at it, we hear from the public and we try to communicate 
in an effective way.
    So public confidence, communication, explaining what we do, 
how we do it, is very important to us.
    Senator Carper. Dr. Lyons, in following up, how long does 
this process usually take for renewals? Just answer that 
question in your comment you are going to give now.
    Mr. Lyons. The process is typically 22 months. We have had 
some shorter than that. It also depends on whether there may be 
hearings. But 22 months is our target, and that has generally 
been met.
    And may I comment briefly on what the Chairman just said?
    Senator Carper. Sure.
    Mr. Lyons. To follow your analogy of planes that have been 
around for some time, those planes, at least I hope it is true, 
and you can tell me if it is, have also been the subject of 
continuing oversight, continuing maintenance and continuing, I 
hope, replacement of components as that became necessary. So in 
the same sense with nuclear power plants, they have been 
subject to that continuing oversight, continuing maintenance by 
the licensee, subject to our oversight, and many of the 
components have been replaced over that period of time.
    Senator Carper. Thank you.
    I have more questions, but I am going to yield to my 
colleagues for some questions. We will come back for a second 
round. Senator Voinovich.
    Senator Voinovich. Thank you, Mr. Chairman.
    Chairman Klein, the NRC has had several months to review 
the first set of COL applications. Do you see anything that 
might jeopardize, and I would be interested in hearing from the 
other commissioners, that would jeopardize the agency's goal of 
completing reviews within three and a half years, which seems 
to me to be a very long time. I don't know what it takes, 
Senator Craig found out. How long does it take them to go 
through an application over in France? Did they get into that?
    Senator Craig. No, we did not talk specific schedules. It 
depends, of course, on the design and the standardization.
    Senator Voinovich. The other thing is, it looks like we are 
going to have a continuing resolution that may not get done 
until February of next year. Does that have any impact on what 
you are trying to get done?
    Mr. Klein. Senator Voinovich, at this point, we see nothing 
that is insurmountable, as Commissioner Svinicki indicated in 
her testimony as well, that would prevent us from meeting our 
obligations. What we are learning as we work through these 
combined operating license applications is that we are getting 
better as an agency articulating what we want to see, and the 
applicants are getting better in their response. So we are 
seeing the quality of the applications and the completeness 
improve. So we are seeing the processes working. We are taking 
lessons learned as we articulate what we need and the 
applicants are doing better in terms of what they submit. So I 
think overall it is a positive story.
    Regarding the budget issue, a continuing resolution is 
challenging for us, because as you know, the Fiscal Year starts 
October 1. I am now starting my third year at the NRC and we 
have never received a budget on time. It makes our planning 
difficult. And we will have some impacts, if the continuing 
resolution goes beyond February or March. We are planning for a 
continuing resolution. We can read the papers as well as you 
all can. So we are planning on a continuing resolution. We are 
trying to prepare for it. But if it extends beyond February or 
March, we will have some challenges in meeting our activities.
    What that will mean is that we will not compromise safety 
on that existing fleet. So what will suffer are the new things, 
which means license renewals, power uprates and the new 
reactors. We will have to prioritize.
    Senator Voinovich. One of the things, I had the impression 
that the designs were kind of cookie cutter, that they had been 
used in other places. I understand you have approved one design 
already. But then there are another two of them that are being 
used in other places in the world. Then you have two more 
designs that are brand new. Does that pose a real problem with 
you in terms of the timing?
    Mr. Klein. Senator Voinovich, it is a challenge. What we 
had expected as we went through the combined operating license 
aspects is that the design certifications for these various 
vendors would be complete. Obviously we have essentially 
completed the Advanced Boiling Water Reactor application and 
the Westinghouse AP1000 design has been approved, but we are 
currently reviewing an amendment to that design. And we are 
reviewing the ESBWR, Areva, and Mitsubishi's design.
    So what Senator Craig had observed in France is they have a 
much more standard process in their country than we have in our 
Country. We are free and open. Therefore, we will have more 
vendors providing reactors. I think what we will have to 
address as we go through the license review process, we will be 
doing things in parallel that we expected to do in series. But 
we will work with the utilities and the stakeholders to make 
sure we do it right. No license will be granted until we are 
confident that it will be safe and complete.
    Senator Voinovich. Any comments?
    Mr. Jaczko. Senator Voinovich, if I could add a few 
comments. I would perhaps, on the first question of if there 
are issues that I see jeopardizing the schedule, I would say 
that there are several, of the five designs that we are looking 
at. Three of them I would say right now would present 
challenges for us to complete a review in three and a half 
years, in the time period that we have talked about. With the 
AP1000 design, there are some outstanding issues that I 
referenced in my opening testimony about sump screen design. 
That is an issue that the staff is working on right now that 
may present some challenges. Until we have complete 
information, we can't necessarily be sure when we will be able 
to complete that part of the review. So that may have an impact 
on our ability to get that design done. And that design is used 
by a number of the applicants that we are looking at in front 
of us.
    There are issues with one of the applicants that is 
referencing the AP1000, some issues again with incompleteness 
of information that may present challenges to us reviewing that 
application in a predictable manner. The application that the 
Chairman referenced related to the ABWR design, we have had 
some challenges with the vendor that is supporting that 
application. The applicant had to change the vendor, so that 
has caused a delay in our ability to review that application.
    The General Electric ESBWR design also came in with a 
modification recently to that design. The staff right now has 
not been able to publish a new schedule for when they would be 
able to complete the review of that design. So that may have 
impacts later on then on the applicants that are referencing 
that design.
    So those are all uncertainties that could create risks from 
the standpoint of the time it will take to review those 
designs. And just a specific comment on the continuing 
resolution, one of the issues that has come to my attention for 
new reactors in particular is how we treat new activity under a 
continuing resolution. Generally, the language prohibits the 
agency from engaging in any new activity. And it is unclear to 
me at this point, but there has been some discussion about how 
we treat new contracts that we might need to issue for new 
reactor application reviews. If that is considered to be a new 
activity, then under a continuing resolution, we wouldn't be 
able to initiate some of those contracts. So that again may 
create some specific challenges with regard to reviewing some 
of the new reactors under a continuing resolution.
    Senator Voinovich. Thank you.
    Senator Carper. Senator Lautenberg.
    Senator Lautenberg. Thank you all for your testimony and 
the work that you do. The agency obviously has great 
responsibility, and particularly pronounced since the search 
for other sources to energize our Country are so much in 
demand.
    Dr. Jaczko, the NRC Inspector General's 2007 report pointed 
out that the NRC didn't even keep records of their reviews of 
license applications. Is that possible? And how important is 
that?
    Mr. Jaczko. I think, Senator, that is an issue we need to 
go back and review and audit, to make sure that we understand 
the importance of that information. But what the Inspector 
General found was that when our teams go out to audit the 
information that they have in the application to confirm the 
programs and the information was accurate, the notes and some 
of the information that they collected onsite they didn't 
necessarily bring back with them to complete the review. So 
they would take the notes, they would have conversations with 
individuals there and then they would formulate their 
conclusions. And those conclusions would be reflected in their 
safety reports.
    So what I think we need to do is we need to go back and 
just verify, for the public ultimately, so that they are clear 
how we made those decisions and how we came to those 
conclusions. I think that will probably involve----
    Senator Lautenberg. That is not very reassuring.
    Dr. Klein, is that detail critical in the evaluation? Is 
the IG correct in raising this as a point of some significant 
concern?
    Mr. Klein. I think again, as Commissioner Jaczko indicated, 
there is no evidence that the technical review was not done, 
the IG will discuss this issue on the second panel, and it is 
probably best for you to ask them that question. But what they 
pointed out is an area that we are addressing, what kind of 
notes and documents do we keep for record. It is no different 
than normal inspection activities, and everyone has to decide 
what they keep and what they discard. The IG pointed out that 
we should keep more complete records. It doesn't imply that we 
didn't do our job. But we are re-examining the kinds of records 
we keep.
    And as Commissioner Jaczko indicated, sometimes there is 
proprietary information that a company has. We look at that 
information but we don't necessarily bring copies back.
    Senator Lautenberg. But the public is certainly entitled to 
be aware of the fact that these data are not being furnished as 
they should be. I am concerned about the fact that, well, it 
isn't quite where it ought to be. How important is it that 
these review details be available?
    Mr. Klein. I think, again, what we looked at and what the 
IG looked at was, again, they found no weakness in our 
technical review. What we found was a weakness that we are 
correcting related to the documentation and the retention of 
the information.
    Senator Lautenberg. That is like the audit trail. It ought 
to be up to date.
    I was concerned before when the Chairman was going through 
a comparison of aging parts of the world, talking about B-52 
and so forth. I was afraid he was going to get to Senators and 
say, all right, so there are replacement components that you 
can put in there, but nevertheless. It wasn't very comfortable.
    [Laughter.]
    Senator Lautenberg. During the Oyster Creek relicensing, 
the NRC did not initially insist on a sophisticated three-
dimensional analysis of the structure of the dry well. How can 
the public have confidence in NRC's relicensing process when it 
took prodding by a non-governmental agency and the company's 
voluntary action to use the best technology available?
    Mr. Klein. Unfortunately, the Oyster Creek issue is before 
the Commission. So the Commission can't talk in a lot of 
details, because we will be in an adjudicatory role.
    So let me just talk in general about the confidence and the 
communication of how we do our license renewal. We do use 
technical input. We also expect and we appreciate independent 
input on things we can do better, and we continue to ask if 
there are things we can do better.
    Again, as I indicated earlier, when we go through the 
license renewal process, it is a very technical and very 
involved process taking over 10,000 hours. The public does have 
an opportunity to participate in that process. Unfortunately, I 
cannot talk specifically about Oyster Creek.
    Senator Lautenberg. I will close with this. The public is 
so skittish. Have you seen an accelerated rate of problems as 
these plants age? And why, if we had to look at the accident, 
the alarm rate that does come in the field, is it worthy of the 
concern that the public seems to exhibit? Or can we say that 
new technology, especially with the new plants, that new 
technology will make these plants absolutely safe, more 
efficient? Can we give any kind of an endorsement that would 
say to the public, OK, maybe we can bring the older ones up to 
snuff, but we have designs that now assure safety, no matter 
what?
    Mr. Klein. As Commissioner Lyons indicated, as plants age, 
a lot of the components are continuously replaced and 
modernized and upgraded. So when you go through a plant that 
has been in operation for a number of years, you will see a lot 
of new components, new upgrades, new technology, new 
techniques.
    I think from a public perspective, one of the advantages 
is, and the industry can talk more about this, the plants are 
running at a higher capacity factor and running a more reliable 
operation as people learn more about the operational aspects. 
What we typically see is high public confidence, and when we go 
out and hold hearings, in general around the nuclear plants, 
people are confident, their friends, neighbors and families 
work there, they go to church there, they go to school. So 
these are people in the communities that work in these plants.
    So in general, what we have seen is confidence in the 
community around the plants is pretty high. Because the 
communities are the ones that work and operate these plants. So 
we have not seen any negative trends.
    Senator Lautenberg. Thank you.
    Senator Carper. Senator Inhofe.
    Senator Inhofe. Thank you, Mr. Chairman.
    We are getting bogged down in so many details here. Those 
of us who are not as familiar with these processes we are 
looking at, if you could help us out a little bit. We are 
talking about two different things: the licensing of new 
applicants and then re-applications, licensing re-applications. 
Chairman Klein, in my opening statement I said that the hearing 
notice for the LES National Enrichment Facility included 
detailed schedule and policy guidance. Since that approach 
clearly instilled schedule and discipline in the process, I 
would first ask if the Commission is using that approach. I 
don't think they are, so I would ask why not.
    Mr. Klein. It turns out we did learn from LES, and we 
incorporated that in our processes. We modified a part of our 
regulatory structure called Part 2, which is not Part 52, but 
it is Part 2 of our regulatory framework, where we do have 
milestones and schedules outlined and available. So we knew in 
terms of this new reactor licensing wave that was coming 
forward to us, so we do have in our regulations in Part 2 
milestones and objectives. So it is there, and we will provide 
that to you.
    Senator Inhofe. That is good. When you mentioned in your 
opening statement that the time, the hours required for a re-
application were 10,000 hours, I believe you said, I asked my 
staff what it would be for a new application. They looked it up 
and said between 60,000 and 80,000 hours. Those of us, I think 
almost all of us up here in our opening statements said our 
concern is that we get there and get there quick. So we're all 
concerned about streamlining, to the extent that we can do a 
better job and meet the best guidelines.
    Senator Isakson asked the question of one of you, I don't 
remember which one, if we do have, if the resources that are 
there are going to be adequate. What I wouldn't want to happen 
is to find out when we are having a hearing 6 months from now, 
well, we could have made these guidelines and these benchmarks, 
but we didn't have the resources. So I would like to have each 
one of you responds as to, do you think right now with what you 
have, do you have adequate resources to try to meet these 
expectations of the Committee?
    Mr. Klein. Senator Inhofe, I believe on the resources issue 
we always try to be prudent and spend our funds wisely. But we, 
I believe, have hired, trained and held our staff accountable 
and laid out our clear expectations. At this point, on both 
license renewals and on new license reviews, we believe that we 
have the funds, assuming the budgets are passed, for 2009, that 
we will have the budgets that will meet those obligations. If 
we have to operate on a continuing resolution for the entire 
year for 2009, we will have difficulties.
    Senator Inhofe. That is a good point to bring out. Far be 
it from me, being a conservative, to try and push it even to a 
higher level in terms of the expenditures. But we do, we just 
want to make sure that you are not going to come back later and 
say you didn't. That is a good thing to bring out on the CR.
    Mr. Klein. The other aspect I would like to point out on 
the efficiency is that we will, being a conservative regulatory 
body, we will be prudent and cautious as we go through these 
first phases of design certifications and the first COLs. What 
we expect to see, after we go through that, we definitely 
expect to have lessons learned and become more efficient with 
no compromises.
    Senator Inhofe. I don't think anyone would disagree with 
that. Is that generally the feeling of the rest of the 
commissioners?
    All right, Commissioner--yes, Dr. Lyons.
    Mr. Lyons. If I may just add, I certainly agree with the 
Chairman on the adequacy of the resources as planned and 
potential concerns on the CR. However, I think we should also 
mention that if we talk about the Yucca Mountain application, 
we are quite concerned that we do not have adequate resources 
by a substantial amount, depending on whether the House or the 
Senate versions might eventually be enacted. There may be a 
substantial shortfall.
    Senator Inhofe. All right, and Commissioner Jaczko, first 
of all, let me apologize to you. We had an appointment set up, 
and then all of a sudden, I had to be on the floor. So you met 
with my staff instead of with me, and I regret that. As I 
recall, during your confirmation hearing, I was the one who 
initiated the idea that we need to be talking. So we will make 
sure we get back on that track.
    Mr. Jaczko. I appreciate that.
    Senator Inhofe. The National Academy of Sciences report 
issued last November recommends shortening the review time for 
licensing applications to 3 years. As I understand in your 
opening remarks, you said that the time that you folks have is 
a little bit longer than that, it is some 42 months plus 
Commission action, which would be three and a half to 4 years. 
You were reluctant to think you could even keep that schedule, 
let alone 3 years. Is this your position?
    Mr. Jaczko. I believe right now there is potential for 
challenges with that. I think we haven't necessarily seen the 
completeness and the quality on the applications that we are 
looking for. If you look at some of the schedules that the 
staff has published, there are important milestones that they 
have laid out when they need to see information from 
applicants. And there have been challenges with applicants 
meeting some of those milestones. As a result, some of those 
schedules may not be met. I think that is part of this process.
    I think as the Chairman has indicated several times, the 
new reactor licensing process was generally envisioned to have 
a complete design that an applicant would literally almost pull 
off the shelf, they would have an environmental review that was 
completed that they would pull off the shelf, and then they 
would marry those two together in a license application. In 
doing that, you would have a very efficient and a very orderly 
way to get to the resolution on the remaining issues.
    Right now we are trying to do all those things at once, 
which is allowable under our processes, certainly. But it is a 
little bit more unpredictable and it has a lot more moving 
parts that can depend on one piece crucially. And if some of 
those other pieces are delayed, then we will have challenges.
    Senator Inhofe. Mr. Chairman, my time has expired. But for 
the record, I would like to get a response from the other 
three, not now but for the record, as to the recommendation on 
that 3-year time period.
    Thank you, Mr. Chairman.
    Senator Carper. And if you would all respond for the 
record, that would be much, much appreciated. Thank you.
    [The referenced information was not received at time of 
print.]

    Chairman Klein: Our current combined operating license 
(COL) application reviews will exceed the 3-year timeframe 
recommended by the National Academy of Sciences. I believe our 
initial reference plant COL reviews will take closer to 4 years 
due to the first time use of our Part 52 combined licensing 
process, ongoing design certification reviews, and needs for 
additional information. As the NRC completes its reviews of the 
reference plant COLs, the process should become more efficient 
and move closer to the suggested 3 year timeline. We will 
continue to improve our process and use lessons learned to 
become more efficient without compromising our core values.
    Commissioner Lyons: I appreciate the thought and analysis 
that the Academy gave to this subject. The NRC will continue to 
do our best to be an efficient as well as effective regulator. 
We have not yet issued a construction and operating license 
pursuant to 10 CFR Part 52, which is the focus of the Academy's 
recommendation. Therefore, currently we are in somewhat of a 
`learn as we go' mode. The original estimates for our review 
schedule were based on our historical experience with 10 CFR 
Part 50 licensing, and we needed those estimates as inputs to 
our planning, hiring, and budgeting processes. However, there 
are a great many factors that will influence the actual 
schedules, not the least of which is the quality and 
completeness of the submitted applications. We will most 
certainly continue to improve our efficiency and effectiveness 
as we go through this process to the actual issuance of a Part 
52 license.
    Commissioner Svinicki: As was experienced in the agency's 
license renewal reviews, over time, efficiencies can be gained 
through the resolution of generic issues and increased 
knowledge of the processes. Consequently, I expect that as 
applicants and the NRC staff become more familiar with the 
issues and challenges both technical and procedural related to 
reviewing new reactor applications, the agency will be better 
able to maximize efficiencies leading to shortened review 
times, while ensuring a stable and predictable process.

    Senator Carper. Senator Sanders, and we have been joined by 
Senator Cardin. Welcome.
    Senator Sanders. Thank you, Mr. Chairman. I have about five 
questions I would beg brief responses, if I could. Let me 
begin, Chairman Klein, with a request. The State legislature 
and the Governor have formed an independent panel in Vermont to 
try to understand how the State relates to Vermont Yankee. 
There is going to be a meeting tomorrow in Montpelier. There 
has been a request, as I understand it, from the NRC, to get a 
representative there to help this panel deal with very 
complicated issues. Can I have your commitment that you will 
send a representative to Montpelier tomorrow?
    Mr. Klein. I certainly would expect, if the State would 
like us to be there, we will have a representative.
    Senator Sanders. I believe that is the case. Do you think, 
then, we can have a representative there?
    Mr. Klein. Yes.
    Senator Sanders. Thank you very much.
    Let me ask Dr. Jaczko, as I mentioned earlier, this took 
place last year. And this was on the front pages of every paper 
in Vermont, great concern, I get many, many e-mails on this 
issue. What was the fine that Entergy paid for this mishap? How 
many millions of dollars was that?
    Mr. Jaczko. This did not fall under the part of our 
enforcement where we issued a fine. So there was no fine, I 
believe.
    Senator Sanders. There was no fine at all. Do you think 
that the American people would be a little bit surprised and 
concerned that the management of a major nuclear power plant 
paid no fine for this mishap? Do you think they would say, gee, 
we think there is something a little bit strange there?
    Mr. Jaczko. I think generally the public views issuing 
fines as synonymous with enforcement action. The staff, when 
they did review this, found that the licensee had not complied 
with some of our regulations in regard to keeping up with 
information in the industry about the ability of this kind of 
problem to fail. The enforcement action we then took was part 
of a process where we don't issue fines. And I think----
    Senator Sanders. Well, I would say, on behalf of many 
millions of people, I think they would be very surprised that a 
mishap of this scope ends up with no fine at all on the part of 
the managing company. Which raises a question also about 
whether the NRC in fact should be actively inspecting all 
aspects of a nuclear power plant, rather than just the core 
safety issues. That is another issue I would like to get into 
in the future.
    Let me just raise another issue. I was glad Dr. Lyons 
mentioned a magic word that I don't believe had been mentioned 
earlier, it is called Yucca Mountain. Right now, we have a 
number of plants, including Vermont Yankee, which have very 
lethal radioactive waste which is now being deposited locally. 
That was never the intention.
    Now, my friends may disagree with me or know more about 
this than I do, but I have every reason to believe, or at least 
strong reason to believe that Yucca Mountain as a repository 
for nuclear waste will never going to happen. We have spent 
billions of dollars on it, it will never going to happen. There 
are people here talking about the construction of dozens of 
more nuclear power plants. We don't have a place to deposit the 
waste. Somebody please tell me what sense that makes to the 
American people. Dr. Lyons?
    Mr. Lyons. From the standpoint of the safe storage of spent 
fuel onsite, I have high confidence in dry cask storage, as 
does the agency.
    However, I think your question is, ``Is that appropriate 
national policy?'' That is not something that the NRC should be 
deciding. In other words, I don't think the NRC should be 
deciding whether storage, albeit safe, at plants is 
appropriate.
    Senator Sanders. But you may have high confidence in it, 
and it is a technical issue which I am not prepared to argue. 
But clearly, that was not the original intention. The original 
intention was not to have dozens of locations around this 
Country where we are storing very lethal waste with a half-life 
of thousands of years.
    Mr. Klein. Let me just comment. The Nuclear Regulatory 
Commission just received the application for Yucca Mountain, 
and we will go through a technical review.
    Senator Sanders. It will go through a technical review. But 
I happen to know both Senators from Nevada who are not terribly 
sympathetic about that application.
    Let me ask my last question. We have heard, staff told me 
that at a meeting with the NRC it is projected that the cost of 
a new nuclear power plant could be as high as $20 billion, cost 
of going up. Have there been independent studies to figure out 
what the value in terms of energy savings or energy production 
would be, using that $20 billion for energy efficiency or 
sustainable energy? In other words, $20 billion is a hell of a 
lot of money for a nuclear power plant. How does that compare 
to investing in energy efficiency?
    Mr. Klein. This is not an area that as the Nuclear 
Regulatory Commission we would get into. We typically do not 
put a lot of value on economics and where people should invest 
money. Our charge is safety, security, protecting people and 
the environment. So that is not our area. While we may have 
opinions personally, it is not something that the NRC does.
    Senator Sanders. Am I correct in understanding that a new 
nuclear power plant could cost as much as $20 billion? Is that 
within the ball park?
    Mr. Klein. I have not heard numbers that high.
    Senator Sanders. Anyone else want to comment on that? Dr. 
Jaczko.
    Mr. Jaczko. Generally there would be estimates, I would 
say, of anywhere from $6 billion to $10 billion right now, 
depending on the size, for a single unit. So a site that might 
have two units could get into that.
    Senator Sanders. Six to ten for a single unit is what we 
are hearing?
    Mr. Jaczko. Yes.
    Senator Sanders. Dr. Lyons.
    Mr. Lyons. Again, I would agree with the Chairman, that is 
simply not our business. Our focus has to be on the safety, not 
on the cost.
    Senator Sanders. Fair enough. But it is our business, $20 
billion or $10 billion is a heck of a lot of money. We have to 
make sure that we are investing it in the best way in terms of 
energy in America, whether it is efficiency or producing new 
types of energy. That is my only point.
    Thank you, Mr. Chairman.
    Senator Carper. That is a good question to ask, and it is 
one you may want to consider offering to our next panel.
    I think Senator Craig is next, if I am not mistaken, then 
to Senator Cardin and Senator Isakson.
    Senator Craig. Mr. Chairman, thank you very much, and to 
all of you again, thank you for your responses to the different 
Senators. I will try not to travel the same track, so Dr. 
Lyons, I will go directly to you and comments you made about 
NGNP and the ability to handle that licensing process in a 
responsible way.
    As you know, we are now looking at the possibility of 
creating an Advanced Reactor Office, legislating that. We are 
working inside the Energy Committee now to look at that 
reality. The President's budget has about $4 million in it that 
deals with new advanced design high temperature gas reactors. 
If you visit with me and all of you commissioners certainly 
could respond, I think I share your concern about doing it 
right, obviously, and doing it in a timely fashion. It has a 
broader scope than just licensing for application in this 
Country. I have spent a good number of years looking at it, in 
fact, legislated it in part into being because of its 
flexibility, its safety, what it can do beyond light water. 
Modularizing it, shaping it to different loads, being able to 
possibly produce hydrogen, being able to produce processed heat 
at reasonable cost from smaller units to chemical facilities 
and all of that kind of thing in a futuristic approach.
    Is it reasonable to assume that you can get your work done 
with the talent that has been historically focused on light 
water? Do we need to create an Advanced Reactor office within 
the NRC that brings that kind of talent and focus to the new 
concepts? While I am not suggesting that those who look at 
current light water designs are not flexible, I am saying, I 
think I am trying to gather from your comments that we need to 
look at it in a different way. Make your comments in relation 
to what I have just said, if you would, please.
    Mr. Lyons. Senator Craig, I think speaking for myself, at 
least, I think the Commission would certainly look to guidance 
from Congress if it wishes to create an Advanced Reactor 
office. I personally don't think that is essential. I believe 
that within the existing New Reactor Office there already has 
been considerable thought given to how we would move forward 
with licensing of the NGNP. And as I mentioned, I believe it is 
in the Chairman's written statement, that we will provide a 
joint strategy with DOE as demanded by the Energy Policy Act of 
2005, a joint strategy to work toward the licensing and the 
research that is required. That would be accomplished whether 
or not we had a separate Advanced Reactor office. I personally 
don't feel strongly that is necessary.
    Senator Craig. OK. Yes, Kristine.
    Ms. Svinicki. Senator Craig, I would support the answer 
that Commissioner Lyons gave, in that I don't know that a new 
organization within the NRC would cure the challenges related 
to this. I think what Commissioner Lyons was expressing in his 
opening statement, and he can modify this if it is not correct, 
is that just as we are discussing today an agency that wants to 
posture itself and lean forward into new reactors, whether that 
be NGNP or commercial applications, what does that take? It 
takes a lot of preparatory activities. For a technology such as 
NGNP that the agency will not have licensed before, is not 
likely to have licensed before, we need to be able to have the 
resources to do that.
    Now, Congress did foresee NRC's role in legislating the 
NGNP project. All appropriations, I would note, go to the 
Secretary of Energy. So the NRC receives its resources as a 
flow-through. So Congress was forward-looking on that, but we 
need to maintain a cognizance that we are receiving our 
resources in order to do that at the discretion of DOE.
    Senator Craig. OK. Further comments on this discussion?
    Mr. Klein. I think the comments that Commissioners Lyons 
and Svinicki both made are really appropriate. What we need to 
do is work parallel with the Department of Energy to establish 
a regulatory framework, as these new technologies come forward. 
We have this minor problem called budgets since we capture 
about 90 percent of our budget through fees to licensees. So 
for us, we believe that we should start in parallel, so as the 
Department of Energy is coming up with new technologies, we 
need to be working with them, not wait until they have an 
answer, so that we can do the preparation of our staff, 
determine the regulatory requirements in process.
    But for us, it will come back to budgets, so that we can 
hire and train those individuals for which we don't have the 
fee recovery.
    Senator Craig. A followup briefly to that, then, because my 
time is up. So what we are hearing from you, instead of taking 
resources from the fees collected, appropriated dollars going 
to you, so that you can parallel and cooperate and work as you 
wish, as you need to with DOE in that relationship? Is that 
what I am hearing?
    Mr. Klein. That is absolutely what I think the three of us 
have stated. We do need basically the consistent funding, so we 
can hire, train and get these individuals, so we can look at 
these long-term projects in parallel with the Department of 
Energy.
    Senator Craig. Thank you. Thank you, Mr. Chairman.
    Senator Carper. You bet.
    Senator Cardin, welcome, we are glad to see you.
    Senator Cardin. Thank you, Mr. Chairman. I would ask 
unanimous consent that my opening statement could be included 
in the Committee record.
    Senator Carper. Without objection, so ordered.
    Senator Cardin. Let me thank you very much for holding this 
hearing. I think it is very important. The Nuclear Regulatory 
Commission's work is extremely important to our Country. I have 
had an opportunity to see first-hand the work that is done. I 
thank all of you for your commitment to safety and to the 
community issues.
    Dr. Klein, I want to concentrate on one part of your 
statement that has me concerned in response to Senator Inhofe's 
questions on resources. You State that early COL applications 
are unlikely to achieve the full benefits of the Part 52 
process. If I understand the Part 52 process, it is to have an 
effective, timely and predictable process. And I want to make 
sure there is nothing more you need from Congress in order to 
achieve the full benefits of a process that will give the 
highest level of assurance to the public of safety and move the 
system as effectively and efficiently and as timely as possible 
to achieve the results.
    So let me just ask an open-ended question. Is there 
anything more that we should be doing in order to make sure 
that the full benefits of the Part 52 process can be achieved?
    Mr. Klein. The short answer is yes. And it has to do with 
space. We now have hired, as Senators Carper and Voinovich 
know, we have hired new people to meet this new workload. One 
of the challenges that we have now is that we have had to move 
into four rental locations. And that has a lot of 
inefficiencies in it. We have to duplicate security, we have to 
duplicate computer systems, we have to have a shuttle bus, lost 
time on all those activities. So I would say that there is one 
aspect that you could help us on, and that is consolidation of 
our space, so that we can all be back together.
    The Kemmeny Commission made a comment after Three Mile 
Island, that one of the complicating factors was the fact that 
the NRC was located in seven different locations. We are going 
right back to that, because we can't seem to get consolidated. 
So space would help us.
    Senator Cardin. I am very familiar with that issue. Dr. 
Lyons.
    Mr. Lyons. Senator Cardin, I certainly agree with the 
Chairman's comment. But I would add one more. We have provided 
recommended legislation to the Committee on the area of 
mandatory hearings. Right now, I would say there is a highly 
antiquated provision in the Atomic Energy Act that requires us 
to hold a so-called mandatory hearing in the COL process even 
though there is nothing contested. We have suggested that has 
been overtaken by many events, everything from sunshine laws to 
freedom of information to the FACA Committee and commission 
requirements that have been levied.
    The idea of having a mandatory hearing when there is 
nothing contested is an unnecessary inefficiency.
    Senator Cardin. Is there agreement on that?
    Mr. Jaczko. Senator, I respect Commissioner Lyons' views on 
that, but I don't agree that the mandatory hearing would play 
little if any role. There is the potential that with these new 
reactor proceedings, there may not be a contested issue. As a 
result, if we eliminate the mandatory hearing provision, there 
would be no formal hearing at all on the licensing process.
    I think sometimes we place too much of a burden on the 
public to generate issues. It is not the responsibility, 
necessarily, of intervenors to come up with every possible 
issue. And if they happen to not have tremendous resources, 
they may focus on one or two issues. Those may not turn out to 
be the issues of most significance in a hearing process.
    So simply relying on the issues that are brought by 
intervenors I think is not necessarily the measure of whether 
or not a hearing should happen.
    Senator Cardin. Let me just make sure I have it straight, 
here. As far as the space efficiency issue, is there any 
disagreement that space efficiency is an issue that is 
affecting the compliance with the new procedures? Everybody 
agrees with that.
    On the hearing issue, I hear there is disagreement. Are 
there any other matters that you want Congress to do to make it 
more likely that the benefit of this process can be achieved?
    Mr. Klein. It would help to have timely budgets.
    Senator Cardin. That is beyond any of our--now you have 
gone too far.
    [Laughter.]
    Senator Cardin. Let's get realistic here.
    Mr. Jaczko. Senator, if I could add one other point, too. 
One issue that I think might be helpful is a reexamination of 
some of the deadlines that were put into the Energy Policy Act. 
For several of the incentives and the benefits, there are 
milestones and deadlines. In my view, some of those milestones 
and deadlines have certainly, I think, achieved their goal, 
which is to stimulate and generate interest in the industry to 
submit applications and to submit filings. But one of the 
downsides of that has been a rush of applications and a rush of 
filings to meet those milestones. And revisiting some of those 
milestones may in fact I think actually enhance the process, 
because it will provide more breathing room for applicants to 
come to us when their applications are really complete and 
really ready, and allow us to work through a number of 
applications in a more focused or smaller number in a more 
focused way to get those done in a timely and predictable 
manner, and demonstrate how the process can work.
    When I first came to the Commission in 2005, there was talk 
of two applications. And now we are talking about, over the 
next several years, 20 some applications for 30 units. A lot of 
that is driven, the timing is driven by some of those 
milestones in the Energy Policy Act incentive.
    So revisiting those I think could help to alleviate some of 
that initial crunch.
    Senator Cardin. Mr. Chairman, could I ask that you review 
the two points that have been raised here about perhaps 
unnecessary hearings and also the limits, times that are in the 
law? And if there is a consensus recommendation that would help 
streamline the process, I think we would welcome receiving that 
information.
    Mr. Klein. We will send you something in writing.
    Senator Cardin. Thank you. Thank you, Mr. Chairman.
    Senator Carper. Yes, if you will make that available to the 
full Committee and Subcommittee, that would be terrific.
    [The referenced information was not received at time of 
print.]
    Senator Carper. All right, Senator Isakson.
    Senator Isakson. Thank you, Senator Carper.
    I am sorry the picture is gone, but Dr. Jaczko, you seem to 
be familiar with that incident.
    Mr. Jaczko. I think we all are, Senator.
    Senator Isakson. OK. Nobody has told, I don't know what 
that incident was? What was I looking at? What actually 
happened?
    Mr. Jaczko. That was a bank of cooling towers which are 
used at the Vermont Yankee Nuclear Power Station to help reduce 
the temperature in the water, so that it can be discharged to a 
local river, I believe, in order to meet environmental 
constraints on the operation of the plant.
    Senator Isakson. Was that either a safety or an 
environmental threat?
    Mr. Jaczko. Certainly it poses the potential for the 
licensee to exceed their permitting requirements on the 
environmental side.
    Senator Isakson. For discharge?
    Mr. Jaczko. For discharge, exactly. Now, they reduced power 
as a result of that, so that they would stay within their 
limits. So as a result, they actually had to go down in power 
to maintain their allowable levels of discharge.
    Mr. Klein. There is one cell that is safety-related, but 
only one cell. The affected unit was not a safety cell. And I 
think one of the difficulties we have had explaining this is 
obviously that is a very graphic picture. But for us, it is not 
a safety-related issue. As Commissioner Jaczko indicated, the 
company had the power down so they did not exceed their 
temperature limits. But it was not a safety issue for the 
reactor.
    Senator Isakson. For the record, I just thought the record 
ought to reflect, I thought I heard you saying it in your 
answer, Mr. Jaczko, this was not a safety or environmental 
violation, which is why it didn't rise to the level of a fine.
    Mr. Jaczko. Certainly I wouldn't say that it wasn't, well, 
in the end, though, the licensee didn't violate their 
environmental provisions, because they did reduce power. But 
that is a required system to meet environmental protection 
issues.
    Senator Isakson. I understand. I think that needs to be in 
the record.
    Not to pick on you, Dr. Jaczko, but you made a comment 
about activity. I understand Dr. Klein's statement about a CR 
and the budgetary constraints that you have. But I heard you 
say there may be, you used the word may, a statutory 
prohibition for a new activity under a CR. And I read this 
graph here that my staff has provided me with, where you have 
13 pending applications and are anticipating 9 or 10 or 11 
more. Those 9 or 10 or 11, then, if they came in during a CR, 
are you saying that would be a new activity, therefore you 
would be statutorily prohibited from beginning the process?
    Mr. Jaczko. That is a question that I have had discussions 
with the staff about. I don't have yet a complete answer, but I 
think it is one that--I don't think, in my view, that is the 
intention of what a new activity would be defined as. It may be 
just a requirement that we have to adhere to.
    Senator Isakson. Thank you. I would just suggest to the 
Chairman, that seems like a technicality we need to correct. 
Because I understand the CR problem, but I don't understand an 
application actually being prohibited just because you are 
under a CR.
    Dr. Klein, did you say 90 percent of your budget comes in 
terms of fees from the industry you regulate?
    Mr. Klein. Yes. In the late 1990's, it was changed from 100 
percent fee recovered to 90 percent fee recovered. So all of 
our licensees pay for our services.
    Senator Isakson. I think that is important for us to note 
in this whole CR question, too, of course, it ultimately always 
is taxpayers' money, whether the utility is paying it, they got 
it from the taxpayer, or the taxpayer does.
    Mr. Klein. A lot of these are ratepayer dollars, as opposed 
to taxpayer dollars.
    Senator Isakson. Well, ratepayers are generally, not 
always, but----
    [Laughter.]
    Senator Isakson [continuing].--generally are taxpayers.
    Dr. Lyons, you responded on Yucca Mountain, or were in part 
of that discussion. I will close with this, Mr. Chairman. I 
understand the controversy at Nevada. I understand the 
controversy anywhere when you are talking about storing nuclear 
waste.
    But as I understand it, the French process of recycling 
reduces spent nuclear fuel from nuclear reactors by 90 percent. 
Is that a proper understanding?
    Mr. Klein. That is a general rule of thumb. It may not 
always be 90, but it is significant.
    Senator Isakson. I think it is important to understand. The 
members from South Carolina and Georgia have gone to Secretary 
Bodman extensively over the last few years, as the Savannah 
River site has ratcheted down in terms of its workload. There 
is a site that has built the nuclear warheads for our arsenal 
for I guess 40 or 50 years, has been environmentally totally 
safe the entire time. In fact, the university system of Georgia 
has an environmental laboratory that has monitored for decades.
    It would seem like although you regulate and don't 
advocate, it would seem like a MOX facility to reprocess spent 
fuel and reduce the waste by 90 percent would be something we 
ought to be investigating as a Nation. I would appreciate, Dr. 
Lyons, your comment on that.
    Mr. Lyons. Speaking from the NRC's perspective, our focus 
has to be on the safety of whatever is proposed. Speaking as an 
individual, I do believe that reprocessing is a better approach 
for the Nation in terms of a spent fuel management overall 
strategy.
    Senator Isakson. Do any of the commissioners disagree with 
that statement?
    [Negative responses.]
    Senator Isakson. Thank you very much, Mr. Chair.
    Senator Carper. And thanks for asking that question.
    One more round, and then we will excuse this panel.
    The NRC does not require a public hearing, and I think 
this, we actually started getting into this with one of Senator 
Cardin's questions. So I am going to followup to that. The NRC 
does not require a public hearing for plant renewal unless a 
contention is filed and admitted by the NRC's Atomic Safety and 
Licensing Board. If you feel it is important to have a 
mandatory public hearing for new plant licenses, why not for 
license renewals? You talked a little bit about this, but I 
want to get back to it.
    Mr. Klein. Speaking personally, I am not really excited 
about mandatory hearings if there are no issues that have been 
brought forward. By the time a hearing or an issue has come up, 
we have so much dialog with the public, with the opportunity 
for intervention, that if there are no new issues to be 
addressed, I am not a supporter of mandatory hearings.
    Senator Carper. Anybody else, briefly?
    Mr. Lyons. I think I already indicated my statement against 
the mandatory hearing.
    Senator Carper. Anyone else? Commissioner Svinicki.
    Ms. Svinicki. Yes, thank you. I didn't respond earlier. I 
am supportive of the Commission's legislative proposal to 
eliminate the mandatory hearing.
    Senator Carper. All right. Commissioner Jaczko.
    Mr. Jaczko. Just to complete the set, I actually am not 
supportive of that provision, for the reasons I indicated. The 
mandatory hearing, or the hearing process, plays an important 
role. As I said, I think we may over-emphasize the distinction 
between contested and non-contested. Contested simply means 
that intervenors have come forward with specific issues. But I 
certainly would not want to say today that we are dependent 
upon intervenors to identify what the problems are with any 
application. The hearing serves as an opportunity for the 
Commission itself to formally review the application, to 
formally review the decisions that the staff has made. It 
provides licensing boards an opportunity to review the 
decisions and determinations of the staff.
    So it serves an important oversight and management function 
on the part of the Commission, whether there are contested 
issues or not. So I think eliminating that mandatory hearing 
provision is tantamount to eliminating the hearing provision. I 
don't know that I am comfortable with that at this point.
    Senator Carper. So out of the four commissioners, three of 
you believe that if there is not a contentious issue that is 
being raised, at least for the license renewals, that a public 
hearing is not appropriate. But I believe you all feel that 
whether there is a contentious issue or not, on a new 
application, there has to be a hearing or series of hearings, 
is that correct?
    Mr. Klein. We have a lot of public dialog, a lot of public 
comments. We expect early on that we will have contested issues 
and we will have hearings.
    Mr. Lyons. And I do not support mandatory hearings for new 
plants. I concur with the Chairman that there are many, many 
opportunities for public input, public involvement, and, as I 
stated earlier, there are a number of pieces of legislation 
which I believe have provided many more opportunities for 
public input and public knowledge, which in my mind no longer 
require the mandatory hearing for the new plant.
    Senator Carper. Very briefly, please.
    Mr. Jaczko. If I could just very briefly refer to one 
comment the Chairman made. With regard to the safety review 
that the Commission conducts, there is no opportunity for 
public hearing. We have opportunities for public hearing on the 
environmental provisions. The only opportunity for public 
participation on the safety review is through the hearing 
process.
    Senator Carper. All right, thank you.
    For the renewal license hearings, public groups claim that 
the NRC provides legal support for the industry. Is that true? 
I'll State it again. For the renewable license hearing, some 
public groups claim the NRC provides legal support for the 
industry. Is that a true assertion?
    Mr. Klein. I don't believe we provide legal support for the 
industry. We provide legal support for ourselves. But the 
industry should pay their own bills.
    Senator Carper. There is a member of your staff right over 
your right shoulder who is nodding her head no. Is that your 
legal counsel?
    Senator Carper. That is our General Counsel.
    Senator Carper. All right, fair enough. Does anyone else 
want to respond to that assertion?
    Mr. Jaczko. That may be in reference to some of the 
confusion about how our hearing process works. Because we 
generally have three parties involved, usually the applicant, 
the staff and then individuals who raise concerns. And often, 
by the time we actually get into many of the arguments and the 
discussions in the hearing process, the staff has done a lot of 
their review of the application. So the staff positions are 
often consistent with the positions of the applicant. So 
sometimes intervenors get the impression that there is a level 
of working together there that isn't necessarily always the 
case. But it does pose a challenge, I think, from a perception 
issue and from a communication issue.
    Senator Carper. Thank you. One more on waste confidence. 
Senator Voinovich had written to the Chairman of the NRC on the 
waste confidence rule. But waste confidence is crucial for the 
health for the health of this industry. Where is the Commission 
in the waste confidence rule process, and when do you think it 
will be finalized?
    Mr. Klein. We received some information from our trusty 
Office of General Counsel, behind me, from the staff on 
recommendations and ways forward. We hope to have a decision on 
that soon. It is very likely that it will be within the next 2 
weeks or less. And we will likely address it through a 
rulemaking process. We have a few technicalities to address.
    I think the important part is to note that dry cast storage 
is safe. We have a lot of confidence in that. I do believe that 
as we move forward, it is very important that there is an 
agreement between the Department of Energy and the utilities 
for these new plants, so that it will give us as a Commission 
more confidence that there is a final path forward for those 
new plants.
    Senator Carper. Does anyone else want to comment? No. OK.
    Senator Voinovich.
    Senator Voinovich. I would just like to point out a couple 
of things and then ask a question. When the EPA did the 
analysis of the Lieberman-Warner-Boxer bill, they claimed that 
in order for them to meet the caps that they specify in the 
application that there would have to be 150 new plants built by 
2050. When the Energy Information Agency looked at the same 
thing, they came back and said, 65 plants by 2030. We have 
heard a lot today about the timing it will take in order to 
move these along. But from a practical point of view, first of 
all, what are the chances of getting 65 new facilities by 2030, 
No. 1 and No. 2, even if these applications move through the 
process, when do you predict that they would come online, which 
is another issue that people are concerned about?
    And the third question really is one that we have been 
working on for a long time, and that is the issue of security. 
As we have had these hearings, I have urged the Commission to 
get more into actually safety, the safety culture, the regimen, 
the standards that are being implemented at the various 
reactors, and where have you gone in terms of improving upon 
that aspect of this? Because prior to this, it seemed that they 
let the issue of safety culture within the framework of the 
people that were operating these facilities, and there wasn't 
any kind of standards that you applied to determine whether or 
not safety, in effect, was something that was being done at 
these facilities.
    Mr. Klein. I will take those in order.
    I believe, whether we could have 65 plants online by 2030 
is more of an infrastructure issue, rather than a regulatory 
issue. As I have said before, I don't believe the NRC will be a 
bottleneck in this process. We intend to be responsive with our 
obligation of safety and security, but also meeting appropriate 
milestones. So I think the number of plants that could be 
available by any given date will probably hinge more on 
manufacturing, construction and other talents, not the 
regulator.
    In terms of reactors coming online, it is reasonable to 
believe that if applications come in on time, and we are able 
to receive requests for additional information, I believe it is 
reasonable to assume that new plants should be running in the 
2016 to 2017 timeframe. And again, the number of those that are 
in operation probably depends upon the contracts that the 
utilities will be able to enable them to actually build. Again, 
I don't believe they will be limited by the Nuclear Regulatory 
Commission.
    And then to your final question on safety culture. Safety 
culture is extremely important, as Davis-Besse pointed out. We 
have two pilots underway with utilities to look at how do you 
measure, how do you encourage safety culture internally. We are 
also looking at a safety culture internal. In other words, we 
should hold ourselves as accountable as those we regulate, so 
we are looking at a safety culture within the NRC.
    The challenge with the safety culture is, how do you 
measure it? What are your metrics? So you often end up 
measuring surrogates in terms of, do people have the ability to 
raise issues without retribution? Is there an open 
communication channel? Things of that nature. So a safety 
culture is something that we are focused on. We have pilots. 
But we haven't, as an industry, and we don't know of any 
industry that really has a good metric on how do you measure 
safety culture. But we are trying to find it.
    Senator Carper. Thank you. And I would urge you to continue 
that search. My hope is that you will find it and put it to 
good use.
    We appreciate very much your being here today and thank you 
for your testimony. Thank you for your response to our 
questions. Thank you for the leadership that you provide for 
our Commission.
    I want to say before you leave, what you are doing is just 
enormously important to our Nation. We face this huge and 
growing reliance on foreign energy. A lot of it is controlled 
by people who don't like us very much. I am convinced they are 
using our money to hurt us. And we have grave threats to our 
environment, really to our world by virtue of global warming, 
and enormous threats to our health, especially for us who live 
on the east coast, because we are at the end of the tailpipe 
when it comes to sulfur dioxide, nitrogen oxide and mercury. 
And nuclear energy is certainly not the sole answer, there is 
no silver bullet here. My colleagues have referred to any 
number of other things that we need to do, including renewable 
energy, efficiencies and conservation. There are plenty of 
other things we can and need to do all at once. But what you 
are doing is an enormously important part of the solution to 
get us out of the mess that we are in and right back on the 
right track.
    So thank you very much. Continue to be ever vigilant. Thank 
you.
    We will call our second panel. A vote has been scheduled 
for 12:15 on an amendment by one of our colleagues to the 
global AIDS bill. And I will just ask my colleague, Senator 
Voinovich, how you would feel about heading over to the floor 
maybe just before 12:15, so we can go ahead, introduce this 
panel, they can begin and when you return, I can go vote. That 
way we won't waste any time.
    Senator Voinovich. That is fine.
    Senator Carper. OK, thanks.
    Gentlemen, welcome. We are delighted that you are here on 
this panel. Hubert T. Bell, Inspector General of the Nuclear 
Regulatory Commission. Who appoints you, if you don't mind my 
asking? Who is the appointing authority for the Inspector 
General at the NRC?
    Mr. Bell. I am nominated by the President, confirmed by the 
Senate.
    Senator Carper. I see. Thanks very much.
    David Christian, Mr. Christian, thank you very much. Nice 
to see you. President and Chief Nuclear Officer at Dominion.
    And I hope I don't mangle this name too much. Is it 
Pietrangelo?
    Mr. Pietrangelo. Correct, sir.
    Senator Carper. Mr. Anthony R. Pietrangelo, Vice President 
for Regulatory Affairs at the Nuclear Energy Institute.
    Mr. Richard Webster, Legal Director of the Eastern 
Environmental Law Center. Thank you for joining us today.
    Dr. Joseph Romm, Senior Fellow at the Center for American 
Progress.
    And finally, H. John Gilbertson, Jr., the Managing Director 
at Goldman Sachs and Company.
    We are delighted that you are here. We welcome your 
participation. We are going to try to keep this rolling, even 
during the course of this vote. We all have roughly 5 minutes 
to speak, then we will followup with questions. We are happy 
that you are here and look forward to continuing this 
conversation with you right now.
    Mr. Bell, you are up first. Your entire statement will be 
made part of the record. If you could summarize and keep it to 
about 5 minutes, please.

 STATEMENT OF HON. HUBERT T. BELL, INSPECTOR GENERAL, NUCLEAR 
 REGULATORY COMMISSION ACCOMPANIED BY: ANTHONY LIPUMA, DEPUTY 
 ASSISTANT INSPECTOR GENERAL FOR AUDITS; GEORGE MULLEY, SENIOR 
          LEVEL ASSISTANT FOR INVESTIGATIVE OPERATIONS

    Mr. Bell. Thank you, Mr. Chairman, members of the 
Subcommittee. It is a pleasure to appear before you today.
    I am accompanied today by Mr. Anthony Lipuma, Deputy 
Assistant Inspector General for Audits, and Mr. George Mulley, 
Senior Level Assistant for Investigative Operations.
    As you know, the mission of the Office of the Inspector 
General at the Nuclear Regulatory Commission is to assist the 
Nuclear Regulatory Commission by assuring integrity, efficiency 
and accountability in the agency's programs. My office carries 
out this mission by independently and objectively conducting 
and supervising audits and investigations related to NRC's 
programs and operations, preventing and detecting fraud, waste 
and abuse and promoting economy, efficiency and effectiveness 
in NRC's programs and operations.
    Over the past year, my office has issued three reports 
pertaining to the NRC's licensing and relicensing processes for 
operating nuclear power plants. These reports identify 
shortcomings relative to the agency's review process. I would 
like to talk today about two of the reports, each of which 
focused on NRC's license renewal program.
    The first report, Audit of NRC's License Renewal Program, 
assessed the effectiveness of NRC's nuclear reactor license 
renewal safety reviews. These reviews are conducted by NRC's 
license renewal staff and focus on how licensees manage adverse 
effects of aging to provide reasonable assurance that plants 
will continue to operate in accordance with the current 
licensing basis for the period of extended operations.
    The OIG audit found that NRC has developed a comprehensive 
license renewal process to evaluate applications for extended 
periods of operation, however, OIG identified areas where 
improvements would enhance program operations.
    One area identified as needing improvement pertained to 
license renewal reporting. Auditors found that NRC staff did 
not consistently provide adequate descriptions of review 
methodology or support for conclusions in license renewal 
reports, because NRC has not established a report quality 
assurance process to ensure adequate documentation. In 42 
percent of the cases reviewed, OIG found identical or nearly 
identical word for word repetition of the licensee's renewal 
application text in the NRC Review Team inspection and safety 
evaluation reports. The lack of precision in differentiating 
quoted and unquoted text made it difficult for a reader to 
distinguish between the licensee-provided information and NRC 
staff independent assessment methodology and conclusion. As a 
result, those who read the report could conclude that 
regulatory decisions are not adequately reviewed and 
documented.
    As a follow on to the audit of the NRC's license renewal 
program, OIG issued sent a report to the Chairman of the NRC 
addressing concerns raised regarding the extent of the NRC 
staff review of license renewal applications. For this report, 
OIG's investigative unit conducted a review of NRC staff's 
preparation of license renewal safety evaluation reports that 
documented NRC assessments of license renewal applications for 
four nuclear power plants (Browns Ferry, Brunswick, D.C. Cook, 
and Oyster Creek). OIG determined that the license review staff 
conducted headquarters and onsite reviews of license renewal 
application materials. Staff used professional judgment to 
determine the extent of their onsite review of licensee 
documents and the number and nature of questions they posed to 
licensee staff and requests for additional information.
    OIG determined that between 70 and 90 percent of the NRC 
review of license renewal applications was performed onsite. 
The results of the onsite reviews were documented in license 
renewal audit reports. Based on information developed by the 
staff during its headquarters and onsite review activities, as 
well as written responses to NRC questions and clarifying 
discussions held with the licensee, NRC reviewers submitted 
their formal input to be used as the basis for a Safety 
Evaluation Report.
    The OIG report to the Chairman noted that NRC onsite 
license renewal audit reports are summary in nature. These 
reports document the findings of the NRC onsite review and 
provide support for the NRC conclusion in Safety Evaluation 
Reports. The audit reports also list the licensee documents 
that were reviewed during the NRC onsite reviews.
    Additionally, based on our review of NRC work hour data, 
OIG noted that significant numbers of hours were used by the 
NRC staff in their review of the license renewal applications 
for the four power plants reviewed by OIG. However, during its 
review OIG learned that as a standard practice the NRC staff 
does not preserve as permanent records copies of all licensee 
documents reviewed onsite or their own working papers, for 
example, inspector notes. These documents provide additional 
direct support of the specifics of the NRC onsite review. The 
lack of licensee documents and NRC working papers made it 
difficult for OIG to verify specific details of the staff 
onsite review activities.
    In response to the OIG audit recommendations pertaining to 
license renewal reporting, NRC has proposed or taken specific 
actions intended to impose standards for report writing and 
ensure consistent implementation of license renewal reviews. 
These actions include updating report writing guidance and 
developing associated training to convey report writing 
standards for describing the license renewal review methodology 
and providing support for conclusions and license renewal 
reports and implementing an enhanced report review process.
    OIG is currently assessing NRC's proposed and completed 
actions to determine whether the actions meet the intent of the 
recommendations. As resources permit, my staff will continue to 
conduct audits related to nuclear power industry licensing 
during Fiscal Year 2009 and beyond. Audits will assess such 
areas as NRC's quality assurance planning for new reactors, the 
agency's readiness to oversee the construction of new nuclear 
power plants, NRC's vendor inspection program and other key 
issues pertaining to new reactor licensing, as well as the 
licensing of Independent Spent Fuel Storage Installation.
    Mr. Chairman, and members of the subcommittee, this 
concludes my report to you on my Office's recent activities 
pertaining to NRC's licensing and relicensing processes for 
nuclear power plants.
    [The prepared statement of Mr. Bell follows:]
    
    
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    Senator Carper. Mr. Bell, thank you very much for your 
testimony.
    Mr. Christian, again, welcome and please proceed.

 STATEMENT OF DAVID A. CHRISTIAN, PRESIDENT AND CHIEF NUCLEAR 
                   OFFICER, DOMINION NUCLEAR

    Mr. Christian. Mr. Chairman, Ranking Member, I am pleased 
to be able to have the opportunity to participate today. As you 
mentioned, I am the Chief Nuclear Officer and President of 
Dominion's nuclear organization.
    Dominion is one of the Nation's largest producers of 
energy. We operate seven reactors on four sites in three 
States, two sites in Virginia with two reactors each, one site 
in Connecticut and one site in Wisconsin. We are actively 
involved in the Federal process that we believe will lead to 
the first new nuclear unit to be built in the United States in 
30 years.
    I was invited here today to give you my company's opinion 
and experience with the new nuclear licensing process. Overall, 
I will say that my observations are that the Nuclear Regulatory 
Commission has been both professional and open in developing 
and implementing the new licensing process, previously referred 
to as the Part 52 process. Although there is still some work to 
be done, we believe that the goals are achievable. Continued 
oversight will be necessary and continued attention will be 
required to assure that the progress achieved through the 
licensing process improvements is sustained.
    My basis for saying that our experience with the NRC's new 
licensing process is positive is that Dominion has hands-on 
experience with two of the three elements in the new licensing 
process, that being early site permitting and combined 
licenses, and we are actively cooperating with General Electric 
Hitachi Nuclear Energy on the third element, the design 
certification for the ESBWR, or Economic Simplified Boiling 
Water Reactor advanced design, a design which includes a 
combination of passive reactor safety designed in unit 
security, economic and reliable operation.
    In 2002, we were the first company to begin working with 
the U.S. DOE on demonstrating the early site permit process. 
Following our submittal, an extensive NRC staff review and 
public input and a mandatory hearing, the NRC issued our early 
site permit in November 2007. On the same day that we received 
our early site permit, we submitted and applied for a combined 
operating license for a new 1,500 megawatt unit at North Anna, 
some 90 miles from here. Dominion's COL application was based 
on NRC guidance, developed with significant interactions 
between the public and the industry. The NRC acknowledged the 
quality of our application and completed its acceptance review 
in less than the prescribed time. The NRC is scheduled to 
complete its detailed reviews in August 2010.
    Our assessment of the NRC's positioning is that they are 
prepared to handle a large, but not unlimited, number of 
applications from utilities and vendors. The NRC strongly 
encourages and encouraged the design-centered working group 
approach or design-centered review approach to maximize its 
review efficiency. Dominion supports this approach through its 
participation in the ESBWR design-centered working group and 
its role as the lead license applicant for this design.
    The NRC has taken a number of actions to prepare for new 
unit applications and those were enumerated in Chairman Klein's 
testimony.
    In sum, the NRC can issue reasonable schedules when 
provided with quality applications that meet its requirements. 
What this results in is applications that are accepted in a 
timely manner and review schedules that are unencumbered with 
conditions.
    The NRC, through its Office of New Reactors, is working to 
maintain its published schedule. In addition, much has been 
said here today about the efficiency of the license review 
process, and the timing of the license review process. It is 
important to remember that the concept of reviewing common 
issues one time for a reference application and then expecting 
subsequent applications to use that reference to reference the 
resolved issues promises to make future application reviews far 
more efficient.
    One aspect of the combined license process which has yet to 
be proved is to confirm that what was built is the same as what 
was licensed. This final aspect is sometimes referred to as 
ITAAC or Inspection Test Analyses and Acceptance Criteria. 
These tests are conducted prior to fuel load and bringing the 
reactor into service. We view this will be a challenge, but we 
expect to resolve it in a manner that ensures public health and 
safety is maintained.
    In conclusion, let me reiterate that our observations are 
that the NRC has been professional and open in developing and 
implementing the new licensing process. It is capable of 
implementing the process to license new units and the industry 
is capable and prepared to submit quality applications. 
Although there is some work still to be done to implement the 
new process, the goal of deploying new reactors in the U.S. 
appears achievable.
    Thank you.
    [The prepared statement of Mr. Christian follows:]
    
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    Senator Carper. Mr. Christian, thank you very much.
    Mr. Pietrangelo, you are welcomed.

 STATEMENT OF ANTHONY R. PIETRANGELO, VICE PRESIDENT, NUCLEAR 
                        ENERGY INSTITUTE

    Mr. Pietrangelo. Chairman Carper, Ranking Member Voinovich, 
I appreciate the opportunity to testify today and on behalf of 
the nuclear industry, thank this Subcommittee for its 
longstanding interest in and oversight of the NRC's activities 
and the issues important to the continued beneficial uses of 
nuclear energy.
    In particular, we appreciate the leadership shown by 
Senator Carper and Senator Voinovich on key issues including 
infrastructure, the loan guarantee program and waste confidence 
that are critical to new plant build. My testimony today 
addresses the following topics: one, the performance of the 104 
power reactors and the contribution nuclear energy makes toward 
the U.S. energy and environmental policies; two, the importance 
of license renewal to extending the value of nuclear power 
plant assets and NRC's license renewal process; and three, the 
prospects for building new nuclear plants in the U.S. and the 
importance of an effective and efficient NRC licensing process.
    The U.S. nuclear fleet continues to operate at record high 
levels of safety and reliability. In 2007, the highlights 
include the industry's capacity factor at 91.8 percent, an all-
time high. U.S. reactors produced 806 billion kilowatt hours at 
an average production cost of 1.76 cents per kilowatt hour, 
both new industry standards. With this excellent performance, 
nuclear energy continues to generate about 20 percent of U.S. 
electricity, despite the fact that nuclear power plants 
represent only about 12 percent of the installed electric 
generating capacity.
    In addition, nuclear energy accounts for more than 70 
percent of the Nation's carbon-free electricity generation and 
prevented the emissions of CO2 equivalent to those from all 
passenger vehicles in the United States in 2007. The 
outstanding performance of the U.S. nuclear fleet, along with 
its contributions to our energy and environmental goals, 
provide the context and foundation for renewing the licenses of 
existing plants and preparations for new plant build.
    License renewal of nuclear power plants in this Country is 
founded upon technical research begun in 1982 through the 
nuclear plant aging research program established by the NRC. 
The program concluded that aging phenomena are manageable and 
should not preclude extended operation for reactors. The 
rulemaking that followed, 10 C.F.R. Part 54, included two 
fundamental principles: the regulatory process will ensure that 
the licensing basis provides and maintains plant safety and 
that the licensing basis carries forward throughout the renewed 
period of operation.
    The license renewal process does not attempt to duplicate 
the regulatory oversight that occurs continually at all 
reactors. Rather, it appropriately focuses on managing the 
effects of aging on key structures and components that are not 
routinely inspected. Applicants for renewal are required to 
identify the important structures and components within the 
scope of the rule. Second, they must identify the aging 
mechanisms or effects that these structures and components are 
subject to. And finally, they must describe how they will 
address and manage the aging effects through plant programs and 
inspections.
    The NRC developed the Generic Aging Lessons Learned, or 
GALL report, to capture experience on aging effects. The report 
also captures practices acceptable to the NRC for managing 
those aging effects. Applicants routinely reference the 
practices detailed in the GALL report in their applications. 
This in large part explains some of the findings in the NRC 
Inspector General's audit of the license renewal process.
    Turning to new plant build, I cannot overState the 
importance of available loan guarantee program to kick start 
the first wave of plants, and that would lower the cost of 
electricity to consumers. NEI expects four to eight plants will 
be deployed by the middle of the next decade. The industry is 
well aware of the areas that plague the construction of the 
existing fleet, and we have focused our efforts on mitigating 
those risks. This must be demonstrated by completing these 
first projects within schedule and budget constraints to build 
confidence for a more significant expansion to occur.
    From a licensing perspective, the NRC and the industry are 
on a steep learning curve with regard to the implementation of 
Part 52. Thus far, the reviews are progressing per established 
schedules. Of utmost importance is the completion of key 
rulemaking activities, including Part 73 on security, aircraft 
impact assessments and the revision of the waste confidence 
rule that will further strengthen the current regulatory basis 
for NRC's waste confidence determination.
    In addition, we expect that efficiencies in the licensing 
process will be gained as the design certifications are 
completed and lessons learned are incorporated from the initial 
early site permit and combined license reviews.
    Going forward, the industry's highest priority will remain 
the continued safe and reliable operation of the existing 
fleet. It is this performance that enabled successful license 
renewal thus far, and that will sustain the recognition of 
nuclear energy as an indispensable element of meeting our 
Nation's energy and environmental goals.
    Thank you, Mr. Chairman.
    [The prepared statement of Mr. Pietrangelo follows:]
    
    
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     Response by Anthony R. Pietrangelo to an Additional Question 
                           from Senator Boxer

    Question 1. Mr. Webster's written testimony mentioned that 
improving the NRC's licensing procedures would actually be good 
for the nuclear industry because it would help improve public 
confidence and reduce resistance to the siting of new plants. 
Do you agree with his statement? Aren't you concerned that 
eliminating the mandatory hearing requirement for new licenses 
would reduce public confidence in the NRC and the safety of new 
facilities?
    Response. In response to the first question, NEI agrees 
with the general proposition that improving the NRC's licensing 
procedures should enhance public confidence in the NRC 
licensing process and thereby reduce public resistance to 
siting new plants. In our view, eliminating the mandatory 
hearing from NRC licensing reviews would affirmatively improve 
the NRC licensing process with no attendant decrease in 
protection of public health and safety and no change in 
opportunities for public participation. Discontinuing the 
unnecessary and duplicative reviews conducted in mandatory 
uncontested hearings would reduce the burden on the NRC Staff, 
the NRC Atomic Safety and Licensing Boards (ASLB) and 
applicants, and shorten the overall licensing process for new 
plants.
    In response to the second question, NEI believes that 
eliminating mandatory hearings should have no effect on public 
confidence in the NRC, NRC licensing decisions, or the safety 
of new nuclear power plants. The mandatory hearing is a 
vestigial artifact of a different era and a different 
regulatory framework for commercial reactor licensing. The 
original purposes of the mandatory hearing--to provide public 
notice of the project and an additional, independent review by 
the NRC Atomic Safety and Licensing Board are now achieved 
through other, more effective NRC processes and other avenues 
for public participation and independent review. The NRC 
licensing process is thorough, fair, and transparent, and 
protects public health and safety against radiological hazard. 
This process clearly merits public confidence in NRC licensing 
decisions absent a mandatory hearing. Additionally, eliminating 
mandatory hearings would have no effect on public participation 
in the NRC licensing and hearing process.
    History of the Mandatory Hearing Provision: Following 
passage of the Atomic Energy Act of 1954 (AEA), the Atomic 
Energy Commission (AEC), the predecessor of the NRC, issued 
three reactor construction permits without any public hearing 
or notice of intent. To address this lack of notice, Congress 
amended the AEA in 1957 to require a hearing for each new 
reactor application. This change was intended to ensure that 
the public was aware of applications for a new power reactor--
that is, the mandatory hearing served a ``public notice'' 
function. In 1962, Congress again amended the AEA to create the 
Atomic Safety and Licensing Board, to alleviate concerns with 
the AEC's dual role as both a regulator and a promoter of 
nuclear energy. Since 1962, the mandatory hearing provisions in 
the AEA have not changed. However, there have been substantial 
changes in the NRC licensing process, the agency's 
organizational structure, and the AEA that render the mandatory 
hearing redundant and unnecessary.
    The ``Public Notice'' Function: NRC uses a variety of 
mechanisms to offer the public detailed information regarding 
new nuclear plant (or combined license (COL) applications. 
Before an application is submitted, letters of intent 
describing the location and timing of an expected COL 
application are available on the NRC's website, http://
www.nrc.gov. The NRC also holds public meetings near the 
proposed new reactor site to explain the licensing process and 
identify ways in which the public may participate in the 
process. Once the NRC receives an application for a COL or 
Early Site Permit (ESP), it publishes in the Federal Register a 
separate Notice of Receipt and Availability of an Application, 
a Notice of Docketing of an Application, and a Notice of an 
Opportunity to Request a Hearing. The application and related 
documents are available on a webpage dedicated to each proposed 
facility. During its review, the NRC holds additional public 
meetings in the vicinity of the proposed facility to solicit 
public input on the application.
    NEPA Considerations: The National Environmental Policy Act 
of 1969 (NEPA), which post-dates the AEA's mandatory hearing 
provision, requires NRC to conduct environmental reviews for 
each application and to provide notice and specific 
opportunities for the public to participate in those reviews. 
Even absent a mandatory hearing, the ``public notice'' function 
of the mandatory hearing would continue to be performed by 
other, more comprehensive and effective means of public 
communication.
    Mandatory Hearings and the Functions of the AEC/NRC: Since 
the mandatory hearing reqUirement was instituted in 1957, the 
regulatory function of the AEC has been separated from the 
promotional function. This resulted in the creation of the NRC, 
whose function is to regulate and license commercial nuclear 
materials and facilities and conduct related research. The 
creation of the NRC as an independent regulatory agency in 1975 
eliminated the structural conflict of interest that prompted 
the establishment of the ASLB in 1962, rendering redundant the 
ASLB's original role as an independent reviewer of uncontested 
issues.
    Mandatory Hearings and the Role of the ACRS: The Advisory 
Committee on Reactor Safeguards (ACRS) is now reqUired by 
statute to conduct an extensive and independent review of the 
Staff's licensing review for every new reactor application. 
Because the ACRS includes subject matter experts from a range 
of technical disciplines, the ACRS is perhaps even better-
equipped to probe the NRC Staff's review than the ASLB. Also, 
ACRS meetings are open to the public and any report issued by 
the ACRS on an application is also publicly available. Thus, 
the ``independent review'' objective of the mandatory hearing 
is served by ACRS review, which is equally independent and 
arguably more insightful.
    Mandatory Hearings and Public Participation: Eliminating 
the mandatory hearing would not eliminate the opportunity for 
the public to participate in hearings on license applications 
for new nuclear plants. Currently, members of the public have 
no right to participate in the NRC's mandatory hearing. 
Eliminating mandatory hearings would therefore have no effect 
on the public's right to participate in the NRC licensing 
process. Importantly, members of the public with standing would 
still be able to offer proposed contentions on the application. 
If proffered contentions were admitted, NRC Licensing Boards 
would still conduct a hearing on those contentions and make de 
novo factual findings on the contested issues raised by 
intervenors.
    This table compares the NRC reactor licensing processes and 
procedures at the time the mandatory uncontested hearing 
requirement was first introduced to the current regulatory 
program.

     Response by Anthony R. Pietrangelo to an Additional Question 
                          from Senator Carper

    Question. Collapsing cooling towers and leaks at Vermont 
Yankee do not build public confidence in the nuclear industry. 
However, these are considered non-safety issues and are not 
under the jurisdiction of the NRC. Does the industry have best 
practices available--similar to NRC's Guidelines for Aging
    Response. The industry does collect and disseminate 
operating experience on non-safety-related structures, system 
and components through the Institute of Nuclear Power 
Operations (INPO). This includes operating experience on 
cooling towers as well as many other categories of non-safety-
related equipment used to produce electricity. INPO also 
generates ``good practice'' documents that provide guidance on 
key aspects of operations and maintenance for both safety and 
non-safety systems that are important to plant reliability.
    A Topical Report on Cooling Tower Structure Events was 
published in March 2008 by INPO that captures key observations 
from operating experience between 2000 and 2007. This report is 
similar to the NRC's Generic Aging Lessons Learned report. It 
details the causes and contributors to cooling tower events and 
provides considerations for improving plant practices in order 
to preclude such events.
    The industry recognized long ago that unreliable non-safety 
systems can undermine reliable electricity generation and 
public confidence simultaneously. Many industry programs were 
developed in the 1980's to improve the operation of the balance 
of plant (the non-nuclear part of the plant) because of its 
adverse impact on plant capacity factors. Since that time, the 
industry has demonstrated steady improvement in fleet average 
performance to the record level of generation in 2007. However, 
we must continue to learn lessons from our operating experience 
to avoid events that both impact reliable generation and 
degrade public confidence in the overall operation of our 
plants.

      Responses by Anthony R. Pietrangelo to Additional Questions 
                          from Senator Inhofe

    Question 1. Of the Requests for Additional Information 
(RAI's) that the industry has received, what percentage of the 
applicants' responses have been returned to the NRC within the 
response deadline?
    Response. Overall, applicants have responded to more than 
5000 Requests for Additional Information (RAIs) by the deadline 
about 80 percent of the time. That percentage rises to nearly 
90 percent for the early site permit and combined license 
applicants. For design certification applicants, who have 
received far more RAIs, the percentage is apprOXimately 76 
percent.
    Note: The on-time performance for design certification 
applicants includes ESBWR design certification RAI responses 
since March 2007, when GE-Hitachi Nuclear Energy (GEH) and NRC 
established explicit agreements on response times for 
individual RAIs. Since submittal of the ESBWR design 
certification in August 2005, GEH's overall on-time response 
rate has been approximately 32 percent; however, since March 
2007, their on-time response rate has been roughly equivalent 
to the industry average.

    Question 2. In the hearing, Chairman Klein testified that a 
Continuing Resolution, if in effect until February, would 
impact license renewals, power uprates, and new reactor 
reviews. Does the industry have a clear understanding of the 
criteria that will be used to prioritize reviews if the NRC 
must cope with a funding shortfall?
    Response. The industry understands that NRC's first 
priority is the safety oversight of the existing fleet of 
operating plants, whether there is a Continuing Resolution or 
not. We also understand that if a Continuing Resolution is in 
effect until February, and assuming the NRC is funded at its 
Fiscal Year 2008 levels, that reviews already underway would 
not be impacted. The impact would be on newly submitted 
applications beginning in Fiscal Year 2009.

    Question 3. For applications to construct new reactors at 
sites with existing units, should the NRC require consideration 
of alternate sites under NEPA, without an indication of new and 
significant information that calls into question the NRC's 
prior determination that the site was acceptable?
    Response. The requirement for an evaluation of alternative 
sites is based on Section 102(2)(C)(iii) of the National 
Environmental Policy Act (NEPA). Consistent with NEPA's mandate 
that reasonable alternatives to an action be evaluated, the 
site selection process focuses on those alternative sites 
considered to be reasonable considering the purpose of the 
application. The alternative site review is designed to 
determine whether there is an ``obviously superior'' site, in 
terms of environmental impacts and economic costs, compared to 
the proposed site.\1\ It is well-established that NEPA's 
requirement to examine alternatives is subject to a ``rule of 
reason.'' \2\ Agencies need only discuss those alternatives 
that are reasonable and that ``will bring about the ends'' of 
the proposed action. Hydro Resources, Inc. (P.O. Box 15910, Rio 
Rancho, NM 87174), CLI01-4, 53 NRC 31, 55 (2001).
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    \1\This standard was first established by the NRC for evaluating 
alternative sites for new nuclear power plants in Public Serv. Co. of 
New Hampshire (Seabrook Station, Units 1 and 2), CLI0977098, 5 NRC 503, 
5260930 (1977). ``Obviously superior'' was later interpreted to mean 
``substantially better.'' Rochester Gas and Elec. Corp. (Stirling Power 
Project, Nuclear Unit No. 1), CLI09800923, 11 NRC 731, 737 (1980).
    \2\NRDC v. Morton, 458 F. 2d 827 (D.C. eire 1972); Citizens Against 
Burlington v. Busey, 938 F.2d 190, 195 (D.C. Cir.), cert. denied, 502 
U.S. 994 (1991).
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    NRC regulations require Early Site Permit (ESP), 
construction permit (CP) and combined license (COL) applicants 
to address certain topics, including alternate sites, in their 
Environmental Reports (ERs). See 10 CFR 51.50(a) and (c); 
52.17(a)(2). The requirement that COL applicants conduct an 
alternative site analysis is less explicit than that for ESP 
applicants; \3\ nevertheless, this obligation clearly applies 
to all ESP and COL applicants, including those who propose to 
construct a new reactor at a site with existing units (a so-
called ``brown field'' site).\4\
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    \3\ESP applicants must include in their ERs ``an evaluation of 
alternative sites to determine whether there is any obviously superior 
alternative to the site proposed.'' In this regard, the ER must discuss 
``all environmental effects of construction and operation necessary to 
determine whether there is any obViously superior alternative to the 
site proposed.'' 10 CFR Sec.  51.50(b)(1)-(2). For COL applicants that 
do not reference an ESP, NRC regulations do not contain a specific 
requirement for an evaluation of alternative sites. However, among the 
information to be included in the COL Environmental Report is a 
discussion of ``alternatives to the proposed action/' which must be 
``sufficiently complete to aid the Commission in developing and 
exploring, pursuant to section 102(2)(E) of NEPA, 'appropriate 
alternatives to recommended courses of action in any proposal which 
involves unresolved conflicts concerning alternative uses of available 
resources.' '' See 10 CFR 51.45(b)(3).
    \4\See NRC Regulatory Guide 4.2, Rev. 2, ``Preparation of 
Environmental Reports for Nuclear Power Stations,'' Chapter 9 (July 
1976); NUREG-1555, ``NRC Environmental Standard Review Plan,'' Rev. 1, 
Section 9.3 (July 2007).
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    The NRC Environmental Standard Review Plan (ESRP), which 
contains non-binding NRC Staff gUidance for reviewing 
applicants' Environmental Reports, currently recognizes as a 
``special case'' reviewing an alternative site analysis 
conducted for a new plant to be co-located at an existing 
reactor site. This guidance illuminates agency expectations 
that the scope of the alternative site review in this situation 
need not reflect the same level of evaluation:
    Recognize that there will be special cases in which the 
proposed site was not selected on the basis of a systematic 
site-selection process. Examples include plants proposed to be 
constructed on the site of an existing nuclear power plant 
preViously found acceptable on the basis of a NEPA review and/
or demonstrated to be enVironmentally satisfactory on the basis 
of operating experience, and sites assigned or allocated to an 
applicant by a State government from a list of State approved 
power-plant sites. For such cases, the reviewer should analyze 
the applicant's site-selection process only as it applies to 
candidate sites other than the proposed site, and the site-
comparison process may be restricted to a site-by-site 
comparison of these candidates with the proposed site. The site 
selection process is the same for this case except for the fact 
that the proposed site is not selected from among the candidate 
sites based on a site by site comparison. ESRP, NUREG-1555, 
Rev. 1, p. 9.3-12 (July 2007).
    Generally consistent with other NRC regulatory guidance in 
Regulatory Guide 4.2 (which is directed at applicants preparing 
Environmental Reports), this discussion expands the gUidance 
for ``Candidate Areas'' and ``Potential Sites'' to focus on a 
more elaborate, top down site selection process--beginning with 
Regions of Interest (ROI), then extending to screening 
candidate areas, identifying potential sites, and screening 
candidate sites, and then selecting the proposed site and 
alternative sites. While this is an appropriate process for 
establishing a newly licensed ``green field'' site, it may not 
offer the most logical or expeditious approach for a site that 
is co-locating at an existing nuclear site. (Many existing 
nuclear sites were already developed to have multiple units 
where the environmental factors were addressed during initial 
site selection review and approval.)
    This ``special case'' affords the NRC Staff reviewer 
flexibility in assessing the adequacy of alternative site 
reviews on a case-by-case basis. Arguably, however, the 
guidance could go further in recognizing that considerable 
environmental and operational information about the impacts of 
a nuclear plant exists with respect to each commercial reactor 
site, and that such information could preclude the need for a 
typical broad site alternative site review process. In 
particular, where an applicant seeks to add a nuclear unit at 
an existing nuclear site, a more limited assessment may be 
sufficient to demonstrate that green field or non-nuclear brown 
field sites are not obviously superior. An existing nuclear 
site would have been selected originally based on a 
comprehensive evaluation and determination that no obViously 
superior alternative in the region exists. Also, an existing 
nuclear site may have been originally intended and evaluated 
for additional nuclear units that were not built. The 
characteristics and the impacts of operation at existing 
nuclear sites are well known. If this information demonstrates 
no major environmental impediments to adding units at the 
existing nuclear site (no factors that would make the 
development of a new site enVironmentally preferable), green 
field and non-nuclear brown field sites should arguably be 
exempted, at least in part, from detailed site-specific 
consideration.
    Under such circumstances, NEPA's rule of reason should not 
require COL applicants to scour a region to identify and 
evaluate new potential sites, or for NRC, in turn, to perform 
independent evaluation of those sites. As the ESRP states, the 
purpose of this evaluation process is not to determine that the 
applicant has selected the best site, but ``to determine if any 
candidate site can be judged as environmentally preferable and, 
if so, obViously superior to the applicant's proposed site.'' 
Another, less laborious process for determining that an 
obviously superior site does not exist may be to allow 
consideration of fewer alternatives, and/or reduce the scope of 
evaluation factors.\5\
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    \5\The evaluation factors presented in NUREG-1555, Ch. 9.3., 
Appendix A, provide an expansive list of assessment requirements that 
is representative of a new site selection process. A subset of these 
factors would arguably be more appropriate when evaluating an existing 
site.
---------------------------------------------------------------------------
    COL applicants may consider economic factors in choosing to 
co-locate new plants at existing sites. Additionally, unless 
there are significant environmental concerns with an existing 
site, the incremental increase in environmental impact 
necessarily would be much less than the impacts for a new site. 
A substantial expenditure of time and resources to evaluate 
multiple alternative options would not provide useful 
conclusions and would not be necessary to satisfy NEPA.
    The ``special case'' discussion in the NRC Environmental 
Standard Review Plan quoted above indicates that NRC is 
forgoing the initial evaluation process and instead would apply 
the ``candidate site'' selection phase. However, the 
application of the ``candidate site'' portion of the selection 
process is also not proper for existing nuclear sites. The 
candidate site selection process, as described in the ESRP, is 
one sequential step of the more extensive process. As discussed 
in the ESRP, the result of that process would be three to five 
alternative sites in addition to the preferred site. That 
selection process arguably should not be required for an 
applicant that proposes to use a viable existing nuclear plant 
site. Instead, NRC should consider revising the ESRP to set 
forth guidance for those cases where an existing nuclear site 
appears to be the most appropriate option. Under such an 
approach, applicants would perform as-needed comparisons 
against the existing site. That approach should satisfy the 
NEPA requirement to determine whether any other candidate site 
is enVironmentally preferable to--and, if so, ``obviously 
superior'' to--the applicant's proposed site.

    Question 4. How should the Commission address contentions 
that challenge the cost of building a new plant based on the 
basis of historical cost overruns?
    Response. The NRC should disposition proposed contentions 
challenging the estimated cost of building a new nuclear plant 
using the same criteria the agency applies to other types of 
proposed contentions in NRC licensing proceedings. Because NRC 
Atomic Safety and Licensing Boards evaluate each proposed 
contention on its own merits, generalizations as to the 
admissibility of ``cost-related'' contentions in NRC licensing 
proceedings for new plants are not determinative. However, the 
limited regulatory jurisdiction of the NRC presumably limits 
(and may preclude) the adjudication of many cost-based 
challenges in NRC licensing hearings.
    Notably, NRC's jurisdictional limits do not foreclose 
opportunities to address cost-related concerns relating to new 
nuclear power plants. Economic regulatory agencies and 
processes outside of the NRC hearing process are in place at 
both the State and Federal levels to evaluate new generation 
needs, to ensure that new plant costs are prudently incurred, 
and to consider whether power sales at both the retail and 
wholesale levels are just and reasonable. Responsibilities for 
energy supply and planning, and for the economic regulation of 
new energy projects, lie with the Federal Energy Regulatory 
Commission (FERC) and State public service commissions.
    The Scope of NRC Regulatory Jurisdiction: Under the Atomic 
Energy Act and the National Environmental Policy Act, the NRC 
is tasked with specific regulatory responsibilities related to 
public health and safety, common defense and security, and 
protection of the environment. Responsibilities for energy 
supply and planning, and for the economic regulation of new 
energy projects, lies with other State and Federal Government 
agencies, such as FERC and State public service commissions. 
Recognizing the differing roles of various Federal and State 
regulators, the NRC has consistently found, for example, that 
the economic interests of a ratepayer or taxpayer do not confer 
standing to raise economic issues in the NRC hearing 
process.\6\
---------------------------------------------------------------------------
    \6\Tennessee Valley Authority (Watts Bar Nuclear Plant, Units 1 and 
2), ALAB-413, 5 NRC 1418, 1421 (1977).
---------------------------------------------------------------------------
    COL Applicants Must Provide Plant Cost Information: The 
scope of NRC licensing hearings (and, consequently, the scope 
of contentions that may be admitted in a licensing hearing) is 
limited by the nature of the application and relevant 
Commission regulations. Similarly, the findings that NRC must 
make concerning project costs prior to issuance of a combined 
operating license (COL) are limited. Nevertheless, COL 
applicants must submit certain cost information to NRC, 
including an estimate of total construction costs for the 
facility and the source(s) of funds to cover these costs. See 
10 CFR 50.33(f)(1)-(3); see also 10 CFR 52.77. Further, NRC 
regulations in 10 CFR 50.33(f)(1)-(3) governing COL 
applications now require applicants to submit: (i) information 
demonstrating that the applicant possesses or has reasonable 
assurance of obtaining the funds necessary to cover estimated 
construction costs and related fuel cycle costs; (ii) estimates 
of the total facility construction costs and related fuel cycle 
costs; (iii) the source(s) of funds to cover these costs. 
Section 50.33(f)(1). Additionally, the COL applicant must 
submit: (iv) information demonstrating that the applicant 
possesses or has reasonable assurance of obtaining the funds 
necessary to cover estimated operation costs for the period of 
the license; (v) estimates for total annual operating costs for 
each of the first 5 years of operation; (Vi) the source(s) of 
funds to cover these costs. Section 50.33(f)(2). Other 
information that NRC may require to enable it to determine an 
applicant's financial qualifications is addressed in 10 CFR 
50.33(f)(4).
    Historical cost overruns for nuclear units constructed in 
the 1970's and 1980's were based on many complex historical 
factors that are not necessarily attributable to today's NRC 
licensees or the current economic environment. To be admissible 
under NRC rules, proposed contentions that challenge estimated 
project costs or an applicant's proposed funding plan must be 
focused on the applicant's analysis and plan as presented in 
the licensing documents. The proposed contention must 
articulate a specific challenge--with the necessary basis--to 
that current cost analysis. It should not be sufficient (and, 
in our view, it is not sufficient under NRC requirements) 
simply to allege that historical overruns existed and therefore 
create an admissible issue. Any specific proposed contentions 
related to the cost of building a new facility will be 
evaluated carefully by the Commission for admissibility in an 
NRC licensing hearing.\7\ Other Forums for Considering Plant 
Cost: Additionally, proposed contentions primarily related to 
electric rates or prudency concerns should not be admitted in 
NRC proceedings because they are more appropriately addressed 
in other forums. Issues related to new project planning and 
siting, including the costs of a proposed project and 
alternatives, normally will be considered in a State public 
service commission process. Issues related to costs actually 
incurred, and whether those costs can be recovered in rates, 
are then considered after the fact, based on actual experience, 
rather than the now-dated experience of the 1970's and 1980's. 
With respect to the cost overruns experienced for some earlier 
generation nuclear plants, there were substantial disallowances 
as a result of these prudency proceedings, demonstrating that 
the economic regulatory process functions effectively, 
independent of the NRC process.
---------------------------------------------------------------------------
    \7\NRC rules require petitioners who request a hearing and/or seek 
to intervene and participate in an NRC licensing hearing to ``set forth 
with particularity the contentions sought to be raised.'' The 
provisions for basis and specificity in proposed contentions require 
that the petitioner:
---------------------------------------------------------------------------
     Provide a specific statement of the issue of law or fact 
to be raised or controverted.
     Explain the basis for the proposed contention.
     Demonstrate that the issue raised is within the scope of 
the proceeding.
     Demonstrate that the issue raised is ``material'' to the 
findings the NRC must make to support the licensing action.
     Provide a concise statement of the alleged facts or 
expert opinions that support the petitioner's position on the 
issue, and on which the petitioner intends to rely at the 
hearing, together with references to the specific sources and 
documents the petitioner intends to use to support his/her 
position.
     Provide sufficient information to show that a genuine 
dispute exists with the applicant/licensee on a material issue 
of law or fact. This information must include references to 
specific portions of the application that the petitioner 
disputes and the reasons supporting each dispute. 
Alternatively, the petitioner must identify and explain the 
relevance of information allegedly absent from the application. 
See 10 CFR 2.309(f)(1)(i)-(vi).
    For new nuclear plants, the ``justness and reasonableness'' 
of a generating company's wholesale power sales are subject to 
review and approval by the FERC under Section 205 of the 
Federal Power Act. At FERC, generating companies can request 
authority under Section 205 to sell power wholesale at 
negotiated, market-based rates, or at cost-based rates. With 
respect to market-based sales, FERC employs rigorous market 
share analyses to determine whether the generator has the 
ability to impose price increases on power purchasers such that 
they are required to pay more than they otherwise would in the 
market. FERC does not directly determine the sales price; 
rather, the generator must be able to negotiate rates that are 
sufficient to cover its carrying costs, costs of production, 
and a reasonable return. When generating companies seek to 
establish cost-based rates, FERC reviews the elements of the 
company's cost of service (including the project capital costs) 
to determine whether those costs support a rate that is just 
and reasonable overall. In setting the authorized rate, FERC 
has authority to consider the prudence of the generator's 
expenditures and whether the overall investment is ``used and 
useful'' for public utility service.
    Similar authority exists at the State level to review and 
approve the justness and reasonableness of the price of power 
sold at retail. States with retail electric choice permit 
consumers to select the most economical supplies from 
competitive electric suppliers, or to purchase electricity from 
the incumbent utility at pre-determined ``provider of last 
resort'' rates established by the public service commission. In 
states without retail choice, State public service commissions 
review the rates charged for retail electric supply service, 
including the prudency of the costs incurred, to prOVide the 
service. When an electric utility purchases power at wholesale 
from a generating company, the states are typically obligated 
to accept the rate established by FERC as just and reasonable 
and allow a full pass-through of the costs. (An exception to 
this rule allows states to disallow the cost of purchased power 
if the purchasing utility did not take advantage of an 
opportunity to purchase more economic supplies.)

    Question 5. How should the Commission address contentions 
that challenge the safety of new units based on historical 
events such as Three Mile Island or Chernobyl?
    Response. As stated in response to Question 3, above, the 
NRC should evaluate proposed contentions challenging the safety 
of new nuclear plants on the basis of ``historical events'' 
such as the accidents at Three Mile Island and Chernobyl under 
the same standard the agency applies to all other proposed 
contentions in NRC licensing proceedings. Because NRC Atomic 
Safety and Licensing Boards evaluate each proposed contention 
on its own merits, the admissibility of a hypothetical 
contention in an NRC licensing proceeding cannot be addressed 
adequately in the abstract. Long-established NRC requirements 
for admission of contentions are likely to preclude the 
adjudication of broadly based safety challenges that lack an 
adequate basis and adequate specificity.
    NRC rules of practice require petitioners who request a 
hearing and/or seek to intervene and participate in an NRC 
licensing hearing to ``set forth with particularity the 
contentions sought to be raised.'' The provisions for basis and 
specificity in proposed contentions require that the 
petitioner:

     Provide a specific statement of the issue of law or fact 
to be raised or controverted.
     explain the basis for the proposed contention.
     Demonstrate that the issue raised is within the scope of 
the proceeding.
     Demonstrate that the issue raised is ``material'' to the 
findings the NRC must make to support the licensing action.
     Provide a concise statement of the alleged facts or 
expert opinions that support the petitioner's position on the 
issue, and on which the petitioner intends to rely at the 
hearing, together with references to the specific sources and 
documents the petitioner intends to use to support his/her 
position.
     Provide sufficient information to show that a genuine 
dispute exists with the applicant/licensee on a material issue 
of law or fact. This information must include references to 
specific portions of the application that the petitioner 
disputes and the reasons supporting each dispute. 
Alternatively, the petitioner must identify and explain the 
relevance of information allegedly absent from the application. 
See 10 CFR 2.309(f)(1)(i)-(vi).

    Given this standard for admissibility of contentions in NRC 
licensing hearings for COL applications, a proposed contention 
that challenges the safety of a new reactor based solely on 
historical events such as the events at Three Mile Island or 
Chernobyl, without more, likely would be rejected.
    Moreover, generalized contentions like those described in 
this question appear to ignore the fact that NRC constantly 
takes into account the results of research and operational 
experience in developing and modifying its ongoing regulatory 
oversight process. That process applies to all existing nuclear 
plants licensed by the NRC, and it also will apply to those new 
reactors that may be constructed and operated under the 
combined license (COL) process. The Commission has described 
this oversight process as follows: ``Since initial licensing, 
each operating plant has continually been inspected and 
reviewed as a result of new information gained from operating 
experience. Ongoing regulatory processes provide reasonable 
assurance that, as new issues and concerns arise, measures 
needed to ensure that operation is not inimical to the public 
health and safety and common defense and security are 
'backfitted' onto the plants.''\8\
---------------------------------------------------------------------------
    \8\``Final Rule, Nuclear Power Plant Ucense Renewal,'' 56 Fed. Reg. 
64,943, 64,945 (Dec. 13, 1991) (promulgating the NRC's initial license 
renewal regulations). Regarding the adequacy of its regulatory 
oversight process, the Commission further stated: ``The Commission 
cannot conclude that its regulation of operating reactors is 'perfect' 
and cannot be improved, that all safety issues applicable to all plants 
have been resolved, or that all plants have been and at all times in 
the future will operate in perfect compliance with all NRC 
requirements. However, based upon its review of the regulatory programs 
in this rulemaking, the Commission does conclude that (a) its program 
of oversight is sufficiently broad and rigorous to establish that the 
added discipline of a formal license renewal review against the full 
range of current safety requirements would not add significantly to 
safety, and (b) such a review is not needed to ensure that continued 
operation during the period of extended operation is not inimical to 
the public health and safety.'' Id
---------------------------------------------------------------------------
    The Atomic Energy Act of 1954 establishes a ``comprehensive 
regulatory framework for the ongoing review of nuclear power 
plants located in the United States.'' County of Rockland II. 
NRC, 709 F.2d 766, 769 (2d Cir. 1983). Under the AEA, the NRC 
is charged with the responsibility to ``ensure, through its 
licensing and regulatory functions, that the generation and 
transmission of nuclear power does not unreasonably threaten 
the public welfare.'' Id. Consistent with its mandate, the NRC 
promulgates rules and regulations governing the construction 
and operation of nuclear power plants. Id.
    Moreover, when a reactor is licensed, the NRC makes a 
comprehensive determination that the design, construction, and 
proposed operation of the facility satisfies agency 
requirements and provides reasonable assurance of adequate 
protection to the public health and safety and common defense 
and security. See 56 Fed. Reg. 64,943, 64,947. Each nuclear 
plant has a ``current licensing basis'' (CLB), a term of art 
that encompasses the gamut of NRC requirements applicable to a 
specific facility over its entire license term. The current 
licensing basis includes, for example, all license conditions, 
orders, exemptions, and licensee commitments that are part of 
the docket of that facility's license (including responses to 
NRC bulletins, generic letters, enforcement actions and other 
commitments documented in NR safety evaluations or licensee 
event reports)--pius all of the NRC regulatory requirements 
with which the licensee must comply. Significantly, the CLB 
does not remain fixed or static. Rather, as is true for the 
regulatory process generally, the CLB evolves over the term of 
the license, as new requirements are imposed on the plant's 
existing licensing basis to address ongoing NRC regulatory 
requirements.\9\
---------------------------------------------------------------------------
    \9\See 56 Fed. Reg. 64,943, 64,947.
---------------------------------------------------------------------------
    A proposed contention based solely on historical events 
would necessarily assume NRC has not imposed new technical 
requirements over time to further enhance nuclear power plant 
safety. Such an assumption is completely incorrect, as 
emphasized by the follOWing 2006 discussion by the Commission 
itself:
    The NRC notes that the regulatory process considers new 
scientific and technical knowledge since plants were initially 
licensed and imposes new requirements on licensees as 
justified. The NRC engages in a large number of regulatory 
activities that, when considered together, constitute a 
regulatory process that provides ongoing assurance that the 
licensing basis of nuclear power plants provides an acceptable 
level of safety. This process includes research, inspections, 
audits, investigations, evaluations of operating experience, 
and regulatory actions to resolve identified issues. These 
activities include consideration of new scientific or technical 
information. The NRC's activities may result in changes to the 
licensing basis for nuclear power plants through issuance of 
new or revised regulations, and the issuance of orders or 
confirmatory action letters. Operating experience, research, or 
the results of new analyses are also issued by the NRC through 
documents such as bulletins, generic letters, regulatory 
information summaries, and information notices. In this way, 
the NRC's consideration of new information provides ongoing 
assurance that the licensing basis for the design and operation 
of all nuclear power plants provide an acceptable level of 
safety.\10\
---------------------------------------------------------------------------
    \10\See 71 Fed. Reg. 74,848, 74,854 (Dec. 13, 2006) (NRC Denial of 
Petitions for Rulemaking from Andrew J. Spano and Joseph C. Scarpelli); 
see also 56 Fed. Reg. 64,943, 64,947.
---------------------------------------------------------------------------
    Senator Carper. Mr. Pietrangelo, thank you for that 
testimony.
    Mr. Webster, before we recognize you and Dr. Romm and Mr. 
Gilbertson, the vote that has occurred, we are about halfway 
through that vote. Senator Voinovich went over earlier, but the 
vote had not started. So we will recess the Subcommittee for 
probably 10 minutes, but we will be right back. I just ask that 
you make yourselves comfortable, take a break. No smoking.
    [Laughter.]
    Senator Carper. We will be back shortly. Thanks for your 
patience.
    [Recess.]
    Senator Carper. We will resume now. Thank you, Mr. Webster, 
for being in the on-deck box for the last 10 minutes. We are 
glad you are here, and are looking forward to your testimony. 
Thanks for coming.

     STATEMENT OF RICHARD WEBSTER, LEGAL DIRECTOR, EASTERN 
                    ENVIRONMENTAL LAW CENTER

    Mr. Webster. Thank you, Mr. Chairman, Senator Voinovich. It 
is a great pleasure to be here. I am Richard Webster, from the 
Eastern Environmental Law Center.
    Before I go on, I would just like to say, if you have any 
trouble with my very thick New Jersey accent, feel free to stop 
me and I can clarify for you.
    [Laughter.]
    Mr Webster. Basically, 40-year old reactors, they are 
really like old cars that have been improved and given a new 
paint job for the purpose of resale. They look great, but you 
have to really tap the panels to make sure there is no rust 
underneath. In the case of Oyster Creek, we, the intervenors, 
have tapped those panels, and we found some of them are almost 
rusted through. As we probed further, with the help of the 
Inspector General and a number of States attorneys general, we 
realized that NRC staff was not effectively tapping those 
panels. They are really admiring the paint job and saying 
everything looks good.
    We believe there are two broad classes of problems. One is 
with the regulations themselves, regarding relicensing, the 
hearing process and safety. The other concerns agency safety 
culture, which leads to a lack of thoroughness on behalf of the 
NRC staff. We believe the lessons of Davis-Besse were either 
never learned or quickly forgotten.
    In terms of the regulatory problems, the relicensing rules 
don't require a comprehensive look at whether safety standards 
could be improved. What happens over time is that the old 
plants licensing basis basically stays about the same, the 
margins decline slightly. The new plants have higher standards 
applied. Relicensing would be the opportunity to close that gap 
and require higher standards for old plants. That opportunity 
is being missed. There is no attempt whatsoever to improve, 
well, actually that is not quite true. There is a minor 
attempt, but in many areas, such as the storage of spent fuel, 
evacuation plans and so forth, there is no attempt to improve 
the current licensing basis.
    Second, as Commissioner Jaczko mentioned, the scope is 
extremely narrow. For the moment, relicensing, the safety 
regulations only concern the aging managing of long-lived 
passive components. They fail to look at everything else such 
as vulnerability to terrorism, evacuation plans and spent fuel 
storage, even though we know that many issues that currently 
present themselves were not examined during initial licensing, 
which remember was nearly 40 years ago. Even for the narrow 
issues that are reviewed, there is no de novo review, so there 
is an assumption that if it has already been signed off on, 
everything is fine.
    The current relicensing process relies upon the ongoing 
safety regulations to solve all the problems, basically. That 
would be OK, if those ongoing regulations were perfect. 
Unfortunately, like most things in life, they are not. At 
minimum, the relicensing process therefore needs to review the 
ongoing safety processes and review compliance with the 
licensing basis.
    I think there are many examples of issues where the NRC has 
allowed industry the benefit of the doubt in terms of safety 
and has allowed these issues to drag on for far too long. Fire 
safety is an example, Davis-Besse is another example.
    Now, turning to the safety culture problems, we found many 
examples of these. And these have come out primarily through 
public participation. At Oyster Creek, when the staff assessed 
that the primary containment might not meet the engineering 
code, instead of taking action to try to improve that primary 
containment, they tried to waive the standard and say the code 
was no longer applicable. Really, in a rare moment of 
agreement, both the licensee and the intervenors thought the 
code was applicable. In effect, the NRC staff wanted to take 
the same approach to safety as a well-known Supreme Court 
opinion took regarding obscenity: they know it when they see 
it. Unsurprisingly, the ASLB, the board rejected the staff's 
completely subjective approach.
    This shows two things. First, we need safety culture 
improvements. Second, we need clear statements of what safety 
standards plants must be required to meet. At the moment, we 
ended up litigating all the way through the hearing process 
what the safety standards were. That simply doesn't make sense. 
Both the public, the owners of the plants and potential 
investors need to know what the safety standards are. I don't 
quite understand how you can regulate safety effectively with 
unclear standards.
    Second example, in the Vermont Yankee proceeding, the 
petitioners pointed out a defect in the metal fatigue 
calculations. It turned out that the NRC had failed to spot 
that defect during the relicensing of nine other reactors.
    Now, we have a lot of prescriptions for solutions, and they 
basically involve more transparency, more transparency to 
empower and encourage citizens to participate in reactor 
oversight. This could include funding of citizens groups, which 
has been a longstanding recommendation since Three Mile Island, 
never been done; access to licensee documents and more agency 
notification of problems and events. We need to change 
administrative procedures to allow citizens a fair process. At 
the moment, and I have been through this process, I can tell 
you, this process is like being Alice in Wonderland at a 
communist show trial. The timing is so strict that you can have 
an issue admitted yesterday, you might be able to have an issue 
admitted tomorrow, but you can never have an issue admitted 
today. That is why 44 relicensings went through with no hearing 
whatsoever.
    Now, even if you get Alice to Wonderland and you get a 
hearing, you can't effectively represent the clients at that 
hearing, you can't cross-examine witnesses, you can't depose 
witnesses. And the NRC staff participate as a party, and they 
nearly always oppose the public. Senator Carper, you asked the 
question earlier, did the staff assist the licensee. I can tell 
you in my hearing, the staff actually tried to exclude two of 
my exhibits, even though the licensee was ready to consent to 
let them in.
    So in conclusion, the experience in relicensing shows that 
the alarms regarding nuclear safety are ringing. But like the 
Peach Bottom guards, the NRC is snoozing. We have to make sure 
we don't relicense rust buckets, and further undermine the 
public's confidence in the industry. Public participation works 
to highlight safety problems, but the NRC has tried to restrict 
meaningful participation as much as possible. Even today, the 
NRC is now proposing, it appears, or at least three of the four 
commissioners are now saying that mandatory hearings should be 
abandoned. That is completely the wrong direction. Public 
confidence will only be increased by greater transparency, not 
less.
    Unless we increase public confidence, nuclear power will 
end up being in the cross-hairs of an intense battle. No good 
solution will be developed.
    So what we need to do is we need to encourage and 
invigorate meaningful public participation. Thank you very 
much.
    [The prepared statement of Mr. Webster follows:]
    
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    Senator Carper. Mr. Webster, thank you very much.
    Dr. Romm, you are recognized at this time.

 STATEMENT OF JOSEPH ROMM, SENIOR FELLOW, CENTER FOR AMERICAN 
                      PROGRESS ACTION FUND

    Mr. Romm. Mr. Chairman, Senator Voinovich, I am delighted 
to be here. I was Special Assistant for Policy and Planning to 
Deputy Secretary Bill White from 1993 to 1995. He had oversight 
responsibility for all the energy programs, including nuclear 
energy. Then I went on to be Principal Deputy Assistant 
Secretary and then Acting Assistant Secretary for Energy 
Efficiency and Renewable Energy.
    Senator Carper. What years did that encompass, please?
    Mr. Romm. From 1993 to 1998, I was at the Department of 
Energy, the first two as Special Assistant, and then 3 years at 
the Office of Efficiency and Renewables.
    I was asked to address the cost issue here. I have three 
main points. First, the licensing process should not be 
expedited because the economic and safety risks are too high. 
Second, nuclear power has become so expensive, it is unlikely 
to achieve net growth by mid-century without tens of billions 
of dollars more in Government subsidies. And third, Congress 
should focus Federal support on energy efficiency and 
renewables, because they have now become better bets than 
nuclear power.
    The first point I think is that since the nuclear action 
could have such harsh consequences with costs ultimately borne 
by the American taxpayer, Congress must enforce the strictest 
safety standards. If power plants take six to 10 years to 
build, that is because the industry has failed to develop and 
standardize a limited set of simple, modular, fail-safe reactor 
designs that could tap into a cognitive scale for mass 
production. In the American market, there are at least five new 
designs.
    I don't think delays are due to red tape. Nuclear plants 
face similar delays in other countries. Why? Quality problems. 
The first advanced reactor design built in the west in Finland 
is already 25 percent over budget and 2 years behind schedule 
because of ``flawed wells for the reactor's steel liner, 
unusable water coolant pipes and suspect concrete in the 
foundation.''
    Second, once billed as too cheap to meter, nuclear power 
simply became ``too costly to matter,'' as the economists put 
it back in 2001. Yet nuclear power is now triple the price that 
it was in 2001. An industry trade magazine headlined a recent 
article, ``For some utilities the capital cost of nuclear power 
plants are prohibitive.'' Nuclear economic expert Jim Harding 
e-mailed me that his current reasonable estimate for levelized 
cost range for nuclear power is 12 to 17 cents per kilowatt 
hour lifetime, much higher than current U.S. electric rates.
    Last August, AEP CEO Michael Morris said he was not 
planning to build any new nuclear plants: ``I am not convinced 
we will see a new nuclear station before probably the 2020 time 
line. So I do not consider nuclear a near-term solution.''
    In October, Florida Power and Light testified that two 
units totaling 2,200 megawatts would cost up to $18 billion, 
which is a stunning $8,000 per kilowatt. Progress Energy told 
Florida regulators that twin 1,100 megawatt plants would cost 
$14 billion, which triples estimates the utility offered little 
more than a year ago. Its 200 mile transmission project would 
add $3 billion more. Total costs, again, nearly $8,000 a 
kilowatt. Nuclear plants are now so expensive that Duke Power 
actually refused to reveal cost estimates for a proposed plant 
in the Carolinas, and a recent California Public Utility 
Commission study puts the cost of power from new nuclear plants 
again at 15 cents per kilowatt hour. Energy efficiency, wind 
and solar all beat that price.
    To date, California's efficiency programs have cut total 
electricity demand by 40,000 gigawatt hours for two to three 
cents per kilowatt hour. California plans to more than double 
those savings by 2020. If that effort would reproduce 
nationwide, efficiency would deliver enough savings to avoid 
the need to build any new U.S. power plants for two decades. A 
May report by this Energy Department concluded Americans could 
get 300 gigawatts of wind by 2030 at a cost of under 8.5 cents 
per kilowatt hour.
    Utilities in the Southwest are already contracting for 
concentrated solar thermal power at 14 to 15 cents per kilowatt 
hour. The Western Governors Association expects that the price 
will drop to 12 cents a kilowatt hour within 5 years. That 
would include 6 hours of storage capacity, which would allow 
concentrated solar to follow the electric load from early 
morning to late evening and eliminate the intermittence issue 
associated with solar. Even solar photovoltaics with battery 
storage can now be installed cheaper than what Florida 
ratepayers are being asked for nuclear power.
    In conclusion, nuclear power's many limitations, especially 
its escalating price, will constrain its growth in America. 
Merely maintaining the current percentage of generation 
provided by nuclear through the year 2050 will probably require 
building some 75 large replacement reactors with a total cost 
approaching $1 trillion, and that won't happen without massive 
congressional subsidies. A U.S. cap and trade system, such as 
you propose, will help all low carbon energy resources, 
including nuclear. After 50 years and nearly $100 billion in 
subsidies from Congress, if new nuclear plants can't compete in 
this emerging low carbon market, then frankly, it doesn't 
deserve yet more taxpayer support or any expedited licensing.
    Thank you.
    [The prepared statement of Dr. Romm follows:]
    
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    Senator Carper. Dr. Romm, thank you very much. Thanks for 
being here and thank you for your testimony.
    Mr. Gilbertson, please proceed.

   STATEMENT OF H. JOHN GILBERTSON, JR., MANAGING DIRECTOR, 
                   GOLDMAN, SACHS AND COMPANY

    Mr. Gilbertson. Chairman Carper, Senator Voinovich, good 
afternoon. My name is John Gilbertson. I am a managing director 
of Goldman, Sachs. I want to thank you both and the Committee 
for the opportunity to discuss financial perspectives on 
nuclear power.
    Our firm works as an advisor and provider of capital to 
integrated electric utilities and power generation companies, 
including most of those who have recently filed or intend to 
file a new COL application. We have also engaged in frequent 
discussions with Members of Congress, their staff, the 
Department of Energy, the Administration regarding 
implementation of the Title 17 loan guarantee program. In this 
work, we have studied the question of how to finance the new 
construction of nuclear units.
    The capital markets today look favorably on the incumbent 
U.S. fleet of 104 units, and upon the companies who operate 
them. It is well understood by investors and lenders that the 
existing fleet is safe, reliable, low-cost, profitable and non-
emitting. These characteristics have also translated into 
superior investment performance. The performance of the U.S. 
nuclear industry is, I believe, one of the great turnaround 
stories in business history. However, this turnaround did not 
occur by accident. Rather, it was the natural result of 
economic opportunity, competitive pressures, a natural learning 
curve, rigorous regulatory scrutiny with strict emphasis on 
safety, the systematic sharing of best practices, regular 
process improvements, and consolidation of fleet ownership, all 
of which have driven nuclear operators to achieve a noteworthy 
record of continuous improvement.
    The financial markets also recognize that nuclear needs to 
become a larger portion of the U.S. fuel mix. Once they are 
built, new nuclear units are expected to supply reliable power 
at all-in hourly rates that are comparatively high by recent 
standards, but more than competitive against the expected cost 
of power in the next 10 to 15 years. This cost advantage is 
expected to widen further as the U.S. pursues climate 
protection through a cap and trade system which puts an 
explicit cost on emitted carbon.
    This need for more nuclear power is also completely 
independent of the expected growth in energy conservation and 
in other sources of clean energy, such as wind or solar. Even 
in the most ambitious growth scenarios for conservation, wind 
and solar, the U.S. carbon footprint would be further reduced 
if there is also significant growth in nuclear share of the 
fuel mix. And this need would only be amplified when plug-in 
vehicles reach commercial scale, thus creating the opportunity 
to use domestically produced clean electricity as a substitute 
for imported oil.
    However, the markets also recognize that the challenge of 
new construction is very difficult. Project sponsors must spend 
large amounts of capital for long lead-time procurement before 
the project has been licensed by the NRC and before the 
construction schedule is set. They must do so at a time of 
steep commodity inflation, a smaller work force for nuclear 
construction, and sharply increased global demand for 
construction services. As a result, the project cost estimates 
have risen dramatically in the past year and are expected to 
continue rising. In the eyes of lenders and investors, these 
projects will face the potential risk of serious delay and cost 
overruns.
    In the U.S., the companies who would undertake nuclear new 
build are under-sized in comparison to the size of each 
project. The fragmented structure of the U.S. power industry 
leaves these companies, even the largest ones, constrained to 
assume the risks in such a project. On their own, we expect 
very few of these companies would pursue nuclear new build, 
because their existing capital structures simply cannot 
withstand the construction risks.
    In this regard, the Title 17 loan guarantee program is 
essential to restarting the nuclear build cycle in the United 
States. However, this program too is under-sized in relation to 
the need. The current $18.5 billion in guarantee authority will 
be enough to support possibly three new projects. There are 
quite a few credible and capable nuclear operators who are 
ready to pursue similar projects, but only if they qualify for 
a Title 17 guarantee.
    The NRC is seen by investors and lenders as a significant 
contributor to this industry turnaround, especially to the 
notable improvements in safety and reliability of the existing 
fleet. In terms of new build, investors are encouraged by the 
streamlined nature of the COL process. However, this process 
has not yet been tested in the current build cycle, and markets 
are still wary of the potential for intervention and prolonged 
delay.
    The best remedy for this concern will be an actual 
licensing experience that is both timely and rigorous. As new 
licenses are granted, investors will pay close attention to the 
length of time from start to finish. The markets will look for 
the NRC to meet current timing expectations and if possible, to 
shorten this time period in subsequent applications, while 
maintaining the rigor of its decisions with safety always being 
the highest priority.
    Mr. Chairman, thank you again for the opportunity to speak 
here today. I look forward to your questions.
    [The prepared statement of Mr. Gilbertson follows:]
    
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    Senator Carper. Mr. Gilbertson, thank you.
    Didn't you join us on a roundtable that we had a while ago?
    Mr. Gilbertson. Yes, about a month ago.
    Senator Carper. Thanks for coming that day, too.
    Real good testimony and timely testimony. We are grateful 
for all of it. I am going to start off, Mr. Webster and Dr. 
Romm raised some serious concerns here. I don't know if, Mr. 
Christian, you or Mr. Pietrangelo want to respond to anything 
that they have said.
    Mr. Christian. Our company believes that what has worked 
well for us to achieve strength is diversity of supply. So we 
also believe that wind plays an important role, and we are 
engaged in deploying wind and other forms of electric power 
generation. We also strongly believe that Americans need to 
become more energy efficient and our energy intensity as a 
Country is improving. That is, GDP per kilowatt hour consumed. 
We have in our company and in our service territory nine 
programs to help people conserve and to stimulate demand-side 
management.
    That said, I think some of the statistics that were cited 
with respect to the capabilities of wind or renewables in 
general to meet all baseload requirements frankly bring to mind 
the caveat that was inserted in some of the Civil War 
newspapers that said, important if true. I don't believe it to 
be true that renewables can supplant other baseload forms of 
electric power generation, and here is why. I think the answer 
kind of falls into two or three categories.
    First, we will take reliability. Everyone knows that wind 
only blows some of the time. We have an obligation to serve, 
and State regulation comes into play as well. Our customers 
demand electricity all the time, when requested. Recently, in a 
heavily wind-supplied area in Texas, ERCOT, they went into a 
stage two emergency when the wind did not blow when it was 
needed on a peak summer day. This was as little as 2 months 
ago. It is pointed out that wind is typically anti-correlated 
to peak demand. That is to say, that when you need it the most, 
it is there the least, which requires regulated companies, who 
have an obligation to serve native load, to simultaneously 
install gas-fired generation. If you are going to install gas-
fired generation to meet the requirement that we are under to 
meet and serve that load, then you begin to get into capital 
inefficiencies.
    All that said, I also would like to make the point from an 
environmental standpoint that wind and nuclear happen to be 
roughly equivalent in terms of greenhouse gas intensity, when 
you take into account all of the energy that goes into making 
the device and all of the energy that comes out of it. Nuclear, 
there is much more energy that goes into it, but you get a lot 
more energy out of it over time.
    So taking the long view, conservation plays an important 
role, extremely important role and this Country needs to become 
more efficient. Wind is going to play an important role, 
because it is a resource that actually requires no fuel.
    But nuclear is going to be required, because even as the 
renewed licenses expire at the end of, say, 60 years of 
operation, that is 100 gigawatts that will begin to peel off of 
the U.S. grid. If we can meet all of our growth and demand 
presently with conservation and renewables, we can't replace 
that 20 percent baseload that is there and due to roll off as 
these plants age.
    Senator Carper. All right.
    Mr. Pietrangelo, any comments at all?
    Mr. Pietrangelo. My only comment is that I thought Mr. 
Gilbertson answered the questions about cost. When you do 
rigorous financial analysis with a lot of sensitivity studies, 
at the end of the day, the cost will be competitive to the 
ratepayers. And it is too much comparing apples and oranges 
with the numbers that have been thrown around today about what 
those numbers include, what year they are looked at in. What is 
ultimately important is the price of electricity to be sold 
from those plants. The analysis that a bunch of companies have 
done, as well as some of the financial analysts that the costs 
from new nuclear will be competitive.
    Mr. Christian. State public utility commissions will demand 
that it be demonstrated to be in the customers' and ratepayers' 
interest.
    Senator Carper. Mr. Gilbertson, after I heard Dr. Romm 
testify, I was sitting here thinking, why would anybody, 
individuals or fund managers, want to invest money in nuclear 
energy, given the kind of picture that he painted. Again, why 
would they?
    Mr. Gilbertson. The issue really is, from a financial 
perspective, the cost per megawatt-hour over the life of the 
project. I think Dr. Romm made quite a few totally valid points 
that we wouldn't quarrel with at all. It is expensive on the 
front end, capital cost is very high.
    What happens with nuclear is, the hourly amorized all-in 
cost of power will be a number that today seems high. But over 
the life of the project, the number will gradually go down by 5 
to 10 percent. And this is notwithstanding what might happen in 
the uranium market, which is a sliver of the all-in cost of 
nuclear, it can double and it is really not going to change the 
hourly cost by much. The all-in hourly cost of nuclear will be 
essentially a flat number through the life of the plant. So if 
you can give me something that produces power at 20 percent 
above today's hourly cost, but tell me it will be flat for 30 
years, that cost number is going to be ``in the money'' through 
the life of that project, by a lot.
    So the issue is getting from today to post-construction. In 
my mind, that is what the loan guarantee program is really 
about: bridging construction finance, most of all. That is the 
problem we are facing right now.
    So this is not to quarrel with the cost points: yes, the 
costs are rising; yes, it will be high in the front-end; but 
through the life of the plant, it will be much cheaper. And I 
am saying all of that, frankly, without an explicit cost to 
carbon. That would just make the nuclear cost advantage 
greater.
    Senator Carper. Is the cost of electricity, say, in a coal 
power, are new coal plants, the costs of them rising as well?
    Mr. Gilbertson. Definitely. Not as fast as nuclear, because 
of some of the bottlenecks in the supply chain. Again, I am 
sure Dr. Romm could speak to the same point. Some of the 
bottlenecks in the nuclear supply chain are a little more 
acute. But some of the bottlenecks are not. Some of the 
construction service companies are going to build coal plants 
the way they are going to build new plants. As we all know, 
today, the ``intervention'' industry has made new coal plants, 
nearly impossible to get going. Although we will see, as 
hopefully clean coal becomes technologically more feasible. But 
that is a long way out.
    Senator Carper. My time has expired and we will come back 
for a second round.
    Senator Voinovich.
    Senator Voinovich. If I listen to you, Mr. Gilbertson, and 
then Mr. Christian is talking about going forward, and there 
are a lot of other people who are going forward, you just 
wonder why are they going forward with these expensive new 
reactors to deal with their baseload delivery of energy. And I 
think Senator Carper made some reference to it, you have to 
look out at the whole situation. If you have coal-fired 
facilities, and some of them may have to be, old ones may have 
to be closed down if you are uncertain about climate change and 
capturing carbon and sequestering it and so forth, that 
perhaps, as they look at their prediction for the future, that 
even though this is very expensive, that this may be the best 
opportunity that they have or option in order to take care of 
the baseload.
    The other thing is that there is promotion of wind and 
solar to the extent that somehow people feel that we are going 
to be able to take care of the baseload delivery of energy in 
this Country with those. I think that is poppycock. Mr. 
Christian, would you like to comment? You are going to put a 
whole lot of money in this. Why are you doing it?
    Mr. Christian. Again, let me say what has been good for our 
company, which is strength through diversity, I believe 
strongly would be good for our Country. We need a diverse mix 
of energy supplies and we look at and evaluate a great many of 
them. As I said, we are into wind and biofuels and coal. We 
have the largest pumped storage operation in North America.
    But what got us looking at nuclear early in the decade, in 
2001, was a change in gas market dynamics, in that there had 
been a historic pattern in this Country where gas, which is a 
very precious fuel, natural gas, can be used for a great many 
things, from fertilizer production to support of industry to 
home heating, would have a peak demand in the winter time, 
especially when home heating kicked in. Then in the summer 
time, gas that is produced in the Gulf of Mexico and 
domestically would be pumped underground in storage facilities 
in the Northeastern United States, and then withdrawn later.
    Early in this decade, gas plants were being built all over 
this Country. We saw those dynamics changing and a competition 
for peak and mid-merit electric power generation for the 
historic putting gas into storage. Eventually, this leads you 
to believe that you were going to need other sources of fuel. 
We continue to evaluate advanced coal, clean coal, carbon 
capture, compatible coal. But we believe nuclear is an 
important asset and can't be taken off the table.
    As I said, taking the long view, we know were it not for 
license renewal, that beginning next year, these nuclear plants 
would be starting to come off the line and this 100 gigawatts 
would slowly trickle away over the course of about 15 or 20 
years. That equivalency in terms of natural gas is about 5 
trillion cubic feet. And this Country is trying to drill and 
find natural gas to meet its growing demand now. Imagine trying 
to do that and also find an additional 5 TCF to replace 
nuclear, if it goes away.
    The coal equivalency would be about 200 million tons a year 
of coal, with the attendant issues there.
    So regardless, I think we are pursuing nuclear because we 
think it is going to make sense for the customer. We think it 
is economic. We think it offers good environmental benefits in 
terms of not emitting greenhouse gases on a greenhouse gas 
intensity basis, it is roughly the equivalent of wind power.
    Senator Voinovich. And no NOx, SOx, mercury or the other 
ones.
    Mr. Christian. No NOx, SOx. Sure. So we think it is good 
for customers, good for shareholders and good for the 
environment.
    Senator Voinovich. And so you have looked at it all? I 
think the point of natural gas, we as a Nation encouraged you 
to use natural gas. It is relatively cheap and in the process 
of doing that, we woke up 1 day and found out that our natural 
gas costs had skyrocketed. We have lost our chemical industry, 
at least our exporting from the chemical industry.
    So you have to look at that and say, hey, this other is an 
option. And you are doing it with your eyes open, because I 
have looked at this. You have the loan guarantees that we are 
working on, and we are trying to get the cap removed. We had a 
meeting with some of your friends from Wall Street, and they 
said if you got rid of the cap, on this that this would help a 
great deal.
    We know that we need the human capital. The Chairman and I 
have had meetings on human capital. We know we are looking at a 
manufacturing capacity that we are going to need to have, and 
the people to run them and so forth. So we do know there is a 
lot of challenges here. But from Mr. Christian's point of view 
and some others, this makes sense, and I am hoping that you 
guys on Wall Street will look at this as maybe something good 
to begin to help with.
    Just one other thing, and I am not trying to take it, maybe 
I am in a way. Mr. Webster, I understand that the press reports 
that on Monday you appeared at a hearing to testify on the 
State of New Jersey's energy master plan, is that correct?
    Mr. Webster. That is correct, Senator.
    Senator Voinovich. And is it true that you advocated for 
decommissioning all of the State's nuclear plants and rely 
entirely on energy efficiency to meet the growing demand for 
electricity?
    Mr. Webster. No, that is not quite true, actually. What I 
said was that Oyster Creek could go offline and we could meet 
the energy output through energy efficiency.
    Senator Voinovich. And you specifically mentioned Oyster 
Creek, to take it off?
    Mr. Webster. That is right.
    Senator Voinovich. And you think that the demand could be 
freer. Because 50 percent of the power in New Jersey comes from 
nuclear power.
    Mr. Webster. Yes, there are actually four, Senator, there 
are four nuclear plants in New Jersey. Oyster Creek is the 
smallest at 600 megawatts. The other three plants are about 
1,000 megawatts each. We are talking about the need for energy 
for 2020. Two of those plants are not actually destined to go 
offline before 2020, the licenses, the current licenses don't 
expire before 2020. One of those plants expires in 2017. Only 
Oyster Creek, the license expires next year. So the discussion 
was primarily about Oyster Creek. I pointed out at that 
hearing, actually, that New York City has an initiative to 
lower New York City's overall energy demand by 30 percent by 
2017, and that initiative will be self-funded. It will actually 
make more money back saved on energy than it costs by 2015. So 
we believe there is a very substantial amount of both taxpayer 
money to be saved and energy that can be saved with those kinds 
of measures.
    Senator Voinovich. So are you opposed to nuclear?
    Mr. Webster. My background, I actually did physics in 
college. So I don't really think it makes sense to be for or 
against a specific technology. Technology done well is great 
and technology done badly is not so great. My objective here is 
to make sure that when we deploy nuclear technology, we deploy 
it in a manner that is safe and that will give us all the 
ability to rely on the safety standards that are applied. At 
the moment, unfortunately, I don't think that is true.
    Senator Voinovich. Thank you.
    Senator Carper. Mr. Pietrangelo, let me go back to you. 
When Senator Sanders was here, he shared with us a large 
photograph of the collapsed cooling tower at Vermont Yankee. It 
was noted that while it was not a safety issue, that kind of 
thing doesn't build confidence in the nuclear industry.
    There was a question as to whether or not on some 
shortcoming on the part of the operator, there would be a fine 
in order. Since it was maybe not a safety issue, there was not 
a fine that was going to be handed out by the NRC. What kind of 
economic penalty, and I think there was some discussion that 
said the plant, the output of the plant was reduced 
significantly. I presume there is some cost to the utility when 
they do that.
    Mr. Pietrangelo. Absolutely.
    Senator Carper. Could you just describe the economic 
penalty to the utility? Setting aside whether or not there is a 
fine by the industry, but just quantify, if you will, the 
economic penalty or loss the utility absorbs because of that 
kind of failure that we saw witnessed here.
    Mr. Pietrangelo. It is on the order of a half a million to 
a million dollars a day.
    Senator Carper. Say that again?
    Mr. Pietrangelo. It is on the order of a half a million to 
a million dollars per day that the unit is offline.
    Senator Carper. In this case, I don't think it was offline 
entirely. It sounded like because it was an environmental issue 
involving the release of water back into a body, a larger body 
of water, they reduced the output. I think that is what they 
were saying.
    Mr. Pietrangelo. The current situation is they reduced the 
output. I think with the prior situation it did shut down and 
then restarted at a lower output level.
    Senator Carper. All right.
    Mr. Pietrangelo. More broadly, Senator, the turbine and 
what we call the balance of plant at a nuclear energy facility 
is really the money side of the plant. If that is not running 
you are not producing electricity. It may not be safety-
related, but it is certainly important to the reliability of 
the station and the generation of the station. That is their 
business, so there is a natural incentive to properly maintain 
that equipment.
    Senator Carper. All right.
    Mr. Christian, in your testimony you mentioned that you are 
cooperating with General Electric Hitachi on nuclear energy for 
the design of the new North Anna reactor. This reactor is one 
of the new designs we have been talking about here, 
incorporating in this case gravity as a passive safety feature, 
rather than using pumps. I would like to know how that 
partnership is proceeding. Have you had any difficulties you 
could share with us?
    Mr. Christian. I think the partnership is proceeding well 
at this time. I would comment that as the industry, as I have 
observed the performance of various vendors in this business 
over the last decade, I have gotten a sense of the extreme 
atrophy that did occur in the previous two decades.
    We are really trying to get this industry going from a 
point of very low capabilities, and those capabilities have 
been building for the last decade. But I will tell you at this 
time that we are pleased with our relationship with GE Hitachi. 
We believe Hitachi brings a lot to the table in the form of 
manufacturing and construction experience. GE certainly has a 
lot of base capabilities as well.
    The reactor itself is an evolutionary design that 
incorporates a lot of passive safety features that make it a 
significant improvement over current generation.
    Senator Carper. Do you expect GE to start manufacturing 
parts for nuclear power plants in the U.S.?
    Mr. Christian. I would imagine that they will. The Nuclear 
Energy Institute also has actually taken a significant 
leadership role in stimulating U.S. manufacturing of nuclear 
quality components, holding regional workshops around the 
Country in which there has been tremendous interest, hundreds, 
literally, of vendors and suppliers that are interested in 
getting back into nuclear manufacturing and providing good 
jobs.
    Senator Carper. And when do you expect the NRC to approve 
this new GE Hitachi passive design?
    Mr. Christian. Their technical review will be completed in 
August 2010, then I believe there is some time after that for 
hearing, which would support, actually, our construction 
schedule, our overall project schedule, which has first safety-
related concrete installation in January 2012. The NRC, 
although much has been made today of, are they doing things 
fast enough or is the process efficient enough, let me tell 
you, as a safe nuclear operator, one that has a profound 
respect for the safety of the reactor core, it is in everyone's 
interest that the technical reviewers be provided adequate time 
to do their jobs with utter probity. It does not concern me if 
the issues are done correctly and done one time. Because one of 
the overarching themes of Part 52 is to achieve issue 
preclusion and foreclosure, so that they don't come up later 
after large cap-ex has been expended.
    So the NRC schedule does support Dominion's project 
schedule, and under that current schedule we would begin 
construction in early 2012.
    Senator Carper. Thank you.
    Mr. Bell, I don't want you to feel left out here. When you 
discussed future work in your written testimony, you outlined 
the audits that your staff will conduct during 2009 and beyond. 
I think the comment you used was, as resources permit. Do you 
have the resources needed to conduct those audits? And if not, 
how will you prioritize your workload?
    Mr. Bell. Over the last 2 years, the agency's programs have 
grown significantly, along with additional resources. 
Unfortunately, my office has stayed the same. So unless I get 
additional resources, I am going to be hard pressed to do the 
mandatory work that we have, in addition to maintaining a 
focused approach enhanced coverage of NRC's Nuclear Safety 
programs. We have audits planned in the area of nuclear safety, 
security, information technology and corporate management. I 
will be happy to, for the record, give you a list of the audits 
that we have planned for the future.
    Senator Carper. We would appreciate that.
    Mr. Bell. Yes, sir.
    [The referenced information was not received at time of 
print.]
    Senator Carper. Maybe one more question, Mr. Pietrangelo, 
then one for Mr. Webster, and then we will call it a day.
    Go back with us, you may have mentioned this in your 
testimony, I think you said that the generating capacity or 
capability, what is the term of art that you use? Operating 
efficiency?
    Mr. Pietrangelo. We generate about 20 percent of the----
    Senator Carper. No, but 91.5 percent is the----
    Mr. Pietrangelo. Capacity factor.
    Senator Carper. Capacity factor. And it is now 91.5 
percent, which is, I think, quite high.
    Mr. Pietrangelo. The industry average.
    Senator Carper. Yes, by historical standards. My guess is 
in past years, you had some companies, some utilities who 
maintained fairly high capacity performance and others did not. 
But today, it seems to be the performance is more nearly even 
across the industry. Why is that?
    Mr. Pietrangelo. I think we have consolidated as an 
industry. There are many fewer operators, so we have small 
fleets within the fleet that share best practices, that 
benchmark each other. Senator Voinovich earlier mentioned the 
Institute of Nuclear Power Operations, which seeks excellence, 
not just compliance with safety regulations. They share a lot 
of the operating experience as well.
    So it is really through a whole symbiotic set of activities 
from what INPO shares through the benchmarking that our members 
do of each other to get those best practices. I think your 
observation is absolutely correct, the whole fleet has come 
along to the point now where if you would have gone back 10 or 
15 years ago, that 91.8 would have been the top quartile of the 
industry's performance.
    Senator Carper. If you had gone back how many years ago?
    Mr. Pietrangelo. Just a few years ago, you would have seen 
that. But when I started, back in 1989, at NEI, the industry 
average capacity factor was in the 60's, low 70's. So that 
amount of improvement in the reliability of the stations really 
is the equivalent of building about another 20 to 25 new plants 
over that course of time.
    Senator Carper. Talk if you will about economic factors and 
market forces compelling the industry to do better, setting 
aside the work of the NRC and our interest here in this 
Subcommittee in driving safety and commitment to efficiency, 
reliability.
    Mr. Pietrangelo. There was always a fear that with economic 
deregulation there would be some incentive to cut corners in 
nuclear operations. Well, the exact opposite has occurred. 
Because unless you are a safe generator, you are not going to 
generate anything at all. So that actually has made management, 
I think, focus even more heavily on the operation and the 
reliabilities, the efficiencies, the benchmarking we talked 
about earlier. I think the overall improvement has been 
stunning.
    Senator Carper. A question for Mr. Webster, this will 
probably be the end of it and we will go have lunch. If we are 
lucky.
    In Chairman Klein's testimony, he discussed the proposed 
legislative change that would eliminate the requirement for the 
NRC to conduct uncontested hearings. We had a little discussion 
on that, as you recall. Let me ask, do you feel that such a 
change is appropriate? I think I know the answer, but go ahead 
and let us have it anyway.
    Mr. Webster. Well, I always hesitate to keep people from 
lunch too long, but I think the answer is absolutely not. We 
actually think that the relicensing hearings that have occurred 
so far have revealed deficiencies in the staff review of those 
applications and have certainly led to an improved safety 
situation. The Oyster Creek facility, the proposals for the 
safety management of that particular issue have changed five 
times. For the better, I mean, we still have a dispute about 
are they good enough. But they have changed five times for the 
better during that proceeding.
    At Vermont Yankee, likewise, an issue that the NRC staff 
had missed was highlighted by petitioners. Now, sometimes 
petitioners have to come up with money for experts, petitioners 
have to find lawyers. It is not easy to be a participant in one 
of these NRC hearings, and that is certainly something that we 
think should be changed and it should be made a lot easier.
    But it can't be expected all the time that the public 
should devote their time, their energy and their money to do 
what really the NRC should be doing itself. The mandatory 
hearings provide some element of check on the staff. In my 
testimony, I quote from some ASLB findings in the mandatory 
hearings where they say the technical portions of the staff 
documents in the record did not support a finding that the 
staff's review supported its decisions. And the ASLB went on to 
say the confidence in the staff's judgment would have been 
materially improved had the more important of these facts been 
checked. But it felt bound by the Commission, which said they 
should defer to the staff. Without that instruction, the ASLB 
would have conducted a much more probing review into the 
quality of the review and reporting.
    Now, we think that a probing review of the NRC staff, the 
quality of their safety review and their reporting, is 
something the public deserves. It should be done openly, it 
should be done transparently. I find it kind of hard to 
understand how all the members here could emphasize the need to 
build public confidence and the need for transparency and then 
in the same breath, start to eliminate one of the things, one 
of the few things left that actually helps in this regard. It 
should be enhanced, not reduced.
    Senator Carper. Thank you. Any other comments on this point 
before we move on? Yes, Mr. Pietrangelo.
    Mr. Pietrangelo. If there is no contention, you can have a 
hearing with yourself, I suppose. But the Commission's proposal 
was only when there were no admissible contentions for a 
hearing, and you were still required to have a mandatory 
hearing. There is no argument with having hearings when there 
is admissible contentions. It is when there are no admissible 
contentions, do you still have to have the hearing.
    With regard to the technical review, what is forgotten 
often is that the Advisory Committee on Reactor Safeguards is 
an independent adjunct to the NRC that does a very thorough 
technical review of every major licensing action that the NRC 
takes, including license renewal, as well as new plants, design 
certifications, early site permits, et cetera. It is their 
statutory to do that. That is the real technical check on the 
staff's work, not the ASLB's that Mr. Webster is referring to.
    Senator Carper. Thank you.
    I would like to wrap it up, if we could. Mr. Webster, if 
you have something just really, really quick.
    Mr. Webster. Very quickly, at nine reactors, neither the 
staff nor the ACRS found the problems with the metal fatigue 
that was found by petitioners. So there is a role for hearings. 
The quotes I gave were from a non-contested hearing. There are 
lots of issues to deal with, even at non-contested hearings. So 
it is simply untrue that these uncontested hearings are just 
pro forma.
    Senator Carper. Thank you all very, very much. This has run 
a bit longer than I anticipated, but it has been enormously 
helpful for me and I hope for others of my colleagues. Thank 
you for spending this time with us.
    I will close with just a thought. I spent 23 years of my 
life as a Naval flight officer, and a lot of time in airplanes, 
and another 4 years before that as a midshipman. We have a big 
Air Force base in Delaware called Dover Air Force base. It is a 
big airlift base. We are a base where we have some of the 
largest airplanes in the world, called C-5s. We have a mix of 
aircraft called C-17s, which are somewhat smaller cargo 
aircraft.
    C-5s, the oldest of the C-5s are probably close to 40 years 
old. We have had to go through a decisionmaking process within 
the Air Force and the Pentagon and the Congress to decide 
whether or not it makes sense to take 40-year old aircraft and 
to change their engines, change their hydraulic systems, change 
out all kinds of systems in the aircraft and to fly them for 
another 20 or 30 or 40 years. The Air Force actually took a 
number of the aircraft, one of them they literally tore apart, 
looking for fatigue and deterioration and all. Then a number of 
other aircraft they looked, they didn't did a complete tear-
down but gave them a very close examination.
    The Air Force ultimately concluded that they could probably 
fly these planes, with the wings and fuselages, for another 30 
or 40 years. And the cost of fully modernizing a C-5 turned out 
to be about one-third the cost of buying a new C-17. And the 
capability, the cargo capability of the C-5 is roughly twice 
that of a C-17. And they fly further without being refueled. So 
it had the effect of about six times the airlift capability for 
a C-5 as opposed to a new C-17.
    There are some people in the Air Force who want to get rid 
of the C-5s, send them off to the bone yard. They didn't call 
them rust buckets, but they said they were old, they were 
aging, they were older than the people who fly them and all. 
Sometimes, if we maintain an aircraft well, it can exceed our 
expectations. If we don't, and if they are poorly designed, 
they won't exceed our expectations or even meet our 
expectations.
    So as we go forward, that may be an example for us to keep 
in mind. We are going to modernize the C-5s, at least the C-
5Bs, and hopefully they will fly safely for another 30 or 40 
years, and provide cost-effective airlift. And hopefully we 
will get that kind of use out of our nuclear power plants. God 
knows we have invested enough in them. It will be comforting to 
know that we are going to continue to benefit from them for 
some time to come.
    Again, my thanks to each of you for your patience, for 
staying here today, for your preparation, for your responses to 
our questions. With that, this hearing is adjourned.
    [Whereupon, at 1:32 p.m., the subcommittee was adjourned.]

       Statement of Hon. Lamar Alexander, U.S. Senator from the 
                           State of Tennessee

    With gasoline rising above $4 per gallon and oil selling 
for more than $140 per barrel, I believe the best way for 
Congress to lower gasoline prices is a strategy based on these 
four words: ``find more, use less.'' Congress already took two 
steps last year toward ``using less'' when it enacted the 
Energy Independence and Security Act (EISA) in 2007, which 
increased the average fuel efficiency standards for cars and 
light duty trucks to 35 miles per gallon by 2020 and increased 
the Renewable Fuel Standard to 36 billion gallons by 2022.
    The Renewable Fuel Standard target of 36 billion gallons is 
the equivalent of 1.6 million barrels of oil per day. The 
Renewable Fuel Standard (RFS) included in EISA and tax 
incentives in the recently enacted farm bill have begun to 
accelerate our nation's transition from corn-based ethanol to 
cellulosic ethanol--in other words, shifting the focus from 
crops we eat to crops we don't eat.
    Just as there were possible unintended impacts on food 
prices from the use of corn-based ethanol, EPA should be alert 
to any potential unintended consequences as the country shifts 
to cellulosic ethanol, particularly of the effect of the RFS's 
sustainability criteria on the use of woody biomass for 
cellulosic ethanol and on the paper industry that relies on 
woody biomass.
    In Tennessee, Governor Bredesen has instituted a 
comprehensive program to encourage cellulosic ethanol 
production from switchgrass. With these types of initiatives to 
produce advanced ethanol from sources other than food stocks, I 
am hopeful that the RFS will continue to play an important role 
in diversifying the nation's transportation fuels and in 
putting downward pressure on gasoline prices. In the longer 
term, I support moving from a RFS to a Low Carbon Fuel Standard 
which is technology neutral and encourages more alternative 
fuels, such as electricity in plug-in electric cars and trucks 
and hydrogen.

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