[House Hearing, 111 Congress]
[From the U.S. Government Publishing Office]
BUDGETING FOR NUCLEAR WASTE MANAGEMENT
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HEARING
before the
COMMITTEE ON THE BUDGET
HOUSE OF REPRESENTATIVES
ONE HUNDRED ELEVENTH CONGRESS
FIRST SESSION
__________
HEARING HELD IN WASHINGTON, DC, JULY 16, 2009
__________
Serial No. 111-14
__________
Printed for the use of the Committee on the Budget
Available on the Internet:
http://www.gpoaccess.gov/congress/house/budget/index.html
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COMMITTEE ON THE BUDGET
JOHN M. SPRATT, Jr., South Carolina, Chairman
ALLYSON Y. SCHWARTZ, Pennsylvania PAUL RYAN, Wisconsin,
MARCY KAPTUR, Ohio Ranking Minority Member
XAVIER BECERRA, California JEB HENSARLING, Texas
LLOYD DOGGETT, Texas SCOTT GARRETT, New Jersey
EARL BLUMENAUER, Oregon MARIO DIAZ-BALART, Florida
MARION BERRY, Arkansas MICHAEL K. SIMPSON, Idaho
ALLEN BOYD, Florida PATRICK T. McHENRY, North Carolina
JAMES P. McGOVERN, Massachusetts CONNIE MACK, Florida
NIKI TSONGAS, Massachusetts JOHN CAMPBELL, California
BOB ETHERIDGE, North Carolina JIM JORDAN, Ohio
BETTY McCOLLUM, Minnesota CYNTHIA M. LUMMIS, Wyoming
CHARLIE MELANCON, Louisiana STEVE AUSTRIA, Ohio
JOHN A. YARMUTH, Kentucky ROBERT B. ADERHOLT, Alabama
ROBERT E. ANDREWS, New Jersey DEVIN NUNES, California
ROSA L. DeLAURO, Connecticut, GREGG HARPER, Mississippi
CHET EDWARDS, Texas ROBERT E. LATTA, Ohio
ROBERT C. ``BOBBY'' SCOTT, Virginia
JAMES R. LANGEVIN, Rhode Island
RICK LARSEN, Washington
TIMOTHY H. BISHOP, New York
GWEN MOORE, Wisconsin
GERALD E. CONNOLLY, Virginia
KURT SCHRADER, Oregon
Professional Staff
Thomas S. Kahn, Staff Director and Chief Counsel
Austin Smythe, Minority Staff Director
C O N T E N T S
Page
Hearing held in Washington, DC, July 16, 2009.................... 1
Statement of:
Hon. John M. Spratt, Jr., Chairman, Committee on the Budget.. 1
Prepared statement of.................................... 2
Report, ``Managing Spent Fuel in the United States: The
Illogic of Reprocessing,'' by Frank von Hippel, dated
January 2007, Internet address to...................... 48
Hon. Michael K. Simpson, a Representative in Congress from
the State of Idaho......................................... 3
Christopher A. Kouts, Acting Director of the Office of
Civilian Radioactive Waste Management, U.S. Department of
Energy..................................................... 5
Prepared statement of.................................... 6
Hon. Michael F. Hertz, Deputy Assistant Attorney General,
Civil Division, U.S. Department of Justice................. 8
Prepared statement of.................................... 11
Kim Cawley, Chief, Natural and Physical Resources, Cost
Estimates Unit, Congressional Budget Office................ 13
Prepared statement of.................................... 14
Hon. Gregg Harper, a Representative in Congress from the
State of Mississippi, letters submitted for the record:
From the Nuclear Energy Institute, dated July 8, 2009.... 30
From the National Association of Regulatory Utility
Commissioners, dated July 8, 2009...................... 33
Hon. Betty McCollum, a Representative in Congress from the
State of Minnesota, newspaper article:
``Aid Cuts Spark Debate Over Prairie Island Nuclear
Plant,'' Star Tribune, July 13, 2009................... 35
Hon. Paul Ryan, ranking minority member, Committee on the
Budget, prepared statement of.............................. 48
BUDGETING FOR NUCLEAR WASTE MANAGEMENT
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THURSDAY, JULY 16, 2009
House of Representatives,
Committee on the Budget,
Washington, DC.
The Committee met, pursuant to call, at 10:04 a.m., in room
210, Cannon House Office Building, Hon. John M. Spratt, Jr.
[Chairman of the Committee] presiding.
Present: Representatives Spratt, McCollum, Edwards,
Langevin, Diaz-Balart, Simpson, Mack, Jordan, Aderholt, Harper,
and Latta.
Chairman Spratt. I call the hearing to order, and explain
first of all to everyone, and particularly to our witnesses,
that we have as we speak three different markups going, Energy
and Commerce, Ways and Means, and as a consequence we will
probably be lightly staffed today, lightly attended today. But
you have two people here today who have a substantial interest
in this subject matter and I am sure there will be others
arriving later. In any event, we very much appreciate your
coming and your being willing to testify.
We have an excellent panel. I want to thank you once again
for coming. First, from the Department of Energy we have
Christopher Kouts. Mr. Kouts is the Acting Director of the
Office of Civilian Radioactive Waste Management. Director
Kouts, thank you for joining us today. Second, from the
Department of Justice we have Michael Hertz. Mr. Hertz is the
Deputy Assistant Attorney General in the Civil Division of the
Commercial Litigation Branch. Mr. Hertz, we thank you also for
coming. And third, from the Congressional Budget Office we are
joined by Kim Cawley. Mr. Cawley is Chief of CBO's Natural and
Physical Resources Cost Estimates Unit. Mr. Cawley, thank you
for joining us.
Our goal for this hearing is to gain a better understanding
of the federal government's liabilities for everything, but
particularly this morning for managing nuclear waste and the
budget implications that are our responsibility. We first held
a hearing on this topic two years ago and we would like to know
what progress the federal government has made in addressing the
problem over the last two years. Nuclear waste results from
both civilian and defense activities. Nuclear energy supplies
approximately 20 percent of our nation's electricity. Nuclear
fuel and weapons are, obviously, an important part of our
natural security and our economy. During this hearing we will
focus on waste that comes from commercial nuclear energy
production.
Under the Nuclear Waste Policy Act of 1982 the United
States government was to have begun in 1998, some years ago, to
remove nuclear waste from commercial reactors and to dispose of
it in a central national repository. Yucca Mountain in Nevada
was chosen as the site for this repository. Since 1983
commercial utilities have paid the federal government a fee for
this service. These fee collections, which range from $750
million to $800 million a year, are placed in a Nuclear Waste
Trust Fund.
After more than a decade, the federal government has now
begun to take this waste from these sites. Nuclear waste and
spent nuclear fuel is being stored currently at 121 sites in
thirty-nine states. Even under the most optimistic time frame
by the time the federal government opens a repository it is
likely to face at least a twenty-year backlog of waste.
Federal delays have resulted in additional cost. In
addition to direct lifetime project costs for Yucca Mountain
that are now estimated at $100 billion, many utilities have
sued the federal government for breach of its responsibilities.
They have been winning their lawsuits. Present estimates of the
eventual total costs of the awards and settlements related to
this litigation range from $12 billion to $50 billion. Each
year of delay in meeting the federal responsibility has been
estimated to add another $500 million to the federal
government's liability. As I was explaining to our witnesses
earlier, we are looking for things where we book an asset, the
Nuclear Waste Trust Fund, with the receipt of funds coming into
it. But because we run a big cash budget we do not necessarily
book the liability that we accrue for waste disposal.
I would readily acknowledge that we are the Budget
Committee, not the Energy Committee. It is not our job or
domain to write energy bills. But it is our job to develop
fiscally responsible policies addressing significant cost
drivers in the federal budget. And we are concerned that the
federal government's failure so far to resolve the problem of
nuclear waste disposal is costing the American people and the
federal government large sums of money. For this reason, the
issue merits our Committee's very careful attention this
morning.
We appreciate once again your coming today. We look forward
to your testimony. But before I turn to you, let me turn to our
Ranking Member, Mr. Simpson, for any statement he cares to
make. Mr. Simpson?
[The prepared statement of Mr. Spratt follows:]
Prepared Statement of Hon. John M. Spratt, Jr., Chairman,
Committee on the Budget
Good morning and welcome to the House Budget Committee's hearing on
Budgeting for Nuclear Waste Management.
We have an excellent panel of government witnesses before us, and I
want to thank them for their participation in this hearing today.
First, from the Department of Energy, we have Christopher Kouts (say
``Coots ''). Mr. Kouts is Acting Director of the Office of Civilian
Radioactive Waste Management. Director Kouts, thank you for joining us
today. Second, from the Department of Justice, we have Michael Hertz.
Mr. Hertz is Deputy Assistant Attorney General in the Civil Division,
Commercial Litigation Branch. Mr. Hertz, we thank you for being here
today as well. Third, from the Congressional Budget Office, we are
joined by Kim Cawley. Mr. Cawley is Chief of CBO's Natural and Physical
Resources Cost Estimates Unit. Mr. Cawley, thank you for joining us.
Our goal for this hearing is to gain a better understanding of the
federal government's responsibilities and liabilities for managing
nuclear waste and the budget implications of that responsibility. We
first held a hearing on this topic two years ago, and we would like to
know what progress the federal government has made addressing the
problem in the past two years.
Nuclear waste results from both civilian and defense activities.
Nuclear energy supplies approximately 20 percent of our nation's
electricity, and nuclear fuel and weapons are an important part of
national security. During this hearing, we will focus on waste that
comes from commercial nuclear energy production.
Under the Nuclear Waste Policy Act of 1982, the U.S. government was
to have begun in 1998 to remove nuclear waste from commercial nuclear
reactors and to dispose of it in a central national repository. Yucca
Mountain in Nevada was chosen as the site for this repository. Since
1983, commercial utilities have paid the federal government a fee for
this service. These fee collections, which average from $750 to 800
million a year, are placed in a Nuclear Waste Fund.
More than a decade later, however, the federal government has not
begun to take this waste from these sites. Nuclear waste and spent
nuclear fuel is currently being stored at 121 sites in 39 states. Even
under the most optimistic timeframe, by the time the federal government
opens a repository, it is likely to face at least a 20-year waste
backlog.
Federal delays have resulted in additional costs. In addition to
direct lifetime project costs for Yucca Mountain that are now estimated
at about $100 billion, many utilities have sued the federal government
for breach of its responsibilities. They have been winning their
lawsuits. Present estimates of the eventual total costs of the awards
and settlements related to this litigation range from $12 billion to
$50 billion. Each year of delay in meeting the federal responsibility
has been estimated to add another $500 million to the federal
liability.
We are the Budget Committee, not the Energy Committee, and it is
not our job to draft energy bills. But it is our job to develop
fiscally responsible policies addressing significant cost drivers to
the federal budget. We are concerned that the federal government's
failure so far to resolve the problem of nuclear waste disposal is
costing the American people large sums. For that reason, this issue
merits our committee's careful examination.
We very much appreciate your joining us today. Before turning to
you for your testimony, let me turn to our Ranking Member, Mr. Ryan,
for any statement he cares to make.
Mr. Simpson. Thank you, Mr. Chairman, and thanks for
holding this hearing today. And thank you to the witnesses for
being here today. First, Mr. Chairman, let me make a unanimous
consent request to allow members one week to submit statements
for the record.
Chairman Spratt. Without objection, so ordered.
Mr. Simpson. As you mentioned, both Mr. Edwards and I have
an interest in this in that we sit on the Energy and Water
Appropriations Committee and deal with how we are going to
appropriate the funds for permanent disposal of this waste at
some point in time, and it concerns us both greatly.
Permanent disposal of high level nuclear waste has been an
ongoing issue of this nation ever since World War II. Both
Republican and Democratic administrations and Congresses have
sought a solution to this vexing problem for over sixty years.
We have conducted hundreds if not thousands of studies, and
have spent billions of taxpayer dollars in the process. During
this time scientific consensus and collective wisdom of every
session of Congress since 1980 has been that, one, geological
storage of nuclear waste is the safest, most economic, and most
effective means of permanent nuclear waste storage. And two,
Yucca Mountain is suitable, if not the best, location for
geological storage.
We have spent nearly $10 billion studying Yucca Mountain as
a permanent site for nuclear waste storage. This is easily the
most comprehensive and expensive environmental study ever
undertaken by this country or any other. There are over 1.5
million documents of evidence that have been prepared in
analyzing Yucca Mountain. Yet, after only six weeks in office
the Obama administration somehow came to the judgment that
Yucca Mountain is not a workable option for the storage of
nuclear waste. The administration's only alternative solution
is ``we need more studies.''
Abandoning Yucca Mountain is not a solution to nuclear
waste disposal. It will only serve to delay a real permanent
solution and will likely slow new growth in the nuclear power
industry. Abandoning Yucca Mountain will also add to the
government's bleak fiscal outlook due to the large liabilities
it has already incurred by not accepting nuclear waste as
promised. Already courts have awarded nearly $1 billion in
damages to utility companies that have been forced to pay fees
to the government for nuclear waste disposal. DOE currently
estimates this liability to reach $12.3 billion and that is
only if Yucca Mountain opens by 2020, which is optimistic.
Every year that Yucca Mountain delays adds another $500 million
to that liability, an estimated $500 million.
My home State of Idaho has nearly 5,000 tons of nuclear
waste related to Cold War defense activities for which the
federal government has agreed to dispose of by 2035. Canceling
the Yucca Mountain project seriously jeopardizes this time
frame. And Idaho is not alone in this dilemma; over thirty
other states face similar problems, including the Chairman's
State of South Carolina. Abandoning Yucca Mountain would also
seriously damage any effort to realistically control greenhouse
gases as nuclear power currently accounts for 72 percent of all
carbon-free energy production in this country. So without a
permanent nuclear waste solution we will not be able to cut
emissions to the level, as the administration has requested and
this Congress has requested.
Finding a permanent solution to disposal of our nuclear
waste has to be a critical part of our long term energy
strategy. Without it, we cannot expect to achieve a green
energy economy because we simply cannot build enough windmills
or solar panels to get there without nuclear power. And simply
proposing to study the issue after years of similar studies,
and billions of taxpayer dollars already spent, will not get us
any closer to a final solution.
I thank you, Mr. Chairman, and I yield back.
Chairman Spratt. Thank you, Mr. Simpson. And in addition to
our Republican members who have just joined us we have Chet
Edwards who is the Chairman of the Energy and Water
Subcommittee, and we are glad to have you here this morning.
Gentlemen, the floor is yours and for purposes of moving
along we will make, without objection, your statements part of
the record. You can summarize as you see fit, but we encourage
you to take all the time you need to get your statements fully
before the Committee. And secondly, we will put questions to
you as a panel when the three of you have completed all of your
testimony. So thank you for coming and let me add as one
further housekeeping detail that all members will be allowed to
submit an opening statement for the record at this point unless
there is objection. Hearing none, so ordered.
Let us begin with Mr. Hertz. Or we will take it in whatever
order you would like to take it. Is there any preference? Mr.
Kouts?
Mr. Kouts. Whatever is your pleasure, Mr. Chairman. I would
be happy to start.
Chairman Spratt. Why do you not lead off, then?
STATEMENTS OF CHRISTOPHER A. KOUTS, ACTING DIRECTOR, OFFICE OF
CIVILIAN RADIOACTIVE WASTE MANAGEMENT, DEPARTMENT OF ENERGY;
MICHAEL F. HERTZ, DEPUTY ASSISTANT ATTORNEY GENERAL, CIVIL
DIVISION, DEPARTMENT OF JUSTICE; AND KIM P. CAWLEY, UNIT CHIEF,
NATURAL AND PHYSICAL RESOURCES COST ESTIMATES UNIT,
CONGRESSIONAL BUDGET OFFICE
STATEMENT OF CHRISTOPHER A. KOUTS
Mr. Kouts. All right, thank you. Thank you, Mr. Chairman,
and members of the Committee. I am Christopher Kouts, Principal
Deputy Director and currently Acting Director of the Office of
Civilian Radioactive Waste Management within the Department of
Energy. I appreciate the invitation to appear before the
Committee to provide a brief status of our program and to
discuss the government's liability due to the delay in meeting
its obligation to begin the acceptance of commercial spent
nuclear fuel by January 31, 1998.
The Nuclear Waste Policy Act of 1982 as amended directs the
Office of Civilian Radioactive Waste Management to undertake
numerous activities. Among those are to provide for the
development of one authorized geologic repository for the
permanent disposal of waste. The Act also authorizes one
commercial spent nuclear fuel interim storage facility under
certain conditions.
The Department's fiscal year 2010 budget request announced
the administration's intended termination of the Yucca Mountain
Repository Project and includes the funding needed to explore
alternatives for nuclear waste disposal and to continue
participation in the Nuclear Regulatory Commission license
application process. However, the Department remains committed
to meeting its obligations for managing and ultimately
disposing of spent nuclear fuel and high level waste. To that
end, the Secretary of Energy is convening a blue ribbon panel
of experts to evaluate alternative approaches for meeting the
federal government's responsibility.
Regarding federal government liability, the Nuclear Waste
Policy Act authorizes the Secretary of Energy to enter into
contracts with commercial nuclear utilities and commercial
research reactor operators that own and generate spent nuclear
fuel. Under the terms of these contracts, in return for the
payment of a fee of one mill per kilowatt hour, that is a tenth
of a cent per kilowatt hour, the government was to begin
disposing of the spent nuclear fuel starting in 1998. The fees
collected under these contracts are deposited in the Nuclear
Waste Fund. The Fund currently has a balance of approximately
$23 billion, which is invested in U.S. Treasury instruments.
The government receives over $750 million per year in revenues
from ongoing nuclear generation and the Fund averages
approximately $1 billion in annual return on its investments.
To date, utility contract holders have paid approximately $17
billion into the Fund.
Beginning in 1998 most contract holders initiated lawsuits
against the government due to the delay in beginning the
acceptance of spent nuclear fuel as required by the contracts.
Courts have determined the delay was a partial breach of
contract by the government and numerous trials have been held
to determine the amount of damages to be awarded. The
Department of Justice, with the Department of Energy's
assistance, has been able to settle several lawsuits
representing approximately 36 percent of commercial nuclear
power reactors that are covered by waste disposal contracts. To
date, close to $600 billion in claims has been paid under these
settlements. Payments are made from the Treasury Department's
Judgment Fund.
Of the remaining pending cases, judgments subject to post-
trial motions, appeals, or remands total approximately $800
million. As the damages in each trial are limited to those
costs incurred prior to the beginning of the trial, future
lawsuits may be brought by utilities to recover alleged
additional damages until the government has accepted their
spent nuclear fuel. And I would like to state for the record
with Mr. Hertz at my left here that having spent countless
hours in depositions and in trial testimony that the Department
of Justice does an outstanding job in defending the United
States of America against plaintiffs' lawsuits and my kudos go
to Mr. Hertz and his staff for their efforts in that regard.
Last year the Department estimated the liabilities under
current law resulting from delaying the beginning of waste
acceptance from 1998 to 2020, which was the last date we had
for the opening of Yucca Mountain, at $12.3 billion. We have
not attempted to further update that estimate.
In summary, the Department remains committed to meeting its
obligations for managing and ultimately disposing of spent
nuclear fuel and high level waste. The Secretary's blue ribbon
panel will provide the opportunity for a dialogue on how best
to address this challenging issue. And the panel's
recommendations will provide a basis for working with Congress
to revise the national policy. The Department looks forward to
an ongoing dialogue with members of Congress, interested
stakeholders, and others as alternative waste management
approaches are reviewed. I want to thank you for the
opportunity to discuss these issues and I would be pleased to
answer any questions that the Chairman or the Committee members
have.
[The prepared statement of Mr. Kouts follows:]
Prepared Statement of Christopher A. Kouts, Acting Director of the
Office of Civilian Radioactive Waste Management, U.S. Department of
Energy
Mr. Chairman and Members of the Committee, I am Christopher A.
Kouts, Acting Director of the Department of Energy's (DOE) Office of
Civilian Radioactive Waste Management (OCRWM). I appreciate the
invitation to appear before the Committee to provide a brief status of
the Civilian Radioactive Waste Management Program and to discuss the
Government's liability due to the delay in meeting its obligation to
begin the acceptance of commercial spent nuclear fuel by January 31,
1998.
The mission of the Department of Energy's Office of Civilian
Radioactive Waste Management is to manage and dispose of the Nation's
commercial and defense high-level waste and spent nuclear fuel in a
manner that protects public health, safety, and the environment. The
Nuclear Waste Policy Act of 1982, as amended, directs the Office of
Civilian Radioactive Waste Management to provide for the development of
one authorized repository for the permanent disposal of waste through
site characterization activities, a specific site approval process, and
submittal of a license application, among other things. The Act
authorizes one commercial spent nuclear fuel interim storage facility
under certain conditions.
The Department's FY 2010 budget request announces the
Administration's intended termination of the Yucca Mountain repository
project and includes the funding needed to explore alternatives for
nuclear waste disposal and to continue participation in the Nuclear
Regulatory Commission license application process. All funding for the
development of the Yucca Mountain facility and related infrastructure--
such as further land acquisition, transportation access, and additional
engineering--has been eliminated.
The Department remains committed to meeting its obligations for
managing and ultimately disposing of spent nuclear fuel and high-level
radioactive waste. To that end, the Secretary is convening a Blue-
Ribbon Panel of experts to evaluate alternative approaches for meeting
the Federal Government's responsibility.
government liability
The Nuclear Waste Policy Act authorizes the Secretary to enter into
contracts with commercial nuclear utilities and commercial research
reactor operators that own and generate spent nuclear fuel. Under the
terms of these contracts, in return for the payment of a fee of 1 mill
per kilowatt-hour, the Government was to begin disposing of the spent
nuclear fuel starting in 1998. The fees collected under these contracts
are deposited in the Nuclear Waste Fund. The Fund currently has a
balance of approximately $23 billion which is invested in U.S. Treasury
instruments. The Government receives over $750 million per year in
revenues from on-going nuclear generation and the Fund averages
approximately $1 billion annual return on its investments. To date,
utility contract holders have paid approximately $17 billion in fees.
Beginning in 1998, most contract holders initiated lawsuits against
the Government due to the delay in beginning the acceptance of spent
nuclear fuel as required by the contracts. Courts have determined the
delay was a partial breach of contract by the Government, and numerous
trials have been held to determine the amount of damages to be awarded.
As of May 2009, 71 lawsuits have been filed by utilities to recover
damages resulting from the delay. The Department of Justice, with the
Department of Energy's assistance, has been able to settle ten of the
lawsuits. This represents approximately 36 percent of the commercial
nuclear power reactors that are covered by waste disposal contracts. To
date, close to $600 million in claims have been paid under these
settlements. Payments are made from the Treasury Department's Judgment
Fund. Under these settlements, contract holders will continue to submit
annual claims for additional costs, and additional annual payments will
be made until the Government ``catches up'' with its spent fuel
acceptance obligations, as they are defined in the settlement
agreements.
Of the remaining 61 lawsuits, four judgments were affirmed
resulting in $35 million paid. Six of the cases were dismissed. The
other 51 cases remain pending. Of the 51 pending cases, 17 were tried
with judgments subject to post-trial motions, appeals, or remands for a
combined total of $790 million. As the damages in each trial are
limited to those costs incurred prior to the beginning of trial, future
lawsuits may be brought by the utilities to recover alleged additional
damages until the Government has accepted their spent nuclear fuel.
Last year, the Department estimated the liabilities under current
law resulting from delaying the beginning of waste acceptance from 1998
to 2020 at $12.3 billion. We have not attempted to further update that
estimate.
conclusion
The Department remains committed to meeting its obligations for
managing and ultimately disposing of spent nuclear fuel and high-level
radioactive waste. The Secretary's Blue-Ribbon Panel will provide the
opportunity for a dialogue on how best to address this challenging
issue, and the Panel's recommendations will provide a basis for working
with Congress to revise the national policy. The Department looks
forward to an ongoing dialogue with members of Congress, interested
stakeholders, and others as alternative waste management approaches are
reviewed.
Thank you for this opportunity to discuss these issues, and I would
be pleased to answer any questions the Committee may have at this time.
Chairman Spratt. Before going to Mr. Hertz, the $12.3
billion? I missed what that represents.
Mr. Kouts. That was the latest estimate that we had,
assuming that the government was going to start performing
beginning in the year 2020. And that assumed that Yucca
Mountain was going to be operational in the year 2020.
Chairman Spratt. Well is there any prospect of that
happening at this point in time?
Mr. Kouts. Well, I believe the administration has made it
clear that its intention is not to proceed with the deployment
of the repository, sir.
Chairman Spratt. Well, we will come back to that. Thank
you, sir. Mr. Hertz?
STATEMENT OF MICHAEL F. HERTZ
Mr. Hertz. Thank you, Mr. Chairman. Mr. Chairman and
members of the Committee, I am Michael Hertz, Deputy Assistant
Attorney General, Civil Division, Department of Justice. I
would like to touch on three points this morning. First, the
origins of the litigation that we are defending. Second, the
current status of that litigation. And third, the liabilities
that we are facing in that litigation and the funding of that
litigation.
Pursuant to the Nuclear Waste Policy Act DOE entered into
seventy-six standard contracts with commercial utilities to
pick up spent nuclear fuel. In return, the commercial utilities
pay a fee on a quarterly basis. In May 1995 the Department of
Energy announced that it would be unable to begin acceptance of
spent nuclear fuel in January 1998 as was called for by those
contracts. A number of utilities went to the United States
Court of Appeals for the District of Columbia Circuit to seek
an order that the Department of Energy was required to pick up
that spent nuclear fuel notwithstanding that fact that a
repository had not been built by 1998, and the Court agreed
with them. But the Court ultimately decided not to order the
Department of Energy to pick up that spent nuclear fuel because
it determined that the utilities had an adequate remedy at law
in the United States Court of Federal Claims to seek breach of
contract damages. And as part of that ruling the United States
Court of Appeals for the District of Columbia Circuit announced
that the Department of Energy would not be allowed to rely on
the unavoidable delay clause in the standard contracts as a
defense to liability.
Therefore, beginning after January 1998, after the breach
occurred because spent nuclear fuel was not begun to be picked
up, utilities began to file cases. They filed seventy-one cases
in the Court of Federal Claims. To date, that is the number
that has been filed. Collectively, those cases currently seek
$5.7 billion in damages. The United States Court of Appeals for
the Federal Circuit, which is the appeals court that the cases
go to from the United States Court of Federal Claims, has
determined that the Department of Energy is in breach of its
obligations. But it has determined that it is only a partial
breach. That is, the Department of Energy is still required to
perform under the contracts, that is to eventually pick up the
spent nuclear fuel, and the utilities can only seek damages up
until the point of time that they file a complaint. So what
that means is that at least every six years the utilities will
have to go back to court to seek whatever increased damages
they have for the preceding six-year period. And that means we
are obviously facing litigation for many years to come.
As was noted, the estimates of potential liability, the
Department of Energy estimates it eventually at $12.3 billion
assuming performance by 2020. The utility industry has
estimated damages of up to $50 billion. Both of those estimates
obviously were done before the administration announced that
Yucca Mountain was not going to go forward.
With regard to the current status of the litigation, of the
seventy-one lawsuits filed fifty-one cases remain pending
either in the Court of Federal Claims or in the Court of
Appeals for the Federal Circuit. Ten cases have been settled,
and as noted that represents about 36 percent of the reactors
that are covered by standard contracts. Six have been
voluntarily withdrawn, and four have been litigated through
final, unappealable judgments.
While the Department of Justice has asserted legitimate
defenses to these cases, we also have made concerted efforts to
settle these cases. As I noted, we have settled approximately
ten cases. The settlement payments so far have been $565
million. Of the fifty-one pending cases, the trial court has
entered judgment in thirteen cases. Six of those cases are
currently on remand to the trial court after appeals and seven
are pending on appeal. Between judgments, most of which are not
final because of appeals and remands, and settlements, the
government's total liability currently stands at $1.3 billion.
As I noted, this only covers a relatively short period of time,
in some cases as short as from 1998 to 2001, depending on when
the utility filed its case. Or in the case of some settlements
it may go all the way from 1998 to 2006 or 2007. So, current
liability stands at $1.3 billion.
There are two significant issues that are still pending
potentially on appeal that could affect the government's
overall liability. One is the unavoidable delay clause that I
mentioned earlier. Although the D.C. Circuit determined that
the United States could not rely on the unavoidable delay
clause, the judge of the Court of Federal Claims determined in
his view the D.C. Circuit lacked jurisdiction to make that
ruling. That ruling from the Court of Federal Claims is now
pending in the Federal Circuit. And the case was actually
argued some time ago, but more recently the Court decided it
wanted to hear that case en banc. That is, rather than the
normal three-judge panel all the judges of the Court would hear
the case. And it has ordered a supplemental briefing which will
be completed in August.
The second major issue pending on appeal is the scope of
the government's obligations under the contract, and
principally at what rate did the government need to accept
spent nuclear fuel? And the rate is a very significant issue
because it actually is the driving force between what the
government's damages are. Last summer the Federal Circuit
entered a number of decisions setting a rate. This rate was
lower than what the utilities had wanted, higher than what the
government had asked for, and higher than the rate the
government has used in the settlements it has entered to date.
That decision is not necessarily final. The government still
has options to ask the entire Federal Circuit to rehear the
case, either those cases or subsequent cases coming to the
Court, to set a definitive rate of acceptance.
To date, all payments have been made out of the Judgment
Fund that has been mentioned. The government's original
position was that payments should be made out of the Nuclear
Waste Fund. But the United States Court of Appeals for the
Eleventh Circuit back in 2002 rejected that argument. And
therefore, the only available funds to pay these judgments is
the Judgment Fund.
Now, a word about litigation costs. These costs to the
government to litigate these cases are quite significant and
they represent a significant burden on the Department of
Justice, implicating our ability to defend other cases. I would
note that the unit of the Justice Department that defends these
cases spends anywhere from twelve to fifteen attorney hours per
year defending cases, just the attorneys. And the total
resources that are spent on the spent nuclear fuel cases
represent 45 percent of that unit's budget, notwithstanding the
fact that they are defending billions of dollars in cases in
other fields. To date, the Department has expended $24 million
in attorneys' costs, $91 million in expert funds, and $39
million in litigation support costs and defenses, for a total
of approximately $150 million. To date, the Department has
funded these expenses exclusively. The Department of Energy has
not provided funds but they have provided cooperation in other
respects and as Mr. Kouts notes we have a very good working
relationship in handling these cases.
To give you some idea of what we face, so far this year we
have had trials in four cases involving five utilities where
the total amount of money claimed was $543 million. This month
alone two more cases are going to trial with the total amount
of claims of $64 million. In August another case is going to go
to trial where the claim is $174 million. In the summer and the
fall two more cases are going to go to trial where the amount
requested is $100 million. And then in December another case is
going to go to trial where the amount requested is $30 million.
So far, there are already three cases set for trial in 2010
where the total amount expected to be claimed is $335 million.
And we are predicting that the total number of cases that will
go to trial in fiscal year 2010 will be twelve, and fiscal year
2011 thirteen cases.
As I noted, these cases will continue to be filed and
litigated into the foreseeable future because of the partial
breach ruling. I would note recently, in addition to the
contracts in which DOE has already been found to be in breach,
DOE has entered into some new contracts with utilities who want
to build some new nuclear power plants. We worked closely with
DOE to try to come up with provisions and that that would
ultimately, if DOE is unable to accept spent nuclear fuel, that
would limit the government's potential liability.
We understand that the administration is going to convene a
blue ribbon panel of experts to make recommendations going
forward and that might provide a basis for revising the
statutory framework to govern the existing obligations. We
would suggest that any legislative solution to these issues
also include provisions to address the government's outstanding
liability. A legislative solution would be preferable to the
current drain on the resources of the courts and the Department
of Justice caused by this seemingly endless litigation.
In summary, the spent nuclear fuel litigation has already
cost the government significant sums in terms of liability and
litigation costs, likely to continue to do so into the
foreseeable future. Thank you for your patience and I look
forward to responding to your questions.
[The prepared statement of Mr. Hertz follows:]
Prepared Statement of Hon. Michael F. Hertz, Deputy Assistant Attorney
General, Civil Division, U.S. Department of Justice
Mr. Chairman, and members of the Committee, I am Michael F. Hertz,
and I am a Deputy Assistant Attorney General of the Department of
Justice, Civil Division. I am pleased to testify today regarding the
status of litigation concerning the Department of Energy's (DOE)
obligations under the Nuclear Waste Policy Act (NWPA) of 1982.
Let me note at the outset that much of the litigation about which
you have asked the Department of Justice to provide testimony is still
pending in the Federal courts. As a result, the Department's pending
matter policy applies to any discussion of those cases. Pursuant to
that policy, I will be happy to discuss matters that are in the public
record.
background
In 1983, pursuant to the NWPA, the DOE entered into 76 standard
contracts with entities, mostly commercial utilities,that were
producing nuclear power. Through the standard contracts, DOE agreed
that by January 31, 1998, it would begin accepting spent nuclear fuel
and high-level radioactive waste (collectively, SNF) created by the
utilities. In return, the utilities agreed to make quarterly payments
into the Nuclear Waste Fund (NWF) created by the statute. The utilities
began making payments into the NWF in 1983. In 1987, Congress
designated Yucca Mountain in Nevada as the sole potential site for a
Federal repository for disposal of the SNF. In May 1995, DOE published
a notice in the Federal Register advising the utilities that held
standard contracts and others that DOE would be unable to begin
acceptance of SNF on January 31, 1998. The notice also explained that
DOE's acceptance beginning on that date was conditioned upon the
existence of an operational repository. 60 Fed. Reg. 21793 (May 3,
1995).
In response to this notice, several nuclear utilities filed suit in
the United States Court of Appeals for the District of Columbia
challenging DOE's understanding. The District of Columbia Circuit held
that DOE was required to begin SNF acceptance in some type of facility
by January 31, 1998. See Indiana Michigan Power Co. v. Department of
Energy, 88 F.3d 1272, 1277 (D.C. Cir. 1996). After DOE continued to
inform utilities that it would be unable to begin accepting SNF by
January 31, 1998, the utilities again requested an order directing that
DOE perform under the standard contracts. The District of Columbia
Circuit denied the utilities' request and instead found that the
utilities' remedy could be addressed through breach of contract claims.
Northern States Power Co. v. United States, 128 F.3d 754, 759 (D.C.
Cir. 1997), cert. denied, 525 U.S. 1015 & 1016 (1998). The court did,
however, issue a mandamus order [added to accord with later reference
to DC Cir mandamus writ] that barred DOE from asserting that its delays
in performing the standard contract were ``unavoidable'' and,
therefore, excused pursuant to the ``unavoidable delays'' provision of
the standard contracts.
status of court of federal claims litigation
To date, utility companies have filed 71 cases in the United States
Court of Federal Claims, alleging that DOE's delay in beginning SNF
acceptance constituted a breach of contract. The Court of Appeals for
the Federal Circuit, in Maine Yankee Atomic Power Co. v. United States,
225 F.3d 1336 (Fed. Cir. 2000), has ruled that the delay constitutes
such a breach.
The utilities' damages claims largely are for the costs incurred to
store SNF that they allege DOE would have accepted from them absent the
breach--specifically, storage costs that utilities allege they would
not have expended had DOE begun timely performance under the standard
contracts. In addition, several utilities have alleged damages arising
from the ``diminution-in-value'' of their plants as the result of DOE's
delay, claiming that they realized these damages when they sold their
plants to other utilities.
Utility industry reports have estimated that the claims will total
about $50 billion, which far exceeds the amount the utilities have paid
into the NWF pursuant to the standard contracts. DOE's most recent
estimate of potential liability is $12.3 billion, based upon a
projected start date of 2020. These estimates do not fully take into
account the Government's defenses or the possibility that plaintiffs
will not be able to prove the full extent of their claims, and they
were developed before the Administration's recent announcement about
the general cessation of Yucca Mountain activities.
In the first case to proceed to trial on the merits in March 2004,
the trial court found that the utility had not incurred any damages as
a result of the partial breach of contract through the date of trial
and denied any monetary recovery, although it ruled that the utility
may return to court if and when it incurs damage because of the delay
in spent fuel acceptance. Indiana Michigan Power Co. v. United States,
60 Fed. Cl. 639 (2004). In affirming this ruling on appeal, the
appellate court held that all claims for breach of the standard
contracts may only run through the date of the complaint and that
utilities must file new complaints with the trial court seeking damages
as they are incurred. Indiana Michigan Power Co. v. United States, 422
F.3d 1369 (Fed. Cir. 2005).
As a result of this ruling, utilities must file new cases with the
trial court at least every six years to recover any costs incurred as
the result of DOE's delay, and we expect to continue to litigate these
claims until after DOE begins performance of the standard contracts. We
have received a total of five complaints filed by utilities while their
first claims were still pending before the trial or appellate courts.
Of the 71 lawsuits filed, 51 cases remain pending either in the
Court of Federal Claims or in the Court of Appeals for the Federal
Circuit, 10 have been settled, six were voluntarily withdrawn, and four
have been litigated through final unappealable judgment.
While asserting legitimate defenses to plaintiffs' claims in
litigation, we also have made concerted efforts to settle claims. The
settlements resolving claims on 12 of the standard contracts in 10 of
the cases involve five companies: Exelon Generation, LLC; South
Carolina Electric & Gas Company; Omaha Public Power District; Duke
Power Company; and, Florida Power & Light Company. These settlements
provide for the periodic submission of claims to the contracting
officer for costs incurred since the date of the last submission. In
total, the Government has paid $565 million pursuant to these
settlements and one trial court judgment that was not appealed.
Of those 51 pending cases, the trial court has entered judgment in
13 cases. Six of those cases are currently on remand to the trial court
and seven are pending on appeal. Between judgments (most of which are
not final because of appeals or remands) and settlements, the
Government's liability currently stands at $1.3 billion. The time
periods covered by these judgments vary, from as short a period as
1998-2001 to as long a period as 1998-2006. The time period for the
amounts paid in settlement is 1998-2007.
The following chart summarizes the status of the 71 cases that have
been filed:
------------------------------------------------------------------------
Number of cases Status/Comments
------------------------------------------------------------------------
6 Voluntarily withdrawn
10 Settled
4 Final unappealable judgments
7 Final judgments on appeal
44 Pending before the trial court
------------------------------------------------------------------------
71 Total
------------------------------------------------------------------------
significant issues on appeal
There are two major issues that should be decided in the pending
appeals which will have a significant effect upon the Government's
continuing liability in these cases. The first issue concerns the
Government's ability to present a defense based upon the ``unavoidable
delays'' clause in the contracts. As noted, the District of Columbia
Circuit, in Northern States, mandated that the Government could not
rely upon such a defense in its litigation of delay claims arising from
its breach. One of the trial court judges at the Court of Federal
Claims found the District of Columbia Circuit's writ of mandamus to be
void and that DOE is entitled to raise the ``unavoidable delays''
defense. Nebraska Public Power District v. United States, 73 Fed. Cl.
650 (2006). On appeal, the Federal Circuit recently announced sua
sponte that it would accept the case for en banc review. Supplemental
briefing is due August 5, 2009. If the trial court ruling is affirmed,
the Government may be able to pursue an absolute defense to the
utilities' damages claims.
The second major issue to be decided in the cases on appeal is the
scope of the Government's obligation to utilities regarding the amount
of SNF to be accepted. In decisions issued in August 2008, the Federal
Circuit ruled that DOE's performance obligation is set forth in a
document issued in 1987, prior to the passage of the 1987 amendments to
the NWPA. Yankee Atomic Electric Co. v. United States, 536 F.3d 1268
(Fed. Cir. 2008); Pacific Gas & Electric Co. v. United States, 536 F.3d
1282 (Fed. Cir. 2008); Sacramento Municipal Utility District v. United
States, Nos. 2007-5052, -5097, 2008 WL 3539880 (Fed. Cir. Aug. 7,
2008). The rates set forth in this document are higher than the rates
that the Government has sought to have the trial court apply in
determining damages. These cases are currently on remand to the trial
court. We may seek rehearing en banc of the appellate decisions if
these cases are appealed again or may seek review in another spent
nuclear fuel case.
payment of judgments and settlements
To date, all payments to the utilities have come from the Judgment
Fund. In Alabama Power Co. v. United States Department of Energy, 307
F.3d 1300 (11th Cir. 2002), the Court of Appeals for the Eleventh
Circuit ruled that the Government could not use the NWF to pay for any
of the damages that the utilities incur as a result of DOE's delay. The
only other available funding source that has been identified to date is
the Judgment Fund. There is no statutory requirement that DOE be
required to reimburse the Judgment Fund.
litigation costs
The costs to the Government to litigate these cases are
significant. The Department of Justice has expended approximately $24
million in attorney costs, $91 million in expert funds, and $39 million
in litigation support costs in defense of these suits. In addition, DOE
and the Nuclear Regulatory Commission have expended thousands of hours
to support this effort. To date, DOE has not provided any funding for
the litigation effort. There is every reason to believe that these
cases will continue to be filed and litigated into the foreseeable
future, and these costs will continue to be incurred.
Unless we are successful in being permitted to mount an
``unavoidable delays'' defense in the near future, or there is some
other resolution to the current and potential litigation, the liability
associated with delays in DOE's ability to accept SNF will only
increase.. Further, in addition to the contracts under which DOE is
already in breach, we understand that, in Fall 2008, DOE executed
several new contracts with entities that hope to open new commercial
nuclear reactors in the future and that, in those new contracts, DOE
agreed to accept and dispose of SNF from those new nuclear reactors at
a certain point after they open. If DOE is unable to accept SNF, the
United States may incur additional liabilities under these recently
executed contracts unless a method of resolving utility delay claims
can be developed through some type of legislative action.
We understand that the Administration intends to convene a ``blue
ribbon'' panel of experts to make recommendations for alternative
options for the long-term storage and disposal of SNF that could
provide a basis for revising the statutory framework that now governs
these obligations. Any legislative solution to these issues should also
consider provisions to address the Government's outstanding liability.
A legislative solution would be preferable to the current drain on the
resources of the courts and the Department of Justice caused by the
seemingly endless litigation.
In summary, the SNF litigation has already cost the Government
significant sums in terms of liability and litigation costs and will
most likely continue to do so into the foreseeable future.
Chairman Spratt. Thank you, Mr. Hertz. Mr. Cawley?
STATEMENT OF KIM P. CAWLEY
Mr. Cawley. Good morning, Mr. Chairman, members of the
Committee. Thanks for the opportunity to be here this morning
to talk about the nuclear waste program with you. Since CBO
last testified on this subject in 2007 there have been some
important developments that I would like to briefly summarize
from my prepared statement.
First, the administration has announced that it intends to
terminate the Yucca Mountain project and explore other
alternatives for disposing of nuclear waste. Despite that
change in policy, the government remains responsible for
handling this waste from nuclear power plants. And regardless
of how we meet that responsibility this job will require some
significant federal spending over many decades.
Over the past twenty-five years or so nuclear utilities
have paid nearly $17 billion to the Department of Energy for
waste disposal services that they have not yet begun to
receive. Currently the Department has no identifiable plan for
handling the waste. Meanwhile, operators of nuclear utilities
continue to pay $750 million to $800 million a year to cover
the cost of the waste that they are generating.
The government is now more than ten years behind in its
schedule to fulfill its contractual obligation to dispose of
waste. So far the U.S. government from the Claims and Judgments
Fund has paid utilities $565 million in compensation because it
has failed to meet that schedule. The Department has estimated
that if it could begin disposing of waste ten years from now,
in 2020, it would still need to continue making these
compensation payments of around $12 billion before it could
catch up and start disposing of waste on schedule. How the
administration's decision to terminate the Yucca Mountain
project will affect these liabilities is unclear. But if the
schedule slips beyond 2020 compensation payments from the
Treasury's Judgment Fund can be expected to increase beyond $12
billion.
Finally, I would like to mention that nuclear waste remains
a growing issue. The amount of civilian and defense waste
waiting for disposal at Yucca Mountain is now about equal to
the legal capacity, 70,000 metric tons, of the repository that
was authorized in the Nuclear Waste Policy Act. The Nuclear
Regulatory Commission has extended the licenses of many of the
nation's nuclear power plants and has received applications to
build twenty-six more new plants. Of course, we do not know how
many of these plants will be built, or how long any of these
plants will continue to operate, but all of them could add to
the growing stockpile of waste that must be handled. And
without a change in law to expand the capacity of the nuclear
waste system taxpayers will continue to compensate utilities to
store substantial amounts of waste in the future.
Thanks again for the opportunity to be here and I would be
happy to answer any of your questions about the budgetary
aspects of the program.
[The prepared statement of Mr. Cawley follows:]
Prepared Statement of Kim Cawley, Chief, Natural and Physical
Resources, Cost Estimates Unit, Congressional Budget Office
Mr. Chairman, Congressman Ryan, and Members of the Committee, I am
pleased to appear before you today to discuss the federal government's
responsibilities and liabilities under the Nuclear Waste Policy Act of
1982 (NWPA). Since I last testified on this subject in 2007, there have
been a number of important developments that I would like to highlight
in my testimony:
The Administration has announced that it intends to
terminate the Yucca Mountain project and explore other alternatives for
disposing of nuclear waste. Despite that change in policy, however, the
federal government remains responsible for permanently disposing of
spent nuclear fuel generated by civilian facilities, which pay fees for
that service. Regardless of how the government meets that
responsibility, discharging those liabilities will require significant
federal spending over many decades.
The Department of Energy (DOE) has not yet disposed of any
civilian nuclear waste and currently has no identifiable plan for
handling that responsibility. Nevertheless, the operators of nuclear
utilities continue to pay fees--of about $750 million annually--to
cover the costs of disposing of the nuclear waste they generate. Over
the past 25 years, those firms have paid a total of $16.3 billion for
waste disposal services that they have not yet begun to receive.
The federal government is more than 10 years behind
schedule in its contractual obligations to remove and dispose of such
waste, and the government has paid nuclear utilities $565 million in
compensation for costs incurred because of its failure to meet that
schedule. DOE currently estimates that liabilities to electric
utilities for such damages will total more than $12 billion if the
department begins to accept nuclear waste by 2020. How the
Administration's decision to terminate the Yucca Mountain project will
affect the federal government's liabilities is unclear, but the
estimate will climb if the department's schedule slips beyond 2020.
Regardless of whether or when the government opens a repository, such
payments (which come from the Department of the Treasury's Judgment
Fund) will probably continue for several decades.
The Nuclear Regulatory Commission (NRC) has now extended
the operating licenses of more than half of the nation's nuclear power
plants for another 20 years beyond the span of their initial operating
licenses. Meanwhile, the amount of existing waste may already exceed
the amount authorized to be disposed of at the repository envisioned
under NWPA. Ultimately, a change in law will be required to authorize
DOE to permanently dispose of all of the waste anticipated to be
generated by existing nuclear power plants at a site other than Yucca
Mountain. Without such a change and steps toward that end, taxpayers
will continue to pay utilities--through settlements and claims awards--
to keep storing substantial amounts of waste.
the federal government's responsibilities under the
nuclear waste policy act
The Nuclear Waste Policy Act established statutory responsibility
for federal actions to take possession of and permanently dispose of
spent nuclear fuel generated at civilian nuclear reactors, as well as
to dispose of radioactive waste resulting from federal activities in
manufacturing nuclear weapons. Under current law, the only solution
that the government is authorized to pursue involves permanent disposal
of waste at a geologic repository, and Yucca Mountain in Nevada is the
only place where such a repository may be located.
Under NWPA, the federal government, through DOE, faces substantial
costs to establish a repository for the nation's nuclear waste. It has
also incurred contractual obligations to remove waste from civilian
nuclear facilities. Under the legislation, the federal government will
have to spend tens of billions of dollars over many decades to fulfill
its obligations to dispose of waste from the current generation of
civilian nuclear reactors. The government will also be responsible for
waste from any new facilities built in the future. However, because of
statutory constraints on the amount of waste that the repository
envisioned under NWPA can store, waste from any such new facilities
cannot be accommodated without a change to the law.
NWPA authorized DOE to build a geologic repository to permanently
store up to 70,000 metric tons of spent nuclear fuel generated by
civilian nuclear power plants and high-level radioactive waste
generated by federal facilities. The total amount of commercial and
defense-related waste that has already been generated may exceed that
capacity.
financing the costs of disposing of nuclear waste
The Nuclear Waste Policy Act also addressed how the disposal of
spent nuclear fuel and defense-related waste was to be paid for. Under
NWPA, the costs are to be borne by the parties that generate it, and
the law authorizes DOE to levy fees on the nuclear power industry to
cover the costs for the waste it generates. The law also authorizes
appropriations from the Treasury's general fund to pay for disposing of
high-level radioactive waste generated by the nation's defense
programs.
financing the costs associated with civilian nuclear waste
Starting in 1983, NWPA authorized DOE to charge electric utilities
fees to cover the costs of disposing of the nuclear waste they
generate. Utilities today pay annual fees at a rate of 1 mil (0.1 cent)
per kilowatt-hour of electricity generated and sold by nuclear power
plants. The fees, which are recorded in the budget as offsetting
receipts (a credit against direct spending), are deposited into the
Treasury's Nuclear Waste Fund. Amounts in that fund are available for
spending only to the extent provided in annual appropriation acts.
Under NWPA, DOE is required to periodically review and, if necessary,
adjust the level of fees to ensure that the fund has sufficient
resources to pay for disposing of the utility industry's nuclear waste.
The department has not increased that annual charge since 1983.
In addition to the ongoing yearly fees, NWPA established one-time
fees to cover the costs of disposing of waste that was generated before
the law was enacted. DOE provided utilities with several options for
paying that one-time charge, but several utilities have not yet paid
the fee, and a significant amount remains uncollected.
NWPA authorized appropriations from the Nuclear Waste Fund to cover
the costs of the civilian nuclear waste program and also permitted DOE
to borrow from the Treasury (subject to approval in advance in
appropriation acts) if balances in the fund were insufficient to cover
the program's immediate costs. (The law stipulated that amounts
borrowed from the Treasury be repaid from future fee collections.) In
addition, the law authorized the Secretary of the Treasury to invest
the fund's unspent balances in nonmarketable Treasury securities, which
are credited with interest.
From 1983 through the end of fiscal year 2008, $29.1 billion was
credited to the fund (see Table 1). That amount includes fees paid by
the nuclear industry totaling $16.3 billion, as well as $12.8 billion
from intragovernmental transfers of interest earnings. Cumulative
expenditures from the fund during that period totaled about $7.1
billion, mostly for analyses related to the waste disposal program and
for appropriations to DOE for initial design work on the Yucca Mountain
facility. The NRC and other federal entities also received modest
appropriations from the fund for work related to the program, leaving
an unspent balance of $22.0 billion at the end of fiscal year 2008. The
Congressional Budget Office (CBO) estimates that in 2009, another $2.0
billion will be credited to the fund--nearly $800 million from fees and
the rest from interest. Expenditures in 2009 will total $0.2 billion,
bringing the fund's end-ofyear balance to $23.8 billion, CBO estimates.
If all of today's 104 licensed nuclear reactors continue to
generate electricity, future annual receipts from industry fees are
likely to average between $750 million and $800 million for at least
the next decade. Most U.S. nuclear power plants began operating in the
mid-1970s or during the 1980s under 40-year licenses. The NRC has
approved 20-year extensions to the licenses of more than half of the
plants in operation today, and it anticipates that many of the others
will apply for such extensions. When those plants reach the end of
their license extensions (or their economically useful lives) and cease
operations--probably in the 2030s and 2040s--they will no longer pay
fees to the Nuclear Waste Fund to dispose of their waste.
TABLE 1.--FEDERAL CASH FLOWS FOR NUCLEAR WASTE DISPOSAL
[Billions of dollars]
------------------------------------------------------------------------
Cumulative totals, CBO's estimates,
1983 through 2008 2009
------------------------------------------------------------------------
Nuclear Waste Fund (for
civilian nuclear waste):
Deposits:
Annual fees............... 14.8 0.8
One-time fees............. 1.5 0
-----------------------------------------
Subtotal................ 16.3 0.8
Interest credited\a\...... 12.8 1.2
-----------------------------------------
Total................... 29.1 2.0
Disbursements............... 7.1 0.2
End-of-Year Balance......... 22.0 23.8
General Fund (for defense-
related activities):
Appropriations 3.6 0.1
------------------------------------------------------------------------
Sources: Congressional Budget Office and Department of Energy.
Note: Amounts are in nominal dollars.a. Components may not add up to totals because of rounding.
Receipts from the one-time fees that remain unpaid and become due
once the federal repository is opened currently amount to about $3.2
billion, DOE estimates.\1\ Interest accrues on the balances due from
those one-time fees until the utilities pay them to the government;
therefore, eventual deposits of such fees will probably be
significantly greater than the current balances due. Also accruing and
adding significantly to the fund's balances are credits of interest on
the fund's unspent dollars. Those amounts are intragovernmental
transfers and do not create net receipts to the federal government, but
they do add to the resources that are authorized to be used for the
waste disposal program.
financing the costs associated with defense-related nuclear waste
In addition to the amounts appropriated from the fees and interest
credited to the Nuclear Waste Fund, the Congress has made annual
appropriations to the nuclear waste program to cover the costs that DOE
estimates are related to the disposal of nuclear waste generated by
federal defense programs. In 2008, DOE determined that about one-fifth
of the total costs of the waste disposal program was attributable to
that endeavor and that this share of the program's total costs should
be paid for with appropriations from the general fund of the
Treasury.\2\ Since 1993, the Congress has provided about $3.7 billion
from the general fund for such costs.
estimates of total life-cycle costs
In 2008, DOE published an estimate of the total costs--including
those for transportation and project management--associated with the
planned underground nuclear waste disposal facility. In DOE's
estimation, the project would cost about $96 billion in 2007 dollars
over an operating period of more than 100 years.\3\
DOE also reported on the adequacy of the annual fee charged for
nuclear waste disposal.\4\ In its study, DOE evaluated several
scenarios in which the costs attributable to civilian nuclear waste
ranged from 70 percent to 85 percent of total costs. In nearly all
cases, DOE determined that the annual fee, along with accrued interest,
was likely to generate sufficient balances to cover the estimated
costs. The agency also noted, however, that under certain conditions, a
future increase in the fee might become necessary.
Judgments about whether the fee is adequate are highly sensitive to
estimates of certain key variables, such as the costs for the
envisioned method of disposal and inflation. Such determinations are
also sensitive to estimates of the interest credited to the fund--
estimates that are a function of interest rates and fund balances,
which in turn depend on projections of appropriated spending from the
fund. In light of the Administration's policy to terminate the Yucca
Mountain project and pursue an alternative means of waste disposal,
there is no current basis to judge the adequacy of the fee to cover
future costs because the method of disposal and its life-cycle costs
are unknown.
federal contractual obligations and liabilities for nuclear waste
Under contracts signed with electric utilities pursuant to the
Nuclear Waste Policy Act, DOE was scheduled to start removing waste
from storage sites at individual power plants for transport to a
federal storage or disposal facility by 1998. After the federal
government missed its 1998 contractual deadline to start collecting
waste, electric utilities began--successfully--to sue the government
for resulting damages. In seeking to resolve the initial lawsuits, DOE
anticipated that it would pay court-awarded damages to individual
utilities from amounts appropriated from the Nuclear Waste Fund or by
issuing credits to those utilities (to reduce their future payments to
the fund) in the amount of the damages that had been awarded.
In 2002, however, the U.S. Court of Appeals for the Eleventh
Circuit held that DOE could not use the Nuclear Waste Fund to pay the
damages resulting from the government's partial breach of its
contracts.\5\ According to the court, payment of the costs of interim
storage incurred by the utilities because of the partial breach was not
within the uses of the fund that were permitted under NWPA. Also, the
court pointed out, because the department would inevitably raise future
fees to compensate for any such payments, the injured utilities would
be the ones to ultimately bear the costs of the partial breach of the
contracts if they were paid from the fund. In addition, utilities that
did not litigate their claims would end up paying larger fees to cover
the costs of damage claims made by other utilities. Agreeing with the
parties that brought the lawsuit, the court stated that making
utilities contribute to a fund that disproportionately paid the storage
costs of other utilities would raise a serious constitutional question
about whether the action constituted a ``taking.'' Following the
court's decision, the government subsequently paid damages to the
utilities from the Treasury's Judgment Fund.
the judgment fund
The Judgment Fund is a permanent, indefinite appropriation from the
Treasury that is available to pay final judgments and awards against
the United States that cannot legally be paid from any other existing
appropriation.\6\ (The fund has no fiscal year limitations, and there
is no need for the Congress to appropriate money to replenish it.) The
fund provides the authority for the government to pay for most court
judgments and settlement agreements entered into by the Department of
Justice to resolve actual or imminent lawsuits against the federal
government. Generally, agencies are not required to reimburse the
Judgment Fund for payments made on their behalf unless the Congress
appropriates money specifically for that purpose.
judgments awarded and paid to utilities under the
nuclear waste policy act
Under the Department of Justice's settlements with electric
utilities, utilities have been reimbursed for the actual costs they
incurred because of DOE's partial breach of its contracts. Such costs
are unique to each nuclear power plant and depend partly on the age and
operating status of the plant and the size and configuration of the
plant's available space for nuclear waste storage.
According to the Department of Justice, as of May 2009 electric
utilities had filed 71 lawsuits seeking compensation for costs they
incurred because the federal government could not begin to accept
nuclear waste for disposal in 1998. Of those lawsuits, 10 have been
settled, 6 were voluntarily withdrawn, and 4 have been litigated to a
final judgment that cannot be appealed. Of the 51 pending cases, 13
have been decided, but some are under appeal. In total, if those
decisions stand, the federal government's liabilities under judgments
and settlements currently total $1.3 billion. That amount includes $565
million that has already been paid to five electric utilities pursuant
to settlements (including a payment of $35 million to the federally
owned Tennessee Valley Authority.) \7\ Because judicial claims for
damages are made retrospectively, many more cases can be expected in
the coming decades as utilities seek to recover their ongoing costs for
storing nuclear waste long after they expected it to be removed and
sent to a permanent disposal site.
future settlements under the nuclear waste policy act
Litigation is ongoing regarding how to calculate damages for DOE's
partial breach of its contractual commitments. The department currently
estimates that if it begins to accept waste in 2020, taxpayers' total
liabilities to electric utilities will total $12.3 billion (in today's
dollars).\8\ Further, DOE anticipates that payments from the Judgment
Fund will span a number of decades after 2020.
DOE's estimate of future damages is uncertain and is predicated on
the department's views of the types of additional business and storage
expenses that the courts will determine are appropriate and reasonable
and should be paid by the department. Those determinations will depend
on such factors as the estimated rate at which DOE would have removed
waste from a particular facility if the department had been able to
accept waste in 1998. If utilities successfully argue that the waste-
acceptance rate used for the purpose of calculating damages should
exceed the rate used in DOE's projections of liabilities, costs will
probably surpass $12.3 billion.
Similarly, costs may be greater if the courts take a broader view
of the expenses for which utilities should be compensated. Although the
federal government is responsible for the permanent disposal of nuclear
waste, individual utilities are responsible for storing the waste until
it can be delivered to a permanent storage facility. Because the
characteristics of utilities' sites vary, the determination of
incremental expenses incurred at particular sites must be made on a
case-by-case basis and will ultimately depend on the courts' views,
which could differ from DOE's.
DOE has previously estimated that liabilities will increase--by
roughly $500 million annually--if the schedule for completing the
planned repository slips further and waste continues to accumulate at
utilities' storage sites.\9\ And even once the department begins to
accept waste, it will face a backlog that, at best, will take more than
20 years to eliminate. As long as the department remains behind
schedule, taxpayers will continue to incur liabilities.
Finally, it is not clear how the Administration's decision to
terminate the Yucca Mountain repository will affect the federal
government's liabilities to electric utilities. If DOE is found at some
point to have fully breached its contractual commitments, the federal
government's liabilities could increase considerably.
the outlook for the federal government's liabilities
Ultimately, a change in law will be required to authorize DOE to
permanently dispose of all of the waste anticipated to be generated by
existing nuclear facilities at a site other than Yucca Mountain.
Otherwise, taxpayers will continue to pay utilities, through
settlements and claims awards, to keep storing substantial amounts of
waste.
The Nuclear Waste Policy Act sets the storage capacity of the Yucca
Mountain site at no more than 70,000 metric tons. DOE estimates that it
is responsible for disposing of nearly that many tons of existing spent
nuclear fuel and high-level waste. The nation's existing nuclear power
plants are producing another 2,000 metric tons of waste per year. In
other words, the total volume of waste may already exceed the statutory
capacity of the repository envisioned under NWPA.
Moreover, the NRC has received 26 applications for licenses to
build new nuclear power plants in the next few years. If constructed,
each of those plants would produce around 20 metric tons of waste per
year, or about 1,000 metric tons over a 40- to 60-year operating
period. Such plants would also pay fees to the Nuclear Waste Fund, and
their waste would become a federal liability because, under NWPA,
nuclear plants are required to sign waste disposal agreements with DOE.
Without additional storage capacity, the cost of storing that waste
would probably become an additional liability of the Judgment Fund.
In any case, even if legislation is enacted to authorize DOE to
pursue a repository at an alternative site with sufficient capacity to
store all anticipated nuclear waste, federal liabilities will remain
substantial, and payments from the Judgment Fund to compensate
utilities for storing waste will continue for many years.
endnotes
\1\ Data supplied to the Congressional Budget Office in July 2009
by the Department of Energy's Office of Civilian Radioactive Waste
Management.
\2\ Department of Energy, Office of Civilian Radioactive Waste
Management, Analysis of the Total System Life Cycle Cost of the
Civilian Radioactive Waste Management Program, DOE/RW-0591 (July 2008).
\3\ Ibid.
\4\ Department of Energy, Office of Civilian Radioactive Waste
Management, Fiscal Year 2007 Civilian Radioactive Waste Management Fee
Adequacy Assessment Report, DOE-RW-0593 (July 2008).
\5\ Alabama Power Co. v. United States, 307 F.3d 1300 (2002).
\6\ In 2008, several thousand individual payments from the Judgment
Fund amounted to nearly $0.8 billion; over the past 10 years, such
payments have averaged around $1.2 billion annually. Most of the
payments are made to settle claims related to federal employment,
torts, property loss, discrimination, medical malpractice, and contract
disputes.
\7\ Information supplied to CBO in July 2009 by the Department of
Justice.
\8\ Information provided to CBO in July 2009 by the Department of
Energy's Office of Civilian Radioactive Waste Management.
\9\ Statement of Edward F. Sproat III, Director, Office of Civilian
Radioactive Waste Management, Department of Energy, before the
Subcommittee on Energy and Water Development of the House Committee on
Appropriations (March 28, 2007).
Chairman Spratt. Let me get something clear. There are a
hundred and three operating nuclear reactors, commercial
reactors in operation generating spent fuel waste. Is that a
correct number? A correct approximation?
Mr. Kouts. I have 104 operating reactors, sir.
Chairman Spratt. All of these have contracts for ultimate
waste disposal with the federal government?
Mr. Kouts. Yes, they do, sir.
Chairman Spratt. And the numbers you are speaking of
encompass only a limited number of those, I take it? What
percentage of the 104 have contracts that have been declared in
breach?
Mr. Kouts. Virtually all of them, sir.
Chairman Spratt. Virtually all of them?
Mr. Kouts. Yes. And in addition to the operating reactors
there are also fourteen shut down reactors. And those shut
downs are also covered by the standard contracts. So all the
operating and shut down reactors, the 104 operating and the
fourteen shut downs, are covered by the standard contracts that
were signed back in the 1980's.
Chairman Spratt. We have a fund of about $20 billion at
this point in time for----
Mr. Kouts. The latest estimate we have, sir--and we keep a
running total of it--it is approximately $23 billion. Yes, sir.
Chairman Spratt. It takes in about $1 billion to $1.5
billion annually?
Mr. Kouts. Approximately between $750 million to $1
billion, and we make about $1 billion in interest every year
based on the Treasury instruments that we invest in.
Chairman Spratt. So this fund, based on the numbers you
gave us, is still growing then? You have settled about $500
million or $600 million worth of cases. And by the way, do
these settlements, does the number you gave us in settlement
amounts reflect the government's liability through a certain
date but not through the completion of the full performance of
full waste disposal? In other words, are they saying that we
can establish as of this point in time we are entitled to, and
you are liable for, waste clean up, waste disposal, but beyond
this date in time you have still got further responsibilities
to go?
Mr. Kouts. Well, let me start and then maybe Mr. Hertz can
fill in. The settlement agreements, sir, basically, set up a
continuous process whereas a utility who has a settlement with
the government incurs costs that are covered by the settlement.
They come in----
Chairman Spratt. Those actual costs, are you settling cases
prospectively based upon the likelihood that the breach will be
continuing? Or you simply take it to a date certain where they
can demonstrate that the actual cost has been incurred and they
sue for that judgment?
Mr. Kouts. The settlements are essentially open ended. And
they will continue to come to the government with the costs
that they have incurred due to the government's delay. And
those payments will stop when the government has performed, and
caught up, and picked up all the backlog that we have incurred
due to the fact that we didn't start to begin waste acceptance
in 1998. So basically under the settlement agreements they come
in every year with whatever costs, or every two years depending
on when they incurred them, it is evaluated, the Department of
Justice makes a judgment, and then there is a payment made from
the Judgment Fund.
Chairman Spratt. Mr. Cawley, you had in your report an
estimate that in 2007 dollars the cost of meeting all of the
liabilities of the federal government would be about $98
billion, to do all of the waste acceptance and disposal?
Mr. Cawley. I think the most recent life cycle cost
estimate that was prepared by the Department for the entire
waste facility over its lifetime was about $98 billion, nearly
$100 billion, to pay for everything in the waste project.
Mr. Kouts. If I could just supplement that comment? The $96
billion figure are the total costs of the program that we
issued last year with the assumption that Yucca Mountain was
going to be built, and all the costs to move the fuel there and
dispose of it are incorporated into that number. That number
also includes past costs of the program. So roughly, it is
about $85 billion more to complete Yucca Mountain.
Chairman Spratt. But that assumes that you start accepting
waste in 2020, does it not?
Mr. Kouts. Yes it does, sir.
Chairman Spratt. And if it is later it will be more? The
liability, the costs will be greater?
Mr. Kouts. Potentially yes, sir.
Chairman Spratt. What is the plan of DOE for Yucca Mountain
while it explores other alternatives?
Mr. Kouts. My guidance, sir, is to continue the licensing
process through fiscal year 2010 and to support the Secretary's
blue ribbon panel which is going to be looking at those issues
in terms of what the new policy alternatives are going to be.
So that is the, we will continue the licensing process and
provide support to that panel.
Chairman Spratt. And for that purpose your budget request
this year was about $34 million for 2010?
Mr. Kouts. The administration's request was approximately
$197 million to fund the continuation of the licensing
proceeding and also to support the blue ribbon panel.
Chairman Spratt. Why does the licensing procedure cost that
much money, close to $200 million? Is there a lot of R and D,
or experimentation, science, engineering connected with it?
Mr. Kouts. There are a lot of people, a lot of scientists,
a lot of engineers that we need in order to answer the
questions of the Nuclear Regulatory Commission and to prepare
for the adjudicatory hearings that the NRC will hold in that
process. So we need that core support, our federal support and
our contractor support, in order to be an active participant in
that proceeding.
Chairman Spratt. And does this keep your basic core
competencies, your basic team, together for Yucca Mountain?
Mr. Kouts. Yes, it does, sir.
Chairman Spratt. Are there any significant job terminations
because of the limited amount you are seeking for next year?
Mr. Kouts. No, sir. We have gone through substantial
reductions in the past but into fiscal year 2010 we do not
anticipate a substantial reduction. There may be some minor
reductions but no substantial reductions, sir.
Chairman Spratt. Thank you very much. Mr. Simpson?
Mr. Simpson. Thank you, Mr. Chairman. Let me start off by
saying I am not here advocating for Yucca Mountain. What I am
advocating for is a permanent geological repository. The
decision to do Yucca Mountain was made years before I came into
Congress. And what I am frustrated by is the amount of money we
continue to spend on a project, get it to a license application
point, and then in a matter of six weeks decide, ``Ah, we will
focus on something else.'' It seems rather like it is made on
the political decision rather than based on science. Can you
tell me what the science was behind the decision, the science,
to not proceed with Yucca Mountain?
Mr. Kouts. I will take that question for the record, sir. I
was not involved in that decision. I do not make policy, I
implement it. But if you like, I will take that question for
the record and get an answer for you.
Mr. Simpson. I would love to have an answer for it because
so far nobody has given one. The, I think all three of you have
mentioned the administration's decision to terminate Yucca
Mountain. What does the law require? The 2002 law passed by
Congress? What does that require? Because I do not know that
this is just the administration's decision. I think Congress
has a role to play in this also. Can anybody tell me what that
2002 law requires?
Mr. Kouts. Well, I can tell you that the process that the
Department went through, since I was intimately involved with
it. There was a, in Section 114 of the Nuclear Waste Policy Act
the Secretary of Energy made a recommendation to the President,
and the President forwarded that recommendation to Congress in
terms of siting Yucca Mountain for proceeding with the license,
and to develop a license, and to develop the site. Under the
statute there was an opportunity for the Governor of Nevada to
submit a notice of disapproval, which he did. And that
subsequently required a congressional resolution by both houses
to be signed by the President to override that objection. That
all occurred in the 2002 time frame.
In terms of the legal issue about abandoning the site,
again, although I have spent a lot of time with attorneys, I am
not an attorney. You can see from my background I am an
engineer. I will take that question for the record and get you
an answer as to what, you know, whether a statute is required
for that decision.
Mr. Simpson. I would think--and I do not know this. I am
not an attorney either, thank God. But I would think that it
would be more than just a presidential decision not to do it.
Which brings up the question of if we are terminating, if the
administration says, ``Let us terminate Yucca Mountain,'' why
the heck should I spend $197 million to proceed with a license
application for something we are going to terminate? This seems
just a little bit bass ackwards, especially when a lot of
people, in fact almost everyone I have talked to, says the $197
million is insufficient to meet the demands of the NRC and the
request that they are going to be asked for to proceed with the
license. It was down last year, the Yucca Mountain budget was
down $100 million or so last year. They laid off 500 people.
Down $100 million again this year to $197 million, it makes me
wonder, and I do not want to be a cynic as you can tell by my
questions, is the reason the administration is pursuing the
license application is so that we will not fall into full
breach? Could you answer that, Mr. Hertz?
Mr. Hertz. The question of full breach is really, in part,
up to the parties. None of the plaintiffs to date have argued
that the government is in full breach and have asked the Court
for the relief. And the government's position is that in fact
it intends to fully perform its obligations under the contract
and the statute to ultimately take the nuclear waste. So I am
not sure the question of the licensing going forward or not,
you know, it might affect the plaintiffs' decision about
whether to seek a full breach. But in theory it is really up to
the parties to present that to the Court and none of them have
done that to date.
Mr. Simpson. That is because we have not, we are still
funding it. If we zero funded the license application I suspect
that would be one of the first things, because it would appear,
and would in fact be a reality, that we were not proceeding
with this.
Mr. Hertz. The Department of Energy still has the
obligation under the contract to accept spent nuclear fuel. The
contract does not say it has to be Yucca Mountain.
Mr. Simpson. But we have no alternative out there. The
alternative is more studies. And let me also say that if more
studies are the answer----
Mr. Hertz. Right. And the government has already been found
in breach because it has not accepted, starting in 1998, any
spent nuclear fuel. And damages, damages are basically the
costs that the utilities incur over and above what they would
have incurred had the government performed under the contract.
Mr. Simpson. Right.
Mr. Hertz. And as long as we do not perform under the
contract, and they can demonstrate that they are incurring
costs that they would not have incurred, they are entitled to
that payment from the government. And that will be true whether
the Energy Department goes through the licensing proceeding or
not, and it will be true until the government accepts the spent
nuclear fuel that we are required to accept under the contract
barring some other legislative change, you know, some other way
to deal with this, you know, the parameters are essentially set
for the litigation.
Mr. Simpson. Could Congress, let me just----
Chairman Spratt. I want one question just for
clarification.
Mr. Simpson. Okay, sure. Go ahead.
Chairman Spratt. Does that mean if a nuclear utility
reactor site has a pool of water on the premises built as part
of the reactor, is there any attribution of cost of that? Does
it have to be over and above that cost, or is any cost assigned
to that?
Mr. Hertz. Well, I mean, that is what the litigation is
essentially about. That is, even if the government had fully
performed under the contract, in many cases utilities would
have had to build some sort of storage because not all the
spent nuclear fuel was going to be picked up from day one.
There was always going to be some rate that the government was
going to accept it. And so what the litigation is about is what
are the expenses over and above what the utility would have had
to expend even if the government had performed under the
contract.
Chairman Spratt. Thank you. Excuse me.
Mr. Hertz. And the question often turns on the rate. So if
you have a lower rate, then the utilities arguably would have
had to build more storage because the government, you know,
lawfully could have picked up at a lower rate. If you come up
with a larger rate utilities can then argue, ``We did not need
as much storage but we had to build it because you did not pick
up at the rate you were required to.
Mr. Simpson. Is DOE paying currently for the storage in
those pools at those sites?
Mr. Kouts. No sir, we are not.
Mr. Simpson. At none of the sites? Even those that would
suit us?
Mr. Hertz. Correct.
Mr. Kouts. That is correct. The Nuclear Waste Policy Act
basically directs that the owners of the waste will essentially
pay for the cost of its storage until the government comes. The
assumption was that we were going to be there on January 31,
1998. We were not. The lawsuits are about the difference
between what they were paying already to what the government
should have done. So we are looking at the difference.
Mr. Simpson. So we are paying some storage cost,
essentially. What they figure we would have picked up?
Mr. Hertz. The Judgment Fund is paying for it.
Mr. Kouts. The Judgment Fund.
Mr. Simpson. The Judgment Fund is paying? Excuse me.
Mr. Hertz. Correct.
Mr. Simpson. Should DOE be paying that instead of the
Judgment Fund?
Mr. Hertz. Well, as I said, the government's initial
position was that those, it had come up in the context of a
settlement, one of the early settlements, whether the
settlement could be paid out of the Nuclear Waste Fund. And the
theory being, one way to look at it is the Nuclear Waste fund
is in part to build the facility to deal with the storage. If
you are paying for the storage in another way, could you pay it
out of the Nuclear Waste Fund? The utilities went to court and
say, ``No, you cannot use the Nuclear Waste Fund for that
purpose.'' And the United States Court of Appeals for the
Eleventh Circuit agreed. They could not pay the settlement out
of the Fund and that meant only the Judgment Fund was
available. And that is based on an interpretation of the
Nuclear Waste Fund.
Mr. Simpson. Okay. The blue ribbon panel. The Secretary
said in our hearing in Energy and Water Committee that a
permanent geological repository will still be necessary?
Mr. Kouts. Yes, sir.
Mr. Simpson. And that we will look at other sites. The
commission will look at other sites. The one site the
commission will not look at is Yucca Mountain, the most studied
piece of earth on the planet?
Mr. Kouts. That is correct, sir.
Mr. Simpson. Are you aware that Congress has in their
appropriation bill on Energy and Water, it has not become law
yet, but it is in the appropriation bill language which says
the $5 million to the blue ribbon commission only goes to the
blue ribbon commission if Yucca Mountain is also an alternative
in that location?
Mr. Kouts. Yes, sir. I am aware of that language.
Mr. Simpson. Does that mean every site that had, that was
considered for a permanent repository prior to the decision to
select Yucca Mountain will now be reconsidered? Could you put
up that slide? Number two, I think it is?
[Slide]
Mr. Simpson. All the sites in those states will now be
considered?
Mr. Kouts. Potentially yes, sir.
Mr. Simpson. Except Yucca Mountain.
Mr. Kouts. That is correct, sir.
Mr. Simpson. Is any site in Nevada to be considered?
Mr. Kouts. I really cannot answer that. That would be,
again, you are speculating as to where the panel may come out.
Mr. Simpson. I am speculating on where they might be able
to look.
Mr. Kouts. I really cannot say.
Mr. Simpson. Because I find it strange that we have taken
just one state--and again, I am not advocating for Yucca
Mountain. I am advocating for a solution.
Mr. Kouts. I understand, sir.
Mr. Simpson. And it just seems that that decision was made
a long time ago. I am going to hold off on the rest of my
questions for a minute, and let everybody else get a round. But
I will have a second round.
Chairman Spratt. Thank you, Mr. Simpson. Mr. Edwards?
Mr. Edwards. Thank you, Mr. Chairman. Mr. Kouts--is that
the correct pronunciation?
Mr. Kouts. It is Kouts, sir.
Mr. Edwards. Mr. Kouts, okay.
Mr. Kouts. Thank you.
Mr. Edwards. Thank you. I am concerned about the speed with
which the Obama administration made the decision to rule out
Yucca as a repository. You said in response to Mr. Simpson's
question that you did not make that decision, your
responsibility is to implement the decisions. But as your
position as Deputy Director of DOE's Office of Civilian
Radioactive Waste Management, I assume you have some knowledge
as to who was involved in making that decision. Who were the
two or three principal players in making that decision in such
a short period of time?
Mr. Kouts. I would, basically it was a secretarial
decision. It was his decision. And----
Mr. Edwards. The Secretary of Energy?
Mr. Kouts. Yes, sir.
Mr. Edwards. Who would he have depended on for information?
Mr. Kouts. I think that is a question for the Secretary,
sir.
Mr. Edwards. Are there other offices other than yours that
have responsibility for Civilian Radioactive Waste Management
in the Department of Energy?
Mr. Kouts. No sir, there are not.
Mr. Edwards. So your, it is your office that has the
responsibility for overseeing that program? Did the Secretary
come to you or your office to ask for information to help him
make that decision?
Mr. Kouts. I did have several meetings with the Secretary.
However, I was not involved in his decision-making process in
that regard.
Mr. Edwards. Okay. My goal here is not to put you on the
spot but to get the facts on the table. What has the
administration said publicly in the press as to why it made the
decision so quickly to end Yucca as a repository?
Mr. Kouts. Well, the Secretary has stated on many occasions
that he believes that there is a better solution, that
technology can provide a better solution, that there are
alternatives. And that is why he is setting up a blue ribbon
panel to look at those alternatives.
Mr. Edwards. He said there are better solutions. He also
told me before our Energy and Water appropriations hearing
several weeks ago that he believes the United States needs more
nuclear power plants. Did he say publicly what was wrong with
the present solution? Was it cost? Was it a particular safety
question that he had? Has he said publicly there was a safety
issue involved at Yucca?
Mr. Kouts. Not to my knowledge, sir.
Mr. Edwards. Okay. Did he ask you any information about the
safety of Yucca?
Mr. Kouts. We had wide-ranging discussions, sir. I, you
know, most of them were policy related but, you know, and
budget related and so forth. But again, that was a secretarial
decision. I think the person to really answer that question is
the Secretary, sir, not me.
Mr. Edwards. Okay. There are principled people in Congress
and the country who believe we should not build any more
nuclear power plants. I respect their principled position. I
happen to disagree with it. We just passed a bill to try to
address global warming. I am one of those who believes that
building more nuclear power plants is a safe way to provide
energy and power for our country without contributing to global
warming. For those of us who believe, as the Secretary said in
answer to my question a few weeks ago, that we do need more
nuclear power plants given, I guess at present it is about 20
percent of our utility power supply. Is that correct?
Mr. Kouts. That is correct, sir.
Mr. Edwards. Those of us who believe we need more nuclear
power plants, and I assume the Secretary, I take him on his
word in his answer to my question, at what point do we have a
train wreck here in terms of the Yucca problem, the repository
problem, causing the commercial sector to just say, ``We have
got to shut down our plants, new nuclear power plants.'' Does
the train wreck occur this year? Next year? Five years from
now? At what point do the companies start canceling their
requests, or applications, for permitting?
Mr. Kouts. Well, that is an interesting question.
Eventually you need a nuclear waste repository of some type in
order to take these materials. The timing of that, does it have
to be next year or the year after? No. My sense is there needs
to be clearly a path to getting the nation there. The time
frame in which that is absolutely needed, the materials that
are at the utility sites right now, they are handled safely.
The NRC, Nuclear Regulatory Commission, makes sure that it is
safe and it is safe. The question is, when are we going to
fulfill the government's obligation to take these materials
away? And that is really the purpose of this hearing. The
Secretary has indicated that he wants to go on a different
policy path than the one the nation has been on. The blue
ribbon panel is going to review that and we will look for those
policy alternatives as that body is formed and as those
deliberations----
Mr. Edwards. In your extensive experience in this arena, if
the present sites at the nuclear power plants are safe why is
it necessary to have a central repository? At what point does
it not become safe to keep the spent rods, and the radioactive
material, at the site of the plants?
Mr. Kouts. Well, they can be kept there indefinitely. The
question is, none of those plants were designed to be a
repository, to protect these materials for hundreds of
thousands of years into the future and make sure that the
radionuclides do not get into the environment. So, yes, near
term, next hundred years, even beyond, they can stay at the
sites where they are. But eventually there has to be a facility
that takes these materials and puts them away to protect them
from the environment. And that facility has to be, you know,
historically the National Academy of Sciences, and
internationally, the best solution that people have come up
with is a geologic repository. And that takes a long time to
develop, and study, and to satisfy all the safety issues. So
the simple answer to your question is, there is no real time
frame. We need one eventually but certainly the materials are
safe where they are now.
Mr. Edwards. Okay. Thank you, Mr. Kouts.
Ms. McCollum. Mr. Chair? Mr. Chair? A point of personal
privilege. Could we ask the engineer here to describe the
difference between reracking--because when you are talking
about this for members who have not been involved in it, and
you are lumping all the storage together, it is not a very
clear picture. So Mr. Chair, for the Committee's information,
could you describe reracking versus temporary storage?
Mr. Kouts. Sure. When a, basically nuclear reactors are, to
put a simple word on it, kind of a teakettle. It produces
steam, and the steam is produced by the heat from the nuclear
reaction that occurs in the reactor core. And fuel assemblies
reside in the core for several years and then they have to be
taken out because their fissile materials basically get
depleted and they are not effective in sustaining a change
reaction. So those materials, those assemblies, have to be
taken out. And they are cooled in a spent fuel pool that the
reactors have. Those pools were never designed to take the
waste over the life of the reactor. It was an expectation that
the government was going to come and take these materials. Or,
back in the days when many of these reactors were built, there
was a reprocessing concept. And you would take these materials
out and remove the uranium that can be reused, and so forth.
Nonetheless, since we are not in that world what happens is
as the pools begin to fill up what the utilities have done is
they have reracked and basically put these together as closely
as they can be in the pool. But still, we have now reached a
point where those pools can no longer hold any more fuel. And
what has to happen is those assemblies have to be taken out and
put in dry storage on the reactor sites, in the back forty, if
you will. And there are roughly forty-four sites in thirty
states where we currently have dry storage. There is
approximately 12,000 tons in dry storage. Overall, there are
about 60,000 tons of commercial spent nuclear fuel that reside
at commercial reactors, about 12,000 of which is sitting in dry
storage. So as the pools become full basically the utilities
have to take that fuel out and put it in dry storage.
So the reracking that the Congresswoman was talking about
is basically the reracking of the pool to maximize the capacity
of the pool. And that has pretty much been done throughout the
industry. And now basically what has to happen is the fuel has
to be put in dry storage. And many of the costs that Mr. Hertz
talks about are the costs the utilities are incurring for
putting the fuel in dry storage in these large, massive storage
devices. And those are the costs that are basically part of the
litigation settlements and also part of the trials that the
Department of Justice is so ably defending us in.
Does that explain the issue? Okay.
Chairman Spratt. I believe Mr. Latta has left. Mr. Aderholt
is also not here. Mr. Harper?
Mr. Harper. Thank you, Mr. Chair. Mr. Kouts, I would like
to follow up on something that Congressman Edwards mentioned a
minute ago and just take that a little further. What impact do
you think that the decision to terminate Yucca Mountain will
have on future expansion of additional commercial nuclear power
plants?
Mr. Kouts. The simple answer to your question, sir, is
until we have clarity, what the blue ribbon panel comes up
with, and what new policy path the Department and the nation is
on. And of course, the Congress has to participate in that
discussion. I am unable to assess, and I do not think anybody
is able to assess, what the impact of this decision is. So
until we have more clarity, until the blue ribbon panel meets,
we have a new policy path, and we know what the implications of
that policy path are, again, we just cannot evaluate that.
Mr. Harper. And obviously I do not want to put you in a
box. But it is not good, is it? I mean, you cannot say that
this is a good decision for the expansion of safe nuclear
power.
Mr. Kouts. Let me go back to my earlier statement. Which
is, we really do not know. Perhaps the blue ribbon panel will
come up with a policy recommendation, and maybe we will begin
to move fuel and take it away from sites faster than maybe
2020. And in that case it would have been good for reducing the
obligation and also been good for moving on with the management
of these materials. Without knowing the recommendations of the
commission there is really no way of commenting on that.
Mr. Harper. Can you tell me how your Department determined
that $196 million was an adequate amount to continue the Yucca
Mountain licensing process?
Mr. Kouts. Well let me first of all tell you over the past
several years we have had a much larger budget and that larger
budget was to continue with the design of the repository, it
was to continue with the design of the 300-mile rail spur that
was to be built to take the materials to Yucca Mountain within
the State of Nevada. It was also to prepare the site for
construction. All those activities have been terminated. So as
a result the needs of the program to simply sustain the
licensing process are substantially reduced. So on that basis
the administration's request is certainly adequate for us to
continue participating in the licensing process.
Mr. Harper. Thank you. Mr. Hertz, when the Obama
administration announced the decision to terminate the Yucca
Mountain program, was the Civil Division consulted prior to
that decision?
Mr. Hertz. I do not believe so.
Mr. Harper. Okay. Can you tell me what the probable impact
will be on the potential liability of the federal government
for damages to the standard contract litigation resulting from
the administration's decision to terminate the program?
Mr. Hertz. Well, I think as Mr. Kouts suggested, we know
what the parameters of the litigation look like now. And we
know what the, in other words, how damages are going to be
calculated. And so, and we know the settlements that we have
entered into. And, you know, I think the simple answer is, if
the decision pushes the date beyond 2020 then our liability is
going to be more. And if the decision, as he suggests, you
know, that we can start taking nuclear fuel before 2020 then
our liabilities may be less. In other words, it is really, as
far as the litigation is concerned, it is the timing.
Mr. Harper. Okay. Mr. Hertz, can you tell me what advice
you have given DOE or the administration concerning steps it
needs to take to mitigate the potential impacts of the delays
in accepting the used nuclear fuel?
Mr. Hertz. Well, I mean, one of the things that we did do
during the last administration is when a number of utilities
wanted to make applications for potentially new reactors, the
question became, the utilities need to have a contract to deal
with spent nuclear fuel as part of the process to get a
license. And we consulted very closely with the Department of
Energy based on the experience that we had in this litigation
to try to come up with contract terms that would make sense
recognizing, you know, that there could be delays in accepting
spent nuclear fuel. And so the new contract has substantially
different terms than the contracts that we have been litigating
in the courts so far. And that is not to say, you know, there
still comes a time when the government is responsible for
picking up spent nuclear fuel. But it is laid out much more
clearly in these contracts. And the utilities know what their
responsibilities are going to be to store spent nuclear fuel
for periods of time before the government is obligated to do it
under the new contracts.
Mr. Harper. It sounds like it would be appropriate to
suspend payments into the waste fund until there is a decision
made on a place to put the fuel.
Mr. Hertz. Well, I mean, that is really a policy call. It
does not really affect the litigation one way or another.
Mr. Harper. Thank you, Mr. Hertz. I appreciate it. Mr.
Chairman, I would ask for unanimous consent to insert into the
record letters from the Nuclear Energy Institute dated July 8,
2009, and from the National Association of Regulatory Utility
Commissioners dated the same day, calling for the suspension of
those annual fees.
Chairman Spratt. Is there objection? Hearing none, so
ordered.
[The information follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Chairman Spratt. Ms. McCollum?
Ms. McCollum. Thank you, Mr. Chairman. And thank you so
much for holding this hearing. This Budget Committee's job is
to think about the long term. But the time frame we are talking
about with nuclear waste is tens of thousands of years. And I
do not believe it is within the capacity of this Budget
Committee. We have great staff on both sides of the aisle. But
I do not think it is within the capacity of this Budget
Committee, even with our very able Chairman and staff, to make
a ten thousand-year budget projection on what it is going to
cost to store this waste when we do not even know if we are
going to be able to store it in the near future. Measuring the
financial, legal, and environmental costs of creating a
permanent storage solution over this length of time is not just
difficult, it is impossible.
My concern, Mr. Chairman, is that the federal government is
not serious about creating a long term solution to the nuclear
waste storage problem. After spending twenty years and billions
of dollars on Yucca Mountain, and the transportation plans that
take it from, for example, Minnesota to Yucca Mountain, the
federal government is about to walk away and start from
scratch. And there is a real cost to that decision. While we
wait, temporary solutions are becoming unacceptable permanent
solutions.
In my State, Minnesota has two nuclear power plants. Both
plants have recently been relicensed. Both are storing their
waste inside in reracked pools, something the utility company,
when I was in the Minnesota House, said that they could never
do, but they managed to do it somehow. And outside, in dry cask
storage. And I think the word cask has a lot to say about how I
feel about the storage. It is dead, dry storage.
Now, it is unacceptable and these plants are continuing to
produce more waste. Prairie Island Nuclear Facility, for
example, in Southwestern Minnesota, has twenty-four of these
temporary storage casks. They look like thermoses. Large, four
or five, six-story thermoses with concrete over the top of
them. And guess what folks? It is on the banks of the
Mississippi River in a flood plain.
While people in Nevada talk about not wanting their
constituents living within 100 miles of Yucca, where nuclear
waste would be buried under a mountain, families in Red Wing,
Minnesota, and as the gentleman pointed out where there is
other dry cask storage, and especially the Prairie Island
Tribal Community, live with it right next to them, within clear
view of swing sets. And now, because the State of Minnesota has
budget cuts the city near the nuclear power plant is cutting
back on its first responder preparedness. The city of Red Wing
can no longer guarantee public safety in the event of a nuclear
incident at or near the power plant. And I have an article, Mr.
Chair, I would like to submit for the record from the Star
Tribune.
[The information follows:]
Aid Cuts Spark Debate Over Prairie Island Nuclear Plant
By Mike Kaszuba, Star Tribune, July 13, 2009
As Xcel Energy pushes plans to extend the life of the Prairie
Island nuclear plant, Red Wing officials say that Gov. Tim Pawlenty's
state aid cuts have made them less confident in their longterm ability
to protect it.
City officials, in an unusual step, have intervened in Xcel's
proposal before the state public utilities commission--a sign that
Pawlenty's budget cuts may have unintended consequences.
In a newsletter to residents, Red Wing officials said they have
``concerns regarding [the city's] diminishing ability to adequately
address the unique obligations we have as a host city to a nuclear
power plant.''
Red Wing's capacity to provide emergency response staffing and
training has been lessened, they said, by ``significant'' reductions in
state aid--including an estimated $898,590 next year--along with state
law changes that allowed Xcel to reduce its property tax payments.
The city's stance has drawn Red Wing into the political debate
surrounding Pawlenty's use of the unallotment process to make state
budget reductions, after the Republican governor resisted the DFL-
controlled Legislature's push during the session for tax increases to
help erase a $4.6 billion deficit.
Pawlenty has cited cities and counties in defending his actions,
arguing that they often complain about state aid cuts even though some
harbor large budget reserves and are unwilling to slash spending. Many
have responded, as Red Wing has, that their budget reserves ebb and
flow as the money is used to run the city.
Pawlenty spokeman Alex Carey said that tying state aid cuts to the
city's ability to provide adequate public safety ``seemingly blurs the
issue, given [that] the power plant hires and pays for its own
security.''
He added: ``I still don't see where public safety comes in, nor is
it clear to us what those `unique obligations' are [that] the city
cites.''
`the game is changing'
Red Wing is one of two Minnesota cities with a nuclear power plant.
The Prairie Island plant, which opened in the early 1970s, has two 538-
megawatt nuclear reactors.
Xcel Energy officials said the company has spent more than $20
million to show that the plant can ``perform safely'' should its life
be extended by 20 years beyond 2014, and that ``Our [proposal] will
have little to no incremental impact on emergency services beyond what
is currently provided,'' said Mary Sandok, an Xcel spokesperson.
Red Wing officials disagree.
``It's going to be extremely difficult to provide these public
safety services that I think are critical and necessary,'' said
Marshall Hallock, the city's finance director.
Although officials said that no one funding cut was responsible for
the city's predicament, they said the combined effect of the state cuts
and Xcel's reduced property tax payments had left the city with 15
percent less revenue since 2002.
Hallock said the drop in Xcel's annual city property tax payments,
which stood at $5.9 million in 1995, would by itself leave the city
with an estimated $2.3 million less next year.
By next year, he added, state aid payments to the city will have
dropped by $1.07 million annually since 2006.
``The game is changing,'' said City Council Member Lisa Bayley. She
joined her colleagues in signing an open letter to Red Wing's residents
that, while generally supportive of the company's proposal, asked that
Xcel provide ``some type of additional assurance to protect the
community's interests.''
In making its case before the state public utilities commission,
Xcel has asked that the generating capacity of each reactor be
increased by 80 megawatts. More important, it is also seeking to have
the number of spent nuclear fuel casks at an adjacent 5.5-acre storage
facility increased to about 60 casks from a current total of 24. The
city says that Xcel's proposed expansion would ultimately result in
even more.
With the case scheduled to come before the commission this fall,
Bob Cupit, the manager of the commission's permitting unit, said Red
Wing's request that its budgetary issues be formally considered has
raised eyebrows.
``This is a unique argument that's being made,'' he said.
a legitimate issue?
Red Wing officials, in pressing their case, said the city remains
the first responder to an incident at the nuclear plant.
While Xcel Energy has its own Prairie Island fire brigade, the city
is responsible for helping control incidents and responding to anything
that extends beyond the plant's physical boundaries--a role that could
include evacuation, decontaminating emergency workers and sealing off
roadways.
``[Xcel's] fire brigade is nothing more than a stop-gap measure,''
said Roger Hand, Red Wing's emergency management director.
Hand said city officials did not alert the governor's office
regarding the issue because Pawlenty ``went through the unallotment
process and, really, he wasn't looking for any input from anybody at
that point.''
Although Red Wing officials are stressing that the city's ability
to provide adequate public safety isn't now being jeopardized, they
have drawn criticism even from DFLers.
Sen. Steve Murphy, DFL-Red Wing, a retired Xcel employee who once
worked at the plant, said city officials had not proven that their
ability to provide public safety for the Prairie Island plant might be
jeopardized. He added that the city had adopted an anti-nuclear
strategy that was troubling.
The public utilities commission ``is not the body--they don't have
jurisdiction over [a city's] economic concerns,'' said Murphy, who
added that his history with Xcel had not colored his views.
But Wadena Mayor Wayne Wolden, the president of the Coalition of
Greater Minnesota Cities--a group that has been critical of Pawlenty's
state aid cuts to local governments--said Red Wing was raising a
legitimate issue.
``How can Minnesota ask a city to host a nuclear power plant and
then cut the critical aid that helps protect that city in the event of
a nuclear incident?'' Wolden asked.
Xcel's Sandok said that, should its request to extend the plant's
life be approved, its property tax payments to Red Wing will actually
begin rising and will reach $9.2 million by 2017.
In addition, she said, Xcel continues to pay Red Wing an estimated
$60,000 annually to recover funds spent on emergency preparedness. She
said that the city also will get $750,000 this year from the state
through a special utility valuation transition aid program to help
offset Xcel's property tax reductions.
``Xcel Energy supports the changes in the law and [in state]
rules'' that led to the company's reduced property tax payments, Sandok
said. ``But we were not the primary proponent of either.''
Chairman Spratt. So ordered.
Ms. McCollum. So I want to talk about permanent storage
solutions because finding a real solution is the federal
government's responsibility and I believe that is part of my
responsibility here. So I have some questions and you can, as
time permits, take a stab at them or get back to us.
How long do you really think it is going to take the blue
ribbon commission to produce these recommendations? And if it
does not recommend moving ahead with Yucca Mountain, and we
start all over again, how long is it really going to take to
select a new waste site, prepare that site, get a new
transportation plan, and then transfer the existing material?
So my question in a nutshell is, are we looking at 2020? 2025?
2030? Are we looking out further, in your best guesstimate?
In the meantime, and this has been discussed, is there a
plan to compensate not only ratepayers but local property
taxpayers for the storage of this waste? And at the end of all
that work, why would we not expect a different political result
than the one we saw in the current Yucca Mountain debate? Would
the reprocessing--so my question is, how long do you think it
is going to take this power storage to happen? And then why are
we not seriously looking as a nation on how to safely reprocess
and cut the half-life of this material? Thank you, Mr. Chair.
Mr. Kouts. If I could, could I take those questions for the
record?
Chairman Spratt. If the panel would, you may as well. And
particularly I was going to ask you about reprocessing also, if
you wanted to address that.
Mr. Kouts. Certainly reprocessing has been looked at for
many, many years. And basically the Secretary is committed to
funding research to essentially make sure that any reprocessing
technologies that are deployed are proliferation resistant.
Chairman Spratt. The reprocessing would still require
ultimately a geological disposal?
Mr. Kouts. Absolutely, sir. It will somewhat reduce the
volume of the materials that need to be permanently disposed
of. But it does not obviate the need for----
Chairman Spratt. Is not size also a function of heat, in
that the heat emitted is still the same as the radioactive----
Mr. Kouts. Heat is less of a concern for us. Volume is a
bigger issue with us in the repository world. But yes, heat is
an issue but not as driving an issue as the volume of the
material that you have to dispose of.
Chairman Spratt. Do you have further observations about
reprocessing?
Mr. Kouts. Again, the Secretary is committed to doing that.
I think that from personal experience you have to have a good
business case for going to reprocessing. And, you know, that
certainly needs to be developed along with the technology
associated with making sure it is proliferation resistant.
Chairman Spratt. The capital cost is substantial.
Mr. Kouts. It is very expensive, sir.
Chairman Spratt. Mr. Mack?
Mr. Mack. Thank you, Mr. Chairman. And I also want to thank
the panel for being here today. As we all know, the Nuclear
Waste Policy Act of 1982 required the federal government to
implement a policy to deal with the disposal of nuclear waste.
In addition to incorporating a disposal policy a Nuclear Waste
Fund was created to pay for research and for carrying out
future projects. In 2002 Congress approved President Bush's
recommendation of the Yucca Mountain site and since then
Congress has continued to fund its research. However, the
current administration has said the Yucca Mountain project,
``is not a workable option,'' for nuclear waste storage and has
halted all Yucca Mountain activities.
In light of the administration's decision to terminate this
project I asked the administration to stop forcing our
taxpayers to pay into a Nuclear Waste Fund until the Department
of Energy devises a new nuclear management strategy. We should
not be asking our constituents to contribute to a fund that is
not being utilized. To date, our constituents have paid or are
obligated more than $30 billion into the Fund. Floridians alone
have contributed over $766 million into the Fund, and the
government has no plan for long term storage which, by law, is
its responsibility. In addition, the Fund has a current balance
of $22 billion and it generates an annual interest of over $1
billion.
In 2009 Congress appropriated only $145 million to the
Civilian Radioactive Waste Management program. Clearly, there
is enough money generated in interest alone from this Fund to
finance these current programs.
As members of the Budget Committee we deal with figures and
numbers all the time, Mr. Chairman. These tax figures tell a
frustrating story. A story about taxpayers once again footing
the bill for an expensive government program. It is time that
we stand up for the taxpayers and demand better.
I have just got a few questions. Does the Secretary say why
we need a new policy direction?
Mr. Kouts. The Secretary has made numerous statements. He
feels that there is a better path, that technology can provide
us a better answer. And basically I will let the Secretary's
statements stand on----
Mr. Mack. But does the Secretary have any evidence of that?
Or is this just something that he has created on his own, you
know, that he just does not like the direction we are heading
so, ``I need a new policy direction.''
I mean this is, if you think about it, it is pretty and,
you know, it must be a horrible position to be in, to defend
something that is pretty much indefensible. Because we are so
far along down the path. And to now decide we want a new policy
direction, without giving any reasons why we need a new policy
direction, I think it is--Mr. Chairman, with all due respect to
everyone, I think it is a bit irresponsible to at least
articulate to the American people, to the Congress, why you
think we need a new policy direction. Has the Secretary said
why?
Mr. Kouts. He has made certain statements on it. Again, he
believes that there are, that technology can give us a better
path. I really think your question is better asked to the
Secretary than myself.
Mr. Mack. Yes, and I recognize it must be a very difficult
position for you to have to try to answer for a decision that
someone has made that is not defensible.
Mr. Kouts. Well, I am sure it is defensible, sir. I just do
not know----
Mr. Mack. Well, I do not know that it is. I mean, I do not
know that it is. You know, I know we are here, and it is, we
are kind of chuckling because you are having to defend
something that you cannot really defend because for a long time
this Congress has worked on a policy on how to store this
nuclear waste. We have taxed people in a Fund to generate the
revenue, and the ability to do this. And now all of a sudden we
want a new policy direction? I mean, could we continue with the
current policy direction and then let the Secretary build a
case for why the Secretary believes that we need a new
direction? I mean, does that not seem more responsible?
Mr. Kouts. Well, again, that is a question for the
Secretary, sir. And he is the senior policy maker in the
Department. And I will certainly take that for the record if
you want me to have that answered.
Mr. Mack. Yes, please. And do you think it is good policy
to continue to tax the American people for a program that, I
guess, will not continue to exist?
Mr. Kouts. I----
Mr. Mack. Do you think they should continue to pay into
that Fund?
Mr. Kouts. I will also that take that for the record.
Mr. Mack. Thank you.
Chairman Spratt. Thank you, Mr. Mack. Mr. Langevin?
Mr. Langevin. Thank you, Mr. Chairman. I want to first of
all thank you for holding this hearing, and I want to thank our
witnesses for their testimony today. My question, first one, is
since obviously the United States is not the only country that
has nuclear power plants and has to deal with this issue of
spent nuclear fuel and storage, which nation in the world could
be looked at as the gold standard of how they deal with spent
nuclear fuel and storage? And what are their costs compared to
the alternatives that we are considering? And I would assume
that the blue ribbon panel will consider this in their analysis
of alternatives. But I think that is an important question for
us to talk about. Which nation in the world would be considered
the gold standard, and what is that method?
Mr. Kouts. Well, I think there is international consensus,
sir, that the best disposition path for these materials is in a
geologic repository. And internationally there are programs,
and there is actually an international group that meets on a
regular basis, that talks about their individual programs. Many
of them have storage, most of them have long term repository
programs, and up until recently, you know, this nation was
looked at as a leader in the development of repositories. So,
but the simple answer to your question is that there is
international consensus that a repository needs to be
developed. The size of the repositories and the scale of them
are much less. We have more operating reactors than anybody
else in the world. We have more spent fuel than anybody else in
the world. So the geologic repositories that need to be built
by other countries are much smaller and deal with much
different geologic media than we do.
Mr. Langevin. Well I know for example that France gets much
of its power, I guess 75 percent to 80 percent of its power
from nuclear power plants. What does France do with its spent
nuclear fuel?
Mr. Kouts. Well, they have a reprocessing system in place
where they reprocess the fuel from their reactors. And they
have had a repository, a long term repository program, but they
have not identified a site yet for that repository. So the long
term plan of the French is to have a repository but, again,
they are reprocessing their fuel, they are storing the residual
components that need to be permanently disposed of in storage
facilities.
Mr. Langevin. Okay. And let me ask this. While we are
clearly focusing on the civilian aspects of this issue, I also
chair the Strategic Forces Subcommittee on the Armed Services
Committee. And I feel it is important to underscore the
challenges associated with nuclear waste management having
important implications, both the civilian public safety and our
national defense. So my question is, can you please clarify the
distinction between the requirements for storage and disposal
of civilian nuclear waste versus defense nuclear waste? And are
these sites dual purpose? Are any of these sites dual purpose?
Mr. Kouts. Well, the high level waste from the defense
complex that the Department manages is substantially different
than spent fuel. The materials that sit in tanks at Savannah
River, at Hanford Reservations, and so forth, that will be
solidified into a vitrified material, into a glass that will be
put into a repository in the long term. And until a repository
is available those will have to be stored where they are until,
again, we have a facility to move those materials to for
permanent disposition.
Mr. Langevin. All right. Now, defense related nuclear waste
management is not subject to the same fee charged to commercial
entities. So then can you please explain how that affects the
process in terms of budgeting and federal liability?
Mr. Kouts. Thank you for that question. And the answer to
it is, essentially, that there are two components of the budget
for this program. One is the Nuclear Waste Fund and the other
is we have a Defense 050 account which pays the defense portion
for the disposition of those materials. So actually, and there
was a presidential decision made back in President Reagan's
administration, where he made a decision to co-locate defense
materials with civilian materials so we did not have a defense
repository and a civilian repository. So there is a component
of our budget that is dedicated, that comes out of the defense
appropriations, that essentially pays for the disposal of those
materials.
Mr. Langevin. What is that amount of money?
Mr. Kouts. That varies from year to year. I think it has
been pretty much a fifty-fifty split over the past several
years. But the defense materials make up a smaller component of
the overall amount of materials that have to go into a
repository.
Mr. Langevin. Okay. Thank you. Mr. Cawley?
Mr. Cawley. Cumulatively, I was going to say, there has
been about $11 billion in spending. Just over $7 billion on the
civilian side and $3 billion, $3.5 billion on the defense side.
Mr. Kouts. That is correct.
Mr. Cawley. Since the beginning of the program.
Mr. Langevin. Okay. Thank you. Well, I see my time is
expired. I will have perhaps some questions for the record. But
gentlemen, thank you for your testimony today and I yield back.
Chairman Spratt. I would just add to the gentleman's
questions and the answer that Savannah River stores nuclear
waste before processing it in the K-Reactor, a place which was
not intended for this kind of storage. So the sooner out the
better.
Mr. Kouts. Yes, sir.
Chairman Spratt. Secondly, while there is a procedure at
the defense waste processing facility called vitrifying this
waste, and there is also interim storage provided in
anticipation that there would be some back up like this, but it
too has limits. So if taking up the output is not adequate then
you have to slow down the input. And you have got waste storage
in many cases in places for which it was not specifically
designed, like the K-Reactor. So that has to be a concern for
Savannah River. And I think generally speaking Hanford is
behind Savannah River when it comes to waste processing.
Mr. Kouts. Yes, it is. That is correct.
Mr. Mack. Mr. Chairman?
Chairman Spratt. Mr. Mack?
Mr. Mack. May I real quick just ask unanimous consent to
insert two letters into the record? I forgot to do that during
my time.
Chairman Spratt. Could you identify the letters?
Mr. Mack. Yes. One is from the NEI and the other one is
from the National Association of Regulatory Utilities.
Chairman Spratt. I think the NEI letter was put in the
record.
Mr. Mack. I think they may be different.
Chairman Spratt. Okay. Without objection, we will put it in
the record.
Mr. Mack. Thank you.
Chairman Spratt. Mrs. Lummis?
Mrs. Lummis. Thank you, Mr. Chairman. Mr. Kouts, first of
all, I feel for you. You are between a rock and a hard place. I
think you were asked today to go throw yourself under the bus
in front of a congressional committee that is frustrated with
the approach that the new administration is taking with regard
to addressing nuclear waste issues.
Let me first ask, do you personally believe the
administration's climate and emission reduction goals can be
met without nuclear power being part of the solution?
Mr. Kouts. Well, first of all, it is not my judgment. But
the Secretary has been very forthright on this, that he feels
that the nuclear option is very critical to meeting climate
change goals. And he has stated that publicly on numerous
occasions. So I think the Secretary has been very clear on
that.
Mrs. Lummis. Okay, thank you. Setting aside for a moment
the non-meritorious decision to abandon Yucca Mountain, even if
the blue ribbon panel is able to find an alternative to Yucca
Mountain that can absorb its statutory 70,000 metric ton
capacity, is this tonnage sufficient for our long term disposal
needs at the current rate at which waste is being produced?
Mr. Kouts. No, it is not. And if I can just add a little
bit to that, early on in the program we had a second repository
program. And we were identifying a site for a second
repository. And Congress in the 1987 amendments terminated that
second repository program and required the Secretary of Energy
to submit to Congress a report on the need for a second
repository. And that report was submitted to Congress last
December. And basically what that report indicates is that
unless--at that point we had Yucca Mountain on the table.
Unless you raise the statutory limit then you needed a second
repository. And it also made some judgments about how much
Yucca Mountain could hold. And basically, Yucca Mountain's
capability is probably three to four times the statutory limit.
So all that information is contained in that report and I would
commend that to you if you have a, you know, substantial
interest in that subject.
Mrs. Lummis. Thank you.
Mr. Kouts. It also identifies the second repository sites
that we looked at, and all the different repository sites that
we looked at early in the year, and the states in which those
sites reside.
Mrs. Lummis. Okay. And this report was dated December?
Mr. Kouts. 2008.
Mrs. Lummis. 2008, thank you very much. Will the blue
ribbon panel consider spent fuel recycling to limit the volume
of nuclear waste as part of a long term solution?
Mr. Kouts. Again, that panel has not been charted. But my
expectation would be that they would look at all different
alternatives, including reprocessing and reduction of volume,
yes.
Mrs. Lummis. And don't the advantages of fuel recycling
warrant further study, including ways to make it more cost
effective and proliferation resistant?
Mr. Kouts. I think the Secretary is committed to that and I
think, you know, we will see what the blue ribbon panel thinks
about that.
Mrs. Lummis. Why do other countries use recycling more than
we do? Why has it been our nation's policy to limit that
option?
Mr. Kouts. I think that has been, there has been a flip-
flop of policy over the years. I think ultimately the driver
has been economics. I think if there was a strong business case
for it I think it would be implemented, and I think the
challenge here is not so much the technology, although that is
somewhat of a challenge, to make it as proliferation resistant
as possible, but also making it as, you know, and a reasonable
cost standpoint is certainly something that needs to be looked
at.
Mrs. Lummis. So you are telling me it is exponentially more
cost, more expensive than storage?
Mr. Kouts. Well again, you have to look at the different
scenarios. Most of the scenarios that I have seen with
recycling in them, basically the cost to the overall system
goes up but it does have other advantages. You get to reuse the
uranium, you do not have to do as much mining of uranium, it
extends the use of our uranium resources, and so forth. So
there are pluses and minuses and that has to be evaluated.
Mrs. Lummis. And are you aware of any effective studies
that makes those kind of cost comparisons now?
Mr. Kouts. Well, I know our Office of Nuclear Energy is
looking into that issue, and doing those kinds of analyses and
that is really a question for them to look at. They have the
expertise in the Department in that regard.
Mrs. Lummis. Thank you. Mr. Cawley, can you estimate the
amount of additional financial liability that may be incurred
by the administration's decision to eliminate all funding
except for that needed to continue licensing processes?
Mr. Cawley. I think it has been stated that until we know
where the policy is going it is pretty hard to say if we will
be disposing of waste at 2020, or after 2020, or before 2020.
So no, we do not have a good estimate of that.
Mrs. Lummis. Okay, thanks. And Mr. Hertz, in your testimony
you stated that because of the government's failure to live up
to its contractual nuclear waste disposal obligations seventy-
one lawsuits have been filed. And of those, ten have been
settled and fifty-one remain pending. Of the cases that are
settled, how often can the claimant resubmit claims for ongoing
liabilities as the government continues to fail to live up to
its obligations? And you may have answered this already, but
I----
Mr. Hertz. No. Under the settlements they, I think they can
come back every year with regard to the costs that they have
incurred. The settlement sets out a scheme and a rate, and sets
out what costs they can claim. So we initially settled the
original lawsuit and we set out a formula going forward. And on
a yearly basis they can go to the contracting officer at the
Department of Energy and make a claim. That is reviewed, and
then sent over to the Department for approval.
Mrs. Lummis. Okay. And one more quick question, Mr.
Chairman? Thank you so much. Do settlements have set formulas
for determining new damages for the same claimant? Or could
additional damages be incurred?
Mr. Hertz. The settlements have a formula for what damages
can be claimed.
Mrs. Lummis. Okay. Mr. Chairman, thank you so much for
holding this hearing.
Chairman Spratt. Thank you. Mr. Diaz-Balart?
Mr. Diaz-Balart. Thank you, Mr. Chairman. Thank you,
gentlemen, for being here. I am a little bit, let me just make
sure that I understood the question to my colleague's, the
answer to my colleague's question when she just asked, in
essence I am going to paraphrase what you asked but I kind of
wrote down, about the estimated amount of additional financial
liability because of the administration's decision to delay or
end Yucca. And the answer was, ``No, we do not know.''
Mr. Cawley. Yes----
Mr. Diaz-Balart. Let me just make sure, am I hearing then
that this decision was made with no consideration of what the
price to the taxpayer could be?
Mr. Cawley. The only estimate I am aware of is the one
prepared by the Department of the $12.3 billion in liabilities,
assuming they could handle waste starting in 2020. I think
under the new policy there is uncertainty about when waste
handling could commence. So there are no new estimates that I
am aware of of how much the liability could be.
Mr. Diaz-Balart. Do you not understand that that could be a
little troubling? That a decision is made that could have
potentially a serious financial implication? And that does not
seem to be a priority? Is that not a little troubling to you? I
mean, I tell you what, I just got, that was not my question. I
was just flabbergasted that a decision that could mean,
potentially, serious implications to the taxpayers and that is
not something that has been, obviously it is not on the front
burner? So these decisions are being made in a vacuum, in
theory, without even, I guess as a, it is not a big priority,
it is not a real important issue, how much it could cost to the
taxpayer? Is that not a little troubling?
Mr. Cawley. I imagine the blue ribbon panel that examines
alternatives will be looking at costs.
Mr. Diaz-Balart. Is that in the charge? Is that one of the
main charges of the blue ribbon panel, to look at the cost?
Could you let us know if it is? And if it is not, why not? If
you would? I mean, I do not expect you to know exactly what
necessarily is in the charge of that blue ribbon panel, even
though you might. Is that part of the charge, to determine, to
know how much it could cost potentially to the taxpayer, short
term, long term? And where that is weighted in their decision?
Mr. Kouts. If I could----
Mr. Cawley. Once they have a charter we will certainly try
to help you with----
Mr. Diaz-Balart. All right.
Mr. Kouts. The charter for the panel has not been----
Mr. Diaz-Balart. Has not been established?
Mr. Kouts [continuing]. Has not been established.
Mr. Diaz-Balart. All right. Well I would just hope then
that that is part of the charge.
Mr. Kouts. I understand, sir.
Mr. Diaz-Balart. Great, thank you. Now, so my question is,
I learned recently that, I did not know this, that I guess
those whose utility companies use nuclear, I guess there is a
small surcharge charged and it is, let me see, it is one-tenth
of 1 percent per kilowatt hour. Now I know that does not seem
like a lot of money, but it is $22 billion out of which $766
million comes from Floridians alone. Now here is the question.
If in fact it looks like, you know, Yucca Mountain is going to
be closed, and nuclear power does not seem to be a huge
priority, is the administration going to come forward with a
proposal to eliminate that fee that people are paying? Or at
least to lower it?
Mr. Kouts. Well, the Fund was set up to provide a fund for
the Department to use to implement the disposal of these
materials. The Department is still committed to meeting its
obligations, it is just going to take a different policy path.
And the Fund would be used to fund that policy path. And until
we know what that policy path is, you know, we will not know
exactly what the needs from the Fund will be.
Mr. Diaz-Balart. Right. But we do know that, again, that
obviously we do not know how much the new policy path may cost,
just from what I am hearing. That is obviously not a big
priority for this administration, how much the taxpayer might
be hit again. But in the meantime, would it not make sense, as
opposed to just continue to charge this surcharge, to at least
postpone it until you have an idea of how much that is going to
cost? In other words, this issue of just charging people
regardless of knowing how much it is going to cost, maybe it
will be more, maybe it will be less, should there not be some
consideration to those who are paying for something that is not
happening before you just continue to charge them?
Mr. Kouts. If I could answer that, Mr. Mack I think
submitted into the record two letters that the Department
recently received from the Nuclear Energy Institute and also
the National Association of Regulatory Utility Commissioners
addressing that same issue. And the Department is in receipt of
those letters, and I really cannot comment on what the response
to the letters will be. But we are certainly aware of the issue
and those letters have made the same request that you have
made, sir.
Mr. Diaz-Balart. And again, I do not mean to be harsh on
you, but again, it is a little bit hard to hear when we are now
at $1 trillion deficit and climbing. I think there has got to
be a realization that this is not our money, this is taxpayers'
money. And that should always be in the forefront of any
discussion of any decision made. And I know that you would
agree with that. Sometimes it looks like that is not the case.
Thank you, Mr. Chairman.
Chairman Spratt. Mr. Simpson, I think you have a couple of
questions?
Mr. Simpson. Yes. Just a couple of things. One is that, you
know, if the charge of this blue ribbon commission is to find a
state or a tribe willing to accept interim storage of this
stuff, you know, we have done that, we have had that before. We
have had a commission, or not a commission, but a nuclear waste
negotiator. In fact, a couple of them that have gone around
and, you know, they found a tribe in Utah that was interested
in it. And the State of Utah said, ``I do not think so.'' I do
not think they are going to have very good luck in trying to
find a state. Consequently, I understand where Nevada is coming
from. And I am not critical of them. You know, as I have said
before, it is not that it is Yucca Mountain, it is that we need
a waste repository and everyone here has said even today that
ultimately we are going to need a waste repository. And I
admire all of your testimony and the Secretary's also. I know
that you are implementing a policy. And the elephant in the
back of the room that nobody is willing to say is that a
promise was made during the campaign to Senator Reid by then
candidate Obama, now President Obama, and you know, the
President is following through on his promise. That is the
reality. It has nothing to do with science. It has nothing to
do with whether this is an appropriate repository or not.
But again, I would state that Congress has a role to play
in this also. Given that we have potential liabilities out
there, and we are paying for some of them now, and there are
liabilities also to states that is not civilian nuclear waste,
but states like South Carolina, states like Idaho, where we
have defense nuclear waste, Navy waste, etcetera, etcetera.
There are penalties imposed through agreements with those
states that if the waste is not removed by a certain date,
penalties follow. I think in South Carolina it is like $1
million a day, or something, after a certain date that the
federal government will theoretically start paying a fee. In
Idaho I am not sure what it is. I do not think we were as good
of negotiators as South Carolina was.
But if I am the federal government and I am looking at
trying to get out from under the potential penalties to the
civilian reactors, or those companies that have reactors that
are now currently storing the civilian waste, my first thought
would be to start looking at current DOE sites to start moving
some of this waste to. Is anyone in the Department, or is the
Department considering, current DOE sites as a location for
interim storage of civilian waste currently held at reactor
sites?
Mr. Kouts. No sir, we are not. We are going to wait for the
recommendations of the blue ribbon panel in terms of what
policy path we want to proceed. That may be one of their
recommendations. I have no idea what they are going to come up
with. But, you know, certain that is one siting option. It has
been looked at in the past. But no, the Department is not
actively looking at those sites, or any sites at this point,
for either an interim storage facility or a repository.
Mr. Simpson. Okay.
Chairman Spratt. Monitored retrievable storage comes up
from time to time at Savannah River and other places. It has
been proposed and never implemented, of course, for various
reasons, but it has been reported. But we are receiving waste
at the Savannah River site and putting it through the system,
for example, and things are happening there. They will diminish
the amount of waste that ultimately has to be disposed of.
Mr. Simpson. You know, the same reaction that we have in
Nevada was experienced in New Mexico for the WIPP site. Very
strong opposition to that. Since it has been opened you do not
find that kind of reaction down there. It seems to be
proceeding very well and we are moving a lot of the transuranic
waste down there, moving it out of Idaho. When they say they
cleaned up Rocky Flats they did not really clean up Rocky Flats
they just moved it to Idaho. And now we are moving it to New
Mexico, to a permanent repository. But the 70,000 metric tons
at Yucca Mountain is a statutory limit, correct?
Mr. Kouts. That is correct, sir.
Mr. Simpson. Mr. Hertz, you mentioned that if federal
policy needed to be changed as a result of the blue ribbon
commission you hope that it dealt with the central liabilities
and so forth out there. What exactly could Congress do in terms
of that? I mean, we cannot just say we were just kidding, can
we?
Mr. Hertz. No. I mean, the way I have thought about it is,
contracts that exist now, both parties have both future rights
and future obligations and presumably some of those could be
adjusted. I am not saying there is unfettered discretion but
there may be things that Congress could consider, coming up
with different proposals to deal with the waste that would deal
with future liabilities even under the existing contracts. So I
think one of the things that we would do as the Department of
Justice is make the recommendation to the blue ribbon
commission that one of the things they consider is the
government's litigation liability going forward as part of
their overall method.
Mr. Simpson. Okay.
Chairman Spratt. Would the gentleman yield?
Mr. Simpson. Sure.
Chairman Spratt. For clarification, do you leave the case
open, the suit open, and render a judgment periodically? Or do
you render a judgment, close it, and then if the prospect for a
particular facility does not appear to be forthcoming, the
utility is then allowed to bring another suit?
Mr. Hertz. Correct. I mean, the way it has worked so far
is, once the Federal Circuit ruled these were partial breaches,
and that they could basically seek their damages up until the
time they filed their complaint, then whatever damage is
incurred after that would have to be filed in a new complaint.
And in fact, I think we already have sort of five----
Chairman Spratt. So you have to relitigate?
Mr. Hertz. I am sorry?
Chairman Spratt. You have to bring a new suit?
Mr. Hertz. You have to bring a new suit. And I think we
already have five of the second generation suits. In other
words, people that had lawsuits, either had judgments or cases
that were still pending, but now they want to seek the next few
years. So they file the next----
Chairman Spratt. Why would not every utility with a
contract bring suit for the alleged breach?
Mr. Hertz. I think, well----
Chairman Spratt. Why would not every reactor, electric
utility with nuclear reactors as generating sources, why would
not every utility to bring a suit to claim these damages?
Mr. Hertz. I think the vast majority have. And I think one
of the things they have to do is be able to establish damages.
But we have had a number of cases that were withdrawn because
whatever the circumstances were in those----
Chairman Spratt. Is that because just sitting in the pools
there minimizes damages?
Mr. Hertz. Or, you know, given what our likely rate was,
and the priority of their pick up, that they would not have
been able to establish damages.
Mr. Simpson. Let me just say in conclusion, Mr. Chairman
and Mr. Kouts, I am very concerned about the administration's
budget for proceeding with the licensing proposal, and whether
the Department can aggressively answer the questions that are
going to be proposed by the NRC. And we will be watching that.
And if it looks like we are slow walking this process I am
going to have some concern, as is the Energy and Water
Appropriations Committee I am certain. So just be aware that we
are going to have our eyes on that. I appreciate it.
Mr. Kouts. Yes, sir.
Mr. Simpson. And thank you all for being here today. I
really do appreciate it, even though I know it is sometimes a
tough assignment.
Chairman Spratt. I echo what my Ranking Member said. We
very much appreciate your coming, the effort you put into this,
and the forthright answers we were given. We may be calling
upon you in the future, but we do indeed appreciate your coming
today. I would ask unanimous consent that all members who did
not have the opportunity to ask questions be allowed seven days
to submit questions for the record. At this point in the record
I would like to submit a study by Frank von Hippel as to the
cost and implications of reprocessing as an alternative.
Without objection, so ordered.
[The report, ``Managing Spent Fuel in the United States:
The Illogic of Reprocessing,'' by Frank von Hippel, dated
January 2007, may be accessed at the following Internet
address:]
http://www.fas.org/programs/ssp/_docs/IllogicReproJan07.pdf
Chairman Spratt. This concludes our hearing. Thank you
again for your participation.
Mr. Simpson. Thank you.
Mr. Kouts. Thank you, Mr. Chairman.
Mr. Hertz. Thank you.
Mr. Cawley. Thank you.
[The prepared statement of Mr. Ryan follows:]
Prepared Statement of Hon. Paul Ryan, Ranking Minority Member,
Committee on the Budget
Mr. Chairman, safe and permanent storage of high-level and spent
nuclear fuel waste is a critical element to our long-term energy
strategy. It also has important budgetary implications that, if not
addressed, will only serve to worsen our already bleak fiscal picture.
Over the past 25 years, we have already spent $10 billion in
taxpayer and ratepayer funds studying Yucca Mountain as a suitable site
for nuclear waste storage. Those studies show that Yucca is, in fact,
suitable for nuclear waste storage, and the Congress has confirmed this
conclusion.
Yet, the Administration has--for I think political reasons--
determined that Yucca is not a workable option and is proposing
millions more to be spent on further studies. It clearly is a delaying
tactic. I don't believe we can learn more about nuclear waste storage
that we don't already know, and more studies will only serve to delay a
final solution and waste more money in the process.
It would also expose taxpayers to large liabilities for the
government's broken promise to store nuclear waste. Courts have already
awarded utility companies nearly $1 billion in damages, and DOE
estimates the government's total liability related to lawsuits is $12.3
billion--that is, if Yucca opens in 2020, which is optimistic by all
accounts. Abandoning Yucca--or even further delay--will only serve to
add billions more to this already unacceptable liability.
It appears that the vast majority of Congress agrees with this
assessment, having rejected 388-30 a motion to recommit the Fiscal Year
2010 Energy and Water Development and Related Agencies Appropriation
Act with instructions to strike funding for Yucca Mountain.
Abandoning Yucca without any clear path forward is irresponsible
from both a budgetary and policy standpoint. It breaks the
Administration's promise to let science guide our decision making
process, and instead puts provincial politics rule ahead of the
national interest.
Mr. Chairman, we don't need further studies on Yucca. The time to
move forward is now.
[Whereupon, at 11:45 a.m., the Committee was adjourned.]