[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]






           THE NRC FISCAL YEAR 2015 BUDGET AND POLICY ISSUES

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

                                HEARING

                               BEFORE THE

                    SUBCOMMITTEE ON ENERGY AND POWER

                                 OF THE

                    COMMITTEE ON ENERGY AND COMMERCE
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED THIRTEENTH CONGRESS

                             SECOND SESSION

                               __________

                              MAY 7, 2014

                               __________

                           Serial No. 113-143

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                    COMMITTEE ON ENERGY AND COMMERCE

                          FRED UPTON, Michigan
                                 Chairman

RALPH M. HALL, Texas                 HENRY A. WAXMAN, California
JOE BARTON, Texas                      Ranking Member
  Chairman Emeritus                  JOHN D. DINGELL, Michigan
ED WHITFIELD, Kentucky               FRANK PALLONE, Jr., New Jersey
JOHN SHIMKUS, Illinois               BOBBY L. RUSH, Illinois
JOSEPH R. PITTS, Pennsylvania        ANNA G. ESHOO, California
GREG WALDEN, Oregon                  ELIOT L. ENGEL, New York
LEE TERRY, Nebraska                  GENE GREEN, Texas
MIKE ROGERS, Michigan                DIANA DeGETTE, Colorado
TIM MURPHY, Pennsylvania             LOIS CAPPS, California
MICHAEL C. BURGESS, Texas            MICHAEL F. DOYLE, Pennsylvania
MARSHA BLACKBURN, Tennessee          JANICE D. SCHAKOWSKY, Illinois
  Vice Chairman                      JIM MATHESON, Utah
PHIL GINGREY, Georgia                G.K. BUTTERFIELD, North Carolina
STEVE SCALISE, Louisiana             JOHN BARROW, Georgia
ROBERT E. LATTA, Ohio                DORIS O. MATSUI, California
CATHY McMORRIS RODGERS, Washington   DONNA M. CHRISTENSEN, Virgin 
GREGG HARPER, Mississippi            Islands
LEONARD LANCE, New Jersey            KATHY CASTOR, Florida
BILL CASSIDY, Louisiana              JOHN P. SARBANES, Maryland
BRETT GUTHRIE, Kentucky              JERRY McNERNEY, California
PETE OLSON, Texas                    BRUCE L. BRALEY, Iowa
DAVID B. McKINLEY, West Virginia     PETER WELCH, Vermont
CORY GARDNER, Colorado               BEN RAY LUJAN, New Mexico
MIKE POMPEO, Kansas                  PAUL TONKO, New York
ADAM KINZINGER, Illinois             JOHN A. YARMUTH, Kentucky
H. MORGAN GRIFFITH, Virginia
GUS M. BILIRAKIS, Florida
BILL JOHNSON, Ohio
BILLY LONG, Missouri
RENEE L. ELLMERS, North Carolina

                                 _____

                    Subcommittee on Energy and Power

                         ED WHITFIELD, Kentucky
                                 Chairman
STEVE SCALISE, Louisiana             BOBBY L. RUSH, Illinois
  Vice Chairman                        Ranking Member
RALPH M. HALL, Texas                 JERRY McNERNEY, California
JOHN SHIMKUS, Illinois               PAUL TONKO, New York
JOSEPH R. PITTS, Pennsylvania        JOHN A. YARMUTH, Kentucky
LEE TERRY, Nebraska                  ELIOT L. ENGEL, New York
MICHAEL C. BURGESS, Texas            GENE GREEN, Texas
ROBERT E. LATTA, Ohio                LOIS CAPPS, California
BILL CASSIDY, Louisiana              MICHAEL F. DOYLE, Pennsylvania
PETE OLSON, Texas                    JOHN BARROW, Georgia
DAVID B. McKINLEY, West Virginia     DORIS O. MATSUI, California
CORY GARDNER, Colorado               DONNA M. CHRISTENSEN, Virgin 
MIKE POMPEO, Kansas                      Islands
ADAM KINZINGER, Illinois             KATHY CASTOR, Florida
H. MORGAN GRIFFITH, Virginia         JOHN D. DINGELL, Michigan (ex 
JOE BARTON, Texas                        officio)
FRED UPTON, Michigan (ex officio)    HENRY A. WAXMAN, California (ex 
                                         officio)

                                  (ii)
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                             C O N T E N T S

                              ----------                              
                                                                   Page
Hon. John Shimkus, a Representative in Congress from the State of 
  Illinois, opening statement....................................     1
Hon. Gene Green, a Representative in Congress from the State of 
  Texas, opening statement.......................................     3
Hon. Fred Upton, a Representative in Congress from the State of 
  Michigan, opening statement....................................     4
    Prepared statement...........................................     4
Hon. Henry A. Waxman, a Representative in Congress from the State 
  of California, opening statement...............................     6

                               Witnesses

Allison M. Macfarlane, Chairman, Nuclear Regulatory Commission...     7
    Prepared statement...........................................    10
    Answers to submitted questions...............................    52
Kristine L. Svinicki, Commissioner, Nuclear Regulatory Commission    24
    Prepared statement \1\
George Apostolakis, Commissioner, Nuclear Regulatory Commission..    24
    Prepared statement \1\
William D. Magwood IV, Commissioner, Nuclear Regulatory 
  Commission.....................................................    25
    Prepared statement \1\
    Answers to submitted questions...............................   102
William C. Ostendorff, Commissioner, Nuclear Regulatory 
  Commission.....................................................    26
    Prepared statement \1\

                           Submitted Material

Chart, ``Increase in Operating Reactor Fees Billed Under 10 CFR 
  Part 171 (per reactor),'' submitted by Mr. Pitts...............    35

----------
\1\ Mr. Svinicki, Mr. Apostolakis, Mr. Magwood, and Mr. 
  Ostendorff did not submit prepared statements. Ms. Macfarlane 
  submitted a statement on behalf of the Commission.

 
           THE NRC FISCAL YEAR 2015 BUDGET AND POLICY ISSUES

                              ----------                              


                         WEDNESDAY, MAY 7, 2014

                  House of Representatives,
                  Subcommittee on Energy and Power,
                          Committee on Energy and Commerce,
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 10:05 a.m., in 
Room 2322, Rayburn House Office Building, Hon. John Shimkus 
presiding.
    Members present: Representatives Hall, Shimkus, Pitts, 
Terry, Burgess, Latta, McKinley, Kinzinger, Griffith, Barton, 
Upton (ex officio), McNerney, Tonko, Engel, Green, Capps, 
Barrow, and Waxman (ex officio).
    Also present: Representative Johnson.
    Staff present: Nick Abraham, Legislative Clerk; Charlotte 
Baker, Deputy Communications Director; Matt Bravo, Professional 
Staff Member; Leighton Brown, Press Assistant; Allison Busbee, 
Policy Coordinator, Energy and Power; Annie Caputo, 
Professional Staff Member; Tom Hassenboehler, Chief Counsel, 
Energy and Power; Brandon Mooney, Professional Staff Member; 
Chris Sarley, Policy Coordinator, Environment and the Economy; 
Peter Spencer, Professional Staff Member, Oversight; Jeff 
Baran, Democratic Senior Counsel; Alison Cassady, Democratic 
Senior Professional Staff Member; and Caitlin Haberman, 
Democratic Policy Analyst.
    Mr. Shimkus. Let me call the subcommittee hearing to order 
and recognize myself for--first of all, welcome the 
Commissioners--and recognize myself for 5 minutes for the 
opening statement.

  OPENING STATEMENT OF HON. JOHN SHIMKUS, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF ILLINOIS

    We convene this hearing today to review the Nuclear 
Regulatory Commission's proposed budget for fiscal year 2015 
and related policy issues. At the outset, let we welcome the 
Commissioners. I note that we have had some difficulty 
scheduling you all in past hearings, but the arrangements for 
this hearing went smoothly. Thank you for making yourselves 
available today.
    The NRC plays a vital role in the safety of our Nation's 
civilian use of nuclear energy and technology, a role that I 
strongly support. The NRC, in fact, historically has 
represented the gold standard worldwide for nuclear safety 
regulation. In this context this hearing will help inform our 
oversight of how the NRC is performing the safety mission today 
amidst the current realities of nuclear power generation and 
whether its resources are used prudently.
    Our Nation's nuclear plants are facing economic headwinds, 
struggling to compete with inexpensive natural gas in a time of 
decreased demand for electricity. Four reactors closed 
prematurely last year, and at least one will this year. Others 
may soon follow. The Department of Energy is currently 
analyzing the impact of one-third of our 100 reactors closing.
    The NRC simply cannot ignore that its actions add to those 
economic headwinds. The NRC has acted on its most safety-
significant post-Fukushima items called Tier 1, but it still 
has Tier 2 and Tier 3 to go. One utility has already estimated 
its post-Fukushima cost to be at least $400 million.
    As my colleague Mr. Johnson summarized so well in our last 
hearing, the NRC and the nuclear industry seem trapped in a 
pattern of ever-increasing costs, chasing even smaller 
increments in safety gains. This pattern is not sustainable. 
The NRC recovers 90 percent of its costs from fees charged to 
its licensees. The NRC's response to the closure of those four 
plants was simply to increase the fees on the remaining plants 
by over 20 percent and request 66 additional staff in their 
2015 budget. As the size of our nuclear industry shrinks, the 
NRC cannot pretend that it needs more regulators to oversee 
fewer plants. This is another pattern that is not sustainable.
    Ten years ago the NRC budget was $626 million, 3,040 staff, 
and planned to review 1,500 licensing actions. In fiscal year 
2015, the NRC budget was $1.67 billion, 3,881 staff, and plans 
to review only 900 licensing actions. These licensing actions 
not only are safety related, but are often important to a 
nuclear plant's continued economic viability.
    Yet in our December hearing, Chairman Macfarlane cautioned 
that if sequestration continued, and I quote, ``nonemergency 
licensing activities,'' close quote, would be negatively 
impacted. So I would like to understand how, with 400 million 
more dollars and 800 more people, the NRC is struggling to 
review 40 percent fewer licensing actions.
    Comparing today's NRC with the NRC of 10 years ago shows 
how management efficiency has degraded over the last decade. In 
2004, the NRC expected the number of productive hours from 
their employees to be 1,776 per year. For fiscal year 2014, 
that number is 1,355, a decrease of 24 percent. In 2004, 
corporate support cost $149 million and constituted 24 percent 
of the agency's budget. For fiscal year 2014, corporate support 
is now 46 percent, $486 million, almost half of the NRC's total 
budget.
    In nuclear safety, as with any regulation, a gold standard 
comes at a price, a price ultimately paid by the electricity 
consumers. The NRC simply must improve its financial discipline 
while continuing to deliver that gold standard. As the NRC's 
Principles of Good Regulation state, and I quote, ``The 
American taxpayer, the rate-paying consumer and licensees are 
all entitled to the best possible management and administration 
of regulatory activities,'' and I close quote. The NRC should 
start by returning to its historic levels of efficiency.
    And with that I yield back my time and recognize the acting 
ranking member of the committee, Mr. Green, for 5 minutes.

   OPENING STATEMENT OF HON. GENE GREEN, A REPRESENTATIVE IN 
                CONGRESS FROM THE STATE OF TEXAS

    Mr. Green. I am glad I am not just a substitute.
    Mr. Chairman, thank you for holding this hearing on the 
fiscal year 2015 NRC budget and policies. I would like to thank 
Chair Macfarlane and the other Commissioners for joining us 
this morning.
    On March 11, 2011, an unforeseen, unpredictable natural 
disaster created the worst nuclear disaster since Chernobyl in 
Japan. The incident at Fukushima reactors reminded us what can 
go wrong but also created an opportunity to learn and implement 
new procedures and protections.
    As a result of the Fukushima incident, many nations around 
the world curtailed the development and use of nuclear 
facilities. Germany and Japan moved rapidly towards natural gas 
and coal, in addition to wind and solar facilities, to offset 
the loss in power generation. Other countries have moved 
forward aggressively with new plants, including France and 
China. China has more than 30 plants under construction with 
more expected. The United States, for the first time in 
decades, we are moving forward with new nuclear facilities.
    As we discuss lessons learned, and implement new standards, 
and look at long-term solutions to climate change, we must 
recognize that nuclear energy will play a critical role. The 
Nuclear Regulatory Commission has many responsibilities, most 
importantly protecting public health and safety. The Commission 
is also responsible for licensing and regulating our civilian 
nuclear power, including new designs.
    As we look towards the future of nuclear power, it is 
important that the Commission balance safety and oversight with 
review and certification. The 21st century power-generation 
sector requires a 21st century regulatory scheme. The 
Commission needs to ensure its staff and procedures include 
enough flexibility and resources to encourage the development 
in the nuclear sector. Businesses require certainty from 
regulatory agencies to invest in the hundreds of billions of 
dollars necessary for the design and construction of the new 
facilities. The Commission must also retain the best people 
possible as new designs and new technology will test the limits 
of the old way of doing things.
    Finally, the NRC must face significant challenge related to 
nuclear waste storage. While many on this committee, including 
myself, believe that Yucca Mountain would resolve many of these 
issues we face today, it is not a near-term solution. The 
temporary storage of spent nuclear fuel located in sites around 
the country must continue to be secured until a permanent 
solution can be found. The courts have issued decrees that 
require NRC to complete the safety evaluation review. It is my 
hope that this will be done expeditiously. The American people 
deserve to know about an investment that has approximately 
taken billions and why or why not the spent nuclear repository 
is or isn't feasible.
    Our country is in the midst of an energy revolution that 
the revolution should provide us room to develop all sources of 
power. Rather than relying on other countries, we will have the 
ability to design, construct, and operate as many power-
generation stations as necessary to meet our domestic needs. 
The power-generation sector is the backbone of our economy of 
which nuclear power is a key component. Let us make sure our 
regulatory agencies have the talent and resources required to 
help grow that sector.
    And, again, I would like to thank Chair Macfarlane for 
appearing before the subcommittee. I look forward to your 
testimony.
    Thank you, Mr. Chairman. I yield back my time.
    Mr. Shimkus. Gentleman yields back the time.
    The Chair now recognizes the chairman of the full 
committee, Mr. Upton, for 5 minutes.

   OPENING STATEMENT OF HON. FRED UPTON, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF MICHIGAN

    Mr. Upton. Thank you, Mr. Chairman.
    I appreciate the Commissioners returning to the 
subcommittee today. Chairman Macfarlane, I am also pleased that 
you are going to be returning to southwest Michigan to visit 
both of my two nuclear plants in the next couple of weeks.
    We know that nuclear energy is an indispensable source of 
clean, reliable, affordable power; however, economic headwinds 
are challenging the viability of some plants, with four closing 
last year and more to follow.
    Budgets are, indeed, a statement of policy. The NRC budget 
for fiscal year 2015 shows an increase in resources and 
staffing despite a shrinking fleet of reactors. This will no 
doubt be a topic of conversation today as we look at the short- 
and long-term plans for the agencies and realistic expectations 
for funding levels.
    NRC's gold standard for nuclear safety oversight is 
essential, absolutely, and something that I strongly support. I 
believe that the NRC has appropriately responded to Fukushima 
with several new requirements addressing Tier 1 issues, the 
most safety-significant issues like the station blackout 
scenario and seismic hazard reevaluations.
    As the NRC turns its attention to Tiers 2 and 3, I think 
that it is appropriate for the agency to assess the safety 
benefits that will be realized by the implementation of the 
actions already taken and view these other, less safety-
significant items accordingly. It is incumbent upon the NRC to 
ensure meaningful safety benefits that warrant any further 
requirements.
    [The prepared statement of Mr. Upton follows:]

                 Prepared statement of Hon. Fred Upton

    I appreciate the commissioners returning to the committee 
today. Chairman Macfarlane, I am also pleased that you will be 
returning to southwest Michigan in the coming weeks.
    Nuclear energy is an indispensable source of clean, 
reliable, affordable power. However, economic headwinds are 
challenging the viability of some plants, with four closing 
last year and more to follow.
    Budgets are statements of policy. The NRC budget for fiscal 
year 2015 shows an increase in resources and staffing despite a 
shrinking fleet of reactors. This will no doubt be a topic of 
conversation today as we look at the short- and long-term plans 
for the agency and realistic expectations for funding levels.
    The NRC's gold standard for nuclear safety oversight is 
essential and something I strongly support. I believe the NRC 
has appropriately responded to Fukushima with several new 
requirements addressing Tier 1 issues--the most safety-
significant issues like the station blackout scenario and 
seismic hazard re-evaluations.
    As the NRC turns its attention to Tiers Two and Three, I 
think it is appropriate for the agency to assess the safety 
benefits that will be realized by the implementation of the 
actions already taken and view these other, less safety-
significant items accordingly. It is incumbent upon the NRC to 
ensure meaningful safety benefits warrant any further 
requirements.

    Mr. Upton. And I yield the balance of my time to Mr. 
Shimkus.
    Mr. Shimkus. Thank you, Mr. Chairman.
    I just want to remind my friend from Texas that we do have 
a long-term storage solution, and it is called the Nuclear 
Waste Policy Act, which is the law of the land.
    But let me also take this moment to compliment the 
Commission's professional staff--and I hope that you would 
relate this to them--who are reviewing the Yucca Mountain 
license application. While the review was slow to start, and 
the Commissioners even slower in providing the detailed 
schedule that I requested, now that I have received it, I am 
pleased with the staff's progress so far. While they may be a 
bit behind on two chapters, they are ahead of schedule on 
others, and their rate of expenditures appears to be 
appropriate. I commend the staff's effort, and, again, I am 
referring to the staff, and I hope you will convey that to 
them, because staff doesn't get thanked as much as they should. 
Right, Mr. Sarley?
    While many aspects of the NRC's budget deserve scrutiny, I 
find one item missing in the budget proposal to be the most 
noteworthy. The DC Circuit Court upheld the NRC's statutory 
mandate to review and issue a decision on the Yucca Mountain 
license application. The NRC has repeatedly stated it lacks the 
resources to do so. Their response to a question from this 
committee was, and I quote, ``The DC Circuit Court of Appeals 
mandamus order does not include a requirement for the 
Commission to request additional funds,'' close quote. 
Unbelievable.
    What is more, I asked the Commission to provide this 
committee with a cost estimate of the resources necessary to 
fill their mandate and issue a decision. The Commission failed 
to provide Congress with this information. Not surprising. So 
the Commission has refused to share its estimate as to what 
those resource needs are so that Congress will know how much to 
appropriate.
    One would think that the agency faced with the plain 
reading of the statutory mandate, a court order upholding that 
statute, and a constitutional duty to cooperate with Congress' 
oversight function would seek clearly to do the right thing. 
Apparently the Commission doesn't feel compelled to fulfill its 
mandate, only to spend down to zero, and DOE appears supportive 
of that strategy.
    In February, the Department of Energy notified the NRC that 
it would not prepare a supplement to the Yucca Mountain EIS 
regarding groundwater issues even after assuring this committee 
that it would. This appears to be an attempt to undermine 
completion of the safety and evaluation report by driving the 
NRC to spread its scant resources even thinner. I urge the 
Commission not to take the bait.
    The Commission was right to focus on completion of the 
safety and evaluation report as an important and achievable 
milestone. The NRC should not proceed to do DOE's work for them 
until having issued the safety and evaluation report.
    And with that, I yield back the balance of my time, and I 
recognize the ranking member of the full committee, Mr. Waxman.

OPENING STATEMENT OF HON. HENRY A. WAXMAN, A REPRESENTATIVE IN 
             CONGRESS FROM THE STATE OF CALIFORNIA

    Mr. Waxman. Thank you very much, Mr. Chairman. I want to 
welcome the members of the NRC, and Chairman Macfarlane 
especially, and her colleagues.
    The Nuclear Regulatory Commission has a lot of issues on 
its plate. Among them, the Commission continues to examine 
safety gaps revealed by the Fukushima nuclear accident in 
Japan, including the vulnerability of U.S. reactors to 
earthquakes. The Commission is examining the potential safety 
benefits of transferring more spent nuclear fuel from reactor 
pools to dry casks. And it is simultaneously overseeing and 
decommissioning five nuclear reactors and the construction of 
five new reactors, and we will explore those issues today.
    But I want to focus on a subject that will be new to the 
members of this subcommittee, but one that I have been working 
on for years, the pervasive uranium contamination in and around 
the Navajo Nation in New Mexico, Arizona, and Utah. It is a 
modern American tragedy. For decades the Navajo Nation has been 
dealing with the deadly consequences of radioactive pollution 
from uranium mining and milling. During the Cold War, millions 
of tons of uranium ore were mined from the Navajo Nation in 
order to supply the Federal Government with the uranium 
yellowcake it needed to build a nuclear weapons stockpile. 
After the mining ended in the late 1980s, hundreds of 
radioactive mines were abandoned. The mining companies simply 
walked away without cleaning them up. Most mines were left wide 
open with no warning about the dangers they posed.
    Over the years, open pit mines filled with rain, and 
Navajos used the unmarked pools for drinking water and to water 
their herds. Mill tailings and chunks of uranium ore were used 
to build foundations, floors and walls for some Navajo homes. 
Families lived in these radioactive structures for decades. 
Radioactive dust from abandoned mines and waste piles blew in 
the air. Navajo children played in the mines and the piles of 
radioactive debris.
    This isn't something that happened in the distant past. 
Navajo kids were swimming in open-pit uranium mines in the 
1990s, and people are still drinking contaminated water and 
breathing in radioactive dust today.
    In 2007, the Oversight and Government Reform Committee held 
a hearing to examine this shameful legacy. There was bipartisan 
agreement that the Federal Government had a responsibility to 
right this wrong. At my request, five Federal agencies 
developed and implemented a 5-year plan to begin addressing the 
uraniumcontamination. Over the last 6 years, these agencies, 
working with the Navajo, made significant progress in assessing 
the contaminated mines, rebuilding contaminated structures, 
providing safe water supplies, and cleaning up some high-
priority sites, but a huge amount of work still remains.
    At the top of that list is the cleanup of the Northeast 
Church Rock Mine near Gallup, New Mexico. Navajo families live 
close to the site, which holds an estimated 1 million cubic 
yards of radioactive mine waste. I raise this issue today 
because the NRC will soon be considering a proposal to dispose 
of this waste in a nearby mill site. The NRC must act 
expeditiously, while ensuring that the disposal is protective 
of human health and the environment.
    Every day that passes is another day that Navajo families 
are exposed to radioactive mine waste. I believe the Commission 
needs to make this project a priority. I intend to ask about it 
at the hearing today to draw your attention to it again, and I 
look forward to hearing your testimony and discussing this 
issue further.
    Thank you, Mr. Chairman. Yield back the time.
    Mr. Shimkus. Gentleman yields back his time, and we want to 
welcome again the Commission. We will start with opening 
statements from all the Commissioners. The chairman will get 5 
minutes. The rest of you will get 2 minutes for your 
statements. And now again we want to welcome Chairman 
Macfarlane, and you are recognized for 5 minutes.

    STATEMENTS OF ALLISON M. MACFARLANE, CHAIRMAN, NUCLEAR 
  REGULATORY COMMISSION; KRISTINE L. SVINICKI, COMMISSIONER, 
      NUCLEAR REGULATORY COMMISSION; GEORGE APOSTOLAKIS, 
COMMISSIONER, NUCLEAR REGULATORY COMMISSION; WILLIAM D. MAGWOOD 
IV, COMMISSIONER, NUCLEAR REGULATORY COMMISSION; AND WILLIAM C. 
    OSTENDORFF, COMMISSIONER, NUCLEAR REGULATORY COMMISSION

                STATEMENT OF ALLISON MACFARLANE

    Ms. Macfarlane. Thank you.
    Good morning, Ranking Member Waxman, Chairman Shimkus, and 
distinguished members of the subcommittee. My colleagues and I 
appreciate the opportunity to appear before you today to 
discuss the U.S. Nuclear Regulatory Commission's fiscal year 
2015 budget request.
    The NRC's fiscal year 2015 budget request provides the 
necessary resources for the agency to continue to meet its 
safety and security objectives. The NRC's proposed fiscal year 
2015 budget is $1.059 billion, an increase of $3.6 million 
compared with the fiscal year 2014 enacted budget. Detailed 
information about the resource requests for each business line 
and areas of corresponding work is available in my written 
testimony and in the NRC's congressional budget justification.
    The NRC faces a different future from what we anticipated 
just a few years ago. We continue to assess the internal and 
external environments and project the agency's expected 
workload and critical skills needs through 2020.
    While there are fewer operating plants and large light 
water reactor applications, the NRC's workload has increased in 
other areas. We will be making a licensing decision on Watts 
Bar Unit 2, for example, transitioning to operational oversight 
for the new Vogtle and Summer reactors, preparing for small 
modular reactor design reviews, continuing to implement the 
Fukushima lessons learned and mitigating strategies, regulating 
the safe decommissioning of shutdown reactors, and continuing 
to address the court's remands on waste confidence and Yucca 
Mountain.
    The NRC is also actively reducing overhead by centralizing 
administrative support services. Since 2010, the centralization 
has achieved a net reduction of approximately 37 million in 
constant dollars, a 17 percent decrease. Additionally, we are 
in the process of consolidating our personnel from satellite 
buildings into a single campus.
    As you know, the NRC is required by law to collect 
approximately 90 percent of its budget in the year appropriated 
through fees from its licensees. The NRC accomplishes this 
requirement by collecting fees for services and annual fees. 
Last month the NRC published its fiscal year 2014 Proposed Fee 
Rule for public comment. The rule calls for an increase in the 
annual fees of $945,000 per reactor compared to the fiscal year 
2013 amount.
    We recognize that both regulatory and fiscal stability are 
important to our licensees, and we seek to provide both. Annual 
fees for both fiscal year 2013 and 2014, however, depart from 
this goal, with the 2013 fees lower than average and the 2014 
fees higher than average. The unusually low reactor annual fee 
in 2013 resulted from a combination of reductions imposed by 
budget sequestration and a refund to licensees resulting from 
an overcharge collected during a prior fee period.
    We then entered fiscal year 2014, anticipating a 
sequestration-driven budget reduction that didn't materialize. 
To the contrary, and fortunately, we received our requested 
funding level. Because the agency received these funds midyear, 
and also as a result of changing industry schedules, our agency 
will not be able to execute this budget as originally planned; 
however, we must still bill licensees to collect the required 
90 percent of our budget before the end of the fiscal year. 
This places the NRC and the industry in a difficult fiscal 
posture, which I hope can be remedied in subsequent fiscal 
years.
    The NRC believes that the safety and security requirements 
we mandate will be most effective if they are paced 
appropriately so that licensees can maintain focus on safe 
operations. We are carefully working to understand and address 
any cumulative effects of our regulations, including 
implementation timelines for new or revised requirements 
commensurate with the priority associated with each action and 
the availability of resources.
    We have enhanced public participation in our rulemaking 
process and have engaged the industry to perform case studies 
reviewing regulatory costs and schedule estimates. The 
Commission has directed staff to continue to develop and 
implement outreach tools to understand cumulative impacts and 
to assess the effectiveness of NRC's process enhancements.
    As we continue to rise to the challenges presented by this 
time of transition, I am confident in the NRC's ability to 
develop and execute the strategies necessary to achieve our 
essential mission effectively and flexibly.
    Thanks for the opportunity to appear before you today. I 
would be pleased to answer your questions.
    Mr. Shimkus. Thank you.
    [The prepared statement of Ms. Macfarlane follows:]
    
    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    Mr. Shimkus. The Chair now recognizes Commissioner Svinicki 
for 2 minutes. Welcome.

               STATEMENT OF KRISTINE L. SVINICKI

    Ms. Svinicki. Good morning, Chairman Shimkus and members of 
the subcommittee. Thank you for the opportunity to appear 
before you today at this hearing to examine the NRC's fiscal 
year 2015 budget request. The Commission's Chairman, Dr. 
Allison Macfarlane, in her statement on behalf of the 
Commission has provided key specifics of the agency's budget 
request and how these activities are intended to support the 
stated goals and outcomes of the NRC's strategic plan and to 
advance the NRC's important missions.
    In light of her detailed statement, I will address only two 
brief areas of current focus. The first area is the NRC's 
effort to better align the application of its resources within 
each budget line with the work in front of us. Chairman 
Macfarlane's written statement describes the changes that have 
occurred in our projected regulatory workload and refers to an 
ongoing initiative led by NRC's Executive Director for 
Operations to take a hard look at each business line in the 
NRC's budget and propose adjustments to the application of both 
human capital and resources to better reflect not where we 
planned on being, but where we actually are in terms of budgets 
and programmatic activities.
    This review is a matter of high agency importance. I will 
be working with my colleagues in the coming months to reflect 
the outcomes of this exercise in both fiscal year 2016 budget 
formulation as well as current-year and near-term budget 
implementation where permissible within agency authorities and 
beneficial to overall efficiency.
    The second area is the cumulative impact of the NRC's 
activities on the regulated community and on the energy 
infrastructure of the Nation. Later this month our Commission 
will convene in a joint public session with the Commissioners 
of the Federal Energy Regulatory Commission. Among the topics 
we plan to receive expert testimony on is that of the dynamics 
that may be affecting the viability of the continued operation 
of nuclear power plants. It is my sense that both of our 
independent regulatory Commissions seek to better understand 
how a wider set of influences is altering the energy landscape 
and, more importantly, for our two Commissions in ways that may 
not be readily reversible.
    Mr. Chairman, and members of the subcommittee, I thank you 
for the opportunity to appear today and look forward to your 
questions.
    Mr. Shimkus. Thank you very much.
    Now we turn to Commissioner Apostolakis and welcome you, 
and you are recognized for 2 minutes.

                STATEMENT OF GEORGE APOSTOLAKIS

    Mr. Apostolakis. Good morning, Chairman Shimkus, and 
distinguished members of the subcommittee.
    I concur with Chairman Macfarlane's statements that we 
understand the need to be proactive about our future. I would 
like to offer a few observations regarding improvements to the 
infrastructure and regulatory framework of the agency in the 
next 10 to 15 years that, in my view, will most effectively 
ensure safety and security in an efficient manner.
    Regarding the agency's future infrastructure, I support the 
vision of our Advisory Committee on Reactor Safeguards, ACRS, 
when it says, quote, ``The ACRS can foresee, for example, a 
time when regulatory staff have routine access to superior 
analysis tools for systems analysis, fundamental logical 
analysis, and risk assessment,'' end of quote. The development 
of such tools requires dedicated resources.
    Regarding the regulatory framework itself, I believe that 
any future revisions should build upon well-established 
practices, such as the defense-in-depth philosophy and risk-
informed and performance-based approaches. After the Fukushima 
accident, there were many recommendations for regulatory 
action. Without the benefit of quantitative risk metrics, it 
was difficult to explain the basis for our prioritization of 
the Fukushima recommendations or how the prioritization of 
these new activities was being integrated with all other very 
important agency activities, such as fire protection. We should 
take the time to develop the infrastructure improvements that 
we envision for the future. Unfortunately, long-term planning 
is often neglected during periods of difficult budgetary 
adjustments. It is often not until an accident occurs that we 
realize how very useful it would have been to have these tools, 
but it is then too late.
    In closing, I would say that if we want a more effective 
and efficient regulatory commission in place 10 to 15 years 
out, we need to invest the resources necessary today. We need 
to develop a vision in investing the necessary infrastructures 
so that the appropriate tools will be available when we need 
them. Thank you.
    The Chair now recognizes Commissioner Magwood for 2 
minutes.

               STATEMENT OF WILLIAM D. MAGWOOD IV

    Mr. Magwood. Thank you, Chairman Shimkus, and good morning. 
Good morning to you and members of the subcommittee and the 
committee. I thank you for the opportunity to speak to you 
today about our fiscal year 2015 budget request and related 
policy issues. As the Chairman's statement has already 
highlighted important aspects for our budget request and our 
ongoing activities, I will only add a few brief comments.
    First, I note that in the 3 years since the Fukushima 
Daiichi accident in Japan, I have seen nothing that would make 
me question the safety of the U.S. nuclear power plants. Since 
March of 2011, we have analyzed a vast array of technical 
issues, debated numerous complex regulatory policies, and 
engaged in an open public discussion about the lessons learned 
from the accident. After all that, the essential conclusion 
reached by the Near Term Task Force in the months after the 
accident remains inviolate: U.S. Nuclear power plants are safe.
    But I think it is important to emphasize the reason that 
our plants are safe. The reason is that in the United States, 
both the regulator and the regulated community places very high 
value in responding to operating experience. U.S. plants are 
safe because we have learned from six decades of operation and 
because we learned from TMI and from 9/11. We can do no less in 
learning from the Fukushima experience.
    As a result we have taken clear, specific actions based on 
lessons learned. I believe the changes we have made thus far 
are appropriate and balanced, and I believe the steps that we 
and our licensees have taken have already made U.S. Plants more 
resilient, and further enhancements will be completed over the 
next few years.
    I will look forward to watching NRC's progress on these 
issues; however, as you know, I was the U.S. Government's 
candidate to serve as the next Director General of the OECD 
Nuclear Energy Agency, and I was selected formally for that 
position in March. I take up that new post in September and 
will therefore step down from this Commission this summer. 
Since this is most likely my final appearance as an NRC 
Commissioner before this committee, I take the opportunity to 
thank you for the serious and thoughtful manner in which this 
panel has overseen NRC's work since my tenure began. I very 
much appreciate the fact that you care so deeply about the 
important issues under NRC's jurisdiction, and that you have 
always engaged us with fairness and balance. We are a better 
regulator because of your oversight.
    Thank you for the opportunity to appear before you today, 
and I look forward to any questions you may have.
    Mr. Shimkus. Thank you, and I think we will get a chance to 
visit before whenever that magical date is, and we want to 
thank you for your service.
    Now the Chair recognizes Commissioner Ostendorff for 2 
minutes.

               STATEMENT OF WILLIAM C. OSTENDORFF

    Mr. Ostendorff. Thank you, Chairman Shimkus and members of 
the committee.
    As this is a budget hearing, I will comment that I think 
that we have tried to use the best available information we had 
in hand in order to project our future workload and our 
licensing activities.
    In my experience, we have been successful in executing our 
oversight responsibilities and responding to challenges such as 
Fukushima, growing cybersecurity threats, and extended 
shutdowns of facilities such as the Fort Calhoun station in 
Nebraska and Honeywell's Metropolis facility in southern 
Illinois. However, as with all predictions, our budget 
estimates for future work are not always on the mark. 
Accurately budgeting for Fukushima work has been a significant 
challenge for this Commission and this agency, especially in 
areas where the work has evolved once it started.
    As the Chairman commented, we have made some changes to our 
structure over the last few years. I think those are good 
changes. I will also note that the nuclear industry and the 
landscape is very different from where it was 5 years ago. I 
think the agency must adapt to these changed circumstances and 
right-size accordingly. I am committed to helping ensure this 
occurs with my colleagues.
    I fully support the Chairman's written testimony in 
addressing the best estimate scenario for the NRC workload in 
the year 2019. I appreciate this committee's oversight role and 
look forward to your questions.
    Gentleman yields back his time, and I thank you, and I 
recognize myself for 5 minutes for my opening questions.
    I want to start with Chairman Macfarlane. Under the Atomic 
Energy Act of 1954 and Energy Reorganization Act of 1974, the 
NRC is required to provide safety oversight of its licensees, 
correct?
    Ms. Macfarlane. That is correct.
    Mr. Shimkus. Still directed to the Chairman Macfarlane, do 
you feel the NRC's fiscal year 2015 budget proposal requests 
the funds necessary to execute that responsibility?
    Ms. Macfarlane. I do, yes.
    Mr. Shimkus. Chairman Macfarlane, were there any court 
decisions issued last year requiring you to request the 
necessary funds to carry out those responsibilities?
    Ms. Macfarlane. Any court decisions last year, being 2013?
    Mr. Shimkus. Correct.
    Ms. Macfarlane. That required us to--sorry?
    Mr. Shimkus. To carry out your responsibilities.
    Ms. Macfarlane. To request additional funds. No, there were 
not any court decisions last year that required us to request 
additional funds.
    Mr. Shimkus. The DC Circuit Court affirmed that the Nuclear 
Waste Policy Act, and I quote, ``provides that the Nuclear 
Regulatory Commission, and I''--in quotation--``shall consider 
the Department of Energy's license application to store nuclear 
waste at Yucca Mountain and''--and I quote again--``shall issue 
a final decision approving or disapproving that application.'' 
The court went on to observe, and I quote again, ``yet the 
Commission still has not issued the decision required by 
statute.''
    In the case of Yucca Mountain, the NRC has statutory 
requirement, but you don't request funding to carry it out 
because the court didn't order you to. In the case of your 
safety oversight responsibility, you request the necessary 
funding without a court ordering you to do.
    Chairman Macfarlane, can you describe for me the process 
the Commission uses to decide which statute you require a court 
order prior to the Commission requesting the necessary funds to 
carry out its responsibilities?
    Ms. Macfarlane. Let me explain about the Yucca Mountain 
situation. We received an order from the court, remand, 
requiring us to continue the licensing process with our 
existing funds. We have done so. We are following the law. We 
are in the process of completing the safety evaluation report 
and the environmental impact statement----
    Mr. Shimkus. Let me reclaim my time. The question is this: 
Can you describe for me the process the Commission uses to 
decides which statutes require a court order prior to the 
Commission requesting the necessary funds to carry out its 
responsibilities?
    Ms. Macfarlane. The Nuclear Waste Policy Act requires us to 
hold hearings. It says, and I quote, ``Nothing in this act 
shall be construed to amend or otherwise detract from the 
licensing requirements of the NRC,'' end quote. So our 
licensing requirements that deal with proceedings for 
developing a repository, 10 CFR Part 2, Subpart J, require us 
to follow Rule 2.325, which says, the----
    Mr. Shimkus. Let me reclaim my time because we are running 
out of it, and you are not answering the question.
    Let me go to each Commissioner. Do you support including 
funding a request to continue the Yucca Mountain license review 
in the NRC's budget proposal?
    Ms. Macfarlane. I do not because the applicant----
    Mr. Shimkus. OK. The answer is no.
    Commissioner Svinicki?
    Ms. Svinicki. I do support seeking funding and have done so 
as part of the Commission's deliberations on the budget.
    Mr. Shimkus. And we are going to pass you up, Mr. 
Apostolakis.
    Commissioner Magwood?
    Mr. Magwood. Currently the Commission has been looking at 
having the staff perform an analysis to tell us what is 
actually required to request in terms of actually conducting 
such an activity. I haven't seen that yet, so I reserve 
judgment until I see that.
    Mr. Shimkus. What does that mean?
    Mr. Magwood. I don't know how much would be needed.
    Mr. Shimkus. But if you knew how much was needed, you would 
assume that there would be a request for it?
    Mr. Magwood. I am willing to look at it.
    Mr. Shimkus. Commission Ostendorff?
    Mr. Ostendorff. Chairman Shimkus, as I testified before 
this committee back in December of 2013, I have supported 
funding for continuing Yucca Mountain licensing activities. I 
took that position during our OMB passback process with the 
2015 budget. That position did not prevail with the Commission.
    Mr. Shimkus. OK. So then the final question, the 
Commissioners have failed to request--you all have failed to 
request additional funding for the license review, and very 
little funding will remain after the actions already ordered by 
the Commission have been completed.
    Final question: Will you commit to oppose expenditures on 
any activities other than in support of the work already 
underway until the SER, Safety and Evaluation Report, is ready 
to be published?
    Ms. Macfarlane. Will we commit to opposing?
    Mr. Shimkus. In other words, the money going in different 
directions without finishing the money to comply with the law 
as required by the Federal courts.
    Ms. Macfarlane. We have ordered the staff to complete the 
SER, complete the EIS, put the material from the licensing 
support network----
    Mr. Shimkus. So you are going to make sure the funding is 
available for them to finish the job.
    Ms. Macfarlane. And we have ordered the staff to tell us if 
they think the funding is not available.
    Mr. Shimkus. So the answer is yes. So the answer is yes. 
Thank you.
    Commissioner Svinicki?
    Ms. Svinicki. Yes. That is our standing direction.
    Mr. Shimkus. Commissioner Magwood?
    Mr. Magwood. Yes.
    Mr. Shimkus. I guess----
    Mr. Apostolakis. Yes.
    Mr. Shimkus. OK. Great.
    Mr. Ostendorff. Yes. I will add that I think we have 
appropriate internal controls in place to ensure that the 
funding is there to complete the SER.
    Mr. Shimkus. And I guess we are going to be able to find 
that out, so we thank you.
    The Chair now recognizes the ranking member Mr. Green for 5 
minutes.
    Mr. Green. Just briefly, is there a time frame of when that 
will be available?
    Ms. Macfarlane. When what will be available?
    Mr. Green. When the completed EIS----
    Ms. Macfarlane. The completed SER should be available 
January 2015.
    Mr. Green. OK. Thank you.
    There was considerable discussion among policymakers, you 
heard in the opening statements, in the industry related to 
NRC's budget. Industry fees have increased. The NRC's fiscal 
year 2015 budget has increased, and staff has increased, but 
the number of operating reactors and material licenses have 
declined.
    I am concerned that forward-looking technology is not 
receiving the level of attention it may deserve. I am further 
concerned that most of the majority of the Commission's 
resources are being devoted to more than 50 rulemakings.
    Chairman Macfarlane, can you provide a sense of why the 
Commission has 50 high-priority rulemakings underway?
    Ms. Macfarlane. We have a number of rulemakings underway, 
that is correct. I want to point out that we don't have fewer 
licensees right now. We do have shut-down reactors, but we 
don't have fewer licensees. We have thousands and thousands of 
licensees. So I just want to be clear on that.
    We now know that we face a different future than we 
expected a few years ago, and we are working very diligently to 
adjust our future budgets to this new reality. A few years ago 
we had 18 combined operating license applications. We now have 
eight. A few years ago we had a number of operating reactors. 
We now have a reduced number of operating reactors. We and the 
industry did not foresee this coming because we rely on 
industry estimates to develop our budget.
    Mr. Green. OK. Can you provide a sense of what percentage 
of the Commission's budget and fees fund these rulemakings?
    Ms. Macfarlane. I will take that for the record, and I will 
get that number to you.
    Mr. Green. OK. I appreciate it.
    [The information appears at the conclusion of the hearing.]
    Mr. Green. For the panel, small modular reactors technology 
holds the promise of scalable and cost-effective and inherently 
safer nuclear power for the future. SMR is a technology that 
can play a key role in our energy future. However, I am 
concerned that the NRC lacks the flexibility and has not 
dedicated adequate resources to the next generation of 
technologies. Does the growth in fees and staff of the NRC 
indicate a focus on the small modular reactors in the next-
generation technology?
    Ms. Macfarlane. Let me assure you, Congressman, we have 
been working very hard to prepare ourselves, and to prepare the 
industry, for small modular reactor design certification 
applications. We have been working with the vendors and the 
manufacturers to make sure they understand our regulations and 
that they are prepared. We have developed guidance for them. We 
have been working very closely with them.
    Mr. Green. Any other responses from the Commissioners?
    Mr. Ostendorff. I agree, Congressman, with the Chairman's 
statement. I think we are waiting for industry to submit these 
applications to our staff. We are ready.
    Mr. Green. Businesses involved in these SMR technology 
require certainty to make the investments and secure capital. 
This requires the NRC to prioritize and focus on these SMR 
applications. The NRC has published a 39-month schedule for 
smaller reactor design certification reviews. In order to 
achieve the schedule, the NRC must resolve a number of issues. 
What is the NRC doing to ensure that the Commission meets the 
39-month schedule?
    Ms. Macfarlane. We are--as I said, we are working very hard 
on this. Unfortunately, we are hearing from the industry that 
they are slowing down their plans for submitting license 
applications, and so we are having to adjust our schedules, 
too.
    Mr. Green. Do you know how many license applications you 
have now?
    Ms. Macfarlane. We don't have any.
    Mr. Green. None at all?
    Ms. Macfarlane. None at all. We were expecting two in 2014, 
and they have been pushed back to either 2015, or 2016, or 
indefinite.
    Mr. Green. Do you know, do they give you a reason for why?
    Ms. Macfarlane. They don't have adequate financing right 
now, and they don't have adequate customers.
    Mr. Green. And do you think that reason is because, you 
know, of course natural gas is historically low. Do you think 
it is just the market conditions?
    Ms. Macfarlane. You know, we are a safety regulator. The 
Department of Energy is the agency working with the industry to 
develop these new designs.
    Mr. Green. OK. Thank you, Mr. Chairman. I yield back.
    Mr. Shimkus. The gentleman yields back his time.
    The Chair now recognizes the chairman emeritus, Mr. Barton, 
for 5 minutes.
    Mr. Barton. Thank you, Mr. Chairman, and thank our NRC 
Commissioners for being here. Mr. Magwood, we wish you the very 
best in your next position. We will miss you, but I doubt that 
you will miss us.
    I have a little bit different view than Chairman Shimkus of 
Yucca Mountain. I do want Yucca, if it is shown to be safe. I 
want it to be the final repository and the permanent 
repository, and I want the NRC to expedite its review and 
complete it, and I hope that the review is positive, positive 
in the sense that it says it is safe to store our high-level 
nuclear waste there for whatever time we need to. So I am pro-
Yucca Mountain, but I am not Yucca Mountain or nothing.
    The State of Texas is moving along at the legislative level 
and at the local level to come up and support an interim 
storage facility if and when the NRC decides to move that way. 
And, again, I want to emphasize that I would rather do Yucca, I 
would rather do it sooner, I would rather have it permanent, 
and let's get on with it.
    So there is no daylight between Chairman Shimkus and myself 
on that, but if we are not going to do Yucca, or if Yucca is 
going to take a long, long time, or some other permanent 
repository other than Yucca is going to be reviewed, I am not 
an opponent of doing interim storage.
    So my first question, and I will go to the Chairwoman, in 
your opinion is it either/or, we either do permanent at Yucca 
or do nothing, or could we have a parallel path that involved 
interim storage while we are reviewing Yucca?
    Ms. Macfarlane. Thanks for the question, Congressman. We at 
the NRC don't set policy for the Nation on its plans for 
nuclear waste disposal. So right now we have the Nuclear Waste 
Policy Act that is the law of the land, and that is controlling 
what happens. Personally, as a former Blue Ribbon Commission 
member, we endorsed following parallel tracks.
    Mr. Barton. OK. Any of the other Commissioners want to 
address that question? Mr. Magwood, you don't have anything to 
lose.
    Mr. Magwood. You always have something to lose, 
Congressman.
    My view is that whatever solution is found, whether an 
interim solution or a final solution, it will take time, and as 
has already been mentioned by the panel, our biggest 
responsibility is to make sure that the spent fuel is safely 
stored where it is now. So I think the NRC's attention is best 
placed today on assuring the spent fuel pools and dry cask 
storage are implemented as safely and effectively as possible, 
and I have put my focus on that. For the longer term, there are 
still a lot of decisions to be made nationally, so we will just 
have to see.
    Mr. Barton. OK. What is the best case--if the review at 
Yucca is completed in a timely fashion, and if it is shown to 
be safe to store permanently our high-level waste there, when 
would we actually begin to move waste to Yucca, best case? And, 
again, anybody can answer that.
    Ms. Macfarlane. You know, again, this is not in our 
purview. You would have to ask the applicant who----
    Mr. Barton. I am not asking--just a general ballpark. The 
next 5 years, next 10 years?
    Ms. Macfarlane. No. I think you are looking at a long time 
frame.
    Mr. Barton. Longer than that?
    Ms. Macfarlane. Yes, I would imagine.
    Mr. Barton. OK. My last question I will go to Commissioner 
Ostendorff. Are you former military?
    Mr. Ostendorff. Yes, sir. I served in the submarine force.
    Mr. Barton. I kind of figured that.
    What do we do with the high-level waste at plants that we 
are decommissioning, and we have decommissioned several? Do 
they stay on site, the waste, or does it move to another active 
site owned by the same utility?
    Mr. Ostendorff. The Naval Reactors Program has cognizance 
over the spent fuel from decommissioned aircraft carriers, 
nuclear cruisers and submarines. That fuel has been removed to 
the Idaho facility.
    Mr. Barton. No. I am talking about a commercial reactor 
that has been decommissioned in the private sector. Some of our 
plants are being deactivated. I am sorry I didn't----
    Mr. Ostendorff. I am sorry. That fuel currently is still on 
site.
    Mr. Barton. Even though the plant doesn't work anymore, you 
keep it on site in the pool or in the cask storage, I guess?
    Mr. Ostendorff. That is correct.
    Mr. Barton. And how long can we do that?
    Mr. Ostendorff. That is the subject, quite frankly, of our 
ongoing waste conference decision that we are addressing right 
now as an agency, because that is a pending adjudication from 
the DC Circuit Court of Appeals. I can't really make a 
statement that directly answers your question, but I would say 
that my personal view is that we believe that spent nuclear 
fuel is safely and securely being stored on site today.
    Mr. Barton. Thank you.
    Thank you, Mr. Chairman.
    Mr. Shimkus. Gentleman's time has expired.
    The Chair now recognizes the gentlelady from California, 
Mrs. Capps, for 5 minutes.
    Mrs. Capps. Thank you, Mr. Chairman, for holding this 
hearing, and I want to thank all of our Commissioners for your 
presence here today and your testimony.
    Chairwoman Macfarlane, last December I asked you about the 
differing professional opinion--I think the parlance is DPO for 
shorthand--of Dr. Michael Peck regarding the seismic safety of 
Diablo Canyon Nuclear Power Plant, which, of course, is in my 
district. And as you know, Dr. Peck is the former senior 
resident inspector at Diablo Canyon, so I believe his views on 
this issue are significant. And as I understand it, the NRC has 
a process it follows to review and respond to a DPO when it is 
filed.
    I wondered if you would please explain briefly this review 
procedure, and give us an update on where Dr. Peck's DPO stands 
in the review process today.
    Ms. Macfarlane. Certainly. Thank you, Congresswoman, for 
that.
    We have a process by which if a staff member disagrees with 
a decision going forward, they can either submit a 
nonconcurrence or differing professional opinion, and they will 
be evaluated by the other staff and management. And if they 
still disagree, they can appeal a further time, and then the 
decision works its way up the management. I can tell you in the 
case of Michael Peck and his differing professional opinion, it 
is still with the differing professional opinion panel for a 
decision.
    Mrs. Capps. OK. So do you know when this review will be 
completed and published?
    Ms. Macfarlane. I don't at this moment, but I can take that 
for the record and get back to you.
    Mrs. Capps. Thank you. I would appreciate that very much, 
and I hope this review can be completed soon, as you 
understand.
    [The information appears at the conclusion of the hearing.]
    Mrs. Capps. I believe Dr. Peck in his report raised several 
important questions, and I know my constituents who live right 
adjacent to Diablo Canyon nuclear facility are eager to see the 
NRC's full response.
    Another question for you, Chairwoman Macfarlane. In your 
testimony, you discuss the rationale behind the sharp increase 
in the fiscal year 2014 fee schedule. As you know, this sudden 
increase is concerning to many utilities, including PG&E, which 
operates Diablo Canyon. According to your testimony, one of the 
main reasons behind the sharp increase is sequestration and the 
resulting irregular appropriations process. Am I correct?
    Ms. Macfarlane. You are correct.
    Mrs. Capps. Obviously NRC did not create the sequestration, 
but I see this as a prime example--and I just want to point 
that out to our committee members--a prime example of the 
lasting and significant impacts of this policy, which I believe 
to be misguided, because who would have predicted? I mean, the 
public wouldn't have guessed that it would have such long-
lasting effects on your agency and your abilities to continue 
your work.
    While a fee increase is understandable, it is obviously 
difficult for utilities, or really for any business, to plan 
their budgets when significant increases are now coming so late 
in the year, and I know you appreciate that, but you probably 
feel like you had no choice. This late and significant fee 
increase is going to force utilities to rework their budgets 
and take funding from other priorities, tough choices to make.
    So looking forward now, Chairwoman, to fiscal year 2015, 
would a return to regular order in our appropriations process 
without the threat of sequestration--would this help to 
alleviate your current planning constraints?
    Ms. Macfarlane. Yes, that definitely would.
    Mrs. Capps. Well, you know, I appreciate that for the 
record, because while we have temporarily removed the threat of 
sequestration with the Murray-Ryan budget, we clearly continue 
to feel the widespread and serious impacts of sequestration. I 
hope we can keep this in mind as we work through our 
appropriations process this summer.
    Now, I have 50 seconds or less. I will just try this, if I 
can do it. As you know, the budget for 2015 eliminates funding 
for your successful Integrated University Program, IUP. As I 
understand it, this cut is part of the administration's broader 
efforts to reorganize STEM programs across Federal agencies. I 
want to know your take on this. Is this accurate, the 
rationale, and can you explain why the funding for IUP was 
eliminated?
    Ms. Macfarlane. It was eliminated as a result of a request 
from OMB, and so it is not included right now.
    Mrs. Capps. Well, this program has been successful and very 
popular, and I am concerned about the impacts it will have on 
the program. I believe NRC's expertise has been key to the 
successful--if mean, if they are not experts, how can they 
really help to guide what the programs are doing? And I hope it 
continues to be funded somehow through the NRC. And I thank you 
for your time.
    Mr. Shimkus. Gentlelady's time is expired.
    The Chair now recognizes the gentleman from Nebraska. You 
are going to yield your time to Mr. Pitts. So the Chair now 
recognizes the gentleman Mr. Pitts for 5 minutes.
    Mr. Pitts. Thanks to the Chair.
    The Department of Energy is currently analyzing the impact 
of a scenario of one-third of our 100 reactors closing. 
Chairman Macfarlane, have you begun to examine the impact of a 
similar scenario on the NRC's resources?
    Ms. Macfarlane. We have not been looking that far out to 
the future. I think that is a 25-year look out to the future, 
and we have not gone that far out.
    Mr. Pitts. In 2013, the NRC charged each operating reactor 
$4.39 million in fees. In 2013, four reactors closed, which 
would suggest a shortfall in NRC's fee collection of over $18 
million. Yet the NRC is increasing fees on the remaining 
reactors by almost $1 million each, totaling $100 million, even 
though the NRC's industry trends assessment once again showed 
no adverse safety trends and several positive trends.
    I would like to ask the clerk to put on the screens the 
graph ``Increase in Operating Reactor Fees Billed Under 10 CFR 
Part 171.''

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    Now, you can see that even if you set aside 2013 because of 
the sequester, that still leaves a 12 percent increase in fees 
from the prior year in spite of four reactor closures. One 
industry executive was recently quoted as saying reactor 
closures are not a matter of whether or when, but how many.
    For your fiscal year 2016 request, it is under preparations 
now, Chairwoman Macfarlane, what changes do you think should be 
made to the basis for next year's budget request to reflect 
this dynamic?
    Ms. Macfarlane. Of course, in our fiscal year 2016 budget, 
which we are developing now so I can't say much in detail 
about, we will be cognizant of these changes, and we will be 
cognizant to the best of our ability of any other changes that 
may occur in the industry over the next few years.
    Mr. Pitts. I would like each of the Commissioners to give 
me your reaction to that question.
    Ms. Svinicki. I agree that we will take these external 
factors into account, but, again, under provisions of current 
law, we are required to collect 90 percent of our annual 
budget. So unless that provision of law is modified, we will 
end up using a similar formula to what we use now.
    Mr. Apostolakis. I agree with my colleagues.
    Mr. Magwood. I agree with what the previous Commissioners 
have said. I would also add, though, that I particularly would 
be interested in looking at potential legislative approaches to 
make the fee a bit more modern. I think the fee has been in 
place for quite some time, and it might be worthwhile taking a 
good look at the structure.
    Mr. Ostendorff. Congressman Pitts, I would agree with my 
colleagues and also add that consistent with Chairman 
Macfarlane's testimony submitted to this committee, that I 
believe we need to take a hard look at our 2019 sizing 5 years 
out and see where that has the agency headed given the changes 
in the nuclear industry.
    Mr. Pitts. Thank you.
    In 2004, the NRC expected the number of productive hours 
from the employees to be 1,776 per year. For fiscal year 2014, 
that number is 1,355, a decrease of 24 percent.
    Chairman Macfarlane, can you explain this decrease?
    Ms. Macfarlane. I would have to look at those numbers to 
accurately address that, but what I can tell you is that the 
situation that we face now has changed. We have fewer new 
reactor licensing actions, but we have additional work in waste 
confidence, in Yucca Mountain, in decommissioning, in other 
areas that we had not expected.
    Mr. Pitts. And finally as I understand it, post-Fukushima 
items have been a categorized into three tiers, with Tier 1 
items carrying the greatest safety benefits. Can you tell me 
the level of resources, both funding and staffing levels 
budgeted, for each tier for fiscal year 2015?
    Ms. Macfarlane. I will take that one for the record and get 
those numbers to you.
    [The information appears at the conclusion of the hearing.]
    Mr. Pitts. Thank you, Mr. Chairman. I yield back.
    Mr. Kinzinger [presiding]. The gentleman yields back.
    The Chair recognizes the gentleman from New York, Mr. 
Tonko, for 5 minutes.
    Mr. Tonko. Thank you, Mr. Chairman.
    I note that on page 4 of your testimony, Chair Macfarlane, 
that you list within the plan licensing activities for fiscal 
year 2015 15 ongoing reviews of compliance with the National 
Fire Protection Association standard for the 25 reactors that 
will transition to a risk- and performance-based set of 
standards.
    Last year the Union of Concerned Scientists released a 
report critical of the NRC's enforcement of fire protection 
standards. The two sets of fire regulations were established 
quite some time ago, I believe in 1980 and 2004. The UCS report 
claimed that almost one-half of our Nation's operating reactors 
are not in compliance with these regulations. Your budget 
request suggests there are at least 25 reactors that are still 
in the process of adopting these standards. It is more than 30 
years since the first set of standards was established and now 
10 years since the 2004 revision.
    So the question is, What is taking so long for these plans 
to come into compliance with fire safety standards?
    Ms. Macfarlane. Let me first say that all plants are in 
compliance with fire safety standards. We have offered all 
plants an opportunity to meet their fire safety requirements a 
different way, and that was the 2004 option, where we offered 
them to meet the National Fire Protection Association 805 
regulations, which allowed the plants to do a performance 
assessment evaluation to meet fire safety regulations. So some 
plants have chosen to do that. That is a fairly long-term 
project that takes a few years to do that. So some plants are 
working that way. Other plants are remaining with the old 
Appendix R method.
    Mr. Tonko. Thank you.
    The Fukushima disaster illustrates for us just how spent 
fuel pools can quickly become unstable when a nuclear power 
plant loses the power needed to cool them.
    In the U.S., many spent fuel pools are overcrowded. 
Currently the United States spent fuel pools overall contain 
five times more radioactive fuel than is in all the reactor 
cores, and some individual reactor pools contain more than 
eights times as much fuel in the reactor core. These spent fuel 
pools are not focused within containment structures or 
reinforced concrete like the reactor cores. So the question 
here, Chair, is, Is the water in spent fuel pools in need 
continuously to be cooled?
    Ms. Macfarlane. Is the water--yes, the water does need to 
be actively cooled.
    Mr. Tonko. OK. And if the ability to cool the pools is 
lost, the spent fuel can overheat and catch fire, potentially 
releasing radiation into the environment. Is that a correct 
statement?
    Ms. Macfarlane. If there is a loss of coolant, loss of 
water in the pools, in some situations that is possible.
    Mr. Tonko. And are densely packed pools more at risk of 
overheating in the event of a cooling system failure?
    Ms. Macfarlane. I think it may in part depend on the 
arrangement of the fuel in the pool.
    Mr. Tonko. One option to enhance safety is to remove some 
of the spent fuel in these pools and place them in dry casks, 
which are steel cylinders encased in concrete and stored 
outdoors on concrete pads.
    Does reducing the amount of fuel in cooling pools reduce 
the potential consequences of an accident if the fuel does 
overheat?
    Ms. Macfarlane. So this is an area that we are actively 
considering right now. We have some staff reports on this 
topic, and the Commission is actively voting on this issue. So 
I don't want to say more until the votes are complete.
    Mr. Tonko. OK. In 2005, the National Academy of Science has 
concluded that moving spent fuel from pools to dry casks 
reduces the likelihood of an accident since wider spacing 
between spent fuel handles--or bundles in a pool improves 
cooling. The casks themselves do not rely on electricity to 
cool the spent fuel?
    That is why I was confused when I saw the NRC staff 
concluded in November that expediting the transfer of spent 
fuel pools to dry casks does not provide a substantial safety 
enhancement.
    NRC staff stated that, and I quote, ``spent fuel pools 
continue to provide adequate protection of public health and 
safety.''
    So Chairman Macfarlane, if reducing the amount of spent 
fuel in pools lessens the likelihood of an accident and reduces 
the consequences of an accident, doesn't it make sense for 
nuclear facilities to think about moving to dry cask storage 
sooner rather than later?
    Ms. Macfarlane. Again, this is an area that we are actively 
voting on, so out of respect to my colleagues, I will not make 
any comments.
    Mr. Tonko. OK. Well, I just do hope that you and your 
colleagues will take a close look at this whole phenomenon.
    Thank you very much. I yield back.
    Mr. Kinzinger. Gentleman yields back.
    Chair recognizes the gentleman from Nebraska, Mr. Terry, 
for 5 minutes.
    Mr. Terry. Thank you, Mr. Chairman, Acting Chairman.
    Now, Chairman, appreciate--I am still caught up in some of 
the same issues that you and I have had some discussions about 
already, and I am still concerned about the emergency 
declaration and who has the power. And, of course, the 
Commissioner has that power to declare it, but I am still 
confused on where in the internal rules and regulations define 
what is an emergency so you--so a Commissioner knows what the 
criteria is to declare an emergency.
    Ms. Macfarlane. I appreciate your interest in this topic 
very much, and I--the appropriations last year required us to 
put the emergency delegation back in our--in our internal 
Commission procedures. We have done so. And I think it is very 
clear to all of us on the Commission, but I suggest you ask my 
colleagues if this clear to them.
    Mr. Terry. OK. Tell me, though, before I ask them if it is 
clear to them, what is the standard, then, for declaring an 
emergency pursuant to the internal Commission procedures? I am 
actually more concerned about the one who has to declare it----
    Ms. Macfarlane. Right.
    Mr. Terry (continuing). Which is you.
    Ms. Macfarlane. The Chairman or the Acting Chairman. So if 
I travel overseas, for instance, I will declare or request that 
one of my colleagues stand in for me, and were there to be an 
emergency, it would be up to them. And we all train and 
practice scenarios so that we are prepared----
    Mr. Terry. What is the criteria?
    Ms. Macfarlane (continuing). To do this.
    What is the criteria?
    Mr. Terry. For an emergency.
    Ms. Macfarlane. For an emergency? I will take that for the 
record and get you the exact wording.
    [The information appears at the conclusion of the hearing.]
    Mr. Terry. I would appreciate that, because that is one of 
the basic reasons for the bill that our committee has drafted 
is there was really no definition of what an emergency is, and 
that allowed there to be abuse by your predecessor.
    Ms. Macfarlane. Yes. I think there has to be a little 
leeway with this, because if you try to specify too much, 
they--you say only in something that affects a plant within the 
United States. If there is an emergency in Canada, it might 
affect us, and we may have to activate.
    Mr. Terry. Sure. But also then the alternative of saying 
that White House says we don't want Yucca Mountain, and then 
the Chairman declares an emergency that truly isn't an 
emergency. So we also have to prevent against those type of 
abuses as well.
    Ms. Macfarlane. Certainly. I understand you wanting to do 
that.
    Mr. Terry. Now, let us talk a little about the internal 
Commission procedures. And there is a process in place when an 
emergency is called, and the executive team is activated, and 
you are the head then, you become the head of or the 
Commission--the chairperson becomes the head of the executive 
team, right?
    Ms. Macfarlane. That is correct.
    Mr. Terry. And then the internal procedures then also list 
then what the executive team--as whoever is leading it, the 
Acting Chair or the Chair. Those are spelled out in those 
internal procedures, correct?
    Ms. Macfarlane. Yes.
    Mr. Terry. Those series of things that have to be done by 
the executive team, those were in the internal procedures when 
Mr. Jaczko was Chairman, correct?
    Ms. Macfarlane. I don't know. The procedures did change in 
2011, and I am not aware of what they looked like before and 
after.
    Mr. Terry. All right. So we will ask the few people that 
were there then.
    Ms. Svinicki and Mr. Magwood.
    Ms. Svinicki. The Commission's internal procedures are not 
where one turns for the detailed procedural outline of how to 
conduct an emergency response. There are other agency documents 
that would guide that, management directives and emergency 
procedures. So I would need to look to those as the 
authoritative source, not the Commission's internal procedures.
    Mr. Terry. Well, I do have the executive team response 
procedure. Is that one of them that you are discussing?
    Ms. Svinicki. Yes, it would be.
    Mr. Terry. Mr. Magwood?
    Mr. Magwood. Yes, I agree with that. That is where the 
procedures would be. And those procedures were in place 3 years 
ago.
    Mr. Terry. They were in place.
    Mr. Magwood. Yes.
    Mr. Terry. I appreciate that.
    And that kind of begs the question of why I push statutory 
correction, because they weren't followed 3 years ago just by 
whim, but yet they existed.
    Also in regard to the executive team response procedure, it 
says, within those procedures, when the executive team is 
enacted, that the Chair, the Director, has to inform the 
Commissioners. Is that correct, Ms. Svinicki and Mr. Magwood?
    Ms. Svinicki. Yes. There are those notification 
requirements.
    Mr. Magwood. Yes.
    Mr. Terry. And, Chairman Macfarlane, that is one of the 
issues that was questioned in the bill, because it does say 
within 24 hours, you have to inform the Commissioners, but yet 
it is already written in the procedures, although they could be 
whimsically pushed aside, as we have learned in the past.
    One last thing is in regard--I am just going ahead, Acting 
Chairman.
    Mr. Kinzinger. Without objection.
    Mr. Terry. And also, and Mr. Tonko was kind enough to mock 
me on this, and you kind of participated in that, as my memory 
serves me, is also notifying press. But also within the ET 
response procedure, it actually says that you have to have a 
designee to issue a press release. That wasn't by magic; that 
wasn't put in the bill because we thought it was some whimsical 
issue that we thought would anger you. That is already part of 
the procedure. So I kind of just wanted to point that out to 
you.
    Yield back.
    Mr. Kinzinger. The gentleman yields back his remaining 
time. Always running over the young guy.
    Chair recognizes the ranking member of the committee, the 
gentleman from California, Mr. Waxman, for 5 minutes.
    Mr. Waxman. Thank you very much, Mr. Chairman.
    Earlier in my opening comments, I discussed the tragic 
impacts of widespread uranium contamination in the Navajo 
Nation, and it has been devastating for the Navajo people and 
their lands. By the late 1980s, 500 radioactive mines were 
abandoned in the Navajo Nation. The Northeast Church Rock Mine 
near Gallup, New Mexico, was the second largest of these 
uranium mines, and it is the highest priority for cleanup 
because of the high radiation levels and the large number of 
families living nearby.
    An agreement to clean up the site was reached with GE, 
which acquired United Nuclear Corporation, the mining company 
that once operated that mine. Under the agreement the mine 
waste will be placed in a new disposal cell to be built on top 
of the existing Church Rock uranium mill tailings disposal cell 
nearby. The design of the new disposal cell and placement of 
the mine waste will require NRC approval of a license amendment 
request by United Nuclear Corporation.
    Chairman Macfarlane, the preparation of the license 
amendment application and NRC's review of that application are 
key steps in finally getting the Northeast Church Rock Mine 
cleaned up. How can NRC help ensure that it receives a complete 
high-quality application that is ready for NRC review?
    Ms. Macfarlane. Well, we are meeting with the licensee. We 
are trying to be proactive and meet with them and make sure 
they understand our requirements and understand our needs, that 
we need a high-quality application. So we have been proactively 
working with them.
    Mr. Waxman. As I understand, the NRC recently requested 
soil samples of the mine and mill sites to better understand 
the volume and characteristics of the material that will be 
moved and how well the existing cell at the mill site is 
functioning; is that right?
    Ms. Macfarlane. I think that is correct. This is a new, 
novel way of dealing with this, so we have to make sure we 
really understand the situation.
    Mr. Waxman. When do you expect United Nuclear Corporation 
to submit a license amendment application?
    Ms. Macfarlane. According to the Environmental Protection 
Agency, they suggested 2016.
    Mr. Waxman. As I understand it, this will be a unique 
application. It is the first time NRC will be reviewing a 
proposal to place one waste cell above another waste cell. Once 
the application is submitted, how long do you anticipate it 
will take for NRC to complete a safety evaluation report and 
environmental review?
    Ms. Macfarlane. It will probably take about 2 years to do 
the safety and environmental reviews.
    Mr. Waxman. The safety and environmental reviews are 
obviously very important. NRC should be thorough and get it 
right; but, of course, the process should proceed expeditiously 
so the Navajo families can finally move back and live in their 
homes, or live in their homes even if they are not moving back, 
and work and play outdoors without sacrificing their health.
    Chairman Macfarlane, will you commit to making this project 
a priority for the Commission and to ensuring that the 
necessary resources are available to complete the review as 
expeditiously as possible?
    Ms. Macfarlane. Yes. We are committed to doing a high-
quality review in a timely manner.
    Mr. Waxman. And let me ask your fellow Commissioners, do 
you agree that this project should be a priority for the 
Commission?
    Ms. Svinicki. I agree. Sir, if I may add that the NRC staff 
also informs the Commission that there are hearing rights 
attached to this process, and that if there is a hearing, 
although the staff can complete its safety and environmental 
reviews in 2 years, if the hearing process takes longer than 
that, sometimes applicants are hesitant to move forward until a 
hearing itself is concluded, and tthat may prolong the process. 
But on the shorter question of the priority, I agree.
    Mr. Apostolakis. I agree it should be a priority.
    Mr. Waxman. Mr. Magwood?
    Mr. Magwood. I agree. And I would also add, Congressman, 
that you may be aware there is a documentary known as ``Navajo 
Boy'' that talks about the tragedy associated with these mine 
wastes. That documentary was screened at NRC for NRC staff. So 
we are very familiar with the issue.
    Mr. Waxman. Good. I am pleased to hear that.
    Mr. Ostendorff. Congressman, I agree with the comments of 
my colleagues.
    Mr. Waxman. I appreciate your commitment. It will be 
several years before this site is finally cleaned up, but we 
should do everything we can to make that day a reality. 
American citizens live near this radioactive waste every day, 
and they deserve nothing less than our best efforts.
    Thank you so much. Yield back the time.
    Mr. Kinzinger. Gentleman yields back.
    Chair now recognizes the gentleman from Ohio for 5 minutes, 
Mr. Latta.
    Mr. Latta. Thank you, Mr. Chairman. And thank you very much 
for the Commission members to be with us today.
    Commissioner Ostendorff, if I can start with you. Under the 
law, NRC is required to recover 90 percent of its budget from 
fees paid by licensees, and they bill operating reactors in two 
ways.The first is under 10 CFR Part 170, and it is for the 
licensee-specific work, such as a new plant review or license 
extension. The second, under 10 CFR Part 171, is an annual fee 
billed to all operating reactors.
    This means that the NRC's workload and, hence, fee 
collection under Part 170 falls short, then the NRC has to make 
it up by raising the Part 170 fees paid by all reactors; is 
this correct?
    Mr. Ostendorff. I am not looking--Congressman, I appreciate 
the question. I am not looking at the parts in front of me, but 
that sounds to me to be correct.
    Mr. Latta. OK. Thank you.
    And for this year, Part 171 fees billed to each reactor 
have increased almost $1 million per reactor. Given we have 100 
operating reactors, that is nearly $100 million. Chairman 
Macfarlane, would you explain to the committee why there is 
such an increase?
    Ms. Macfarlane. Sure. I would be happy to. And I am going 
to use a graphic because I think that will help explain it.
    So this is a little pie chart, and it shows you in blue, 
because that is probably all you can make out in this circle, 
65 percent of the fee increase comes because--as a result of 
sequestration. In fiscal year 2013, we were sequestered, and 
the fee was reduced because of that, because the budget was 
reduced. And so the annual fee in fiscal year 2013 was 
significantly lower because of that.
    Sequestration did carry over into some of fiscal year 2014. 
We did not get our appropriation until halfway through fiscal 
year 2014. So that is in part why the licensees are being hit 
with such a big number in their last quarter. If we had gotten 
the full budget, full 2014 budget, at the beginning of the 
fiscal year, things would have been a little bit better. That 
was 65 percent of the fee increase.
    Twenty percent of the fee increase comes from a correction 
that we had to do. We overbilled in prior years for services. 
In fiscal year 2013, the fee was reduced because of that, in 
part. And so, again, it was anomalously low, the fee was 
anomalously low in fiscal year 2013.
    Mr. Latta. Pardon me, if I could, let me reclaim my time. I 
want to read something to you. This is from the NRC's proposed 
rule on fee recovery, explains the reason for the large 
increase this way: The annual fees for power reactors increased 
primarily as a result of the decreased 10 CFR Part 170 billings 
that decline in current-year licensing reactions, delays in 
major design certification applications and combined operating 
licensing, and shutdown of two operating reactors.
    So I guess in looking at this, then, so NRC's own document 
doesn't say anything about the sequester. It says NRC's 
declining workload and productivity are primarily to blame for 
the increased Part 171 fees, reinforcing points that several of 
our Members made in our December 12th hearing that we had last 
year regarding NRC's declining workload and licensing actions 
and the new reactor licensing.
    The NRC document also makes clear that the two reactors 
shutting down and remaining reactors all have to pay more to 
make up that difference. So with these rosy assumptions out 
there about the level Part 170 work, that work doesn't 
materialize, and then the operating reactors paying the price--
pay the price via increased 171 fees.
    And so for 2 years in a row, the NRC has accounted for the 
shutdown of the reactors and the resulting loss of those fees 
by simply billing the remaining reactors more to make up that 
difference.
    And so, Chairman, do you believe it is acceptable for NRC 
to increase the fees billed to reactor operators by $100 
million in a single year?
    Ms. Macfarlane. Congressman, thank you.
    We are required to collect fees in the year appropriated, 
90 percent of the fees in the year appropriated. So that is a 
requirement by law. We have very little flexibility with this 
situation. We regret the situation as well.
    Mr. Latta. If I could reclaim my time, because I am running 
out here.
    Do you anticipate the Part 171 fees increasing again next 
year?
    Ms. Macfarlane. The Part 171 fees. I don't at the moment, 
but we will see what happens with the larger environment in 
which we work.
    Mr. Latta. Thank you very much, Mr. Chairman. My time has 
expired.
    Mr. Kinzinger. Gentleman yields back.
    Chair recognizes the gentleman from New York, Mr. Engel, 
for 5 minutes.
    Mr. Engel. Thank you, Mr. Chairman. I would like to welcome 
Chairman Macfarlane and the Commissioners back to the 
committee, and thank you for your testimony.
    Let me start with you, Chair Macfarlane. We have discussed 
Indian Point in the past. It is just about 10 miles or so from 
my district. I have been long in favor of closing it because of 
a number of difficulties that we have had with it. So I want to 
again revisit one of what I consider the most serious safety 
issues facing the New York metropolitan region and to urge 
continued vigilance from the NRC.
    I note that the safety budget request for operating 
reactors is 577.3 million, which is an overall funding decrease 
of 12.8 million compared to the fiscal year 2014 enacted 
budget. I know that the number of operating reactors has 
decreased by four; another has announced its closer later on in 
the year. But I remain concerned at a time when there is 
pressure on the Federal budget at times at the expense of vital 
programs, I want to make sure the NRC maintains adequate 
funding to ensure the public safety of all of our nuclear 
facilities.
    So let me ask you, under your current budget constraints, 
do you believe that the NRC maintains the operational ability 
to meet all of the safety requirements it is responsible for, 
even with the proposed decrease?
    Ms. Macfarlane. Yes, absolutely, I do. And let me assure 
you that we take our mission to assure public health and safety 
very, very seriously. We would not--we make sure that we budget 
appropriately to maintain that mission.
    Mr. Engel. Would any of the Commissioners disagree with 
that?
    OK. Thank you.
    The last time the Commissioners were before our 
subcommittee, before our subcommittee, we discussed a bill, 
which was H.R. 3132, which would have dramatically altered the 
NRC's ability to respond to nuclear disaster. As the NRC 
continues to review the disaster at Fukushima and budget for 
that analysis, do you, Madam Chair, believe that the NRC has 
adequate resources to fully complete the review and implement 
necessary changes?
    Ms. Macfarlane. We have adequate resources. We are a bit 
squashed in our skill sets. So, in particular, to do the 
Fukushima reviews, we need a number of seismologists, 
hydrologists, -ologists, and those are in somewhat short 
supply. They are required for Fukushima, they are required for 
waste confidence, they are required for Yucca Mountain, and 
they are required for new reactor reviews. So those folks are 
in somewhat short supply.
    At the same time, because the Fukushima work is time 
limited, we don't want to go out and hire a bunch of people who 
won't have work to do 7 years down the road. So we are trying 
to manage our resources very carefully.
    Mr. Engel. Thank you.
    Anybody else care to comment on that?
    OK. I guess, Madam Chair, everyone agrees with you, so that 
is good news.
    I want to go back to some of the things Mr. Tonko mentioned 
about dry cask storage of spent fuel rods. I know that you say 
you are discussing it, so some of the things you prefer not to 
comment on.
    But risks from spent fuel in storage pools obviously can be 
reduced by moving some of it to dry casks. And again, the 
budget fiscal year 2015, the requests for spent fuel storage 
and transportation has overall decreased, again, by 2.3 million 
compared to the fiscal year 2014 budget.
    So could you tell me, under the fiscal year 2015 budget 
request, how are you prioritizing the dry cask storage of spent 
fuel rods as well as any other hurdles that remain for the 
implementation of this safer storage system?
    Ms. Macfarlane. I believe we have adequate resources to 
evaluate any new dry cask storage proposals that we receive.
    Mr. Engel. Thank you.
    Anybody else?
    See, everyone agrees with you. What a great Chair.
    Thank you, Mr. Chairman. I yield back.
    Mr. Kinzinger. Gentleman yields back.
    Chair recognizes himself now for 5 minutes. And again, 
thank you all for being out here, thanks for your service to 
your country, and thank you for spending the time with us 
today.
    So the 16th Congressional District that I represent in 
Illinois has four nuclear power plants. We also have the site 
in Morris, Illinois, where there was originally the idea of 
nuclear reprocessing and recycling, and, of course, a lot of 
spent fuel storage and everything there as well.
    So this is a very, very important concern to me. And I 
would like to also make a plug for, you know, look, this is 
important that we open Yucca Mountain, follow the law, and move 
ahead on that.
    But I have a couple of points--of questions I want to make. 
According to the NRC's proposed rule on fee recovery, corporate 
support, a.k.a. overhead, makes up nearly half of your 
Commission's total budget. That means that for almost every 
dollar being spent on substantive work, there is a dollar being 
spent supporting the people doing the work, at a total cost of 
$486 million annually.
    In fact, after looking at past fee recovery rules, it seems 
as though corporate support costs, with one exception, have 
increased every single year for the past decade.
    In your written testimony, you state that the steps to 
reduce overhead have been taken, but the growing corporate 
support burden indicates that those actions so far have been 
ineffective. I believe this to be especially concerning given 
the reduced workload on the NRC with the decrease in the number 
of operating reactors and overall applications over the past 
few years.
    Chairman Macfarlane, what are your plans to bring this 
under control? And are you planning any new actions that you 
haven't already taken over the past few years in the future?
    Ms. Macfarlane. Thank you for your question, Congressman.
    Corporate support, I believe, in 2015 would be 362 million 
out of the 1.06 billion, or 34 percent of the budget. And I 
will let you know that we have already been taking action to 
reduce that aspect of our budget. Since 2010, we have reduced 
significantly, 192 FTE and about $30 million, by centralizing 
administrative functions, and we are going to continue to do 
that. But we are also going to take a larger look at where we 
are going to be and where the industry is going to be in 2019, 
2020 and see how we can appropriately resize and restructure 
the agency to address that future.
    Mr. Kinzinger. So is this a--I mean, do you have future 
steps in mind that you have not implemented yet as a----
    Ms. Macfarlane. Yes, we are in the process of developing 
that. Stay tuned.
    Mr. Kinzinger. Do any of the other Commissioners have any 
comments on that at all?
    Mr. Magwood. I would just make one comment. I think the 
agency has had to deal with the fact that, I think as the 
Chairman has mentioned, that the future hasn't turned out to be 
what we thought it was going to be several years ago. So we 
have structured ourselves and prepared ourselves for a much 
more vigorous level of licensing activity than has actually 
developed, but the infrastructure still is in place because we 
wanted to be ready. Now that that future has changed, we have 
to adjust again and turn the aircraft carrier around, and it 
takes some time. We are working on it, and it is something we 
take very seriously.
    Mr. Kinzinger. Thank you. And there is a footnote that 
appears several times in the budget request. Says, the metric 
for number of license actions is challenged due to Fukushima-
related work competing for the same critical area skill set 
branches and NRR, Office of Nuclear Reactor Regulation.
    Chairman Macfarlane, how many NRC licensing actions and 
reviews have been delayed because of Fukushima-related work?
    Ms. Macfarlane. I don't have an exact number. I can take 
that for the record and get you an exact number if you would 
like.
    Mr. Kinzinger. Yes. That would be great.
    [The information appears at the conclusion of the hearing.]
    Mr. Kinzinger. And, you know, I understand that because of 
what happened, it is important, but I definitely urge you all 
to return to a normal order of business for the sake of 
everyone, including my constituents who are being impacted by 
the continual diversion of resources to that task force.
    And the last question for the Chairman: Wouldn't an effort 
to reduce corporate support costs free up resources to spend on 
regulatory reviews that the industry needs to operate 
economically?
    Ms. Macfarlane. Yes. And as I said, we are--we are looking 
at that issue, and we are in the process already reducing 
corporate support.
    Mr. Kinzinger. OK. Again, thank you all for your testimony.
    I will yield back and recognize the gentleman from 
California, Mr. McNerney, for 5 minutes.
    Mr. McNerney. Thank you, Mr. Chairman. And good morning. 
Thank you for coming to testify this morning.
    I just have sort of a general question, Chairwoman. You 
know, we are all worried about climate change and so on. Do you 
see the future of nuclear power having the capacity to step in 
and help generate sufficient power and energy to reduce our 
consumption of fossil fuels in the next 10 years?
    Ms. Macfarlane. As I said earlier this morning, we at the 
NRC are a safety regulator, so we are not in the business of 
prognosticating and developing energy policy for the Nation. 
Nonetheless, I will note that nuclear energy produces base load 
power that is largely carbon free.
    Mr. McNerney. So do you see enough permits being issued in 
the next 10 years to double production?
    Ms. Macfarlane. I can just give you some facts. The facts 
are that we have five reactors in the process of construction 
and coming online. And we have had five reactors either 
announce or actually shut down in the past 2 years.
    Mr. McNerney. And it takes a good 10 years between the time 
a reactor is initially funded and designed and created and----
    Ms. Macfarlane. It takes a number of years. I don't know if 
10 is the exact number, but it takes a number of years, yes.
    Mr. McNerney. Well, I am going to talk a little bit about 
the lessons of Fukushima. I think in 2011, the NRC created a 
task force to analyze the lessons of that disaster, and the 
task force found that the level of protection against natural 
phenomena differs from one plant to the next in the United 
States depending on when it was built and licensed.
    Accordingly, the Commission ordered all U.S. nuclear 
reactors to reevaluate the vulnerability to earthquakes. The 
plant operators in the central eastern United States had to 
submit seismic hazard screening reports by the end of March. 
What is the status of these reports?
    Ms. Macfarlane. We did receive them, and we have reviewed 
them. And in the next few days we will be issuing a letter to 
the licensees on our prioritization and schedule for those that 
have to do more analysis.
    Mr. McNerney. Thank you.
    If a nuclear reactor finds that it is unprepared for a 
seismic hazard, what action does it have to take in the short 
term to address this concern?
    Ms. Macfarlane. It has to immediately be capable of dealing 
with a seismic hazard. We won't let plants operate that aren't 
capable of dealing with situations that they need to.
    Mr. McNerney. So you will potentially shut down plants?
    Ms. Macfarlane. If we need to, until they are ready, have 
done what we require to be prepared.
    Mr. McNerney. Now, each of the plant operators will also 
undertake a longer-term seismic risk evaluation; is that right?
    Ms. Macfarlane. Only if we decide that they need to, if 
their, in technical terms, ground-to-motion response spectrum 
exceeds their design basis.
    Mr. McNerney. So how long do you think these really 
evaluations will take?
    Ms. Macfarlane. If they have to do the detailed evaluation, 
those evaluations take a number of years. I believe for those 
plants that we will deem the highest priority, it will take 
probably 3 years.
    Mr. McNerney. So we could conceivably see plants shut down 
for as long as it takes.
    Ms. Macfarlane. The plants have been evaluating themselves, 
and we have evaluated them in terms of safety. So if there are 
plants that do have their--these ground motion response 
spectrum exceeding the design basis, we will require interim 
actions.
    Mr. McNerney. OK. I am going to yield back.
    Mr. Kinzinger. Good man. Gentleman yields back.
    Chair now recognizes the gentleman from Texas, Mr. Hall, 
for 5 minutes.
    Mr. Hall. Thank you, Mr. Chairman. And I thank the 
Commissioners for being here.
    And looking at the NRC's proposal rule on fee recovery for 
fiscal year 2014, there have been a lot of numbers here on 
total cost, a million here and a million there, then and now. 
Let me ask you this: The number of licensing employees is now 
2,254; is that correct?
    Ms. Macfarlane. The number of employees at the Nuclear 
Regulatory Commission?
    Mr. Hall. Licensing employees, yes.
    Ms. Macfarlane. Licensing employees. I will have to check 
that number for you.
    Mr. Hall. Does it sound reasonable to you?
    Ms. Macfarlane. It could be.
    Mr. Hall. Anything could be. Does it sound reasonable to 
you? We have these from the task force and from public numbers.
    Ms. Macfarlane. I will check that number for you.
    Mr. Hall. All right. That won't help me today, but I 
appreciate it.
    [The information appears at the conclusion of the hearing.]
    Mr. Hall. The number of licensing employees is now, what 
you don't know for sure, 2,254, according to our search. And it 
was 1,297 10 years ago. And the number of hours these licensing 
employees are expected to be productive is 1,355 hours each 
day. Do you know that figure?
    Ms. Macfarlane. No, I don't.
    Mr. Hall. Ten years ago, they were expected to be 
productive, according to your own records, for 1,776 hours.
    The hourly rate that the NRC charge for licensing work is 
now 279 bucks an hour; is that right?
    Ms. Macfarlane. It is in that area.
    Mr. Hall. Do you not know that figure?
    Ms. Macfarlane. Yes. You are correct.
    Mr. Hall. OK. Ten years ago it was only $156. Did you know 
that?
    Ms. Macfarlane. No, I did not.
    Mr. Hall. If I have this straight, there are a lot more 
folks being paid a lot more money to work a lot fewer hours. I 
don't know how you can deduct anything other than that.
    NRC is spending 486 million on corporate support this year. 
Chairman Macfarlane, given all the support these licensing 
employees are getting, shouldn't they be able to work as many 
productive hours as they used to work 10 years ago?
    Ms. Macfarlane. I believe we are spending 362 million on 
corporate support. But anyway.
    Mr. Hall. Our figures show you spent 486 million on 
corporate support this year. Is that incorrect?
    Ms. Macfarlane. I believe it is 362 million. In the 
congressional budget justification, page 151 of the 
congressional----
    Mr. Hall. That may make it worse, then. We say that the NRC 
is spending 486 million on corporate support this year. Now, 
Chairman Macfarlane, given all the support these licensing 
employees are getting, look like they ought to be as productive 
as they were 10 years ago. Do you have any answer for that? 
Assuming that these figures are correct.
    Ms. Macfarlane. Sorry, can you repeat the question?
    Mr. Hall. Do you have any--assuming that these figures are 
correct, and we said that the NRC is spending 486 million on 
corporate support, and if we have it straight, there are a lot 
more folks being paid a lot more money to work a lot fewer 
hours today. Is that correct? Is there any reason for that?
    Ms. Macfarlane. As I said in my previous statement, we are 
reducing corporate support by combining administrative and 
centralizing administrative functions across the offices at the 
agency. So those numbers will be going down. We are actively 
doing that.
    Mr. Hall. Well, you think that they will be able to work as 
many productive hours as they did 10 years ago?
    Ms. Macfarlane. Absolutely.
    Mr. Hall. Anybody else like to answer that, if she doesn't 
have an answer for it?
    Ms. Macfarlane. Of course, our staff is very busy, and they 
are working as many productive hours as they have in the past. 
They are not working less.
    Mr. Hall. Well, you are on record, you are talking for the 
record, and I am asking questions for the record, and these 
questions and your answers will be on the record. Will you 
please check those? It seems that that would free up enough 
resources, if our figures are correct, to review licensing 
actions in a timely fashion and eliminate the NRC's need for a 
budget increase.
    Ms. Macfarlane. We have many responsibilities at the NRC 
besides licensing actions, and we are working very hard to be 
as timely as possible.
    Mr. Hall. But I am only asking you about licensing. And the 
record is there, and I would ask you to review that record and 
give us some answer. Would you like for me to send you 
questions for further questions?
    Ms. Macfarlane. Sure.
    [The information appears at the conclusion of the hearing.]
    Mr. Hall. I think my time is up, Mr. Chairman.
    Mr. Kinzinger. Gentleman yields back.
    Chair recognizes the gentleman from Ohio, Mr. Johnson, for 
5 minutes.
    Mr. Johnson. Thank you, Mr. Chairman. Thank the panel for 
being here with us today.
    As my friend Mr. Shimkus noted, you failed to request any 
funding to proceed with the Yucca Mountain license review. And 
our questions for the record from the December 12th hearing, 
you were asked to provide, and I quote, ``detailed schedule and 
resource estimates to render a final decision on the issuance 
of a construction authorization for Yucca Mountain,'' but you 
failed to do that as well.
    So, Commissioner Magwood, how is Congress supposed to know 
how much to appropriate if the NRC refuses to estimate the 
costs of carrying out its statutory mandate?
    Mr. Magwood. Congressman, if I knew how much it would cost, 
I would tell you.
    Mr. Johnson. On the 12th, you took that as a task, the 
Commission took that as a task, and we haven't seen anything.
    Ms. Macfarlane. Yes. And I--yes. We are in the process of 
developing that estimate, Congressman.
    Mr. Johnson. When will we see it?
    Ms. Macfarlane. As soon as we can. We are working very hard 
on that.
    Mr. Johnson. Has OMB in any way instructed you either 
directly or indirectly to withhold such information?
    Ms. Macfarlane. I do not believe so.
    Mr. Johnson. No. OK.
    So the NRC failed to request funding for the spent fuel 
disposal enshrined in law, but I notice your budget includes 
language for modeling, and I quote, ``future alternate 
strategies for disposal of spent nuclear fuel,'' and for 
supporting, and I quote, ``changes in the national high-level 
waste and spent nuclear fuel management strategy.''
    This appears to be a reference to the DOE's Strategy for 
the Management and Disposal of Used Nuclear Fuel and High-Level 
Radioactive Waste.
    So, Chairman Macfarlane, are you aware that DOE strategy 
has not been authorized by Congress, and the DC Circuit Court 
stated the strategy is, I quote, ``based on assumptions 
directly contrary to the law''?
    Ms. Macfarlane. I was not aware.
    Mr. Johnson. You are not aware. OK. Well, you are now.
    The NRC staff provided a briefing for the committee staff 
on the fiscal year 2015 budget. Our staff raised questions 
about the alternate disposal strategy language. And a response 
from NRC's Congressional staffers--Congressional Affairs Office 
was, and I quote, ``the activities described in this bullet 
represent a nominal change in resources essential to maintain 
and enhance NRC capabilities to analyze risk and assess 
performances of geologic disposal of high-level waste and spent 
nuclear fuel in a variety of geologic settings. This effort is 
not related to any action before the Commission. Policy issues 
are the purview of the Commission, and this is a significant 
policy issue on which the Commission would have to direct the 
staff on how to proceed.''
    So, Ms. Svinicki--did I pronounce your name right? I 
apologize. Do you support directing the staff to work on 
alternate disposal strategies? That is a yes or no. Do you 
support directing the staff?
    Ms. Svinicki. I support their maintaining cognizance of the 
policy development for the Nation, yes.
    Mr. Johnson. But do you support directing the staff to work 
on alternate disposal strategies?
    Mr. Svinicki. If ``working'' is maintaining a level of 
cognizance of the scientific debate, then, yes.
    Mr. Johnson. Mr. Magwood, do you support directing the 
staff to work on alternate disposal strategies?
    Mr. Magwood. I would have said just no, but I actually 
agree with Commissioner Svinicki's comment. But beyond that, 
no.
    Mr. Ostendorff. Congressman Johnson, I agree with 
Commissioner Svinicki, but I also must add for clarification, 
because I don't know that it has been clearly presented, is 
that we, the Commission, have or are working to provide this 
committee with an estimate for how long it would take and what 
budgetary resources to move forward with the Yucca Mountain----
    Mr. Johnson. And I understand that. I understand that is 
what you are saying, but I also understand that what the law 
requires, you have got money in the budget for other things, 
but you don't have money in the budget for what the law 
requires.
    So you failed to request funding for statutory mandate to 
review the Yucca Mountain license application to provide 
Congress with a cost estimate. Instead you are requesting funds 
to support a strategy that has not been authorized and is based 
on assumptions directly contrary to the law.
    So, Chairman Macfarlane, will Yucca Mountain funds be used 
to support this effort?
    Ms. Macfarlane. The Nuclear Waste Fund will be used for 
the----
    Mr. Johnson. To do what is in violation or contrary to the 
law?
    Ms. Macfarlane. It is licensed for. It is required for. I 
will not support anything else.
    Mr. Johnson. Mr. Chairman, I have exceeded my time.
    Mr. Kinzinger. Gentleman yields back.
    We figured out the problem between Mr. Hall's numbers and 
your number. Your number that you are talking about is the 
budgeted number. What we have here--and we are happy to provide 
to you all if you need to see it--is the actual expenditures in 
terms of corporate support. And we have seen that increase----
    Ms. Macfarlane. For 2014.
    Mr. Kinzinger. Right. For 2014 and 2013 and 2012. And it 
has been--we are happy to provide that if you need to.
    With that, if there are no other Members seeking 
recognition, I would like to thank all the witnesses and 
Members that have participated in today's hearing. Remind 
Members that they have 10 business days to submit questions for 
the record. And I ask that the witnesses all agree to respond 
promptly to the questions.
    The subcommittee is adjourned.
    [Whereupon, at 11:48 a.m., the subcommittee was adjourned.]
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