[House Hearing, 111 Congress]
[From the U.S. Government Publishing Office]



                         BUDGET IMPLICATIONS OF
                         CLOSING YUCCA MOUNTAIN

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

                                HEARING

                               before the

                        COMMITTEE ON THE BUDGET
                        HOUSE OF REPRESENTATIVES

                     ONE HUNDRED ELEVENTH CONGRESS

                             SECOND SESSION

                               __________

             HEARING HELD IN WASHINGTON, DC, JULY 27, 2010

                               __________

                           Serial No. 111-30

                               __________

           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            DEVIN NUNES, California
JOHN A. YARMUTH, Kentucky            ROBERT B. ADERHOLT, Alabama
ROBERT E. ANDREWS, New Jersey        CYNTHIA M. LUMMIS, Wyoming
ROSA L. DeLAURO, Connecticut,        STEVE AUSTRIA, Ohio
CHET EDWARDS, Texas                  GREGG HARPER, Mississippi
ROBERT C. ``BOBBY'' SCOTT, Virginia  CHARLES K. DJOU, Hawaii
JAMES R. LANGEVIN, Rhode Island
RICK LARSEN, Washington
TIMOTHY H. BISHOP, New York
GWEN MOORE, Wisconsin
GERALD E. CONNOLLY, Virginia
KURT SCHRADER, Oregon
DENNIS MOORE, Kansas

                           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 27, 2010....................     1

    Hon. John M. Spratt, Jr., Chairman, Committee on the Budget..     1
        Prepared statement of....................................     6
        Additional submission:
            Kim Cawley, Chief, Natural and Physical Resources, 
              Cost Estimates Unit, Congressional Budget Office, 
              prepared statement of..............................     3
    Hon. Paul Ryan, Ranking Minority Member, Committee on the 
      Budget.....................................................     7
    Dr. Kristina M. Johnson, Under Secretary of Energy, U.S. 
      Department of Energy.......................................     8
        Prepared statement of....................................     9
    Michael F. Hertz, Deputy Assistant Attorney General, Civil 
      Division, U.S. Department of Justice.......................    11
        Prepared statement of....................................    13
    Hon. Rick Larsen, a Representative in Congress from the State 
      of Washington, submission for the record:
        Congressional letter dated July 6, 2010, to Hon. Steven 
          Chu, Secretary, U.S. Department of Energy..............    33
    David Wright, South Carolina Public Service Commissioner.....    43
        Prepared statement of....................................    46
    Hon. Gerald E. Connolly, a Representative in Congress from 
      the State of Virginia, prepared statement of...............    53

 
                         BUDGET IMPLICATIONS OF
                         CLOSING YUCCA MOUNTAIN

                              ----------                              


                         TUESDAY, JULY 27, 2010

                          House of Representatives,
                                   Committee on the Budget,
                                                    Washington, DC.
    The Committee met, pursuant to call, at 10:20 a.m., in room 
210, Cannon House Office Building, Hon. John M. Spratt, Jr. 
[Chairman of the Committee] presiding.
    Present: Representatives Spratt, Kaptur, Becerra, Doggett, 
Etheridge, McCollum, Scott, Larsen, Connolly, Schrader, Ryan, 
Simpson, Jordan, Nunes, Lummis.
    Chairman Spratt. Good morning, and welcome to the Budget 
Committee hearing. Our topic today is the budget implications 
of the administration's proposal to close the Yucca Mountain 
Nuclear Waste Project. Speaking for myself, I am opposed to the 
administration's decision to terminate Yucca Mountain for 
several reasons.
    First, I am concerned that the federal government's failure 
to resolve the problem of nuclear waste disposal has 
significant implications for the federal budget, which is our 
jurisdiction. Second, it also means that nuclear waste that 
belongs in a permanent repository will instead be stored 
indefinitely at sites including my state and my district.
    Radioactive waste is a byproduct of this nation's energy 
production and defense. By law, disposing of spent nuclear fuel 
and high level waste is a federal responsibility. But because 
the federal government is not meeting its obligation, waste is 
being stored indefinitely at more than 120 sites across the 
nation. In addition to the several sites that are in my 
district, South Carolina, my state, has the Savannah River 
Site, of which we are justly proud. But it stores more than 37 
million gallons of nuclear waste, a grim legacy of the Cold 
War.
    This approach is not what Congress had in mind. The Nuclear 
Waste Policy Act of 1982 set up a system for dealing with this 
waste. That plan or process included a fee collected from the 
electric utilities, who have paid for taking the waste off 
their hands beginning in 1998, twelve years ago. After decades 
of study and analysis by experts, the government decided to 
have a single national nuclear waste repository. Later, 
Congress approved Yucca Mountain, Nevada, as the site and the 
Department of Energy submitted the license application with the 
Nuclear Regulatory Commission.
    But after decades of analysis and decisions, and after 
billions of dollars in fees collected and appropriations made, 
the administration decided last year to drop--abandon--Yucca 
Mountain Project. This March, the administration told the 
Nuclear Regulatory Commission that it wanted to withdraw the 
license application for Yucca Mountain with prejudice. The 
Commission is in the midst of deciding whether to allow that. 
In addition, there are several pending lawsuits challenging the 
administration's right to do what it has done.
    I have called for the administration to instead move 
forward with Yucca Mountain as required by law. I have been 
joined in this view by many others in Congress. Our goal for 
this hearing is to gain a better understanding of the budget 
implications of the administration's proposal to close Yucca 
Mountain. First of all, how much have we spent on the project 
so far? A basic question for a Budget Committee to ask. What 
happens if the project is indeed stopped with prejudice? How 
much does the federal government owe to these utilities for 
failing to meet its obligations, or our obligations? I am 
doubtful there are easy alternatives or welcome options to the 
Yucca Mountain site. If we abandon Yucca where do we go to find 
a suitable alternative?
    We have several excellent witnesses today to pursue the 
answers to those questions and I want to thank them for their 
participation. First, from the Department of Energy we welcome 
Under Secretary Kristina Johnson. She is accompanied by the 
Department of Energy's General Counsel Scott Blake Harris. Dr. 
Johnson, Mr. Harris, thank you both for joining us today.
    Also on our first panel from the Department of Justice we 
have Michael Hertz. He is the Deputy Assistant Attorney General 
in the Civil Division. Mr. Hertz, we welcome you again and 
appreciate your coming.
    After we hear from these government witnesses, we will get 
a view of this problem from the state and local level. We will 
hear testimony from Mr. David Wright, who is Vice Chairman of 
the Public Service Commission of South Carolina. Mr. Wright, I 
thank you also, sir, for coming.
    In addition, the Committee has just received from the 
Congressional Budget Office updated estimates of the funding 
and liabilities related to Yucca Mountain. For the record, CBO 
estimates, one, the nuclear industry has paid more than $17 
billion in fees since 1983 for the federal government to remove 
nuclear waste, and they contribute $750 million to $800 million 
more each year. Second, another $14 billion in interest has 
been credited to the nuclear waste trust fund. CBO's statement 
also addresses how much has been spent on nuclear waste 
removal. More than $7 million from the fund has been spent, a 
large percentage of it for Yucca Mountain. Congress has 
appropriated another $4 billion to deal with defense related 
waste. And finally, CBO tallies the budget cost of failing to 
meet federal obligations. The government has paid more than 
$700 million to date, with more to come, in judgments and 
settlements with the nuclear industry. Potential total 
liabilities, including the sums above, could exceed $13 
billion, according to the latest estimates.
    Without objection, we will make the CBO statement in its 
fullness part of the record. Hearing none, so ordered.
    [The prepared statement of CBO 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 provide updated information about the federal government's 
responsibilities and liabilities under the Nuclear Waste Policy Act of 
1982 (NWPA). Since I testified on this topic in 2009, there have been a 
number of important developments.\1\ After signaling its intention to 
terminate a project to build a geologic repository for nuclear waste at 
Yucca Mountain--the only site where such waste is authorized to be 
stored under current law--the Administration announced in January 2010 
the formation of a Blue Ribbon Commission to make recommendations on 
alternative means of storing, processing, and disposing of nuclear 
waste. In March, the Administration filed a motion with the Nuclear 
Regulatory Commission (NRC) to withdraw its license application to 
construct a permanent repository at Yucca Mountain. That motion was 
denied in June by a three-member NRC panel; the Administration has 
subsequently appealed that decision.
---------------------------------------------------------------------------
    \1\ See the statement of Kim Cawley, Congressional Budget Office, 
The Federal Government's Responsibilities and Liabilities under the 
Nuclear Waste Policy Act, before the House Committee on the Budget, 
July 16, 2009.
---------------------------------------------------------------------------
    Despite those developments, the federal government remains 
responsible for permanently disposing of spent nuclear fuel generated 
by civilian facilities, and the owners of those facilities continue to 
pay fees for that service. Regardless of how the government meets that 
responsibility, that task will require a significant amount of federal 
spending over many decades.
               the federal government's responsibilities
                   under the nuclear waste policy act
    The Nuclear Waste Policy Act requires the federal government to 
take possession of and permanently dispose of spent nuclear fuel 
generated at civilian nuclear reactors and to dispose of radioactive 
waste that results 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 the NWPA, the federal government, through the Department of 
Energy (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. The government will also 
be responsible for disposing of waste from any new facilities built in 
the future.
           financing the costs of disposing of nuclear waste
    The NWPA addressed how the disposal of spent nuclear fuel and 
defense-related waste was to be paid for. Under that act, 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.
    In 2008, DOE published an estimate of the total costs--including 
those for transportation and project management--associated with 
geologic disposal of waste generated by existing nuclear plants. At 
that time, Yucca Mountain was assumed to be the primary repository. In 
DOE's estimation, the project would cost about $96 billion in 2007 
dollars over a period of more than 100 years.\2\ DOE has not published 
an updated estimate of the cost of completing a geologic repository for 
the nation's nuclear waste.
---------------------------------------------------------------------------
    \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).
---------------------------------------------------------------------------
       financing the costs associated with civilian nuclear waste
    Starting in 1983, the 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 the electricity they sell that is generated 
by nuclear power plants. In addition to the ongoing yearly fees, the 
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.
    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. The NWPA authorized appropriations from the Nuclear 
Waste Fund to cover the costs of the civilian nuclear waste program. 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.
    Table 1 summarizes the government's receipts and disbursements 
related to the nuclear waste disposal program from 1983 through the end 
of fiscal year 2009. During that time, $31.0 billion was credited to 
the Nuclear Waste Fund. That amount includes fees paid by the nuclear 
industry totaling $17.1 billion as well as $13.8 billion from 
intragovernmental transfers of interest credited to the fund. 
Cumulative expenditures from the fund during that period totaled about 
$7.3 billion, mostly for analyses related to the waste disposal program 
and for initial design work by DOE 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 
$23.6 billion at the end of fiscal year 2009. CBO estimates that in 
2010, another $2.0 billion will be credited to the fund--nearly $800 
million from fees and the rest from interest. Expenditures in 2010 will 
total $0.2 billion, bringing the fund's end-of-year balance to $25.4 
billion, CBO estimates.

  TABLE 1.--CUMULATIVE RECEIPTS AND DISBURSEMENTS OF THE NUCLEAR WASTE
                                  FUND
                          [Billions of dollars]
------------------------------------------------------------------------
                                    Cumulative Totals
                                    1983 Through 2009    Estimated 2010
------------------------------------------------------------------------
Deposits:
    Annual fees...................              15.6                0.8
    One-time fees.................               1.5                0
                                   -------------------------------------
      Subtotal, cash receipts.....              17.1                0.8    Interest credited \a\.........              13.8                1.2
                                   -------------------------------------
        Total Deposits............              31.0                2.0Disbursements.....................               7.3                0.2Fund Balance......................              23.6               25.4Memorandum:
    Appropriations from the                      3.7                0.1
     General Fund for Defense-
     Related Activities...........
------------------------------------------------------------------------
Source: Department of Energy and Congressional Budget Office.Notes: Amounts are in nominal dollars. Components may not add up to
  totals because of rounding.\a\ Intragovernmental transfers from general revenues.

    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.
    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.\3\ 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 because the fund's balance is invested in U.S. Treasury 
securities, and thus, the crediting of interest does not create net 
receipts to the federal government. However, such amounts add to the 
resources that are authorized to be used for the waste disposal 
program.
---------------------------------------------------------------------------
    \3\ Data supplied to the Congressional Budget Office in July 2010 
by the Department of Energy.
---------------------------------------------------------------------------
   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 provided 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 life-cycle 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.\4\ Since 1993, the Congress has provided about 
$3.8 billion from the general fund for such costs--roughly half of the 
budgetary resources provided to the waste program so far.
---------------------------------------------------------------------------
    \4\ 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).
---------------------------------------------------------------------------
       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, which are paid from the Treasury's Judgment 
Fund.
    Pursuant to the Department of Justice's settlements with electric 
utilities, utilities have been reimbursed for the 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.
        existing liabilities under the nuclear waste policy act
    According to DOE, as of June 2010, electric utilities filed 72 
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, 11 have been settled, and about $725 
million has been paid under those settlements. Ten other cases have 
been dismissed, and one affirmed judgment has resulted in a payment of 
$35 million to the Tennessee Valley Authority (a government entity). Of 
the 50 pending cases, 20 have been decided, but some are subject to 
post-trial motions. If those decisions stand, the federal government's 
liabilities, including amounts already paid pursuant to settlements, 
will total $1.8 billion.\5\ 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.
---------------------------------------------------------------------------
    \5\ Information supplied to CBO in July 2010 by the Department of 
Energy.
---------------------------------------------------------------------------
         future liabilities under the nuclear waste policy act
    DOE currently estimates that, if it begins to accept waste in 2021, 
taxpayers' liabilities to electric utilities--including amounts already 
paid--will total $13.1 billion (in today's dollars).\6\ Further, DOE 
anticipates that payments from the Judgment Fund will occur for several 
decades. DOE has previously estimated that liabilities will increase--
by roughly $500 million annually--if the schedule for completing the 
planned repository slips further beyond 2021 and waste continues to 
accumulate at utilities' storage sites.\7\
    In addition, 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.
---------------------------------------------------------------------------
    \6\ Ibid.
    \7\ Ibid.
---------------------------------------------------------------------------
    Ultimately, a change in law would 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. Even 
if such legislation is enacted, federal liabilities will remain 
substantial, and payments from the Judgment Fund to compensate 
utilities for storing waste will continue for many years.

    Chairman Spratt. Before turning to our witnesses for their 
testimony, let me turn to our Ranking Member, Mr. Ryan, for his 
opening statement. Mr. Ryan?
    [The prepared statement of John M. Spratt, Jr. follows:]

       Prepared Statement of Hon. John M. Spratt, Jr., Chairman,
                        Committee on the Budget

    Good morning and welcome to this Budget Committee hearing. Our 
topic today is the Budget Implications of the Administration's proposal 
to close the Yucca Mountain nuclear waste project.
    I oppose the Administration's decision to terminate the Yucca 
Mountain project for two reasons. First, I am concerned that the 
federal government's failure to resolve the problem of nuclear waste 
disposal has significant implications for the federal budget. Second, 
it also means that nuclear waste that belongs in a permanent repository 
is instead being stored indefinitely at sites including in my state and 
my district.
    Radioactive waste is a by-product of our nation's energy production 
and defense. By law, disposing of spent nuclear fuel and high-level 
waste is a Federal responsibility. However, because the Federal 
government is not meeting its obligation, waste is being stored 
indefinitely at more than 120 sites across the nation. In addition to 
the several sites that are in my district, South Carolina also has the 
Savannah River site, which stores more than 37 million gallons of 
nuclear waste as a legacy of the Cold War.
    This approach is not what Congress had in mind. The Nuclear Waste 
Policy Act of 1982 set up a system for dealing with this waste. That 
plan included a fee collected from utilities to help pay for taking the 
waste off their hands beginning in 1998.
    After decades of study and analysis by experts, the government 
decided to have a single national nuclear waste repository. Later, 
Congress approved Yucca Mountain, Nevada, as the site, and the 
Department of Energy submitted the license application with the Nuclear 
Regulatory Commission.
    However, after decades of analysis and decisions, and after 
billions of dollars in fees collected and appropriations made, the 
Administration decided last year to abandon the Yucca Mountain project.
    This March, the Administration told the Nuclear Regulatory 
Commission it wanted to withdraw the license application for Yucca 
Mountain. The commission is in the midst of deciding whether to allow 
that. In addition, there are several pending lawsuits challenging the 
Administration's right to do that.
    I have called for the Administration to instead move forward on 
Yucca Mountain as required by law. I have been joined in this view by 
others in Congress.
    My goal for this hearing is to gain a better understanding of the 
budget implications of the Administration's proposal to close Yucca 
Mountain:
     How much have we spent on the project so far?
     How much will we need for the future?
     What happens if the project is indeed stopped?
     How much does the Federal government owe to these 
utilities for failing to meet its obligations?
    I am doubtful that there are easy alternatives to the Yucca 
Mountain site. If we abandon Yucca Mountain, where are we going to find 
a suitable alternative?
    We have several excellent witnesses today, and I want to thank them 
for their participation in this hearing.
    First, from the Department of Energy, we welcome Under Secretary 
Kristina Johnson. She is accompanied by the Department of Energy's 
General Counsel, Scott Blake Harris. Dr. Johnson and Mr. Harris, thank 
you for joining us today.
    Also on our first panel, from the Department of Justice, we have 
Michael Hertz. Mr. Hertz is Deputy Assistant Attorney General in the 
Civil Division. Mr. Hertz, we thank you for being here today as well.
    After we hear from these government witnesses, we will get a view 
of this problem from the state and local level. We will hear testimony 
from Mr. David Wright, who is Vice Chairman of the Public Service 
Commission of South Carolina. Mr. Wright, thank you for joining us.
    In addition, the committee just received from the Congressional 
Budget Office updated estimates of funding and liabilities related to 
Yucca Mountain. CBO estimates:
     The nuclear industry has paid more than $17 billion in 
fees since 1983 for the Federal government to remove nuclear waste, and 
they contribute $750 to $800 million more each year.
     Another $14 billion in interest has been credited to the 
Nuclear Waste Fund.
    CBO's statement also addresses how much has been spent on nuclear 
waste removal:
     More than $7 billion from the Fund has been spent--a large 
percentage of it for Yucca Mountain.
     Congress has appropriated another $4 billion directly to 
deal with defense-related waste.
    Finally, CBO tallies the budget costs of failing to meet Federal 
obligations:
     The government has paid more than $700 million in legal 
judgments and settlements with the nuclear industry.
     Potential total liabilities--including the sums above--
exceed $13 billion.
    Without objection, CBO's statement will be made part of the record.
    Before turning to our witnesses for their testimony, let me turn to 
our Ranking Member, Mr. Ryan, for an opening statement.

    Mr. Ryan. Thank you, Mr. Chairman, for this hearing. I 
might be a little less diplomatic, but I will be brief.
    It is clear that safe and permanent storage of high level 
and spent nuclear fuel waste is a critical element to our long 
term energy strategy. It is also important, has important 
budgetary implications that if not addressed will only serve to 
worsen our already bleak fiscal picture.
    Over the past twenty-five years we have already spent $10 
billion in taxpayer and ratepayer funds to study Yucca Mountain 
as a suitable site for nuclear waste storage. These studies 
show that Yucca, in fact, is suitable for nuclear waste 
storage, and Congress has confirmed this conclusion. Yet the 
administration has, for what I think are political reasons, 
determined that Yucca is not a workable option and is proposing 
millions more of taxpayer dollars be spent on further studies. 
This delaying tactic is a waste of taxpayer dollars and a 
hindrance to permanently resolving this issue.
    In addition to the futility of these studies, it would also 
expose taxpayers to large liabilities from the government's 
broken promise on nuclear waste storage. Courts have already 
awarded utility companies over $1 billion in damages for the 
government's breach of contract. And DOE estimates the 
government's total liability relating to lawsuits is $12.3 
billion. Abandoning Yucca, or even further delay, would add 
billions more to this already unacceptable liability. 
Abandoning Yucca is also clearly at odds with the 
administration's promise to let science guide our decision 
making process and instead puts political calculations ahead of 
the national interest.
    Mr. Chairman, we do not need further studies on Yucca. I 
look forward to the testimony of today's witnesses and hope 
that we can move forward in resolving this issue. Thank you.
    Chairman Spratt. Thank you, Mr. Ryan. Before proceeding 
with our witnesses, I would ask unanimous consent that all 
members be allowed to submit an opening statement for the 
record at this point. Without objection, so ordered.
    We welcome all of our witnesses today and would advise each 
of you that your prepared statements have been made part of the 
record so that you can summarize as you see fit. But we welcome 
you to take as much time as you see necessary to fully explore 
and state your case.
    Dr. Johnson, let us begin with you, and thank you again for 
coming. The floor is yours.

STATEMENTS OF KRISTINA M. JOHNSON, UNDER SECRETARY, ACCOMPANIED 
  BY SCOTT BLAKE HARRIS, GENERAL COUNSEL, U.S. DEPARTMENT OF 
    ENERGY; AND MICHAEL F. HERTZ, DEPUTY ASSISTANT ATTORNEY 
      GENERAL, U.S. DEPARTMENT OF JUSTICE, CIVIL DIVISION

                STATEMENT OF KRISTINA M. JOHNSON

    Ms. Johnson. Thank you. Thank you very much. Mr. Chairman, 
members of the Committee, my name is Kristina Johnson and I am 
the Under Secretary of Energy. I appreciate the invitation to 
appear before the Committee to discuss issues surrounding the 
government's responsibility for the safe management and 
disposition of nuclear waste.
    The Department remains committed to meeting its obligations 
for disposing of spent nuclear fuel and high level radioactive 
waste. To that end, the Secretary at the direction of the 
President has established a Blue Ribbon Commission on America's 
Nuclear Future, chaired by former Congressman Lee Hamilton and 
General Brent Scowcroft. The Commission is evaluating options 
and will make recommendations for developing a safe, long term 
solution to managing the nation's used nuclear fuel and nuclear 
waste. The Blue Ribbon Commission is working expeditiously and 
is expected to submit its draft report within a year from now 
and its final report six months later.
    As you know, the administration has decided that Yucca 
Mountain is not an option for a repository for spent nuclear 
fuel and high level waste. Consistent with that decision, on 
March 3, 2010, the Department filed a motion in the Nuclear 
Regulatory Commission Licensing Proceedings asking for 
permission to withdraw its license application for a Yucca 
Mountain repository. On June 29th the designated NRC Atomic 
Safety and Licensing Board denied the Department's motion. On 
June 30th, the Commission invited the participants in the 
licensing proceeding to submit briefs on whether the Commission 
should review and affirm or reverse the Board's decision. The 
NRC has not yet made a ruling. The Department remains confident 
in its legal authority to withdraw the application.
    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 one mill per kilowatt hour 
the government was to begin disposing of spent nuclear fuel 
starting in 1998. The fees collected under these standard 
contracts are deposited into the Nuclear Waste Fund. As you 
commented, the fund currently has a balance of approximately 
$25 billion which is invested in U.S. Treasury instruments. The 
government receives approximately $750 million per year in 
revenues from ongoing nuclear generation, and the fund averages 
approximately $1 billion annual return in its investments. To 
date, utility contract holders have paid nearly $18 billion in 
fees.
    It is important to note that the government's obligation 
under these contracts is to dispose of the spent fuel. The 
contracts specify no method or location for the disposal. It is 
also important to understand that contracts going forward to 
take used fuel from newly built reactors would contain 
provisions different from the earlier original contracts under 
which the government has been found liable and which are 
discussed.
    The Department has in recent years developed a new standard 
contract for utilities planning to build new commercial 
reactors. Under these new standard contracts, the Department 
would not be required to complete disposal of the spent fuel 
until twenty years after the expiration of the operation 
license and any extensions thereto. Assuming such a reactor 
became operational in 2020, any liability resulting from the 
obligation to accept used fuel from the reactor most likely 
would not come into effect until the end of this century.
    Beginning in 1998, most contract holders initiated lawsuits 
against the government due to the delay in beginning the 
acceptance of the 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. 
Last year, the Department estimated the liabilities under 
current law resulting from the delay in beginning waste 
acceptance from 1998 to 2020 could be as much as $13 billion. 
We have not attempted to update this estimate. As you know, the 
Department of Justice is in charge of defending these cases. I 
understand that Deputy Assistant Attorney General Hertz will 
address the status of the litigation.
    The Department remains committed to meeting its obligations 
for managing and ultimately disposing of spent nuclear fuel and 
high level radioactive waste. The Blue Ribbon Commission 
provides an opportunity for a dialogue on how best to address 
this challenging issue, and the Commission'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 alternate 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. Thank you.
    [The prepared statement of Kristin M. Johnson follows:]

             Prepared Statement of Dr. Kristina M. Johnson,
          Under Secretary of Energy, U.S. Department of Energy

    Mr. Chairman and Members of the Committee, my name is Kristina M. 
Johnson, Under Secretary of Energy. I appreciate the invitation to 
appear before the Committee to discuss issues surrounding the 
Government's responsibility for the safe management and disposition of 
nuclear waste.
    The Department remains committed to meeting its obligations for 
disposing of spent nuclear fuel and high-level radioactive waste. To 
that end, the Secretary, at the direction of the President, has 
established a Blue Ribbon Commission on America's Nuclear Future 
chaired by former Congressman Lee Hamilton and General Brent Scowcroft. 
The Commission is evaluating options and will make recommendations for 
developing a safe, long-term solution to managing the Nation's used 
nuclear fuel and nuclear waste. The Blue Ribbon Commission is working 
expeditiously; it is expected to submit its draft report within a year 
from now, and its final report six months later.
    As you know, the Administration has decided that Yucca Mountain is 
not an option for a repository for spent nuclear fuel and high-level 
waste. Consistent with that decision, on March 3, 2010 the Department 
filed a motion in the Nuclear Regulatory Commission (NRC) licensing 
proceeding, asking permission to withdraw its license application for a 
Yucca Mountain repository. On June 29, 2010 the designated NRC Atomic 
Safety and Licensing Board denied the Department's motion. On June 30, 
2010, the Commission invited the participants in the licensing 
proceeding to submit briefs on whether the Commission should review and 
affirm or reverse the Board's decision. The NRC has not yet made a 
ruling. The Department remains confident in its legal authority to 
withdraw the application.
                         the standard contracts
    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 standard contracts are deposited in 
the Nuclear Waste Fund. The Fund currently has a balance of 
approximately $25 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 nearly $18 billion in fees.
    It is important to note that the Government's obligation under 
these contracts is to dispose of the spent fuel; the contracts specify 
no method of or location for disposal. It is also important to 
understand that contracts going forward--to take used fuel from newly 
built reactors--contain provisions different from the earlier original 
contracts under which the Government has been found liable (and which 
are discussed below).
    The Department has in recent years developed a new standard 
contract for utilities planning to build new commercial reactors. Under 
these new standard contracts, the Department would not be required to 
complete disposal of the spent fuel until 20 years after expiration of 
the operating license and any extensions thereto. Assuming such a 
reactor became operational in 2020, any liability resulting from the 
obligation to accept used fuel from that reactor most likely would not 
come into effect until the end of this century.
     liability under the original version of the standard contract
    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.
    Last year, the Department estimated the liabilities under current 
law resulting from the delay in beginning waste acceptance (from 1998 
to 2020) could be as much as $13.1 billion. We have not attempted to 
update that estimate.
    As you know, the Department of Justice is in charge of defending 
these cases. I understand Deputy Assistant Attorney General Hertz will 
address the status of the litigation.
                               conclusion
    The Department remains committed to meeting its obligations for 
managing and ultimately disposing of spent nuclear fuel and high-level 
radioactive waste. The Blue Ribbon Commission provides an opportunity 
for a dialogue on how best to address this challenging issue, and the 
Commission'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. Mr. Harris?
    Mr. Harris. Mr. Chairman, I have no prepared statement. But 
if you do not mind, I would take just a second to make a 
personal statement. I have been practicing law in Washington 
for thirty-four years. This is the third federal agency in 
which I have served. This is only the second time that I have 
had the opportunity to appear before a Committee of the House 
of Representatives. And I just want to tell you it is an honor 
to be here today. Thank you.
    Chairman Spratt. And we are happy to have you. Mr. Hertz?

                 STATEMENT OF MICHAEL F. HERTZ

    Mr. Hertz. Thank you, Mr. Chairman. My name is Michael 
Hertz. I am a Deputy Assistant Attorney General in the Civil 
Division of the Department of Justice, the division that is 
handling the spent nuclear fuel contract litigation. I have 
testified before this Committee twice before, and I am 
privileged to be here for a third time.
    As I have before I would like to touch on three points this 
morning. One, the origin of the litigation that we are 
handling. Two, the status of that litigation. And three, the 
liabilities that we are facing and the costs of that 
litigation.
    As you know, in 1983 pursuant to the Nuclear Waste Policy 
Act the Department of Energy entered into seventy-six standard 
contracts with commercial utilities that were producing nuclear 
power. DOE agreed that by January 31, 1998, it would begin 
accepting spent nuclear fuel. In return the utilities agreed to 
make quarterly payments into the Nuclear Waste Fund, and they 
began making those payments in 1983. As is well known, DOE has 
not yet commenced accepting spent nuclear fuel. However, DOE 
has clearly stated its continuing commitment to meet its 
obligations for disposing of spent nuclear fuel and high level 
radioactive waste.
    In response to DOE's delay, utility companies filed 
seventy-two cases in the United States Court of Federal Claims 
alleging that DOE's delay in beginning to accept spent nuclear 
fuel constituted a breach of contract. The Court of Appeals for 
the Federal Circuit agreed with that and ruled that it 
constituted a breach, but it held that it was a partial breach. 
Partial, in response to both the fact that the utilities kept 
paying the fees, and the government maintained its obligation 
to dispose of the spent nuclear fuel.
    Utilities' damage claims are largely for the costs incurred 
to store spent nuclear fuel that they allege DOE would have 
expected absent the breach. That is, storage costs that 
utilities allege that they would not have expended had DOE 
begun timely performance under the contracts. In addition, some 
of the utilities have alleged diminution in value claims for 
utility plants that they have sold to other utilities. Total 
claims to date approximately $5.7 billion, although I would 
note in the cases that we have filed, there are no claims data 
in thirteen of the pending cases yet. As has been stated, DOE 
estimated its potential liability in 2009 at about $13.1 
billion, assuming that a start date of acceptance would begin 
in 2020. That estimate was created before the administration 
announced that it would not proceed to build the repository at 
Yucca Mountain.
    Because these are partial breach cases, the utilities have 
to return to court at least once every six years to file new 
claims. So, we will probably continue to litigate these claims 
until DOE begins accepting spent nuclear fuel.
    Of the seventy-two cases filed, six of them are what we 
refer to as ``round two'' cases. That is, cases where utilities 
would come back to file a second claim. Thirty-two cases remain 
pending before the trial court, the United States Court of 
Federal Claims. Four cases, there have been final judgment 
where we are making a determination whether to appeal. There 
are thirteen final judgments on appeal. There are five final 
unappealable judgments. Eleven cases have been settled. And six 
cases were voluntarily withdrawn.
    The government's liability for judgments that have already 
been entered, many of which are not final or are subject to 
appeal, and settlements currently stands at approximately $2 
billion. I would note that last year when I was before this 
Committee that figure was $1.3 billion. This $2 billion amount 
covers approximately 60 percent of the claim years of 
liability. That is, that liability that accrued between January 
31, 1998, and the end of 2009. In total, the government has 
paid out approximately $760 million pursuant to settlement and 
one trial court judgment that was not appealed. Additional 
government liability will continue to accrue for as long as DOE 
is delayed in commencing spent nuclear fuel at contractually 
required rates.
    To give you an idea of the extent of the litigation, the 
Department has conducted two spent nuclear trials this year 
where the total claim by the utilities was approximately $70 
million. Next year, we are expecting to have eight trials in 
2011, where the amount the utilities claim is approximately 
$900 million. And in 2012, we are expecting six trials, the 
first three of which we expect the total claims to be $212 
million, and we do not have claims data for the other three 
that will be heard in that year.
    While we are asserting legitimate defenses to these claims, 
we have also made concerted efforts to settle them. As I noted, 
we have paid out a certain amount in settlement. We have 
settled cases, seventeen of the standard contracts in eleven of 
the cases. I would note also that we have recently begun 
discussions with the utilities as a group to explore the 
possibility of reaching a standard agreement with a larger 
segment of the utilities whose claims are currently pending.
    Because many of the major recurring issues have been 
resolved, the ultimate success of many types of claims is now 
more predictable to both the government and the utilities, 
which may make settlement more possible.
    The payments of settlements and judgments to date have all 
been paid out of the Judgment Fund. In 2002 the United States 
Court of Appeals for the Eleventh Circuit determined that the 
Nuclear Waste Fund was not available to pay these judgments or 
to pay settlements. The litigation costs--and we are also 
unaware of any statutory requirement that DOE is required to 
reimburse the Judgment Fund. So these funds come from the 
Judgment Fund the Treasury holds. The litigation costs that we 
have incurred to date, the government's cost of close to $200 
million. We are spending approximately twelve to fifteen 
attorney man years per year on defending these cases. The costs 
constitute about $29 million in attorney costs, $111 million in 
expert fees, $52 million in litigation support costs. I would 
note that the President's budget for fiscal year 2011 has 
requested an $11 million increase for the Civil Division to 
handle more effectively this litigation, and we would urge the 
Congress to pass that.
    Absent settlement, these litigation costs will continue to 
be incurred into the foreseeable future. Until DOE begins SNF 
acceptance or another suitable arrangement is made with the 
industry, the government's underlying liability will continue 
to accrue.
    I look forward to responding to questions from the 
Committee. Thank you.
    [The prepared statement of Michael F. Hertz follows:]

        Prepared Statement of 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 obligations 
under the Nuclear Waste Policy Act (``NWPA'') of 1982. I testified 
before the Committee in October 2007 and July 2009 regarding the same 
subject, and this testimony updates and supplements the testimony that 
I have previously provided. 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 Department of Energy (``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. To date, DOE has 
not yet commenced accepting SNF. The commencement date for SNF 
acceptance at a Federal facility is currently unknown; however, DOE has 
clearly stated its continued commitment to meeting its obligations for 
disposing of spent nuclear fuel and high-level radioactive waste. 
Status Of Court Of Federal Claims Litigation
    In response to DOE's delay, utility companies have filed 72 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, 1341 (Fed. Cir. 2000), has ruled that the 
delay constitutes such a breach.
    The utilities' damages claims are largely 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 as part of the sale.
    DOE's most recent estimate of potential liability, which was 
formulated in 2009 and assumed a projected start date of SNF acceptance 
of 2020, was as much as $13.1 billion. This estimate does not fully 
account for the Government's defenses or the possibility that 
plaintiffs will not be able to prove the full extent of their claims, 
and they were created before the Administration's 2009 announcement 
that it would not proceed to build a repository at Yucca Mountain, 
Nevada.
    The United States Court of Appeals for the Federal Circuit has held 
that, because the utilities are continuing to perform their obligations 
under the standard contracts by paying money to the NWF with the 
expectation of future performance, all claims for breach of the 
standard contracts are ``partial'' rather than ``total'' and damages 
are only available through the date of the complaints that have been 
filed. Indiana Michigan Power Co. v. United States, 422 F.3d 1369 (Fed. 
Cir. 2005). To comply with the applicable statute of limitations, 
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, 
absent settlement, we will continue to litigate these claims until 
after DOE begins accepting SNF.
    Of the 72 lawsuits filed, 50 cases remain pending either in the 
Court of Federal Claims or in the Court of Appeals for the Federal 
Circuit, 11 have been settled, six were voluntarily withdrawn, and five 
have been litigated through final unappealable judgment. Of the 50 
pending cases, the trial court has entered judgment in 17 cases, 13 of 
which are pending on appeal and the time to appeal on the remaining 
four of which has not yet elapsed. Six of the 72 cases represent 
``second-round'' claims--that is, claims that seek recovery for 
expenditures incurred after the claim period for their initial claims 
and that are required to be brought in a second lawsuit as a result of 
the partial nature of the Government's breach.
    The Government's liability for judgments that have already been 
entered (most of which are not final because of appeals or remands) and 
settlements currently stands at approximately $2.0 billion. This amount 
covers approximately 60% of the claim-years of liability (that is, the 
total number of individual years in which individual contract-holders 
could seek damages for DOE's failure to accept SNF) that accrued 
between January 31, 1998 and the end of 2009. In total, the Government 
has paid approximately $760 million pursuant to settlements and one 
trial court judgment that was not appealed. In addition to the 
approximately 40% of the claim-years through 2009 that are not already 
the subject of settlements or judgments, additional Government 
liability will accrue for as long as DOE is delayed in commencing SNF 
acceptance at contractually required rates.
    As noted, I provided testimony to this Committee concerning these 
cases in October 2007 and July 2009. Both prior to and since these 
times, the Department has been actively involved in trying cases, and 
the judgments issued in these cases have resulted in a large number of 
appeals being filed and handled. The following chart depicts the 
progression of SNF cases through trial and to appeal as of October 
2007, July 2009, and July 2010:
    The Department of Justice has conducted 2 SNF trials in 2010. 
Barring settlements and excluding cases that may be remanded for 
further proceedings by the Federal Circuit, our current estimate is 
that we will conduct 8 trials in 2011 and 6 trials in 2012. Because the 
plaintiffs are suing for partial breach, we also anticipate that, 
absent settlement, the number of pending cases will increase as 
additional utilities file second-round claims.
    While asserting legitimate defenses to plaintiffs' claims in 
litigation, we also have made concerted efforts to settle claims. The 
settlements resolving claims on 17 of the standard contracts in 11 of 
the cases involve six companies: Exelon Generation, LLC; South Carolina 
Electric & Gas Company; Omaha Public Power District; Duke Power 
Company; Florida Power & Light Company; and PSEG Nuclear LLC. These 
settlements provide for the periodic submission of claims to the 
contracting officer for costs incurred since the date of the last 
submission.
    We have also recently begun discussions with the utilities as a 
group to explore the possibility of reaching a standard settlement with 
a larger segment of the utilities whose claims are currently pending. 
Because many of the major recurring issues have been resolved as the 
cases have worked their way through trial and the appellate process, 
the ultimate success of many types of claims is now more predictable to 
both the Government and the utilities. Because the claims of a 
substantial number of the utilities are not substantially affected by 
issues that require resolution at the appellate level, it may be 
possible to implement an administrative claims process with these 
utilities that is less expensive and more efficient than litigation and 
that achieves largely the same results.
                      proceedings in other forums
    There are several matters currently pending in the United States 
Court of Appeals for the District of Columbia Circuit and before the 
Nuclear Regulatory Commission (``NRC'') that are related to DOE's 
obligation to accept SNF. Those cases do not directly implicate the 
breach of contract cases in the Court of Federal Claims and the Federal 
Circuit, but could have some effect upon the issues likely to arise 
during the litigation.
    In In Re Aiken County (D.C. Cir.), the States of South Carolina and 
Washington, a county in South Carolina, and three individuals are 
seeking review of the Secretary of Energy's decision to move to 
withdraw the license application and to terminate other activities 
related to development of the Yucca Mountain site for a permanent 
repository for nuclear waste. The District of Columbia Circuit has 
consolidated the various petitions and is handling them on an expedited 
basis, with the Government's brief currently due to be filed on July 
28, 2010. In a related matter, an Atomic Safety and Licensing Board of 
the Nuclear Regulatory Commission has recently held that the Secretary 
of Energy lacks authority to withdraw the previously submitted license 
application for Yucca Mountain, and the full NRC has requested briefing 
from interested parties regarding whether it should ``review, and 
reverse or uphold, the Board's decision.''
    In addition, in National Association of Regulatory Utility 
Commissioners v. United States Department of Energy (D.C. Cir.), two 
industry groups and several nuclear reactor owners have filed 
petitions, which have been consolidated, challenging the continued 
collection of NWF fees. 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. We are also unaware of any statutory requirement 
that DOE be required to reimburse the Judgment Fund for judgments paid, 
unlike other statutory schemes that govern the adjudication of contract 
and other monetary disputes with the Government. Litigation Costs
    The costs to the Government to litigate these cases are 
significant. The Department of Justice has expended approximately $29 
million in attorney costs, $111 million in expert funds, and $52 
million in litigation support costs in defense of these suits. In 
addition, DOE has expended many manhours to support this effort. Absent 
settlement, these litigation costs will continue to be incurred into 
the foreseeable future, just as, until DOE begins SNF acceptance (or 
other suitable arrangement is made with the industry), the Government's 
underlying liability will continue to accrue.

    Chairman Spratt. Let me just ask you for the record if the 
numbers that I read previously by CBO comport with your 
understanding of the costs, the different costs, of this 
situation?
    Mr. Hertz. I had a quick opportunity to look at CBO's 
statement this morning, and I thought they were pretty 
accurate, pretty consistent with the numbers that I gave you 
this morning as well, and that we have at the Department as 
well.
    Chairman Spratt. We will give you a copy and if there is 
any deviation that should be noted for the record, we would 
appreciate your doing so.
    Mr. Hertz, do you agree that the Department of Energy has 
the authority to terminate with prejudice?
    Mr. Hertz. Mr. Chairman, that matter is in litigation now, 
both before the Nuclear Regulatory Commission in a case that 
the Department of Energy is handling, and it has been 
challenged in the D.C. Circuit. And I am really not prepared to 
comment on pending litigation. I will note that the Department 
of Justice is defending the Department of Energy's decision to 
file the motion in the litigation in the D.C. Circuit.
    Chairman Spratt. Supporting what position?
    Mr. Hertz. Supporting the position of the Department of 
Energy that it had authority to file the motion to withdraw the 
application for a repository at Yucca Mountain.
    Chairman Spratt. And what parties have taken up the other 
side of that issue?
    Mr. Hertz. What parties?
    Chairman Spratt. Yes, sir.
    Mr. Hertz. I think a number of the utilities and some of 
the trade groups have filed that case in the D.C. Circuit, and 
Aiken County, South Carolina, as well.
    Chairman Spratt. Dr. Johnson, it is said frequently that 
Yucca is not ``a workable option.'' Would you explain to us 
what ``workable'' means in this context?
    Ms. Johnson. Well, thank you very much, Mr. Chairman. As 
Secretary Chu has said, over the past two decades the science 
and technology for managing the back end of the fuel cycle has 
accelerated our understanding. And I will give you a few 
examples there. When we are thinking about managing the back 
end of the fuel cycle, we have improved our understanding of 
the kinds of forms of high level waste that we will get. We 
have improved our understanding for proliferation resistant and 
recycling technology. We operate right now the only deep 
geologic storage facility in the world at the Waste Isolation 
Pilot Plant in New Mexico that has received 5,000 shipments 
since it started operating in 1999.
    Chairman Spratt. That is in a salt dome. Are you suggesting 
a salt dome would be the alternative location for a deep 
geologic repository?
    Ms. Johnson. I am not suggesting that. But if I may, just 
to continue where my thinking is going and to answer your 
question. In addition, we also have accelerated our 
understanding of high performance computing in the nuclear 
sense. Taking a page from the Stockpile Stewardship Program, we 
know how to model and simulate nuclear materials in a way that 
we had not when the Nuclear Waste Policy Act was passed in 
1982. And as a result, this administration believes that it is 
time to step back and to look at what we have learned, and to 
see if there is a better solution with broader support. Which 
is why we are standing up the Blue Ribbon Commission with 
distinguished individuals to help make recommendations on how 
we might better manage the back end of the fuel cycle.
    Chairman Spratt. But in the case of NEPA----
    Ms. Johnson. Right.
    Chairman Spratt [continuing]. The basic requirement is that 
all viable options be considered. You are ruling out in the 
consideration of new alternatives consideration of Yucca 
Mountain. Do you think that is compliant with the NEPA, the 
spirit and letter?
    Ms. Johnson. The Blue Ribbon Commission will consider many 
options, including deep geologic storage. But it is not a 
siting organization or committee. So, therefore, it will not 
consider Yucca or any other site in any other state.
    Chairman Spratt. But it will consider deep geological 
repositories, not Yucca?
    Ms. Johnson. Deep geologic repository of spent nuclear fuel 
is one of the options that I am sure it will be considering, 
since it has been asked by the Secretary and charged to 
consider all options that may result in a better solution to 
the long term disposition of spent nuclear fuel and high level 
waste.
    Chairman Spratt. Would Yucca be on the table?
    Ms. Johnson. Again, the Blue Ribbon Commission, Mr. 
Chairman, is not a siting committee. It is looking for making 
recommendations on the best possible solutions to managing the 
back end of the fuel cycle.
    Chairman Spratt. I am still fetching for why Yucca is 
unworkable after all of these years, and all of this money 
spent, we come to the unilateral decision that Yucca is not a 
workable option?
    Ms. Johnson. Again, stepping back for a minute and thinking 
about where we have come as a society over the last twenty-five 
years. If you think back in 1982 when the Nuclear Waste Policy 
Act came into being, that was a time when Intel introduced the 
8286 microprocessor, which had a processing speed of six to 
eight megahertz. It was before the Macintosh was introduced. It 
was before the IBM PC became available in 1986. We connected 
through a modem dial up. It was before widespread utilization 
of the analog cell phone, never mind the digital cell phone. In 
December, 2009, the Jaguar high performance computer at Oak 
Ridge National Lab was acknowledged as being the fastest 
computer in the world and it achieved 1.25 petaflops. Given 
Moore's Law, what has happened over the last thirty years, we 
have thirty thousand times the processing speed of a single 
processor. And high performance computing architectures that 
were not known at the time that the Nuclear Waste Policy Act 
came into being leverages that another ten thousand to a 
million times. Given also the capability we have developed 
through the Stockpile Stewardship Program, I think it is 
prudent to step back and see: can this new technology 
capability that has come online will help develop a better 
solution?
    Chairman Spratt. Will this be, then, recycling? 
Reprocessing?
    Ms. Johnson. It could----
    Chairman Spratt. Is that what you have in mind as an 
alternative to----
    Ms. Johnson. I do not want to presuppose what the Blue 
Ribbon Commission will recommend at this time. But I think it 
is important to realize what the technology may do now that we 
could not have envisioned even ten years ago.
    Chairman Spratt. But if the Commission said, ``Let us 
consider reprocessing.'' Would that be in its purview?
    Ms. Johnson. I believe that the Blue Ribbon Commission has 
been directed to consider all possible methods for dealing with 
the back end of the fuel cycle, and we will look forward to 
getting those recommendations. But again, I do not want to 
presuppose or prejudice what they might say. They are a 
distinguished group of individuals. They include, as you know, 
former Senators Domenici, Hagel; Ms. Susan Eisenhower; and the 
Honorable Former Under Secretary Moniz to mention just a few, 
besides the leaders General Scowcroft and former Congressman 
Lee Hamilton. So, we are looking very much forward to their 
recommendations and providing all the information to help them 
in their deliberations.
    Chairman Spratt. In the meantime there is a great deal of 
data and information and analytical results that have been 
achieved through the expenditure of $10 billion to $11 billion 
at Yucca Mountain. What do you do to preserve that data for 
future use?
    Ms. Johnson. That is a great question, and we have been 
very diligent about setting up six functional groups to look at 
the orderly shut down of Yucca Mountain. And that includes 
procurement and contracts, that includes transferring the 
records for management to legacy management within the Energy 
and Environment Programs at the Department of Energy. So, we 
are very conscious of records and data collection. We are even 
keeping the specimens of the rocks that have been used for some 
of the research at Yucca Mountain and preserving those as well. 
So, we are allocating the resources as well as the individuals 
to make sure that we retain all the knowledge gained from this 
endeavor.
    Chairman Spratt. There are others here who have questions 
to ask, and I will come back to my additional questions. But 
one final question concerns the people----
    Ms. Johnson. Right.
    Chairman Spratt [continuing]. Who have engaged in this 
Yucca Mountain project. I understand there is somewhere between 
2,500 and 3,000 workers who have been, employees and 
contractors, who have been working on Yucca Mountain. What 
happens to their jobs?
    Ms. Johnson. Again, thank you for the question. To my 
knowledge, it is 200 federal employees and about 400 
contractors.
    Chairman Spratt. 207?
    Ms. Johnson. 200 federal employees and about 400 
contractors. And we have worked with the employees to help and 
support them in their careers. So, to the point where we now 
have only thirty federal employees that are still either 
considering retirement or considering other career options that 
we are supporting. And so we issued, the Deputy Secretary 
issued a memorandum which gives the RW employees preference in 
terms of jobs within the Department of Energy. And we have been 
very diligent about providing resources to help employees 
because we care very much about the individuals that we have 
worked with, to continue their career, or if they choose to 
separate, to help them in any way we can.
    Chairman Spratt. Mr. Hertz, you mentioned several different 
elements of damages in addition to the damages due to delay in 
taking possession of the spent fuel. Included in your estimate 
were expert witness fees and attorneys. What were those numbers 
again, for those ancillary costs?
    Mr. Hertz. The fees I was referring to are the costs that 
the government has incurred in defending these cases. And what 
I said was that the Department of Justice has expended about 
$200 million in defending the cases.
    Chairman Spratt. Are we paying also the plaintiffs' 
lawyers, the electric utilities that are suing?
    Mr. Hertz. The plaintiffs' lawyers are paid by the 
utilities.
    Chairman Spratt. So, all the cost in bringing the suits, 
including expert witness fees and attorneys' fees, are being 
borne at the present time by the utilities, by the plaintiffs?
    Mr. Hertz. Each side is bearing its own costs.
    Chairman Spratt. Okay. Thank you, sir. Mr. Ryan?
    Mr. Ryan. I will yield my time to Mr. Simpson.
    Chairman Spratt. Mr. Simpson?
    Mr. Simpson. Thank you, Mr. Chairman. Thank you, Mr. Ryan. 
I appreciate it. This hearing would be almost funny if it were 
not so serious, because I honestly do not believe that there is 
anybody within the Department of Energy or here that believes 
that a good decision was made by shutting down Yucca Mountain. 
However, it is what it is. And we have to deal with what it is. 
And we all know the reason that the administration decided not 
to go forward with Yucca Mountain.
    Does the Administration, does the Department feel like it 
has to follow public law?
    Mr. Harris. Perhaps as the General Counsel that question is 
best directed to me, and the answer is absolutely yes, sir.
    Mr. Simpson. Public Law 107-200 passed in 2002 by Congress, 
signed by the President, establishes Yucca Mountain as the site 
for the permanent geological repository. The ASLB Board has 
twice ruled against the Department of Energy's withdrawing its 
license application, although the NRC Commission has not 
followed up on that. In part, they stated that Congress had a 
say in this. It was not just up to the DOE to decide to 
withdraw the license application, that it had to go through 
Congress. Do you differ with that opinion?
    Mr. Harris. Actually I do, sir, with all due respect. I 
differ in a couple of particular points. First, Congress did 
not, in fact, as I read the law designate Yucca Mountain as the 
nuclear repository in the sense that it directed that it be 
built. What it did in 2002, the way I read the law, is that it 
instructed the Secretary to go ahead and prepare and file an 
application, which of course was done. I think it was in 2008 
when it was finally filed.
    Mr. Simpson. Well did we not override the State of Nevada's 
objections?
    Mr. Harris. Yes, sir, you absolutely did that. You did, and 
that is what triggered the process, if you will, by which the 
application was filed. The question decided by the Board, and I 
believe decided incorrectly by the Board, is whether or not the 
direction to file an application meant that once it is filed it 
was now beyond the power of the Secretary of Energy and the 
administration to withdraw that application no matter what the 
Secretary, no matter what the Department, no matter what the 
administration believed about whether that was wise. I believe 
Congress, in setting up this statute, left that authority with 
the Secretary of Energy. And I believe we have applied it 
lawfully. Having said that, you are correct, the Board has 
disagreed. And that will be reviewed, I believe, by the Nuclear 
Regulatory Commission.
    Mr. Simpson. I can tell you that there are an awful lot of 
members of Congress that would disagree with that. Let me ask 
you again. The Blue Ribbon Commission, as you have said Dr. 
Johnson, is not a siting commission. Everyone, virtually 
everyone, including the Secretary, has stated that a deep 
geological repository will be necessary at some point. Whether 
it is Yucca Mountain or something else, we are going to have to 
have a deep geological repository. In the appropriation bill 
for $5 million for the Blue Ribbon Commission, we stated in 
there that they could only use that if Yucca Mountain was in 
fact an option. The Commission's co-chair stated in their first 
press conference that Secretary Chu has made it quite clear 
that Yucca Mountain is not an option. What is going on with 
that?
    Ms. Johnson. Well, as you said, and thank you very much for 
the question, Secretary Chu has said that Yucca Mountain is not 
an option. And again I think that goes back to we are standing 
at a very interesting time, as you are well aware, in the 
restart of the civilian nuclear power industry. And as a 
result, given the stand of this administration with the recent 
conditional loan guarantees that have been issued for the new 
power plant in Vogtle, in Georgia. We understand that it is 
very important that we have the best workable solution for long 
term disposition of the spent nuclear fuel and high level 
waste. So, I think considering all the work that has, all the 
knowledge that has gone on in the last thirty years from high 
performance computing, to understanding the geology, to 
understanding the long-lived actinides, and how to make them 
shorter lived, as well as the transuranic waste experience from 
WIPP, I think that it is prudent to step back and to see what 
is the best possible solution to the long term disposition of 
spent nuclear fuel.
    Mr. Simpson. But we will need a geological depository at 
some time? Because there is going to be some stuff left over, 
no matter what you do.
    Ms. Johnson. I am sure there will be some stuff left over. 
And again, not to predispose what might be recommended by the 
Blue Ribbon Commission. I do believe they will consider deep 
geologic storage. I do not know what shape, form, factor, or 
how deep. But again, I am looking forward to their 
recommendations and working with the Blue Ribbon Commission in 
the appropriate way to help our nation move forward on managing 
the back end of the fuel cycle.
    Mr. Simpson. If, with the administration's opinion, Yucca 
Mountain is off the table, is anything in any location or site 
in Nevada off the table? Or just Yucca Mountain?
    Ms. Johnson. Well, again, I think we are going to wait for 
the recommendations from the Blue Ribbon Commission, which is 
not a siting committee.
    Mr. Simpson. Let me ask Mr. Hertz, are the fines that are 
being paid, the penalties being paid by the federal government 
to the utilities, are those, are there penalties involved? Or 
are those mostly for the cost of the utilities' storage of the 
nuclear waste that the federal government should be paying for? 
Their on site storage?
    Mr. Hertz. They are not fines and penalties, they are 
damages. And they are damages that are being incurred. What the 
court does is it engages in an exercise of looking at the 
breach world and the non-breach world. What would have been the 
utility's expense if the Department of Energy had not breached 
the contract? That is the base. Then you look at what the 
utility's expense is in the breach world, because Energy has 
not picked up the spent nuclear fuel. Compare the two, the 
difference is damages. So, the government is paying essentially 
the increased storage capacity that is necessary at various 
utilities because the government has not come and picked up the 
spent nuclear fuel.
    Mr. Simpson. Will those costs increase in the future as 
more and more utilities sue the federal government? And 
effectively, you know, I do not know what case we have got to 
stand on, or what ground we have got to stand on. We have 
breached contract.
    Mr. Hertz. As I have said, the Federal Circuit has said 
there has been a partial breach of the contract. Until we begin 
performing under the contract, until we begin picking up waste 
at what the Federal Circuit has decided was the contractual 
rate of acceptance that the government had agreed to, that we 
will keep incurring damages. The amount of damages in any given 
case is very individualized. You know, it depends on the 
configuration of the utility. It depends on what kind of 
storage they engage in, what their physical plant looks like. 
At some point, you would think that utilities build, I mean, 
they put spent nuclear fuel in pools, they have to remove it 
from the pools and put it on slabs. They have to store it. They 
incur expense to secure that. At some point, the current 
utilities will stop operating, they will stop producing spent 
nuclear fuel. If the federal government does not pick up, does 
not begin picking up the spent nuclear fuel, you will incur 
costs to secure those things on site.
    Mr. Simpson. Currently, the damages are being paid out of 
the Judgment Fund?
    Mr. Hertz. Correct.
    Mr. Simpson. There is $24 billion sitting in the nuclear 
waste disposal fund----
    Mr. Hertz. Correct.
    Mr. Simpson [continuing]. That the ratepayers and also the 
rest of the taxpayers have paid into that fund. If we are, if 
we do not move forward with completing this geological 
repository, can those funds be used to pay the utilities for 
their on site storage of the SNF that we have not taken charge 
of?
    Mr. Hertz. Probably not without legislation. The government 
had argued that, early on when we settled a case for increased 
costs, that we should be able to pay those increased costs, 
that settlement out of the Nuclear Waste Fund. The United 
States Court of Appeals for the Eleventh Circuit disagreed with 
that under the Nuclear, under the Act, saying that those funds 
were only available essentially to design and build a 
repository. They were not designed for on site storage, which 
in effect that settlement was. So, unless there is legislation 
changing that, and legislation can change it. I mean it, you 
know, it is a decision of the court interpreting the Act as it 
existed at the time.
    Mr. Simpson. Should we stop charging the ratepayers for the 
construction of a waste repository when we are not doing it?
    Mr. Hertz. You mean the fee, the annual fee that is being 
paid?
    Mr. Simpson. Right.
    Mr. Hertz. Well, I mean, there is litigation that has been 
filed by some of the utilities challenging that. Challenging 
the Secretary's determination not to reconsider setting the 
rate. And that litigation is being defended by the Department 
of Justice. I think, you know, under the Act as it exists now, 
the costs to build a repository, or to ultimately dispose of 
this, are to be borne by the utilities. You know, this is a 
question if you were to stop it, if the Secretary were to 
determine that, and then the Blue Ribbon Commission came up 
with another solution, and that was going to cost a certain 
amount, you would just have to ramp up the rate at that point. 
At least unless the law changed in some other respect. But 
under the law now the utilities have to bear the cost through 
this fund.
    Mr. Harris. Congressman?
    Mr. Simpson. Dr. Johnson, let me--go ahead.
    Mr. Harris. Might I add to that?
    Mr. Simpson. Sure.
    Mr. Harris. Though I do not want to discuss the details of 
the litigation, obviously, I thought I might express the 
Department of Energy's view on this. In our view, we are 
absolutely required and committed to taking and disposing of 
the spent nuclear fuel. We believe we have an obligation that 
is commensurate with the obligation to take the fuel to charge 
the fee to be able eventually to dispose of it. We view the two 
obligations as inextricably linked in law. And that is why we 
are continuing with the spent nuclear fuel fee. We think our 
obligation to take it is tied, as a matter of law, to our 
obligation to charge the fee.
    Mr. Simpson. Can I ask one last question, Mr. Chairman? Dr. 
Johnson, this year the mark up in the Energy and Water 
Subcommittee and also I believe in the Senate Energy and Water 
Subcommittee included no funds to proceed with Yucca Mountain 
for the licensing application. Should the NRC rule, as I 
believe they correctly will, that the administration cannot 
unilaterally withdraw the application, what will the Department 
do in terms of the $100 million to $200 million that will be 
necessary to proceed with the license application? Will they 
come in and ask for a reprogramming to do that? Or will they 
just ignore it and say, ``We do not have any funds?''
    Ms. Johnson. Thank you very much for the question. If the 
NRC were to rule, and we would follow the rulings, and we would 
follow the appropriate appropriations processes, and we would 
do what we need to do to follow what we have been directed to 
do by Congress and the NRC.
    Mr. Simpson. Do you not think it would be wise to put that 
$100 million in there now, and then if we do not have to spend 
it that would be a wonderful thing?
    Ms. Johnson. I think we feel confident that we have the 
authority to withdraw the application. Therefore, we need to 
plan for what the President's budget, which calls for no 
funding for continuing with the licensing. Having said that, we 
do have funds in nuclear energy to continue to look at research 
and how to manage the back end of the fuel cycle. We do have 
funds allocated in legacy management to continue with the 
records and the management of the records so that we do not 
lose the knowledge. We have funds allocated in general counsel 
in order to continue the processing of the contracts. So, I 
believe we are following a very well thought out process in 
order to be prepared to, when we get the recommendations from 
the Blue Ribbon Commission, to carry those out with your help 
and Appropriations.
    Mr. Simpson. If the Department, if the NRC rules that they 
cannot withdraw it, the license application, will the 
Department still have the personnel in place? Or is it being 
dismantled at a rate that we will have to appropriate money to 
put everybody back in place to proceed with the license 
application?
    Ms. Johnson. Certainly, we have been following a path to 
take care of the people, to make sure that they have 
opportunities as we believe that we have the right to withdraw 
the motion and to close down Yucca Mountain. So, we have had to 
move and make sure that the employees can find other positions. 
So, therefore, we will not have employees as of October 1, and 
we would have to restart that process.
    Mr. Simpson. Thank you.
    Chairman Spratt. Ms. McCollum?
    Ms. McCollum. Thank you, Mr. Chairman. I think it is 
important to know a little bit where people are coming from, so 
I am going to make a couple of brief comments. And I want to 
thank you all for being here today, and I want to thank the 
Chairman particularly for holding this hearing.
    For over a decade, my time as a state legislator in 
Minnesota, I have worked on the issue of what to do with our 
nation's nuclear waste. Minnesota tax ratepayers have already 
contributed $714 million to the Nuclear Waste Fund to find a 
permanent solution to this problem. And yet, the U.S. 
government still does not have an answer for how to store the 
nation's radioactive waste. I am deeply troubled, very troubled 
by this.
    Until the administration can detail a real plan and 
commitment to resolving the issue of nuclear waste, it is 
irresponsible to abandon the study of Yucca Mountain as a 
viable option, particularly after $100 billion has already been 
spent on the project. The administration and many of my 
colleagues have pushed for a nuclear power plant expansion. I 
believe we should not even be discussing the future of nuclear 
power until we can start cleaning up our present toxic waste 
mess.
    Now, we have heard a lot about the consequences of Yucca 
Mountain and what it holds for Nevadans. But let me tell you 
about the serious consequences for Minnesotans. About thirty 
miles from my district, St. Paul, lies the Prairie Island 
Indian Community on the banks of the Mississippi River. The 
children of Prairie Island for over two decades have seen 
concrete casks of nuclear waste from their swing sets on a 
storage site that is owned and operated by Xcel Energy that was 
designed, designed to be only a temporary storage facility. 
This is unacceptable for human health, and for environmental 
hazards in this community like many others across America. And 
in fact, my understanding is that the Prairie Island community 
only has one emergency exit, because they only have one exit to 
leave the reservation in case of something happening.
    So, I think, you know, you really understand the thrust of 
my frustration. I am not anti-nuclear power. But I am anti-
nuclear power expansion when we have not figured out how to 
solve our problem. Now, a lot of the questions have been asked 
about cost, and court cases. And Secretary, Dr. Johnson, you 
keep talking about, you know, moving forward, and the panel is 
going to come up, this blue ribbon panel is going to come up 
with the solution idea and not the storage idea. Is it, in your 
opinion, that this blue ribbon panel would find fault with 
Yucca Mountain?
    Ms. Johnson. Well, thank you very much for the questions, 
and again for the opportunity to address this. And I, like you, 
am very much pro-nuclear as one of the potential----
    Ms. McCollum. I have limited time, so if you could just 
answer the question?
    Ms. Johnson. Oh, okay.
    Ms. McCollum. Because the clock is running for me now.
    Ms. Johnson. Oh, I see. Let me start again, then, if I 
will, to be succinct. As I was saying, I am pro-nuclear. Which 
means that I also am very concerned about how we manage the 
back end of the fuel cycle. And I just want to say that it has 
been shown that the storage on site, dry cask, by the Nuclear 
Regulatory Commission, is safe up to 100 years. And the 
International Atomic Energy Commission has said that dry cask 
storage is safe up to 300 years. So, the first thing is that we 
have time to figure out the best possible solutions for 
managing the back end of the fuel cycle.
    Ms. McCollum. Excuse me, Mr. Chairman. If I heard you 
correct, then, we will wait how many generations before we 
decide whether or not to do anything with this temporary 
storage? I mean, temporary to me is not 100 or 300 years. So, 
my question is, is there something in the modeling that shows 
that Yucca Mountain would be less safe than storing nuclear 
waste in temporary storage facilities on the banks of rivers 
where children play nearby?
    Ms. Johnson. And as I was saying, it is safe to store it up 
to 100 years, which gives us time to work on managing the back 
end of the fuel cycle.
    Ms. McCollum. Is that your idea of temporary storage? We 
were told that this was only temporary storage. Is 100 to 300 
years temporary storage?
    Ms. Johnson. I believe that originally the storage and the 
long term solution was going to be at ten thousand to a million 
years. So in terms of relative to long term storage I think 
that up to 100 years is within a temporary storage. I am not 
suggesting that we would actually store it for a hundred years. 
What I am saying is that we are doing active research in 
managing the back end of the fuel cycle. We have----
    Ms. McCollum. Thank you. Thank you.
    Ms. Johnson. Okay.
    Ms. McCollum. Mr. Chairman, I am going to editorialize here 
in the few minutes that I have left. I do not think any 
reasonable person thinks 100 years is temporary. And the whole, 
the whole premise of reasonable storage and safe storage, 
Minnesota, when it made its decision to store, was told Yucca 
Mountain was going to be open. We were told it was going to be 
temporary. I was there. I heard the testimony. I saw the 
letters that came from the Department of Energy. I did not vote 
to store, because I was very skeptical until Yucca Mountain was 
open that it would be there. Mr. Chairman, this is a very, very 
serious issue, especially if we are considering nuclear power 
as part of the mix, which we should. But then we need to 
grapple with this and not push it down for another hundred 
years, for another two, three, five generations to deal with. 
Thank you, Mr. Chairman.
    Chairman Spratt. I thank the lady. Mrs. Lummis?
    Mrs. Lummis. Thank you, Mr. Chairman. My question is for 
Mr. Harris. Why withdraw Yucca Mountain's license application 
with prejudice? I mean, if we are going to have a Blue Ribbon 
Commission that is going to consider options, and as Dr. 
Johnson has pointed out the technology is such that we really 
need to step back in her view and evaluate all these options, 
why would you dismiss with prejudice? Why not dismiss without 
prejudice, so if the Blue Ribbon Commission ultimately 
determines that Yucca Mountain given all the options explored 
is exactly the right place? You have pulled it off the table.
    Mr. Harris. Thank you, Congresswoman. So I work with people 
who routinely use words like petaflops. And my job is to put 
into legal terminology what I understand their policy decisions 
to be. We filed our motion with prejudice because I understood 
it to accurately reflect the decision of the Department, the 
Secretary, and the administration to end the Yucca Mountain 
process and to move ahead with a different plan. Having said 
that, of course, that is being considered by the Nuclear 
Regulatory Commission now. And whether or not we are ultimately 
able to withdraw it with prejudice will be decided by the NRC. 
I just want to point out, it is not a unilateral move we are 
making. We are seeking permission to do these things and I 
sought it in this sense because it is my understanding it 
reflects the decision that was made.
    Mrs. Lummis. So Mr. Harris, you are directly contradicting 
what Dr. Johnson testified to earlier in response to a question 
by Mr. Simpson, and which is that all options are on the table. 
So, how can----
    Mr. Harris. If I contradicted her I promise you I did not 
do so deliberately. My understanding, again, of the 
Department's policy is that Yucca Mountain is in fact off the 
table. I believe what she said in response to the earlier 
question was that the Blue Ribbon Commission is not a siting 
commission and is looking at alternatives. I may have 
misunderstood, but that was my understanding of her testimony.
    Mrs. Lummis. Excuse me, it might have been my 
misunderstanding. Dr. Johnson, so you really are saying Yucca 
Mountain is off the table? Completely off the table?
    Ms. Johnson. Yucca Mountain is not being considered as----
    Mrs. Lummis. Well, that is, no. Is it off the table?
    Ms. Johnson. It is off the table. Yucca Mountain as a site 
is off the table.
    Mrs. Lummis. Because? What is the scientific justification 
for taking Yucca Mountain off the table?
    Ms. Johnson. Well, as I mentioned earlier, the Secretary 
said over the last two decades we have made great strides in 
the understanding of not only the forms of nuclear waste but 
how to manage the back end of the fuel cycle, reduce 
potentially the amount of nuclear waste, and therefore, come up 
with a better solution to managing the back end of the fuel 
cycle. And the only thing I just want to say, if I may----
    Mrs. Lummis. Dr. Johnson?
    Ms. Johnson. Yes?
    Mrs. Lummis. I apologize, because we are on a clock.
    Ms. Johnson. Yes.
    Mrs. Lummis. And you do not see the clock.
    Ms. Johnson. Okay.
    Mrs. Lummis. So, you are saying that the panel has 
determined that scientifically there is something wrong with 
Yucca Mountain?
    Ms. Johnson. That is not what I said. What I said is the 
panel, the committee, the Blue Ribbon Commission, is not a 
siting commission, so it is not considering any particular 
site. It is considering all options to deal with the back end 
of the fuel cycle and to deal with spent nuclear fuel and high 
level waste.
    Mrs. Lummis. Dr. Johnson, President Obama in one of his 
first actions as President, was to send a memorandum to 
agencies saying, ``Science and the scientific process must 
inform and guide the decisions of my administration. The public 
must be able to trust the science and scientific process 
informing public policy decisions.'' Is the Blue Ribbon 
Commission adhering to this memo when you are not, when you are 
saying there is no scientific justification for taking Yucca 
Mountain off the table?
    Ms. Johnson. I did not say that.
    Mrs. Lummis. Okay, so what are you saying?
    Ms. Johnson. What I said was, is that the Blue Ribbon 
Commission is being stood up to consider all options to manage 
the back end of the fuel cycle, and to make recommendations for 
a best possible solution that would have broad support.
    Mrs. Lummis. Okay, so now the issue is public support?
    Ms. Johnson. No, I did not say public support. I said broad 
support. The Blue Ribbon Commission is comprised of, it is an 
interesting commission as you know. It has got academics, it 
has got government, it has got not for profit, that are going 
to be considering what is the best possible way to proceed to 
manage the back end of the fuel cycle from an energy policy 
perspective.
    Mrs. Lummis. So it is energy policy? Not public policy?
    Ms. Johnson. The Blue Ribbon Commission is being set up to 
make recommendations to the Secretary of the Department of 
Energy on the best method and way to go after managing the back 
end of the fuel cycle.
    Mrs. Lummis. Thank you, Mr. Chairman. I have to say, you 
know, I share the frustration of my colleagues on this 
Committee with the scientific response being lacking. Thanks, 
Mr. Chairman. I yield back.
    Mr. Scott. Thank you, Mr. Chairman. Mr. Hertz, what is the 
annual amount of payments we are making based on the 
liabilities so far?
    Mr. Hertz. I am not sure I can give it to you on an annual 
basis. I think one of the things I testified to is the increase 
in what our liability has been found since the year I 
testified. As I think I said, our current liabilities in the 
litigation, although some of it is still subject to appeal, is 
about $2 billion. Last year when I testified, it was only $1.3 
billion.
    Mr. Scott. Now, once we are on the hook for liability you 
would expect that to continue, and others will come in, and 
that number will grow. Is that right?
    Mr. Hertz. Well, a couple of things I have said. Some of 
those cases are still on appeal, so some of those judgments 
that are in that number may get reduced, one. Two, I think all 
of the utilities who could have sued us, virtually all of them 
have sued us. As I said, they sue us for a period of time up 
until they file their complaint. And----
    Mr. Scott. Right. And then once you get judgment on that, 
then the next year, six months later they are going to come 
back for some more.
    Mr. Hertz. Six years, six years later.
    Mr. Scott. Six years later they are going to come back for 
some more.
    Mr. Hertz. Correct. Now----
    Mr. Scott. So, once they have come in you would expect 
those to continue, you have to pay, and that number is going to 
grow.
    Mr. Hertz. Well the total number will certainly grow. There 
is no question about it. Whether the amount each year grows per 
utility, I do not think we know.
    Mr. Scott. Well, this is the Budget Committee. We are 
trying to look for a number.
    Mr. Hertz. Right. And I think the only numbers that we 
really have is the estimate from the Department of Energy, 
which was I believe about $13 billion in total liability when 
they were predicting that----
    Mr. Scott. Well, if you can give us some numbers as to what 
we are on the hook for now, and how much we can expect it to 
grow, that would be helpful to this Committee.
    Mr. Hertz. You know, again, the best I can do is the 
numbers I have given you, and told you the amount that is 
coming up in trials over the next two years, which----
    Mr. Scott. Okay. Well, if you can come up with some numbers 
that would be helpful because we are going to have to budget 
for some of this. Now, the, Dr. Johnson you have indicated that 
you have withdrawn, you made a motion to withdraw the 
application, right? What basis would the Commission have to 
deny that motion?
    Mr. Harris. You are asking us to argue the other side of 
the case.
    Mr. Scott. If they have the right to say no, how do you 
have the right to be there to begin with?
    Mr. Harris. Well, so the question is, what does the law 
require? Our review of the law is that the Atomic Energy Act, 
the Department of Energy Organization Act, and the Nuclear 
Waste Policy Act, allow the Secretary to make the decision to 
withdraw the application for the facility at Yucca Mountain. 
However, whether or not we are correct in our understanding of 
the law is something that is and will be decided in the first 
instance by the Nuclear Regulatory Commission. And so, we filed 
the motion basically asking for permission to withdraw, setting 
forth our understanding of the law. We have opponents who 
believe our understanding is incorrect.
    Mr. Scott. Well, what is the status, what is the status of 
that request? Were you not rejected?
    Mr. Harris. There is an administrative board, at sort of a 
trial level if you will, at the Nuclear Regulatory Commission 
that denied our motion. It said we misunderstood the law.
    Mr. Scott. Now how many times have you been denied?
    Mr. Harris. We have been denied one time by that board. The 
Nuclear Regulatory Commission on its own immediately issued an 
order asking the parties to brief the questions. One, whether 
it should review that decision? And two, if it is to review 
that decision whether it should affirm it or reverse it? That 
has been fully briefed, by the way, by all of the parties. And 
I anticipate that the Nuclear Regulatory Commission will decide 
the issue sometime in the next few months.
    Mr. Scott. What is the time table for the Blue Ribbon 
Commission to come up with a solution?
    Ms. Johnson. The time table for the Blue Ribbon Commission 
to make their recommendation is a year from now we will have 
received a draft report, and six months later we will receive 
their final report on recommendations.
    Mr. Scott. But that is not, that is not a solution. Then, 
that just gives you some options but not a solution.
    Ms. Johnson. That is correct. That is correct.
    Mr. Scott. So, you will start thinking about it in a year 
and a half?
    Ms. Johnson. We will be, obviously we are doing R and D 
right now in the back end of the fuel cycle. But we are going 
to wait till we get their draft report----
    Mr. Scott. Well----
    Ms. Johnson [continuing]. So that we do not preclude, or 
presuppose, anything that the Blue Ribbon Commission might say. 
And if I could just----
    Mr. Scott. Let me, I want to get into another question. You 
can answer them both at the same time. I think we have 
concluded that it has to go somewhere. If it does not go to 
Yucca Mountain, what was in second and third place?
    Ms. Johnson. So, right now, as I was mentioning before, the 
NRC has said that spent nuclear fuel can be stored on site in 
dry cask storage for up to a hundred years. The International 
Atomic Energy Commission has said that it is safe to be stored 
for up to three hundred years. That does not mean we are going 
to take a hundred years, and it certainly does not mean we are 
going to take three hundred years. It does mean that we have 
time to take a year to step back and get some of the smartest 
and brightest individuals that we have in this country to come 
up with recommendations that will give us a better solution 
than we have right now.
    And that does not preclude that we would not potentially be 
able to move faster than the approach that we are on now. It 
certainly does not mean we are going to take a hundred years. 
But it does give us time.
    Mr. Scott. But if it is not Yucca Mountain, what was in 
second or third place?
    Ms. Johnson. Again, I do not want to preclude the work of 
the Blue Ribbon Commission. And there is not a second or third 
place. We are looking forward to their recommendations.
    Mr. Scott. It was not South Carolina?
    Ms. Johnson. Again, the Blue Ribbon Commission is not a 
siting body, and they are not considering any site anywhere in 
the U.S. or elsewhere.
    Mr. Scott. Well, there must, there must have been second 
and third choices. Yucca Mountain did not come out of the air. 
I mean, you had choices. What, did----
    Ms. Johnson. Yucca Mountain, I believe, was decided on over 
the course of the last twenty years. So, it was not just this 
last----
    Mr. Scott. Has anybody suggested that another place is more 
appropriate?
    Ms. Johnson. Again, this is not a siting, the Blue Ribbon 
Commission is not a siting commission. So, we are not 
considering any particular site.
    Mr. Harris. Congressman, if I can help? At one point a 
number of different locations were being considered. At some 
point, Congress decided that the Department of Energy should 
proceed only with Yucca Mountain. I do not recall the specifics 
of that, and did not prep myself on that for this hearing. But 
there were a number of other sites that we were to consider, 
and Congress decided that we should proceed with Yucca 
Mountain.
    Chairman Spratt. Mr. Nunes?
    Mr. Nunes. Thank you, Mr. Chairman. Mr. Harris, you seem 
fairly convinced that you are reading the law the right way and 
that the Department of Energy, and the Secretary has the 
decision to close Yucca Mountain. You know, and despite Ms. 
Johnson just said that for twenty years the Congress was 
heading down the road of developing Yucca Mountain. And I just 
wonder, what are you going to do with Yucca Mountain now that 
you have decided to close it?
    Mr. Harris. I am convinced of my legal opinion, which 
probably is not a shock if you talk to lawyers very often. But 
I would have to defer to the Under Secretary about what will 
happen with Yucca after that.
    Mr. Nunes. I would like to see the plan for what you guys 
are going to do with it. Casino under the ground or something 
in Nevada? I would be----
    Ms. Johnson. With all due respect, I am not sure that that 
is actually being planned right now. But I could take that 
under advisement, I guess.
    Mr. Nunes. Well, if you guys could get back to me with what 
the plans would be if it was in fact closed down?
    Ms. Johnson. Yes, sir. I will take that as a----
    Mr. Nunes. And Mr. Chair, I would like to yield to Mr. 
Simpson. He had an additional question. I would like to yield 
the rest of my time to Mr. Simpson.
    Mr. Simpson. Thanks, Mr. Chairman. There were two sites 
being considered besides Yucca Mountain. One of them was, there 
were a number of them, and it was down to three sites. Hanford, 
Washington, and a place in Texas, and Congress ultimately 
decided Yucca Mountain would be the final place.
    And I also want to clear up, people seem to get Yucca 
Mountain and the Blue Ribbon Commission confused. The Blue 
Ribbon Commission is a commission that is going to look at the 
processes of how we deal with nuclear waste, and whether we can 
do it in a more efficient manner, whether we can reduce the 
volume of waste through reprocessing, other types of things. 
But ultimately, I think everybody agrees that you are going to 
have to have a geological repository at some time, at some 
location. Does that mean the other places are back on the 
table? Probably so, if the only place we are not going to 
consider is the place we have done fifty-two scientific studies 
on to make sure that it is the appropriate and everything else. 
The only place we know more about than anyplace else on Earth, 
we are not going to consider it.
    So, but this question. Is the Department considering in 
their budget the fact that we are currently investing, I cannot 
remember what, $14 billion in the waste treatment plant at 
Hanford, that will design waste based on the storage 
requirements at Yucca Mountain? And that we will probably have 
to redesign and rebuild much of that waste treatment, or at 
least a portion of that waste treatment plant, when we finally 
at some time ultimately come up with a decision of where to put 
it, and the requirements for that specific location? That we 
will have invested a whole lot of money based on Yucca Mountain 
being the place that will no longer be valid?
    Ms. Johnson. Thank you very much for the question. So, the 
waste treatment plant at Hanford is a very robust way of 
handling both low level waste and high level waste. The low 
level waste is not destined to go to Yucca. The high level 
waste is.
    Mr. Simpson. Right.
    Ms. Johnson. So, because WIPP right now does not receive 
high level waste, because it is such a robust method, the glass 
vitrification, it would be suitable for long term storage 
appropriate for I believe any recommendation that might come 
out of the Blue Ribbon Commission.
    Mr. Simpson. Would the, well you are going to have to have 
a siting location, and that siting location is going to have to 
have requirements just like Yucca Mountain has requirements. If 
the waste that is produced by the waste treatment plant in 
Hanford does not meet those requirements of a new location, 
because we do not know what that new location is and what those 
requirements will be, are we going to have to invest a lot of 
money in redoing this?
    I guess what bothers me a whole lot, within the Department 
of Energy and our policy, the government's policy over the last 
fifty years, is that we spend a lot of money and then respend a 
lot of money as we change as things go on and on and on. We 
buried waste out to the INL for years under the ground because 
guess what? Ground was the greatest protection there was. 
Unfortunately, it caused us some problems. Now, we are spending 
billions of dollars digging up that waste and sending it to the 
WIPP site. Are you worried? Is the Department looking at all 
this stuff?
    Ms. Johnson. So, Hanford has five different elements to it, 
as you probably know.
    Mr. Simpson. Right.
    Ms. Johnson. So, there is the waste tanks themselves, there 
is the low level waste facility, there is a high level waste 
facility, there is an analytical laboratory, and the balance of 
systems. Hanford is on track to come on line between 2019 and 
2020. So, where we are now is we believe that the processing 
that we have designed going on at Hanford will be able to 
handle low level waste to go to WIPP, high level waste to go to 
a permanent storage, and will be consistent and compatible with 
the recommendations that come out of the Blue Ribbon 
Commission.
    Mr. Simpson. Thank you.
    Chairman Spratt. Mr. Etheridge?
    Mr. Etheridge. Thank you, Mr. Chairman. And let me thank 
you for this hearing, and thank our witnesses for your 
testimony. I do not need to remind any of us, but I think it 
goes without saying that nuclear power is an important part of 
our alternative and renewable energy debate. And for my home 
state it is a big piece because they are looking at expanding. 
And as a part of our nation's effort to reduce our dependence 
on foreign oil as a way to help level that up and down of the 
cost of energy over time. And I think it will help contribute 
to international stability where we now have a lot of 
instability. And I think an important priority has to be in 
that process for reducing our national debt. And that is really 
what this Committee is about, is talking about budgeting.
    I just came from a meeting a few minutes ago that I chair 
with some new Dems about, I co-chair that Committee on Budget 
Discipline, and we have been talking about that. So, I am 
concerned about the cost we are talking about here. Because 
every time we, as we say on the farm, we replow a field, it 
costs some energy to replow that field. And we are spending 
money to replow it. And depending on which numbers you come out 
with, we are talking about about $13.1 billion or somewhere in 
that number. That is a lot of money. And these dollars affect 
every taxpayer.
    So, let me ask any of you three who want to respond to 
this. What are our options to reduce this liability and protect 
the taxpayers' investment, number one? And number two, we have 
talked about now, and I know this is, you said Yucca Mountain 
is closed. But would it be less expensive or more expensive if 
we did use that site? And are there other possibilities that 
would work that will help protect the taxpayer? That is really 
what we are about here. How do we protect the people who pay 
the bill?
    Mr. Harris. Congressman, can I perhaps start off with that 
question? The $13.1 billion you are referring to is the current 
estimate of potential liability for paying utilities for not 
having taken the spent nuclear fuel. We can----
    Mr. Etheridge. Let me interrupt you just a second, then I 
will come back to your question.
    Mr. Harris. Surely. Yes, sir.
    Mr. Etheridge. We use a lot of nuclear fuel. And in my home 
state, we have invested about $868 million so far into the 
fund.
    Mr. Harris. Into the fund, yes, sir.
    Mr. Etheridge. Okay, excuse me. Go ahead.
    Mr. Harris. Yes, sir. I do understand that. The point is, 
the government's liability is solely a function of when it 
begins to take the waste and how much of that waste it takes. 
It is a direct correlation. It is conceivable to come up with a 
plan that would allow us to begin to take waste even before 
Yucca Mountain could have come online. For example, and this is 
just a hypothetical, we are currently prohibited by law from 
doing interim disposal. That is a legal prohibition. Were the 
Blue Ribbon Commission to recommend interim disposal, I am not 
saying it will. But were it to, were Congress to decide this 
was a good idea, I am not saying it will or should, but there 
are possibilities that would allow us to go forward to take 
nuclear waste more quickly than we even could have with Yucca 
Mountain. And that would have a direct impact on the liability 
of the United States government to the utilities.
    Mr. Etheridge. Any comment, Dr. Johnson?
    Ms. Johnson. I wanted, if you would not mind repeating your 
second question? But before you do that I just want to say that 
I am very aware that the State of North Carolina is largely 
dependent right now on coal, with sixty-some percent of it 
coming from coal, and coal that is actually imported from 
surrounding states. And so, I do believe that nuclear will be 
an ever bigger part of the solution, particularly for states 
such as----
    Mr. Etheridge. And they are in the process of looking at 
more nuclear. But my point is, that they have already paid a 
substantial amount in it.
    Ms. Johnson. Right.
    Mr. Etheridge. And the longer we wait, that cost is going 
to continue to be out there with no resolution. Mr. Hertz?
    Mr. Hertz. Let me say I agree with Mr. Harris. You know, 
the government's liability is a direct function of how quickly 
and how soon we begin to pick up the waste. I think the other 
possibilities include if we are able to come up with a 
settlement plan that substitutes administrative resolution of 
the utilities' claims as opposed to court litigation. You know, 
there could be, you know, it is not, it should come as no 
surprise that often in court litigation you get extravagant 
claims, at least initially. You know, in an administrative 
process where the rules were more well defined in terms of what 
the government would pay for in terms of damages versus what it 
will not pay for, could ultimately save the government some 
money as well. And that is one of the things we are looking at 
in terms of a, you know, a long range settlement, or if 
Congress were to enact some kind of administrative mechanism to 
resolve these claims as opposed to litigation.
    Mr. Etheridge. Thank you. I think the issue is not about 
litigation, because that is after the fact. The question is, we 
have not gotten the job done so the taxpayers are paying twice. 
They are paying through the rate that is going into the fund. 
And ultimately, if there is litigation and a penalty, they are 
going to get to pay a second time, because the government does 
not have any money, it comes from the taxpayer. And I think 
that was the point I was trying to make. I yield back, Mr. 
Chairman.
    Chairman Spratt. Mr. Larsen?
    Mr. Larsen. Thank you, Mr. Chairman, for the hearing. And 
just, I would like to start by asking unanimous consent to 
enter for the record a letter that was sent earlier this month 
signed by ninety-one members of the House regarding this issue 
to Secretary Chu? Unanimous consent to enter that into the 
record?
    Chairman Spratt. Without objection, so ordered.
    Mr. Larsen. Thank you.
    [The letter to Secretary Chu follows:]
    
    
    
    Mr. Larsen. I was going through the testimony of Mr. 
Wright, who is testifying next. And page eight of his testimony 
is actually sort of Washington State's argument in this. And I 
think it is just important to note that, and this echoes what 
Mr. Etheridge said, that the states of Idaho, South Carolina, 
and Washington State indeed have agreements with the federal 
government with a date certain to move defense waste out of 
their respective states. Significant penalties to the federal 
government are incurred if the agreements are not complied 
with. It is yet another way that all taxpayers and not just 
ratepayers are having to pay for compensation for the 
government's failure to build the site at Yucca. And as well, I 
want to make a point before asking a question, that earlier the 
discussion was about what the federal government has had to pay 
to litigate. There is a large amount of money as well that 
states are having to pay to litigate to get the federal 
government to do its job. And we are certainly paying that cost 
in Washington State. Fortunately, there is a firm consensus in 
Washington State that the federal government should do its job 
and clean up Hanford as well as moving forward on Yucca.
    But I would like to ask Dr. Johnson to reconcile a 
statement from the charter of the Commission on, its advisory 
committee charter. Three C: Options for permanent disposal of * 
* * Excuse me, the Commission is supposed to look at options 
for permanent disposal of used fuel and/or high level nuclear 
waste including deep geological disposal. So, in fact, the Blue 
Ribbon Commission is in fact looking at deep geological 
disposal, but apparently not looking at Yucca Mountain. Is that 
correct?
    Ms. Johnson. That is correct.
    Mr. Larsen. So, if they are not into a siting decision, it 
seems to me that they are looking at deep geological disposal, 
certainly they are not going to point to a place on the map. 
But it seems to me that, and I do not want to prejudge what 
they are going to say, but I will. They are going to say 
something along the lines, if they get to this point, they are 
going to have to say, ``Look, your disposal site has to have 
these characteristics, it needs to be so far away from folks,'' 
and it is going to, you know, the map is going to shrink on us. 
And it is going to end up being maybe not an actual piece of 
acreage but it is going to be a general direction. It certainly 
seems to me. Does that make sense to you?
    Ms. Johnson. Well, thank you very much for the question. 
Again, the Blue Ribbon Commission is not a siting organization. 
It is considering, as you said----
    Mr. Larsen. I am sorry, I know they are not a siting 
organization. I am asking you if my statement makes sense to 
you, that if they are not going to site but they are looking at 
deep geological disposal they are going to have to look at 
certain geological characteristics around this country. And 
that is going to shrink the map for where deep geological 
disposal goes. Does that make sense to you or not?
    Ms. Johnson. So, the Blue Ribbon Commission is looking at 
many options. It is looking at processes, as well as policy----
    Mr. Larsen. Right, I got that.
    Ms. Johnson [continuing]. As well as the technology. So, we 
do not want to presuppose what they are going to recommend.
    Mr. Larsen. I do not either. Does it make sense to you what 
I said?
    Ms. Johnson. If you would not mind, could you say that one 
more time?
    Mr. Larsen. No.
    Ms. Johnson. Okay.
    Mr. Larsen. So, back to high level waste in Hanford, 
although you do not want to prejudge what they said, it sounded 
like you prejudged the Blue Ribbon Commission when you said the 
high level waste at Hanford with the WTP would be consistent 
and compatible with Blue Ribbon Commission recommendations. 
That sounds to me like you are prejudging what they might say 
about high level waste at WTP.
    Ms. Johnson. The high level waste at WTP is going to be 
stored in, as the plan of record is right now, in a very robust 
vitrification form that would be able, in my view, to be stored 
anywhere. And I am not going to presuppose the options that the 
Blue Ribbon Commission is going to come up with for that 
ultimate long term disposition storage.
    Mr. Larsen. No, I do not think you will, except earlier you 
did. You said it would be consistent and compatible with Blue 
Ribbon Commission recommendations. I will go back and look at 
what you said earlier to clarify what I said.
    Ms. Johnson. Okay.
    Mr. Larsen. So, it sounded to me like you were in fact 
prejudging one aspect of what they might come up with.
    Ms. Johnson. Well, I also said earlier that the Hanford is 
going to come online in 2019 and 2020. We will have the 
recommendations from the Blue Ribbon Commission, the draft in a 
year and the final report within eighteen months.
    Mr. Larsen. I would also say that that is not on track. On 
track was about 2015. It is off track, and it is going to be 
about 2019 to 2020.
    Ms. Johnson. Right.
    Mr. Larsen. Just for the record.
    Ms. Johnson. Yeah. And I appreciate your comments there. As 
you know, it has been rebaselined, and we have a new consent 
decree that has been established. And we have with the new 
baseline to finish this by 2019 or 2020. Thank you.
    Mr. Larsen. Right. Thanks. Thank you, Mr. Chairman.
    Chairman Spratt. Mr. Becerra?
    Mr. Becerra. Thank you, Mr. Chairman. And thank you, the 
three of you, for your patience in answering the questions. I 
apologize for not being able to be here for the entire hearing, 
but I would like to ask a couple of questions. My understanding 
is, and maybe this has already been discussed so please forgive 
me if you are going to be repetitive in your response. My 
understanding is that whether or not we were to move forward 
with Yucca Mountain or any other potential site, that we still 
have not resolved the issue of what we do with, how we dispose 
of safely, with all of the nuclear contaminated materials that 
we might have generated by 2020. Is that still the case? And 
Dr. Johnson, why do I not ask you that question.
    Ms. Johnson. Right. Thank you very much. We have learned a 
lot over the last twenty years about the technology and the 
research involved with managing the back end of the fuel cycle. 
We have learned that there are ways to modify the forms of some 
of the waste. We have learned about how to be better about 
proliferation proof, or I should say resistant, technologies 
that may involve recycling. And I think at this moment, given 
the way that technology has accelerated, we want to step back 
and see are there better solutions for managing the back end of 
the fuel cycle? And hence potentially reducing the amount of 
waste that we would be storing going forward?
    Mr. Becerra. Okay. So, there is some hope that we can come 
up with better ways to package the waste so that perhaps we 
will be able to more efficiently not only store it but dispose 
of it?
    Ms. Johnson. I think there are ways that we would consider 
that would be different than we are doing now. That does not 
mean that that would not be compatible with we are doing at the 
WTP. Because right now if you look at where we are with regard 
to the whole design cycle, there is still time should we 
choose. And we still continue to look for best practices to 
reduce the cost to the taxpayer.
    Mr. Becerra. Yeah. And my sense is that once we make a 
decision on how to move forward, whether it is Yucca Mountain 
or anything else, we want to make sure that we have used every 
available piece of evidence and science to help guide us. 
Because once we move in a particular direction, it will be a 
heck of a lot harder to turn away from that and come up with 
something else.
    Ms. Johnson. Is that a question, or----
    Mr. Becerra. Or a comment.
    Ms. Johnson. Oh, okay.
    Mr. Becerra. But I am assuming that we want to get it 
right.
    Ms. Johnson. Well, I think again, as I said, and before you 
were here, is that we are at an interesting time in the history 
of our nuclear power industry. And we started thirty years ago 
with the Nuclear Waste Policy Act, and times have very much 
changed in thirty years. And I think that one of the things 
that I realized in thinking and preparing for this briefing, is 
just how far we have come with our computational efforts. Where 
we can model and simulate what we would be doing in the back 
end of the fuel cycle, and point to opportunities to come up 
with a better solution. And that is a tool we have not utilized 
before for this particular application. We have utilized it 
brilliantly in the Stockpile Stewardship Program.
    In 1993, after the Comprehensive Test Ban Treaty, we 
decided we no longer were going to explode nuclear weapons in 
order to understand their aging. And therefore, what we had to 
do is combine simulation and modeling at a very detailed level 
with some of the experimental data that we had in order to 
predict how those nuclear materials would react and nuclear 
weapons would age over time. We have been very successful at 
doing that.
    We are in a position now where we can do the same thing and 
apply it towards clean up, apply it towards managing the back 
end of the fuel cycle, and give us opportunities to do a better 
job and a better solution. So, why not take advantage of that 
knowledge now, take a moment, step back, and see if there is a 
better solution? Because as the Secretary said, we can do 
better.
    Mr. Becerra. I do not know what the solution is. I do know 
this. That we are asking you to captain the USS Enterprise and 
go where no human being has gone before. And for that reason, I 
hope that what you will do is apply every bit of brain power 
and evidence and technology that we have within our disposal to 
try to come up with a solution that can unify the country 
behind a particular proposal. I do not believe at this stage we 
are there. I appreciate the work that you have been trying to 
do. I understand the frustration that many feel. And I suspect 
we will continue to see lawsuits generated for any number of 
reasons.
    But what I would urge you to do is to watch a few of the 
previous episodes of Star Trek and get a sense of how Captain 
Kirk was able to always prevail. Because we have to make sure 
that when we go where no human being has gone before, that we 
end up on the right planet. So, I thank you for having come and 
provided more insight on this issue. Mr. Chairman, I thank you 
very much. I yield back the balance of my time.
    Chairman Spratt. Mr. Doggett?
    Mr. Doggett. I have no questions at this time, Mr. 
Chairman.
    Chairman Spratt. Mr. Simpson, do you have anything further?
    Mr. Simpson. No, I have been questioned out.
    Chairman Spratt. I have a couple, then we will call it 
quits. Looking back at the history of the defense waste 
program, and the defense nuclear program in particular, when we 
have come to junctures like this and had critical decisions to 
make, we have typically turned for outside advice to the 
National Academy of Sciences. And they have typically come back 
with very, very skilled and expert answers to our questions. 
Why in this case did we not follow that precedent, and choose 
for the membership of this Blue Ribbon Commission the NAS, 
National Academy of Sciences, as opposed to the group of 
individuals? All of whom are quite, quite renowned in their own 
right, but quite a few of whom are not technically versed in 
the subject matter. Why did we not choose to simply go back to 
the NAS and ask them for guidance?
    Ms. Johnson. Thank you very much for the question. As you 
said, the Blue Ribbon Commission is a committee, a commission, 
of very esteemed and distinguished individuals. And they do 
include members of the National Academy. They also include 
individuals that have served the country, including Senators 
Domenici and Hagel, and they are chaired by General Brent 
Scowcroft as well as Congressman Lee Hamilton. And I think that 
this distinguished committee will discharge their duties 
diligently and give us an excellent report.
    Chairman Spratt. Well, thank you for your----
    Mr. Simpson. Mr. Chairman?
    Chairman Spratt. Mr. Simpson?
    Mr. Simpson. I do have one other comment or question, 
because I do not know that I got a really clear answer. Mr. 
Becerra mentioned that we have to make sure that we get this 
right. And I am not sure that there is any getting it right. 
What we can do is use the best technology that we have at the 
current time, and I am sure forty years from now it will be 
different. And we will say, ``You know what? If we had known 
this back then, we could have done this.'' Just like we are 
saying that now about what we decided in 1980. And I think that 
is what this Blue Ribbon Commission is all about. So, I have no 
problem with what the Blue Ribbon Commission is looking at.
    But as I have stated, and I do not know that I got a clear 
answer from you, do you disagree with the Secretary of Energy 
that a geological repository, regardless of what you do. 
Regardless of what process you use, a geological repository 
will be needed at some time?
    Ms. Johnson. I would never disagree with the Secretary.
    Mr. Simpson. That is why I qualified the question that way.
    Ms. Johnson. Stepping back again, you know, I understand 
what you are saying about, well, forty years from now we have a 
different view of what is going on. You know, let me see if I 
can put it in the way that there has been extraordinary 
progress over the last thirty years with regard to computation. 
With regard to our knowledge about the basic materials, and 
with regard to transuranic waste, high level waste, low level 
waste. And I think given that right now, when we are 
considering restarting, and we are restarting, and this 
administration has signaled its strong interest in restarting 
the civilian nuclear energy program, that it gives us a chance 
to take a year and six months from now to step back and say, 
``Let us find a better solution with broad support.''
    Mr. Simpson. That will end up in a geological repository?
    Ms. Johnson. Again, I do not want to preclude what the Blue 
Ribbon Commission might recommend.
    Mr. Simpson. Well, if they can find something else, that 
would be wonderful. But nobody believes they will, and nobody 
believes that is possible. That ultimately there is going to be 
a pile of gunk that has to go somewhere.
    Chairman Spratt. Mr. Scott has a further question.
    Mr. Scott. Just to follow up on the time table for the Blue 
Ribbon Commission, you said in a year to year and a half you 
would get a recommendation. And then I guess at that point we 
will, they are not a siting committee, so at that point we will 
start looking for a site? As the gentleman from Idaho just 
mentioned. It has taken us, what, twenty or thirty years to get 
to this point with Yucca Mountain. Once we start, why would we 
not expect it to take twenty or thirty years with whatever site 
is picked, fighting tooth and nail against it, delaying, and 
doing everything they can, filing suit? Why should we think it 
would not take another thirty years to get to where we are now?
    Ms. Johnson. Right. Thank you very much for the question. 
In the charter 3-E, the Blue Ribbon Commission is being asked 
to recommend not only methods and ways to manage the back end 
of the fuel cycle but also for options for decision making 
processes and management of disposal. So, there is also a 
process they will be recommending as well as recommendations 
for how to manage the back end of the fuel cycle. And I have 
full confidence in the Blue Ribbon Commission to recommend 
processes and procedures that can be accomplished in a 
reasonable period of time.
    Mr. Scott. Thank you.
    Chairman Spratt. Thank you. And to our panel, Dr. Johnson, 
Mr. Harris, Mr. Hertz, thank you very much for your patience, 
your forbearance, and for your forthright answers to our 
questions. We appreciate your coming here to participate in 
this hearing.
    Ms. Johnson. Thank you.
    Chairman Spratt. Thank you very much indeed.
    Mr. Hertz. Thank you, Mr. Chairman.
    Chairman Spratt. Our next witness is Mr. David A. Wright, 
who is the Vice Chairman of the Public Service Commission of 
South Carolina. Mr. Wright, welcome indeed. Thank you very much 
for your participation in this hearing. As you may have noted, 
we have made your statement and the other statements part of 
the record so that you can summarize them as you see fit. But 
you may also take your time and review thoroughly what you have 
presented for us. And we very much appreciate your coming. The 
floor is yours.

          STATEMENT OF DAVID A. WRIGHT, VICE CHAIRMAN,
          PUBLIC SERVICE COMMISSION OF SOUTH CAROLINA

    Mr. Wright. Good morning, Mr. Chairman. I guess it is still 
morning. And members of the Committee, my name is David Wright, 
and I am Vice Chairman of the South Carolina Public Service 
Commission. In addition to that, I am past Chairman and current 
member of the Subcommittee on Nuclear Issues and Waste 
Disposal, and a member of the Full Electricity Committee of the 
National Association of Regulatory Utility Commissioners. And I 
also serve as Chairman of the Nuclear Waste Strategy Coalition.
    The issues that you are addressing today are very important 
to South Carolina and any state that is home to commercial 
spent nuclear fuel or the nation's defense waste. I am grateful 
to have this opportunity to represent and share our views 
concerning the disposition of spent nuclear fuel, currently 
stored at nuclear power plant sites that is intended for 
ultimate disposal at the Yucca Mountain Geological Repository.
    By way of the Nuclear Waste Policy Act of 1982, the federal 
government became responsible for disposal of high level 
radioactive waste, including spent or used nuclear fuel from 
commercial reactors. Utilities, ratepayers, and regulators had 
the expectation from the NWPA that the Department of Energy 
would begin initial waste acceptance and disposal in the 
properly licensed and constructed repository by January 31, 
1998. Utility ratepayers have paid and continue to pay for the 
disposal cost of the material. To date, ratepayers in states 
that receive power from commercial nuclear utilities have paid 
over $17 billion into the Nuclear Waste Fund. Including 
allocated interest, the Nuclear Waste Fund today totals almost 
$35 billion, but only a fraction of the money collected from 
ratepayers has actually been spent on the developing of the 
Yucca Mountain repository. The ratepayers in South Carolina, 
Mr. Chairman, have paid nearly $1.3 billion into the Nuclear 
Waste Fund, or more than $2.3 billion when interest is 
included.
    State public utility commissions, like mine, are one of the 
stakeholders on the disposition of used nuclear fuel from 
commercial reactors because the fees paid to the Nuclear Waste 
Fund by the current caretakers of the used fuel, that would be 
electric utilities, are passed onto ratepayers who are supplied 
with electricity from nuclear power generation.
    When the Director of the Office of Civilian Radioactive 
Waste Management within the Department of Energy submitted the 
Yucca Mountain repository license application in June of 2008, 
it was a comprehensive document. The eight thousand page 
document was the culmination of over twenty-five years of 
exhaustive investigation of the site. Like others, I expected 
the NRC to conduct a rigorous review and conduct an open, fair, 
and inclusive adjudicatory process. The filing of the license 
application was an important step, because it appeared to take 
the application out of the political arena and put it under a 
full blown court review that would be based on science, not 
politics.
    Since 1998, when DOE failed to meet its obligation to begin 
waste acceptance for disposal, organizations that I and my 
state are a part of have simply asked that the government 
fulfill its part of the bargain and remove the spent fuel per 
the standard contract, since the utilities and ratepayers 
continue to pay for services not performed. That remains our 
position, as we believe that the license application shows that 
Yucca Mountain will meet the requirements of the NWPA and 
regulations. If Yucca Mountain cannot be licensed through the 
NRC process, or is licensed but not built, we interpret NWPA as 
still requiring DOE to develop and dispose of spent nuclear 
fuel in a geologic repository. Therefore, unless the law is 
repealed or amended to direct otherwise, Congress is the only 
body that can authorize DOE to conduct a site search for 
another suitable repository site.
    This is particularly costly, and most locations where the 
fuel pool cooling storage capacity at the reactor sites has 
long since been filled. In addition, the older fuel in the 
spent fuel pools is being removed and placed in concrete and 
steel containers called ``dry cask'' that are stored outside in 
concrete vaults. More than 62,000 metric tons of uranium is 
currently stored in pools or dry cask storage at nuclear plant 
sites in the United States. This amount increases with each 
refueling cycle, which generally occurs about every eighteen 
months. License applications for at least twenty-four new 
nuclear units have been submitted to the Nuclear Regulatory 
Commission. The amount of spent nuclear fuel to be stored will 
increase as new units are constructed and old units are 
relicensed, usually for an additional twenty years, as is 
happening with numerous reactors.
    Nearly 3,800 metric tons of uranium is stored at four 
nuclear plant sites in South Carolina, Mr. Chairman, which are 
home to seven reactors as you know. Two nuclear units at the 
V.C. Summer Nuclear Station in Jenkinsville, South Carolina, 
have been approved by the South Carolina Public Service 
Commission and are awaiting license approval by the NRC. 
License applications for another two units near Gaffney, South 
Carolina, have been submitted to the NRC but not to the South 
Carolina Public Service Commission.
    This nation will need more base load electric generation as 
the population grows and the economy recovers. Some areas, such 
as the Southeast in general, and South Carolina in particular, 
need for base load generation is needed in the near future. 
Renewable energy, conservation, and efficiency help to lessen 
the amount of base load generation needed but cannot entirely 
eliminate that need. The climate and health impacts of burning 
coal have forced utilities to depend upon gas fired and nuclear 
plants to meet the need for new base load generation. Without a 
solution to the storage of spent nuclear fuel, meaning a 
permanent repository, state regulators may be hesitant to 
approve the construction of new nuclear units, and utilities 
may be hesitant to construct new nuclear units, even if the NRC 
approves the license applications. Such circumstances could 
result in reduced electric reliability, brown outs, and 
increased costs of electricity as gas fired generation would be 
the only option, and its price would increase as the demand for 
natural gas increases, all else being equal.
    Federal courts have already ruled that the federal 
government is liable for the added storage costs past the dates 
agreed in original contracts with spent fuel utilities. The 
Department of Energy already faces at least $1.5 billion in 
court judgments and legal expenses resulting from failure to 
meet the government's obligations. In 2009, when DOE had a plan 
to begin waste acceptance and disposal at Yucca Mountain by 
2017, DOE officials estimated that the liability for sixty-five 
cases could reach $12.3 billion, growing further by at least 
$500 million for each additional year of delay. DOE pays these 
court determined liabilities from the Judgment Fund.
    What is really happening is this: because of the federal 
government's failure to construct a permanent repository, 
ratepayers are paying up to four times for ongoing spent fuel 
storage and future disposal. And that does not include 
decommissioning funds. First ratepayers are paying into the 
Nuclear Waste Fund for storage at the deep geologic repository 
at Yucca Mountain. Second, because of the initial delay, 
ratepayers have to pay through rates to expand and rerack their 
existing cooling pools in order to accommodate more waste. 
Third, ratepayers are continuing to pay through rates to keep 
the waste stored at the existing plant sites in dry cask 
storage. And finally, all taxpayers, not just ratepayers, are 
paying through taxes for judgments and settlements through the 
Judgment Fund.
    Congress should suspend collection of the nuclear waste 
fees until further notice and refund the Nuclear Waste Fund 
money to ratepayers if Yucca is not built. Not counting defense 
waste, over 62,000 metric tons of spent fuel is stored in 
seventy-two operating and shut down reactor sites in thirty-
four states. Individuals and organizations opposed to nuclear 
power will raise questions or even voice fears over safety and 
security at some of these storage facilities. Although the 
utilities and NRC contend that storage is safe and secure, it 
still costs ratepayers big money to implement individualized 
security programs for each of these locations around the 
country. How can this be more efficient, safe, secure, or cost 
effective than having all spent nuclear fuel and defense waste 
at one secure deep geologic location?
    Recently, there has been great interest in reprocessing, or 
recycling as some call it, of spent nuclear fuel. The 
organizations that I am a member of, including NARUC, have 
supported research into reprocessing and recycling and share 
the views that, if there will be substantial global nuclear 
power expansion, there will probably become a time when uranium 
becomes more scarce and expensive, and closing the fuel cycle 
will become necessary. But no matter the future course of this 
country, whether we reprocess, or recycle, or maintain the 
status quo, a geologic repository is still needed for defense 
related, high level radioactive waste that has already been 
reprocessed, or cannot be reprocessed, and the residue from any 
future reprocessing program.
    Finally, the states of Idaho and South Carolina, and maybe 
Washington as was mentioned a while ago, all have agreements 
with the federal government with a date certain to move defense 
waste out of their respective states. There are penalties, they 
are substantial, for the government's failure to comply. And 
that is just another way that the taxpayer, all taxpayers not 
just ratepayers, are going to pay for the government's failure.
    Thank you for the time today, and I appreciate being here. 
And I will answer any questions that you may have.
    [The prepared statement of David A. Wright follows:]

                  Prepared Statement of David Wright,
               South Carolina Public Service Commissioner

    Good Morning, Mr. Chairman and Members of the Committee.
    My name is David Wright and I am a legislatively elected 
commissioner and current Vice-Chairman of the South Carolina Public 
Service Commission. In addition to that, I am the past Chairman and 
current member of the Subcommittee on Nuclear Issues and Waste 
Disposal, and a member of the full Electricity Committee of the 
National Association of Regulatory Utility Commissioners, most often 
referred to as NARUC. I also serve as Chairman of the Nuclear Waste 
Strategy Coalition (NWSC).
    The issues that you are addressing in this hearing are very 
important to South Carolina and any other state that is the home to 
commercial spent nuclear fuel, or the nation's defense waste. I am 
grateful to have this opportunity to represent and share our views 
concerning the disposition of spent nuclear fuel currently stored at 
nuclear power plant sites that is intended for ultimate disposal at the 
Yucca Mountain geologic repository.
    I believe it's important to know how we got to where we are today, 
because it has led to the positions the organizations I represent 
currently hold.
    By way of the Nuclear Waste Policy Act of 1982 (NWPA), the federal 
government became responsible for disposal of high-level radioactive 
waste--including spent or used nuclear fuel from commercial reactors. 
Utilities, ratepayers and regulators had the expectation from the NWPA 
that the Department of Energy (DOE) would begin initial waste 
acceptance and disposal in the properly licensed and constructed 
repository by January 31, 1998, as the law and contracts signed with 
owners of spent fuel required.
    Utility ratepayers have paid, and continue to pay, for the disposal 
costs of the material. To date, ratepayers in states that receive power 
from commercial nuclear utilities have paid over $17 billion dollars 
into the Nuclear Waste Fund (NWF). Including allocated interest, the 
NWF today totals almost $35 billion, but only a fraction of the money 
collected from ratepayers has actually been spent on developing the 
Yucca Mountain repository. The ratepayers in South Carolina have paid 
nearly $1.3 billion into the NWF, or more than $2.3 billion when 
interest is included.
    State public utilities commissions, like mine, are one of the 
stakeholders on the disposition of used nuclear fuel from commercial 
reactors because the fees paid to the Nuclear Waste Fund by the current 
caretakers of the used fuel, the electric utilities, are passed on to 
the ratepayers who are supplied with electricity from nuclear power 
generation.
    When the Director of the Office of Civilian Radioactive Waste 
Management (OCRWM) within the Department of Energy (DOE) submitted the 
Yucca Mountain repository license application (LA) in June 2008 it was 
a comprehensive document. The 8,000-page document was the culmination 
of over 25 years of exhaustive investigation of the site.
    Like others, I expected the NRC to conduct a rigorous review and 
conduct an open, fair and inclusive adjudicatory process. The filing of 
the license application was an important step, because it appeared to 
take the application out of the political arena and put it under a 
full-blown court review that would be based on science, not politics.
    Since 1998, when DOE failed to meet its statutory and contractual 
obligation to begin waste acceptance for disposal, organizations that I 
and my state are a part of have simply asked that the government 
fulfill its part of the NWPA disposal bargain and remove the spent fuel 
per the Standard Contract since the utilities and ratepayers continue 
to pay for services not performed. That remains our position, as we 
believe that the license application shows that Yucca Mountain will 
meet the requirements of the NWPA and regulations.
    If Yucca Mountain cannot be licensed through the NRC process, or is 
licensed but not built, we interpret NWPA as still requiring DOE to 
develop and dispose of spent nuclear fuel in a geologic repository. 
Therefore, unless the law is repealed or amended to direct otherwise, 
Congress is the only body that can authorize DOE to conduct a site 
search for another suitable repository site.
    This is particularly costly in most locations where the fuel pool 
cooling storage capacity at the reactor sites has long since been 
filled. In addition, the older fuel in the spent fuel pools is being 
removed and placed in concrete and steel containers--called dry casks--
that are stored outside in concrete vaults.
    More than 62,000 metric tons of uranium is currently stored in 
pools or dry cask storage at nuclear plant sites in the United States. 
This amount increases with each refueling cycle, which generally occurs 
about every 18 months. License applications for at least 24 new nuclear 
units have been submitted to the Nuclear Regulatory Commission (NRC). 
The amount of spent nuclear fuel to be stored will increase as new 
units are constructed and old units are re-licensed, usually for an 
additional 20 years, as is happening with numerous reactors.
    Nearly 3,800 metric tons of Uranium is stored at four nuclear plant 
sites in South Carolina, which are home to seven reactors. Two new 
nuclear units at the VC Summer Nuclear Station in Jenkinsville, SC have 
been approved by the South Carolina Public Service Commission and are 
awaiting license approval by the NRC. License applications for another 
two nuclear units near Gaffney, SC have been submitted to the NRC, but 
not to the South Carolina Public Service Commission.
    This nation will need more base load electric generation as the 
population grows and the economy recovers. Some areas, such as the 
southeast in general and South Carolina in particular, need more base 
load generation in the near future. Renewable energy, conservation, and 
efficiency help to lessen the amount of base load generation needed, 
but cannot entirely eliminate that need. The climate and health impacts 
of burning coal have forced utilities to depend upon gas-fired and 
nuclear plants to meet the need for new base load generation. Without a 
solution to the storage of spent nuclear fuel, meaning a permanent 
repository, state regulators may be hesitant to approve the 
construction of new nuclear units and utilities may be hesitant to 
construct new nuclear units even if the NRC approves the license 
applications. Such circumstances could result in reduced electric 
reliability, brown outs, and increased cost of electricity as gas-fired 
generation would be the only option and its price would increase as the 
demand for natural gas increases, all else being equal.
    Federal courts have already ruled that the federal government is 
liable for the added storage costs past the dates agreed in original 
contracts with spent fuel utilities. The Department of Energy already 
faces at least $1.5 billion in court judgments and legal expenses 
resulting from failure to meet the government's obligations. In 2009--
when DOE had a plan to begin waste acceptance and disposal at Yucca 
Mountain by 2017--DOE officials estimated that the liability for 65 
cases could reach $12.3 billion, growing further by at least $500 
million for each additional year of delay. DOE pays these court-
determined liabilities from the Judgment Fund.
    What is really happening is this--Because of the federal 
government's failure to construct a permanent repository, ratepayers 
are paying up to four times for ongoing spent fuel storage and future 
disposal--and that does not include decommissioning funds. First, 
ratepayers are paying into the NWF for storage at the deep geologic 
repository at Yucca Mountain; second, because of the initial delay, 
ratepayers have to pay through rates to expand and re-rack their 
existing cooling pools in order to accommodate more waste; third, 
ratepayers are continuing to pay through rates to keep the waste stored 
at the existing plant sites in dry cast storage; and finally, all 
taxpayers--not just ratepayers--are paying through taxes for judgments 
and settlements through the Judgment Fund.
    Not counting defense waste, over 62 thousand metric tones of spent 
fuel is stored in 72 operating and shutdown reactor sites in 34 States. 
Individuals or organizations opposed to nuclear power will raise 
questions, or even voice fears, over safety and security at some of 
these storage facilities. Although the utilities and the NRC contend 
that storage is safe and secure, it still costs ratepayers big money to 
implement individualized security programs for each of these locations 
around the country. As the Office of Homeland Security increases 
security requirements, the cost for security programs at the plant 
sites will increase.
    How can this be more efficient, safe, secure or cost effective than 
having all spent nuclear fuel and defense waste at one secure, deep, 
geologic location?
    Recently, there has been great interest in the reprocessing, or 
recycling as some call it, of spent nuclear fuel. The organizations I 
am a member of, including NARUC, have supported research into 
reprocessing and recycling and shares the view that, if there will be 
substantial global nuclear power expansion, there will probably come a 
time when uranium becomes more scarce and expensive and closing the 
fuel cycle will become necessary.
    No matter the future course of this country--whether we reprocess, 
recycle, or maintain the status quo--a geologic repository is still 
going to be needed for defense-related high-level radioactive waste 
that has already been reprocessed or cannot be reprocessed, and, the 
residue from any future reprocessing program for commercial spent 
nuclear fuel.
    Finally, the states of Idaho and South Carolina, and maybe 
Washington, as well, have agreements with the federal government with a 
date certain to move defense waste out of their respective states. 
There are significant financial penalties to the federal government in 
the agreements for failure to comply--which is yet another way that all 
taxpayers, not just ratepayers, will have to pay compensation for the 
government's failure to build the site at Yucca Mountain.
    Thank you for the opportunity to testify before you today. I look 
forward to your questions. I will also be happy to provide written 
answers to further questions, should you have any I am unable to answer 
today or for which you would like me to provide answers at a later 
date.

    Chairman Spratt. South Carolina has a particular interest 
in this because we have defense waste generated at the Savannah 
River Site as well as bomb grade materials that are being 
brought onto site to be processed into a fuel that can be 
burned in commercial reactors.
    Mr. Wright. Yes, sir.
    Chairman Spratt. Are you comfortable with the, would you 
explain to the Committee the liquidated damages which we have 
in law in the event that the waste accepted in South Carolina 
is not timely processed and removed from the site?
    Mr. Wright. Are you talking about from Savannah River Site?
    Chairman Spratt. Yes, sir.
    Mr. Wright. Well, the South Carolina Commission, Mr. 
Chairman, does not regulate or control SRS. So, I am not 
really, I guess, confident or comfortable answering the 
question because I do not know exactly how much that would be. 
But I would be more than happy to go home and get that answer 
for you, and get that written and submit that.
    Chairman Spratt. If you do that, submit it for the record. 
Before we agreed to accept the bomb grade material in 
particular for reprocessing into fuel we stipulated with the 
Department of Energy that if they failed to perform this in a 
reasonable period of time, and we provided more than what was 
anticipated, then there would be damages payable to the State 
of South Carolina for the delay. Rather than having to prove 
the actual damages, we would be entitled to liquidated damages 
in a very substantial amount.
    Mr. Wright. Yes, sir.
    Chairman Spratt. The purpose being to encourage the 
Department of Energy to do what it was telling us it was going 
to do.
    Mr. Wright. Yes, sir. And my understanding, just from the 
periphery of things where the defense waste in those states are 
concerned, I believe that Idaho's date is the closest date. And 
using that as a model, I know that, I believe they are 
substantial, almost per day costs.
    Chairman Spratt. Does the State have concerns that the dry 
cask storage and the alternative expedients that are being 
considered are adequate from a safety standpoint?
    Mr. Wright. Mr. Chairman, it is my understanding and 
belief, because we are told and nobody really has disputed it 
in proceedings, that in order to get a license for a nuclear 
reactor you have got to prove that the fuel can be safely 
stored on site. But having said that, the deal that was cut 
with the federal government, and the utilities, and the 
ratepayers of this country were, we are going to charge you 
one-tenth of a cent per kilowatt hour, and we are going to 
dispose of your waste in return for that. And it has been 
twenty-eight years, and that has not happened yet.
    Chairman Spratt. I have a few more questions, but let me 
turn to the members who are here now and let me give them an 
opportunity. Mr. Simpson?
    Mr. Simpson. Thank you, Mr. Chairman. And thank you, Mr. 
Wright, for being here. Do not hold me to this, but it seems 
like Idaho's agreement with the federal government, the penalty 
is like $60,000 a day.
    Mr. Wright. That is the number that comes to mind.
    Mr. Simpson. And I think we were fairly cheap. I think 
South Carolina did a lot better job of negotiating. I think 
they were upwards of a million bucks a day or something for----
    Mr. Wright. It very well could be. But I would like to 
research that for the Chairman to be accurate.
    Mr. Simpson. Yeah. But you mentioned waste confidence. In 
order to build a new reactor, we have to have waste confidence. 
They have to show that there is going to be a path forward to 
disposal of the waste. How are we going to do that? How are we 
going to license any new reactors, or power plants, nuclear 
power plants, if we cannot meet that waste confidence rule of 
where the waste is going to go?
    Mr. Wright. Well, I do believe it is going to become issues 
in proceedings. Because the proceedings that have gone forward 
so far have been with the understanding that there was going to 
be a repository built. You know, that change has just been a 
recent announcement, as things go, especially in the Yucca 
Mountain process.
    Mr. Simpson. Yeah. As I understand, it may fall on Congress 
to have to legislate waste confidence. Which I do not think was 
the original intent, but that is what they are talking about 
now.
    Mr. Wright. Well, and that is my understanding, that 
Congress. I think under any scenario Congress has to take the 
lead and has to act on this.
    Mr. Simpson. Right. Should we suspend the taxes being paid 
by the ratepayers that use nuclear power? The tenth of a cent 
per kilowatt hour that they are paying? I was looking at the 
amounts. Most people look at that and say, ``What is a tenth of 
a cent?'' I think in New York it was, like, $81 million a year 
the ratepayers pay there that could stay in their economy. And 
at least suspend it until we decide where we are headed with 
this? Because we have got $24 billion, I think it is, sitting 
in that fund right now.
    Mr. Wright. Well, there is, quite honestly, and my personal 
opinion is I think it ought to be considered and done, yes, 
sir. But there is litigation that is going forward now where 
that very issue is concerned. And NARUC is involved in that.
    Mr. Simpson. Could you tell me in general, what are the, 
what is the status of the storage pools, the capacity that 
currently exists at nuclear power plants around the country? 
Are they getting full, or----
    Mr. Wright. Yes, sir. And I believe, and I have that 
document I think with me. But the Nuclear Energy Institute does 
have a document that I can supply to the Committee that does 
show the reactors, and who is, whose pools are full and are now 
in dry cask, and those that are nearing being full and 
considering dry cask storage.
    Mr. Simpson. Okay. I thank you for being here. This is a 
dilemma that we are going to have to face somehow.
    Mr. Wright. Yes, sir.
    Mr. Simpson. But it is a problem we need to address and 
solve.
    Mr. Wright. Yes, sir.
    Mr. Simpson. I appreciate it. Thank you.
    Chairman Spratt. Mr. Scott, do you have questions?
    Mr. Scott. Yes?
    Chairman Spratt. Do you have questions?
    Mr. Scott. Thank you, Mr. Chairman. Mr. Wright, the federal 
government has made a motion to withdraw its application for 
Yucca Mountain. What do public service commissioners outside of 
Nevada think of that?
    Mr. Wright. Well, they are not real happy about it, I can 
tell you that. I mean, a lot of us, and I can speak 
specifically to my committee, the Subcommittee on Nuclear 
Issues and Waste Disposal, which is made up of commissioners. 
And then, you know, not just my committee, but those that have 
defense waste in the states around the country, or even get 
power from across state lines. They may not have a reactor but 
they do pay into the fund. They do not understand the ``with 
prejudice'' thing at all. And one, we feel, commissioners do 
feel, especially the ones that have been involved in this 
issue, feel like there was a knife taken to us. Because we were 
encouraging working alongside the Department of Energy and 
pushing forward trying to get a license application submitted 
so that we could move forward and get the process started, and 
consider the science of Yucca Mountain. If science proves it is 
not workable, then it is not, and then the Congress can do what 
they want. But the commissioners, we were supportive of that 
and we were all working toward encouraging Congress to move 
forward with funding to make sure the license app could be 
defended, and then it is like they turned on us.
    Mr. Scott. Have the commissioners expressed an opinion as 
to whether or not the federal government has the legal 
authority to withdraw the application?
    Mr. Wright. We do not believe that they do. And I can tell 
you, you know, in South Carolina we are part of that lawsuit 
process. You know, the bottom line is, you know, we have your 
waste, and you have our money.
    Mr. Scott. Now, there is a concept of total life cycle 
costs, when you try to charge for electricity, for example, 
charge for power, that you want to charge the total life cycle 
costs, not just the annual little costs. Because if there is a 
balloon, like disposal costs at the end, you want to have 
collected that going through. If you do not know what you are 
going to do for disposal, how do you set a reasonable cost for 
consumers for their electricity?
    Mr. Wright. Well, I mean, one-tenth of a cent is one-tenth 
of a cent. That is what we are, that is what we are----
    Mr. Scott. That is what you----
    Mr. Wright. The utilities are obligated to charge that to 
the ratepayer.
    Mr. Scott. And the federal government is obligated to take 
the disposed waste, so that is your end cost?
    Mr. Wright. That is what you would think, yes.
    Mr. Scott. Okay. Now, if they----
    Mr. Wright. But, but, taxpayers are having to pay, and 
ratepayers, through the Judgment Fund to settle these suits, 
too.
    Mr. Scott. And if they are paying to settle these lawsuits 
and have this ongoing expense of litigation, is that cost of 
litigation, is that cost passed on to the ratepayers in South 
Carolina? I mean, somebody has got to pay the cost of the 
litigation, if----
    Mr. Wright. Well, and in our State it is the State of South 
Carolina, the City of Aiken, that are involved in the 
litigation, so ratepayers would not be involved in that. There 
is not a utility in my state that is suing. Now, they are suing 
for the Judgment Fund for failure, and there have been 
settlements, I believe with Duke and with SCE&G. So, there have 
been settlements out of the Judgment Fund, but that does not 
come from the Nuclear Waste Fund.
    Mr. Scott. If we are not going to use Yucca Mountain, if 
Yucca Mountain is as we heard ``off the table,'' when would you 
expect us to have a site designated, open, and working?
    Mr. Wright. Well, it is my position personally, and others 
too, but I am going to speak for myself right now. The Nuclear 
Waste Policy Act is pretty clear on that. Congress selected the 
site and went through a long process, and Yucca was selected at 
the end. And that is the law of the land.
    Mr. Scott. And if we start----
    Mr. Wright. And Congress has to change that.
    Mr. Scott. If we start from scratch, and start looking all 
over from scratch, how long do you think it would take to get 
to where we are now?
    Mr. Wright. I would probably, my son would probably have 
great-grandchildren. I really have no idea.
    Mr. Scott. Thank you, Mr. Chairman.
    Chairman Spratt. Mr. Etheridge?
    Mr. Etheridge. Thank you, Mr. Chairman. Thank you, 
Commissioner Wright, for being here today. I guess just like 
our southern neighbor, North Carolina taxpayers are, they have 
invested significantly in nuclear plants, are in the process of 
adding to that.
    Mr. Wright. Yes, sir.
    Mr. Etheridge. Or in the process of trying to do that. And 
we have been paying, trying to move toward building a more 
sustainable energy future, as I said earlier. And we rank, I 
think, probably fifth, or certainly in the top five, in the 
money invested in the Nuclear Waste Fund, somewhere in the 
neighborhood of, short of $900 million. You stated in your 
testimony that ratepayers pay four times----
    Mr. Wright. Yes, sir.
    Mr. Etheridge [continuing]. For waste----
    Mr. Wright. Not counting decommissioning funds.
    Mr. Etheridge [continuing]. Yeah, for waste disposal. I 
would be interested in you expanding for the record how that 
affects the average homeowner's bill each month, or a business 
consumer each month.
    Mr. Wright. Well, every utility, nuclear utility, has to 
come before commissioners for a rate proceeding, especially 
when they are looking at raising rates. Not too many of them 
will come to reduce rates, but you know, we welcome that when 
they do. But people are becoming more and more aware about the 
cost that they are having to pay for, whether it is to store 
the waste on site, the Nuclear Waste Fund fee, the security for 
the location where the waste is stored. And so, they see the 
multiple hits and they are starting to catch onto it, okay? For 
a long time they did not catch onto it. A lot of times even the 
staff of members of Congress did not know about it. But they 
are becoming more educated about it. And so, the more that it 
is talked about and they see it, I think, and especially in 
tough economic times. And it is more aggravated now because the 
cost of commodities, coal, natural gas, all those things that 
we are looking for, base load needs, are going up. And so at 
some point, along with taxes. So, at some point the customer 
and the consumer, ratepayer, taxpayer, they are all at some 
point a ratepayer and a taxpayer for sure, enough is enough. 
And they will, you know, it is going to get more difficult.
    Mr. Etheridge. So, but what are the four times they pay?
    Mr. Wright. The four times they pay?
    Mr. Etheridge. Yes.
    Mr. Wright. They pay to the Nuclear Waste Fund.
    Mr. Etheridge. Right.
    Mr. Wright. Okay? The one-tenth of a cent. Then they are 
paying into the fund, or through rates they are paying to 
enlarge their cooling pools to rerack, to expand to keep more 
waste. Then they are taking the waste that has filled the pool, 
okay? And they have got it, and it has been there for five 
years or longer. They are taking it out of the pool so they can 
put other waste in there to cool it. And then they are putting 
that in dry cask storage, and they are having to pay to store 
that on site. And then the fourth time that they are paying is, 
again is not just a ratepayer but a taxpayer, through the 
Judgment Fund to settle these lawsuits.
    Mr. Etheridge. Thank you, Mr. Chairman. I yield back.
    Chairman Spratt. And for all of these additional steps, the 
reracking and so forth, is that cost being sought and recovered 
in the litigation against the Department of Energy?
    Mr. Wright. I am not exactly sure how that is all, I heard 
Mr. Harris try to explain that. Or maybe it was the gentleman 
over here, Mr. Hertz, and I was a little bit confused about 
that. But I do know that when the expansions are made at the 
nuclear facilities, that the ratepayer is paying that recovery 
cost there. I know that.
    Chairman Spratt. And if this issue is not resolved within, 
say, the next ten years, will it be necessary for the nuclear 
plants in South Carolina to expand their pools for the 
placement of the casks with nuclear waste?
    Mr. Wright. That is a good question, Mr. Chairman. I know 
that if they are full, they just continue to put it in dry cask 
storage. I do not know that they would enlarge the pools 
anywhere. But the new, you know, you have got the new plants 
that are going to be coming on line, two of them for sure, in, 
I think in 2016 and 2017, something like that, at the----
    Chairman Spratt. That is my next question. Despite this 
issue, Duke, Progress Energy, and SCANA, three of Carolina's 
utilities, are still pushing forward with plans for new 
reactors.
    Mr. Wright. Well, the only two that have been through a 
rate proceeding, have been approved, are the two at V.C. Summer 
that are through SCANA, through SCE&G. The other plants have 
not come before us, but there has been paperwork filed at the 
NRC. But there has not been a proceeding before the State. So 
what they are going to do, I could not tell you what the 
utilities' future for Duke or Progress are. But SCANA moved 
forward. But when SCANA moved forward, Yucca was still the end 
site, the geologic repository.
    Chairman Spratt. We have several different engineering 
groups that have kind of merged efforts for several different 
providers, several different power companies. In order not to 
reinvent the wheel, they are working together on technology and 
design of new facilities. And in addition, of course, we have 
others in the State working on the creation of MOX fuel out of 
bomb grade materials.
    Mr. Wright. Yes, sir.
    Chairman Spratt. Have we had any layoffs or significant job 
losses as a result of the decisions by DOE to close Yucca 
Mountain?
    Mr. Wright. I believe there has been some impact at SRS. I 
am not, I can get that for you. But I believe there has been 
some impact, but how much I do not have knowledge of that.
    Chairman Spratt. It was my information that one group in 
particular in the Fort Mill area of the State, near Charlotte, 
closed down an office due to the fact that this decision----
    Mr. Wright. Yes, sir. I am sure that has happened. But to 
quantify it, I could not tell you how many people or, you know, 
what the economic impact is. Although I can certainly get that, 
because the City of Aiken would give me that information.
    Chairman Spratt. If you get it and submit it for the 
record, we would appreciate it.
    Mr. Wright. Yes, sir. I would be glad to do that.
    Chairman Spratt. Any other questions of the witness? Thank 
you very much, Mr. Wright, for coming today. And I would ask 
unanimous consent that members who did not have the opportunity 
to ask questions be given seven days in order to submit 
questions for the record. Thank you very much, Mr. Wright, and 
the hearing is adjourned.
    [The prepared statement of Mr. Connolly follows:]

  Prepared Statement of Hon. Gerald E. Connolly, a Representative in 
                  Congress From the State of Virginia

    Mr. Chairman, thank you for holding this hearing on the budgetary 
implications of the plan to close Yucca Mountain as a nuclear waste 
repository. I look forward to a discussion of the financial issues 
surrounding the storage of our nation's growing stock of spent nuclear 
fuel and other radioactive waste.
    Nuclear and radioactive waste is an unfortunate byproduct of our 
nation's 104 nuclear reactors and power plants, hospital waste, 
industrial waste, federal nuclear weapons programs, and other domestic 
sources. Nuclear power currently generates roughly 20 percent of the 
nation's electricity. Most of the waste from these reactors is stored 
on the individual sites at this time. There is more than 56,000 metric 
tons of waste stored around the country at 121 different sites. In my 
own state of Virginia, more than 30 percent of our electricity is 
generated by two plants at North Ana and Surry. More than 2,000 metric 
tons of waste from the four reactors at those plants is stored on site 
in the Commonwealth.
    For decades, we have heard various proposals on how nuclear waste 
can be made harmless to Americans' health and to the environment. So 
far, none of these proposals have proved viable.
    Radioactive waste also poses a threat to national security and 
serves as a tempting target for those wishing to use the material for 
dirty, radiological bombs or other weapons of terror. Whether we as a 
nation continue to store nuclear waste in many different facilities, or 
move it to one central storage facility, there will be costs associated 
with safely and securely maintaining those storage locations and 
providing for the well being of American citizens.
    The President has made the closure of the Yucca Mountain repository 
a priority, and his Fiscal Year 2011 budget proposal terminates funding 
and saves $197 million. Although $10.4 billion has already been spent 
on the project since its inception in 1982, the total cost has been 
estimated to be $96 billion. Meanwhile, concerns continue over the 
impact of impact of this closure on the nation's ability to continue to 
adequately store spent nuclear fuel and other radioactive waste at 
various locations throughout the nation. In addition, there are 
concerns about the federal government's liability to the commercial 
nuclear power industry for failing to begin removing spent nuclear from 
their facilities. To date, the nuclear utility companies have paid $31 
billion in fees for the Nuclear Waste Fund that may be in jeopardy 
should federal courts rule that the government is required to return 
those funds in the event of the lack of a federal disposal option. In 
addition, due to delays in receiving civilian waste, the federal 
government has paid out roughly $1 billion already, and may be facing 
at least $12 billion in further liabilities.
    The budgetary implications of the nation's nuclear waste storage 
are complex and need to be addressed in a manner that protects the 
environmental, health and fiscal security of taxpayers. I look forward 
to this hearing and the testimony of Dr. Johnson, Mr. Harris, Mr. Hertz 
and Mr. Wright.

    [Whereupon, at 12:22 p.m., the Committee was adjourned.]

                                  
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