[House Hearing, 114 Congress]
[From the U.S. Government Publishing Office]
H.R. 4979, THE ADVANCED NUCLEAR TECHNOLOGY DEVELOPMENT ACT OF 2016, AND
H.R. ___, THE NUCLEAR UTILIZATION OF KEYNOTE ENERGY POLICIES ACT
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON ENERGY AND POWER
OF THE
COMMITTEE ON ENERGY AND COMMERCE
HOUSE OF REPRESENTATIVES
ONE HUNDRED FOURTEENTH CONGRESS
SECOND SESSION
__________
APRIL 29, 2016
__________
Serial No. 114-141
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COMMITTEE ON ENERGY AND COMMERCE
FRED UPTON, Michigan
Chairman
JOE BARTON, Texas FRANK PALLONE, Jr., New Jersey
Chairman Emeritus Ranking Member
ED WHITFIELD, Kentucky BOBBY L. RUSH, Illinois
JOHN SHIMKUS, Illinois ANNA G. ESHOO, California
JOSEPH R. PITTS, Pennsylvania ELIOT L. ENGEL, New York
GREG WALDEN, Oregon GENE GREEN, Texas
TIM MURPHY, Pennsylvania DIANA DeGETTE, Colorado
MICHAEL C. BURGESS, Texas LOIS CAPPS, California
MARSHA BLACKBURN, Tennessee MICHAEL F. DOYLE, Pennsylvania
Vice Chairman JANICE D. SCHAKOWSKY, Illinois
STEVE SCALISE, Louisiana G.K. BUTTERFIELD, North Carolina
ROBERT E. LATTA, Ohio DORIS O. MATSUI, California
CATHY McMORRIS RODGERS, Washington KATHY CASTOR, Florida
GREGG HARPER, Mississippi JOHN P. SARBANES, Maryland
LEONARD LANCE, New Jersey JERRY McNERNEY, California
BRETT GUTHRIE, Kentucky PETER WELCH, Vermont
PETE OLSON, Texas BEN RAY LUJAN, New Mexico
DAVID B. McKINLEY, West Virginia PAUL TONKO, New York
MIKE POMPEO, Kansas JOHN A. YARMUTH, Kentucky
ADAM KINZINGER, Illinois YVETTE D. CLARKE, New York
H. MORGAN GRIFFITH, Virginia DAVID LOEBSACK, Iowa
GUS M. BILIRAKIS, Florida KURT SCHRADER, Oregon
BILL JOHNSON, Ohio JOSEPH P. KENNEDY, III,
BILLY LONG, Missouri Massachusetts
RENEE L. ELLMERS, North Carolina TONY CARDENAS, California
LARRY BUCSHON, Indiana
BILL FLORES, Texas
SUSAN W. BROOKS, Indiana
MARKWAYNE MULLIN, Oklahoma
RICHARD HUDSON, North Carolina
CHRIS COLLINS, New York
KEVIN CRAMER, North Dakota
Subcommittee on Energy and Power
ED WHITFIELD, Kentucky
Chairman
PETE OLSON, Texas BOBBY L. RUSH, Illinois
Vice Chairman Ranking Member
JOHN SHIMKUS, Illinois JERRY McNERNEY, California
JOSEPH R. PITTS, Pennsylvania PAUL TONKO, New York
ROBERT E. LATTA, Ohio ELIOT L. ENGEL, New York
GREGG HARPER, Vice Chairman GENE GREEN, Texas
DAVID B. McKINLEY, West Virginia LOIS CAPPS, California
MIKE POMPEO, Kansas MICHAEL F. DOYLE, Pennsylvania
ADAM KINZINGER, Illinois KATHY CASTOR, Florida
H. MORGAN GRIFFITH, Virginia JOHN P. SARBANES, Maryland
BILL JOHNSON, Ohio PETER WELCH, Vermont
BILLY LONG, Missouri JOHN A. YARMUTH, Kentucky
RENEE L. ELLMERS, North Carolina DAVID LOEBSACK, Iowa
BILL FLORES, Texas FRANK PALLONE, Jr., New Jersey (ex
MARKWAYNE MULLIN, Oklahoma officio)
RICHARD HUDSON, North Carolina
JOE BARTON, Texas
FRED UPTON, Michigan (ex officio)
C O N T E N T S
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Page
Hon. Ed Whitfield, a Representative in Congress from the
Commonwealth of Kentucky, opening statement.................... 1
Prepared statement........................................... 2
Hon. Bobby L. Rush, a Representative in Congress from the State
of Illinois, opening statement................................. 4
Hon. Jerry McNerney, a Representative in Congress from the State
of California, opening statement............................... 6
Hon. Fred Upton, a Representative in Congress from the State of
Michigan, prepared statement................................... 72
Hon. Frank Pallone, Jr., a Representative in Congress from the
State of New Jersey, prepared statement........................ 73
Witnesses
Marvin Fertel, President and Chief Executive Officer, Nuclear
Energy Institute............................................... 7
Prepared statement........................................... 10
Answers to submitted questions............................... 83
Jeffrey S. Merrifield, Partner, Pillsbury Law Firm, Chairman,
Advanced Reactors Task Force, Nuclear Infrastructure Council... 24
Prepared statement........................................... 26
Answers to submitted questions............................... 91
Todd Allen, Senior Fellow, Clean Energy Program, Third Way....... 34
Prepared statement........................................... 37
Answers to submitted questions............................... 94
Geoffrey Fettus, Senior Attorney, Natural Resources Defense
Counsel........................................................ 48
Prepared statement........................................... 50
Answers to submitted questions............................... 97
Submitted Material
Statement of the Nuclear Energy Institute........................ 74
Statement of the American Nuclear Society........................ 76
Statement of Clearpath Action.................................... 77
Statement of Third Way........................................... 79
Statement of the Clean Air Task Force............................ 80
Statement of Transatomic Power Corporation....................... 82
H.R. 4979, THE ADVANCED NUCLEAR TECHNOLOGY DEVELOPMENT ACT OF 2016, AND
H.R. ----------, THE NUCLEAR UTILIZATION OF KEYNOTE ENERGY POLICIES ACT
----------
FRIDAY, APRIL 29, 2016
House of Representatives,
Subcommittee on Energy and Power,
Committee on Energy and Commerce,
Washington, DC.
The subcommittee met, pursuant to call, at 9:34 a.m., in
room 2123, Rayburn House Office Building, Hon. Ed Whitfield
(chairman of the subcommittee) presiding.
Present: Representatives Whitfield, Shimkus, Latta,
McKinley, Kinzinger, Long, Rush, McNerney, Tonko, Green, Doyle,
Castor, Welch, and Loebsack.
Staff Present: Will Batson, Legislative Clerk, E&P, E&E;
Allison Busbee, Policy Coordinator, Energy & Power; Tom
Hassenboehler, Chief Counsel, Energy & Power; A.T. Johnston,
Senior Policy Advisor; Chris Sarley, Policy Coordinator,
Environment & Economy; Dan Schneider, Press Secretary; Peter
Spencer, Professional Staff Member, Oversight; Andy Zach,
Counsel E&E; Jeff Carroll, Minority Staff Director; Rick
Kessler, Minority Senior Advisor and Staff Director, Energy and
Environment; John Marshall, Minority Policy Coordinator; Dan
Miller, Minority Staff Assistant; Alexander Ratner, Minority
Policy Analyst; Tim Robinson, Minority Chief Counsel; Andrew
Souvall, Minority Director of Communications, Outreach and
Member Services; and Tuley Wright, Minority Energy and
Environment Policy Advisor.
OPENING STATEMENT OF HON. ED WHITFIELD, A REPRESENTATIVE IN
CONGRESS FROM THE COMMONWEALTH OF KENTUCKY
Mr. Whitfield. I would like to call the hearing to order
this morning. I recognize myself for 5 minutes.
Good morning, and welcome to our hearing to discuss
legislative proposals to advance the use of nuclear energy.
I want to thank all of our witnesses in advance, and I will
be introducing each of you before your 5-minute opening
statement.
But we want to thank Marvin Fertel for the great job he did
at the Nuclear Energy Institute, and I think it is his plan to
go on and look at other challenges at the end of this year. So
we are delighted he is here. He has served as NEI's president
and chief executive officer since 2009 and has had a long and
distinguished career advocating for the nuclear industry.
Nuclear energy is an integral part of our energy policy.
The current fleet of roughly 100 operating nuclear power plants
safely and reliably generates about 20 percent of our Nation's
electricity. However, many of these power plants are
approaching the end of their current license, and unnecessary
regulatory costs are adding to challenging economic conditions.
This outlook provides a timely opportunity to examine
proposals to improve the regulatory framework for nuclear power
plants and options to develop a regulatory framework for
advanced nuclear technologies.
New nuclear technologies hold great promise to operate in a
cost-competitive environment with even greater safety margins
than existing reactors while generating less waste and reducing
proliferation concerns. However, regulatory uncertainty is
repeatedly cited as a top barrier to developing these
technologies. The Department of Energy, which supports nuclear
research and development activity, should collaborate, where
applicable, with the NRC to address this uncertainty.
Today, we are going to hear from stakeholders about how to
more effectively manage the regulatory process, including
options to increase the efficiency and certainty of the NRC's
existing licensing process. Representative Kinzinger's
discussion draft highlights that cumbersome red tape in our
regulatory process forces ratepayers to pay more for safe,
clean nuclear power, and I want to thank him for his
legislation, and we look forward to your comments about that.
Also, I certainly appreciate Congressman Latta's leadership
in addressing regulatory barriers hindering the development of
advanced nuclear technologies. His legislation, the Advanced
Nuclear Technology Development Act, will assure that DOE's
technical expertise, research, and facilities are utilized,
when appropriate, to assist the NRC.
And at this time, I would like to yield a minute or so to
Mr. Latta, and then I will yield to Mr. Kinzinger, for their
comments on their legislation.
[The prepared statement of Mr. Whitfield follows:]
Prepared statement of Hon. Ed Whitfield
Nuclear energy is an integral part of an ``all of the
above'' energy policy. The current fleet of 100 operating
nuclear power plants safely and reliably generates about 20
percent of our nation's electricity. However, many of these
power plants are approaching the end of their current license
and unnecessary regulatory costs are adding to challenging
economic conditions. This outlook provides a timely opportunity
to examine proposals to improve the regulatory framework for
nuclear power plants and options to develop a regulatory
framework for advanced nuclear technologies.
I have raised concerns in previous oversight hearings about
the Nuclear Regulatory Commission's (NRC) discipline in its
regulatory activities and responsiveness to NRC licensees. It
is Congress' responsibility to consider how these activities
can be improved while assuring adequate protection of public
health and safety. I am confident we can identify efficiencies
to assure NRC adheres to their Principles of Good Regulation,
while fulfilling their critical mission.
New nuclear technologies hold great promise to operate in a
cost competitive environment, with even greater safety margins
than existing reactors while generating less waste and reducing
proliferation concerns. However, regulatory uncertainty is
repeatedly cited as a top barrier to developing these
technologies. The Department of Energy, which supports nuclear
research and development activities, should collaborate where
applicable, with the NRC to address this uncertainty.
Today we will hear from stakeholders about how to more
effectively manage the regulatory process, including options to
increase the efficiency and certainty of the NRC's existing
licensing process. Representative Kinzinger's discussion draft
highlights that cumbersome red tape in our regulatory process
forces ratepayers to pay more for safe, clean nuclear power.
I appreciate Congressman Latta's leadership to address
regulatory barriers hindering the development of advanced
nuclear technologies. His legislation, the Advanced Nuclear
Technology Development Act, will assure that DOE's technical
expertise, research, and facilities are utilized when
appropriate to assist the NRC. This legislation also requires
the NRC to draft the regulatory roadmap for the scores of
companies who need a regulatory framework for 21st century
nuclear technologies.
Mr. Latta. Well, thank you very much, Mr. Chairman. Thanks
for yielding.
And thanks for our panel for being with us today.
I would like to again thank you for holding this hearing
today on nuclear power, which is highlighting the bill
Congressman McNerney and I introduced last week, H.R. 4979, the
Advance Nuclear Technology Development Act of 2016.
I would like to ask unanimous consent, Mr. Chairman, to
enter several letters of support into the record. These letters
are from the Nuclear Energy Institute, the American Nuclear
Society, and ClearPath.
Mr. Whitfield. Without objection.
[The information appears at the conclusion of the hearing.]
Mr. Latta. Thank you very much.
The future of the nuclear industry needs to start now with
Congress ensuring that the Nuclear Regulatory Commission is
able to provide the certainty that the private sector needs to
invest in innovative technologies. Nuclear power is currently
20 percent of our national energy portfolio and must remain a
vital part of our energy mix.
As the United States looks to the future, more energy will
be needed, and nuclear power provides a reliable, clean
baseload power option. Investment in new technologies is
already happening with approximately 50 companies in this
country working to develop the next generation of nuclear
power.
And again, that is why we have introduced H.R. 4979. It is
time for Congress to ensure that NRC provides a framework so
that innovators and investors can prepare to apply for
licensing technologies. H.R. 4979 not only requires that NRC
establish a regulatory framework for issuing licenses for
advanced nuclear reactor technology, but it also requires that
NRC submit a schedule for implementation of the framework by
2019.
Safety in nuclear is the number one goal, and the
regulatory framework ensures that NRC has the opportunity to
develop a framework that enables them to safely regulate the
future technology of the nuclear industry. H.R. 4979 also
requires that the Department of Energy and the NRC collaborate
in advancing new nuclear technology. The National Labs in DOE
provide opportunities for testing of new nuclear technology on
Federal lands and the option to look at public-private
partnerships between the DOE and the private sector companies
interested in investing in the future of nuclear.
There is also a role for the NRC in this space because
these testing opportunities allow for a demonstration of
technologies that NRC has not been licensing over the past 4
years.
And, Mr. Chairman, I greatly appreciate you holding this
hearing, and I yield back to you. Thank you very much.
Mr. Whitfield. Mr. Kinzinger, Mr. Upton is not going to be
here, so I want to give you his time.
Mr. Kinzinger. Thank you.
Mr. Whitfield. And then if Mr. Latta wants to talk some
more, he can talk some more too then.
At this time I recognize Mr. Rush for his 5-minute opening
statement.
OPENING STATEMENT OF HON. BOBBY L. RUSH, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF ILLINOIS
Mr. Rush. I want to thank you, Mr. Chairman, for holding
this important hearing today on H.R. 4979, the Advanced Nuclear
Technology Development Act of 2016, and the Nuclear Utilization
of Keynote Energy Policies Act.
Mr. Chairman, as we move towards a reduced carbon
sustainable energy economy, there is no doubt that nuclear
energy will need to play an instrumental role in order to reach
those objectives. While today's fleet of nuclear reactors
utilize light-water reactor technology, more attention is now
being paid to the use of non-LWR reactor designs that have been
demonstrated by the Department of Energy but are currently not
licensed for commercial use in the United States.
In fact, Mr. Chairman, emerging innovative designs of
advanced nonlight-water reactors and light-water small modular
reactors have the potential to produce nuclear power more
efficiently and with less waste than the current technologies.
If we are to truly develop and scale up these technological
advances, it is important that policymakers and the Nuclear
Regulatory Commission provide regulatory certainty for the
nuclear industry in order to encourage investment in these
next-generation nuclear designs.
So I applaud my colleagues, Mr. Latta and Mr. McNerney, for
introducing H.R. 4979. This legislation seeks to provide
guidance and direction to the NRC and the DOE to ensure that
these two agencies have sufficient technical expertise in order
to support and regularly advance reactor technology.
The rule also requires the NRC to formulate a plan that
would help foster civilian research and development of advanced
nuclear energy technologies and enhance the licensing and
commercial development of such technologies.
Mr. Chairman, I fully support the intent of this
legislation. I look forward to hearing feedback from our panel
of experts on both the necessity for this type of legislation
and the implications once it is enacted. In regards to the
Nuclear Utilization of Keynote Energy Policies Act, I also look
forward to engaging the witnesses on this legislation.
Mr. Chairman, finally, if nuclear energy is going to
continue to play a constructive role in a reduced carbon energy
portfolio, we must ensure that we have policies in place that
appropriately reflect the contributions of the industry and the
current reality that it faces. So I commend my colleague from
Illinois, Mr. Kinzinger, for introducing a bill draft that at
the very least initiates a conversation toward reaching this
goal.
Of course, Mr. Chairman, today's bill is simply a
discussion draft, and we would need to hear from the NRC
commissioners themselves before moving into the legislative
process. But I look forward to today's hearing, and I look
forward to testimony from today's experts on both the need for
the changes outlined in the bill as well as the practical
implications if these changes were indeed enacted.
I want to thank you, Mr. Chairman. I yield back the balance
of my time.
Mr. Whitfield. The gentleman yields back.
At this time I recognize Mr. Kinzinger for 5 minutes. And
if some others who want some of your time, you might consider
yielding to them. Thank you.
Mr. Kinzinger. Sure. This will be fairly quick.
Mr. Chairman, I want to thank you for holding the hearing,
and I want to thank each of the witnesses for being here today.
It is an important topic.
As we have heard, nuclear power generates about 20 percent
of electricity in the United States, and in Illinois it is over
50 percent, including 60 percent of our Nation's carbon-free
electricity. These plants are high performing, consistently
having the highest capacity factors by far in the electricity
industry and setting the gold standard for commercial nuclear
safety worldwide.
We have to recognize, however, that while our nuclear fleet
is strong today, the demand for clean, reliable, and affordable
energy is only increasing. We have an obligation to safely
maintain our existing fleet of 99 units and to ensure the NRC
continues to regulate efficiently and effectively so investment
in plants can continue.
The regulatory inefficiency and uncertainty we often see
today does nothing to help our existing fleet, does nothing to
foster investment in new plants, or most importantly, to ensure
safety and protect public health.
I want to thank the NRC for providing me with technical
feedback on this draft, which we are currently reviewing, and I
look forward to continuing to work with them throughout this
process. Furthermore, I appreciate the interest in my
colleagues in this issue addressed in my discussion draft,
including establishing fair and more equitable NRC fees,
streamlining the licensing process, and improving the current
regulatory framework for decommissioning plants. These are all
important conversations to have so that nuclear power can
continue to provide clean, reliable, and affordable electricity
to ratepayers in the United States.
Again, I welcome this opportunity to discuss how we can
maintain our Nation's position as the global leader in civilian
nuclear power and NRC's position as the gold standard of
safety. I think all of us who are in this room recognize that
if we cede the position, it will have serious consequences not
only for our economy but also for our national security.
With that, Mr. Chairman, I am happy to yield to anybody who
wants my time.
Mr. Whitfield. Anybody on our side seek additional time?
Mr. Kinzinger. Great. I yield back.
Mr. Whitfield. OK. Yields back.
At this time I recognize the gentleman from California, and
thank him very much for cosponsoring this legislation as well,
for 5 minutes.
OPENING STATEMENT OF HON. JERRY MCNERNEY, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF CALIFORNIA
Mr. McNerney. Thank you, Mr. Chair.
Our Nation will, by necessity, diminish our dependence on
fossil fuels in order to fight climate change, and as we do so,
we will need to turn more and more to nuclear power.
H.R. 4979, the bill that my colleague, Mr. Latta, and I
introduced, allows the NRC to develop the needed technical
expertise for emerging technologies. This legislation provides
a pathway for the NRC and the DOE to continue collaborating and
establishes a regulatory framework for consideration of
licensing advanced reactors. This will help ensure that as
newer, safer technologies are developed, that the NRC has the
framework in place to review new applications.
Mr. Chairman, with unanimous consent, I would like to
submit three letters, one from Berkeley's Nuclear Engineering
Department, one from Third Way, and one from the Clean Air Task
Force, into the record.
Mr. Whitfield. Without objection.
[The information appears at the conclusion of the hearing.]
Mr. McNerney. And I will yield the balance of my time to my
colleague from Pennsylvania.
Mr. Doyle. And I thank my colleague.
I want to thank the chairman and the ranking member for
holding this important hearing today. To me, nuclear is a
critical component of our energy future. We need to work here
at this committee to ensure that it remains feasible and safe
for our constituents back home by investing in this incredible
energy source and its technology and making sure its value as
carbon-free reliable baseload power is properly appreciated.
I believe that advanced nuclear is a key component of
maintaining nuclear power in the future and will be an integral
part of our energy portfolio here in the United States. My
colleagues, Congressman Latta and McNerney's bill takes
important steps in that direction.
I also want to applaud our colleague Mr. Kinzinger for his
discussion draft. I think we share many similar concerns
regarding the nuclear industry, and I am optimistic that we
will be able to find some common ground on solutions. Though I
couldn't help but notice the acronym for your bill is NUKEPA,
which I find somewhat distressing.
But I am certainly encouraged by bringing attention to
these issues the nuclear industry is facing, and I do hope we
can work together on solutions and by coming up with a
different acronym than the one you have chosen.
Thank you. I yield back.
Mr. Whitfield. The gentleman yields back. So that concludes
the opening statements, and I am going to introduce the
witnesses individually before they speak.
So first of all, we have Mr. Marvin Fertel, who I mentioned
in my opening statement, president and chief executive officer
for the Nuclear Energy Institute.
Thanks for being with us, and we look forward to your
testimony. You are recognized for 5 minutes.
STATEMENTS OF MARVIN FERTEL, PRESIDENT AND CHIEF EXECUTIVE
OFFICER, NUCLEAR ENERGY INSTITUTE; JEFFREY S. MERRIFIELD,
PARTNER, PILLSBURY LAW FIRM, CHAIRMAN, ADVANCED REACTORS TASK
FORCE, NUCLEAR INFRASTRUCTURE COUNCIL; TODD ALLEN, SENIOR
FELLOW, CLEAN ENERGY PROGRAM, THIRD WAY; AND GEOFFREY FETTUS,
SENIOR ATTORNEY, NATURAL RESOURCES DEFENSE COUNSEL
STATEMENT OF MARVIN FERTEL
Mr. Fertel. Thank you, Mr. Chairman and Ranking Member Rush
and members of the subcommittee. On behalf of the commercial
nuclear energy industry, I want to thank the committee for
considering the Advanced Nuclear Technology Development Act,
H.R. 4979, and the discussion draft of the Nuclear Utilization
of Keynote Energy Policies Act.
I am pleased to represent the broad nuclear industry,
including the owners and operators of nuclear power plants and
the supplier community today.
As Congressman Kinzinger said, nuclear energy is the
largest and most efficient source of carbon-free electricity in
the United States. Our 99 reactors produce nearly 20 percent of
our Nation's electricity and approximately 63 percent of our
carbon-free electricity.
Nuclear energy facilities demonstrate unmatched reliability
by operating with an average capacity factor of 92 percent,
higher than all other electricity sources. And importantly,
they are essential to the country's economy and the communities
in which they operate.
Despite the significant environmental, economic, and
national security benefits that nuclear energy provides, the
current regulatory requirements and licensing processes
challenge the industry's ability to build new technologically
advanced reactors.
The prospect of developing advanced reactors has become
both attractive and necessary in the U.S. and abroad. In this
country, approximately 126,000 megawatts of generation will be
retired over the next 15 years. The U.S. Energy Information
Administration forecasts the need for 287,000 megawatts of new
electric capacity by 2040 in addition to the electric capacity
that will be needed to replace the retired power plants.
Many other countries are looking to a rapid expansion of
nuclear energy to address their growing electricity and
environmental needs. Advanced nuclear reactor designs offer
many technological advances for the U.S. and are also well
suited to developing economies. However, without strong Federal
leadership and direction, the U.S. industry runs the risk of
falling behind its international competitors.
H.R. 4979 affirms Congress' commitment to U.S. leadership
in nuclear technology and safety. The industry supports
provisions in the bill that effectively direct the NRC to think
differently about licensing reactors. The bill calls for an
efficient, risk-informed, technology-neutral framework for
advanced reactor licensing and a phased review process that
could effectively facilitate private financing for advanced
reactors.
Developers will be able to demonstrate progress to
investors and other participants in these first-of-a-kind
projects and obtain necessary capital investments as they
achieve milestones.
The NRC imposes stringent safety requirements that all
nuclear facilities must meet to maintain public health and
safety. As we look to the details of how innovative advanced
reactor technologies can meet these requirements, it is
important for the NRC's regulatory framework to acknowledge
that there will be a variety of effective ways to meet their
safety requirements.
H.R. 4979 also recognized that it is a government function
to develop the regulatory infrastructure to licensed advanced
reactor technologies and therefore authorizes Federal funding
to support those activities.
Congress should reform the NRC's fee-recovery structure to
make fees more equitable and transparent. Despite NRC's efforts
to reduce its budget and rightsize the agency, fees continue to
be excessive and limitations of the mandated 90 percent fee
rule create fundamental structural problems.
The NRC budget is approximately $1 billion per year,
despite significant declines in its workload. In particular,
according to an Ernst & Young study performed for the NRC, the
NRC spends 37 percent of its budget on mission support costs,
more than 10 percent higher than some peer agencies.
Because the NRC must collect 90 percent of its budget from
licensees and the NRC budget has not correspondingly declined,
remaining licensees are responsible for paying higher annual
fees. With recent premature shutdowns and additional reactor
decommissionings in the coming years, the current fee structure
virtually guarantees that remaining licensees will continue to
bear even higher annual fees.
The draft Nuclear Utilization of Keynote Energy Policies
Act adopts a straightforward approach to making NRC fees more
equitable. It would continue to require the licensee to pay for
all agency activities attributable to a licensee or class of
licensees but disallow collection of fees associated with the
agency's corporate support. While there are Federal budget
questions that arise with this approach, it would require the
NRC to justify corporate support costs to Congress in order to
receive appropriations, and in turn, prompt the NRC to control
its budget and reduce or eliminate wasteful spending.
The draft bill recognizes the value of allowing
international investments in U.S. nuclear plants by removing
outdated restrictions on foreign ownership that ignore the
multiple protections to our Nation's security and the reality
of today's global nuclear energy markets. The draft bill also
eliminates the uncontested mandatory NRC hearing on
construction permits and combined license applications. This
would not limit public participation since the public does not
participate in a mandatory hearing and multiple other formal
opportunities are available for public participation.
The draft bill would require that the NRC improve the
regulatory framework for decommissioning nuclear power
reactors. It is in the best interests of all parties, the NRC,
licensees, and other stakeholders, to have a more efficient
regulatory framework for plants entering the decommissioning
process. The existing framework does not appropriately account
for the significant reduction in risk that results when a power
reactor ceases operations, defuels, and decommissions.
In closing, on behalf of NEI and its members, I wish to
thank Congressmen Latta and McNerney for introducing the
important advanced reactor legislation. We support passage of
this bill. We also appreciate Congressman Kinzinger's work to
reform NRC fees and the regulatory process.
We look forward to working with members of the committee
and their staff to advance these reforms. Again, thank you for
the opportunity to testify today.
[The prepared statement of Mr. Fertel follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Mr. Whitfield. And our next witness is Mr. Jeffrey
Merrifield, who is partner of the Pillsbury Law Firm and also
chairman of the Advanced Reactors Task Force, the Nuclear
Infrastructure Council.
Welcome, and you are recognized for 5 minutes, Mr.
Merrifield.
STATEMENT OF JEFFREY S. MERRIFIELD
Mr. Merrifield. Thank you very much, Mr. Chairman. I also
want to thank Ranking Member Rush and members of the
subcommittee. As a former commissioner of the U.S. Nuclear
Regulatory Commission, I frequently testified before this
committee, and it is again an honor to----
Mr. Whitfield. Mr. Merrifield, would you move your
microphone a little closer?
Mr. Merrifield. Sorry. I got it.
Mr. Chairman, again, thank you very much.
Thank you, Ranking Member Rush.
As a former member and former commissioner of the Nuclear
Regulatory Commission, I frequently testified before this
committee, and again, it is an honor to be here this morning.
Today, I am appearing in my role as chair of the U.S.
Nuclear Infrastructure Council, Advanced Reactors Task Force,
although, as mentioned, I am a partner in the Pillsbury Law
Firm. My testimony will discuss the provisions in H.R. 4979 on
advanced reactors, as well as the proposed changes to the NRC
procedures that are the subject of a discussion draft offered
by Congressman Kinzinger.
NIC salutes the subcommittee's focus and support for
advanced reactors, as well as the NRC budget reform provisions
that provide funding for the NRC to develop a modernized
nuclear licensing framework for advanced nuclear technologies.
NIC issued a framework for advanced reactor licensing
modernization white paper on February 22, 2016, which embraces
many of the elements contained in the legislation.
When I first became a commissioner in 1998, the NRC, with
the support of Congress, worked to rightsize the agency,
consistent with the level of licensing and inspection
activities. At that time, the agency had approximately 3,400
employees, and within the next few years we were able to reduce
that down to about 2,800, principally through attrition, yet
without any sacrifice to its mission of protecting people and
the environment.
Today, the agency faces the same challenges to reduce its
staff and to become more efficient and timely in its licensing
activities. While the NRC has made great strides in rightsizing
the agency through Project AIM, we believe further efficiencies
can be realized, while at the same time maintaining safety and
inspection activities and improving the timeliness of
licensing.
During the past decade, the U.S. has maintained its
technology leadership by developing new passive Generation III
reactors in Georgia and South Carolina, as well as small
modular light-water nuclear reactors headed toward deployment.
NIC has seen significant growth and support for Generation IV
advanced reactors that will provide expanded options for
economical, carbon-free electricity and industrial heat
generation.
If the United States is to be successful in maintaining its
lead in developing and deploying these reactors in the 2020s
and 2030s, Congress must consider significant policy changes.
We believe the language in section 6 of H.R. 4979 will allow
the agency to create a modern, risk-informed, technology-
neutral framework, which will enable the development of
appropriate advanced reactor regulations without passing these
costs on to the developers or the utilities.
While section 6(a)(6) calls for the NRC to evaluate options
to allow applicants to use phased review processes, we believe
the language should be strengthened to require the NRC to
establish specific stages in the commercial advanced nuclear
reactor licensing process, including a prelicensing vendor
design review modeled after the Canadian Nuclear Safety
Commission vendor design process that was recommended by the
NIC white paper.
Such a process would allow advanced reactor developers and
investors to have a clearer picture of where they stand in the
NRC process and in meeting NRC safety requirements and allow
them to achieve further investment in their technologies.
We would emphasize a need to establish risk-informed
performance criteria applicable for advanced reactors. While
licensing process reforms are needed, advanced reactor
technical performance criteria arecritically required for
developers to proceed with advanced reactor designs, and the
NRC must move forward to finalize advanced generic design
criteria, source term, and emergency planning requirements,
among others.
We strongly support section 2 of the discussion draft which
places fair and equitable provisions on the agency's fee-based
programs. By eliminating the current fee-based-to-nonfee-based
ratio and articulating the specific areas that will be borne by
general revenues, the draft provides the appropriate balance
between the fees borne by individual companies and those
overhead activities covered by the Federal Government.
NIC believes the discussion draft would be strengthened by
providing that the early stage engagement between advanced
reactor developers and the NRC should be conducted at no or
limited cost, with an appropriate cost share, perhaps 50/50 for
later stages of the licensing process. While this can be funded
through general revenues or a DOE grant program, either way, it
should avoid the DOE and NRC picking advanced reactor winners
and losers. We believe the private sector is better placed to
identify and promote innovation, and the NRC licensing fees
should not have a chilling effect on these entrepreneurial
efforts.
Finally, I strongly support the elimination of the foreign
ownership requirements of section 3 and the mandatory hearing
requirements contained in section 4, and I am pleased to
discuss my views with the subcommittee.
I would ask that some additional letters of support,
including that of X-energy, be included in the hearing record.
And with that, I again thank you very much for allowing me
to testify today.
[The prepared statement of Mr. Merrifield follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Mr. Whitfield. Thank you, Mr. Merrifield.
Our next witness is Mr. Todd Allen, who is a senior fellow
at the Clean Energy Program for the Third Way.
Dr. Allen, thanks for being with us, and you are recognized
for 5 minutes, and please get the microphone up close. Thank
you.
STATEMENT OF TODD ALLEN
Mr. Allen. Absolutely.
Good morning, Chairman Whitfield, Ranking Member Rush,
other distinguished members of the subcommittee. On behalf of
Third Way, I greatly appreciate the opportunity to provide
testimony on the importance of nuclear energy innovation.
My perspective on nuclear energy comes from my diverse
career. My first job after college, I lived on a floating
nuclear reactor as an officer in the U.S. nuclear submarine
fleet. I spent 10 years teaching at the University of Wisconsin
nuclear engineering. I have seen firsthand the young generation
that believes in nuclear technology as a critical component for
providing clean energy.
I have worked in the national laboratory system as the
deputy for science and technology at the Idaho National
Laboratory, working to open up the laboratory facilities to
university and industry users across the country. Now I am at
think tank, where I think.
Third Way supports the further development of an innovation
culture that creates and brings to market advanced nuclear
technologies. Currently, nuclear energy is provided as a single
product offering, specifically large gigawatt scale electricity
production machines. But the national energy system is changing
rapidly, opening up the possibility of nuclear energy
supporting a wider range of functions if new ideas can get from
conception to commercialization.
A 2015 Third Way report identified nearly 50 companies,
backed by more than $1.3 billion in private capital, developing
plans for new nuclear plants in the U.S. and Canada. These
companies are creating a growing number of product options of
varying sizes and capabilities intending to build upon the
continued success of our current light-water reactor fleet,
which provides over 60 percent of the carbon-free electricity
in the United States.
Private-public partnerships will be key to the story,
similar to the way hydraulic fracking and the Internet were
developed and how SpaceX is currently teaming with NASA to send
unmanned vehicles to Mars.
So how can Federal investments nurture this emerging
culture of nuclear innovation? I will use as an example a
hypothetical graduate nuclear engineering student named Carla
who wants to provide clean energy to the world and make money
at the same time. What is her path to success in transitioning
a good idea on paper to a marketable product and a thriving
company, and where can partnerships with the Federal Government
be useful?
First step, Carla would benefit from early interactions
with technical experts, financiers, and business developers. We
suggest Carla could be helped through the creation of private-
public partnerships in early innovation, a proposal we have
called Innovation Centers. Innovation Centers would also
benefit the Department of Energy by providing the agency with
valuable information on private sector investment trends that
could then inform how DOE directs research dollars to solve
problems that support multiple companies.
Step two, securing investments. At the Innovation Center,
Carla has opportunities to troubleshoot and mature her concept.
She is also introduced to financial firms, which ultimately
helps her secure a small investment to fund her company. Carla
could leverage for private investment to receive DOE cost
share, allowing her to move quickly and to signal to investors
that her design is especially promising. The Department of
Energy already engages in cost share programs, like the ones
currently supporting project agreements with Southern Company's
TerraPower and X-energy, and further use of these is
encouraged.
Her third step, specialized testing. Here is where the
Federal programs become uniquely valuable, through access to
national test beds. Some development requires access to
specialized capabilities. For instance, test reactors,
facilities to test radioactive materials, or high-performance
computing. Fortunately, a number of the Department of Energy
laboratories have these types of facilities and expertise that
Carla needs. The Department of Energy created the Gateway for
Accelerated Innovation in Nuclear, or GAIN program, to
facilitate these private-public interactions.
Step four, beginning her regulatory process. As she
develops her technology, Carla would like to get signals from
the regulator, short of licensing, that her technical solutions
are reasonable. This will help her gain additional funding
increments as she develops her designs. She needs a regulator
who is staffed and funded in a manner that allows it to be
ready to respond to emerging light-water reactor technologies.
Ideally, the pace of regulatory review would support new
products for an energy system that is changing rapidly, all
while maintaining the traditional exemplary safety record.
Step five, demonstration reactor. As is typical with many
new and capital-intensive technologies, Carla may need to build
a demonstration of a reactor before moving on to a full-scale
commercial reactor. To address this, the Department of Energy
should allow innovators like Carla a chance to build their
demonstrations at one of their laboratories that already have
experience running nuclear facilities, allowing Carla to build
her reactor at Idaho or Oak Ridge, for example, to help her
more affordably test her design and make any final changes to
commercialize her product.
Final step, NRC licensing of her demonstration reactor.
Because Carla is hoping her demonstration reactor design will
eventually be commercialized, which would require her to go
through the NRC licensing process, it would benefit her if the
NRC were involved in the licensing and construction of her
demonstration reactor. When Carla's demonstration reactor
works, she is ready to work with her investors and the Nuclear
Regulatory Commission to get final design approval and funding
for commercialization.
Where can Congress help? Early innovation. Support the
creation of multiple private-public Innovation Centers that
facilitate the creation of a new generation of nuclear
entrepreneurs. This can be formally done through report
language in the appropriations process.
Test beds. Support the GAIN program as our national nuclear
Innovation Center, ensuring a modern infrastructure with world-
leading staff that serves as the Nation's test bed. Ensure that
federally supported R&D programs are structured to maximize
value through well-structured private-public partnerships. And
finally, regulation. Ensure that the Nuclear Regulatory
Commission is staffed, structured, and funded to support a pace
of regulatory review that would support new products for an
energy system that is changing rapidly.
House Resolution 4979 asks the NRC and DOE to look broadly
at their functions and report back on how they could better
serve this emerging nuclear innovation community. We are
supportive of this national approach and have suggested some
specific ideas. We hope DOE and NRC have additional useful
ideas.
We also appreciate the intent of the discussion draft from
Mr. Kinzinger and are ready and willing to interact to optimize
our ability to move nuclear technology forward.
Thank you for inviting me to testify. I look forward to
your questions.
[The prepared statement of Mr. Allen follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Mr. Whitfield. Thank you.
And our next witness is Mr. Geoffrey Fettus, who is the
senior attorney for the Natural Resources Defense Council.
Thanks for being with us, and you are recognized for 5
minutes.
STATEMENT OF GEOFFREY FETTUS
Mr. Fettus. Thank you, Chairman Whitfield and Ranking
Member Rush and distinguished members of the committee. It is a
great honor to be here. I will just highlight a few points
here.
First, with respect to H.R. 4979, which requires DOE and
the NRC to work together to work to develop a plan with public
input for advanced reactor licensing systems, such a charge has
merit in that it asks two of the relevant Federal agencies to
work together, but some cautions are in order.
Two hundred and seventy days is far too short a time to
both gather and analyze the necessary technical and regulatory
information and provide for public comment with respect to such
a complicated set of economic, security, and environmental
challenges as those faced by the licensing of advanced
reactors.
Further, both EPA and the President's Council on
Environmental Quality should be part of any such enterprise,
EPA for its standard-setting authority and CEQ for its
oversight of NEPA obligations. Even though many of these
advanced reactor concepts have been around for decades, none of
the current space have demonstrated the security,
environmental, and safety improvements necessary to make them
viable in the near term, and more pertinent to the reality of a
carbon-constrained future, none of them have demonstrated any
likelihood that they will be able to compete in competitive
energy markets. And the licensing process, effectively designed
by industry and streamlined by the NRC multiple times over the
last two decades, has little to do with that.
Thus, our concern is real that the practical nuclear
engineering and economic hurdles inherent to these technologies
may serve as a distraction to the rapid continued scale-up of
existing, economically viable, and proven solutions to the
threat of climate change from wind, solar, and energy
efficiencies.
Second, we found the discussion draft substantially more
problematic, and I will highlight just a few of the sections.
Section 2 unwisely shifts substantial costs to the
taxpayers rather than collecting them, as has been done
historically via licensing fees.
Section 3 requires a study on the feasibility and
implications of repealing foreign ownership restrictions. While
it is wise to study a matter and collect information before
legislating, we would urge a requirement for wide public input
on a matter this complicated, especially from the security
terms.
Section 4 does away with the mandatory hearing provision,
which would do much harm to public confidence that all
technical issues have been thoroughly and adequately considered
by the NRC. Indeed, the mandatory hearing plays a crucial role
in supplementing the contested hearing process in which few
issues--and I want to stress this--sometimes no issues survive
the gauntlet of NRC's arduous procedural requirement for
admission of issues to a hearing.
The mandatory hearing process has a proven track record of
highlighting weaknesses in the NRC's staff's review. For
example, in the case of the Clinton ESP, the Atomic Safety and
Licensing Board found the staff's review, and I quote, ``did
not supply adequate technical information or flow of logic to
permit a judgment as to whether the staff had a reasonable
basis for its conclusions,'' 64 NRC at 460.
Section 5 is equally troublesome as it is simply a
codification of agency drift to an informal, less rigorous
hearing process that really has already been underway for a
long time. And rather than ensuring the hearing process
continues to become a yet more expedient process and more of a
restrictive venue for states and the public, Congress should be
directing NRC to submit a substantially redesigned adjudicatory
hearing process that will provide regulatory certainty but will
also simplify the hearing requirements to allow substantive
technical issues of safety or environmental concern come to the
fore rather than entertaining joint industry-staff efforts to
flyspeck, curtail, or have dismissed literally every contention
that has ever been filed before the Atomic Safety and Licensing
Board.
Section 6 is also problematic in that it weakens the
opportunity for hearings on inspections, test analyses, and
acceptance criteria prior to operation. It further bars the use
of incomplete information as a basis for granting a hearing.
Briefly, the perception that hearings cause delays in
licensing has no basis in fact. The industry has long
structured the hearing process, and NRC staff requests for
additional information are at the heart of the timing, and that
is simply evidence of the regulator doing its job.
But even more to the point, docketing the application
before it is complete when it often contains substantial areas
that are promised to be addressed later or leaves out
significant details creates the false impression that the time
between when the application is docketed and when the final
decision is rendered is attributable to the hearing process and
public participation. This delay should not be used to justify
even further restrictions.
Section 7 would do grave harm to NEPA and likely bar any
meaningful NEPA review by staff. The current NEPA process, as
is practiced by the NRC, is already problematic, and I detail
that in my testimony.
And finally, with respect to section 8, we recommend
striking the text in section (b), ``factors,'' entirely from
the draft legislation as this language can prejudice and
distort the final decommissioning rulemaking that has just
commenced at the Commission.
Thank you again for this opportunity, and I am happy to
take any questions.
[The prepared statement of Mr. Fettus follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Mr. Whitfield. Well, thank you.
Thank all of you for your testimony.
At this time, we will recognize members for questions.
And, Mr. Latta, you are recognized for 5 minutes.
Mr. Latta. Well, thanks, Mr. Chairman, and again, thanks
for holding today's hearing.
And, gentlemen, thanks very much for your testimony today.
It is very much an appreciated.
Mr. Merrifield, if I could start with the first question to
you.
My legislation requires the development of phased licensing
process to provide certain assurances to the license
applicants. What do you see are the primary advantages of
structuring the licensing process in this manner and how would
you recommend the NRC develop such a process?
Mr. Merrifield. Well, I think right now one of the
disadvantages of the current system is it is sort of all or
nothing. You have to put in your license application and wait a
very long period of time to determine whether the NRC is going
to find that to be acceptable.
For the advanced reactor community, having a stepwise
process, as envisioned by your bill, would allow early
interaction with the NRC and an early indication of whether
that design may be licensable. If, indeed, the NRC finds out
that that is the case, that developer can identify additional
areas of funding to continue to process that application and
that design.
If for some reason--and we hope it is not the case--the NRC
were to find that that would be something that would be
difficult or not able to be licensed, then that applicant can
then make a logical business decision whether they want to
continue to move forward or not, and we think that is a real
benefit to innovation.
Mr. Latta. Well, thank you. And your testimony also
suggests that the model used by the Canadian nuclear regulator
should be pursued. What do you think makes their structure more
unique and constructive?
Mr. Merrifield. Well, it has some very specific steps to
it. It does have this pre-application vendor design review. It
has got some specific deliverables that are expected by the
Canadian regulator that are well spelled out. It has a specific
timing for when that review should occur. And, indeed, they
even have limitations in terms of what the cost is going to be
for the applicant.
So it makes it a very clear program for everyone involved
to understand what is expected in that first step, and it
allows the technology both to be evaluated as well as to move
forward.
Mr. Latta. Thank you.
Dr. Allen, if I could turn to you, following up on that, do
you have any additional thoughts regarding the benefit of the
phased licensing process.
Mr. Allen. Just one small thing. I agree with the
commissioner that it is a very important early signal to
someone who is trying to take an early idea to
commercialization to be able to get that feedback from the
regulator.
The other thing by getting those is, parallel to this, we
have got the Department of Energy doing research programs in
similar technical areas. The more that we can get early signals
that we can then use to feed back and guide how we spend
Federal dollars on research in a way that helps those private
companies is also very useful.
Mr. Latta. Thank you.
If I could ask Mr. Fertel a question of you. In your
testimony you talk about that the country is going to lose, in
the next 15 years, 126 gigawatts of generation and that we are
going to need 287 gigawatts by 2040. I represent a district
with 60,000 manufacturing jobs. We have to have a baseload
capacity out there.
Could you just maybe kind of give me an overview of how
many power plants we are talking about when you are talking
about 126 gigawatts and what we are going to need when you look
at 287?
Mr. Fertel. I think, Congressman, in general, you could
think about them if they are gas plants, which is what we are
building now, they are probably on the order of 400 to 500
megawatts each. So if we need 100,000 of them, we are going to
be building 2,500-megawatt--I am sorry--1,000, yes, we would be
building 100 of those, to get to 240 plus--it is almost 500,000
megawatts. So you would be building 1,000 plants at 500
megawatts each.
Mr. Latta. Thank you.
Mr. Merrifield, the Advanced Nuclear Technology Development
Act requires the NRC to develop a risk-informed regulatory
framework. Given your experience as a commissioner, would you
please provide your interpretation of what a risk-informed
framework means and what the primary inputs are into such a
framework?
Mr. Merrifield. Well, a risk-informed performance-based
approach uses a combination of risk analysis and performance
history to identify what are the most significant areas to
focus your inspection and your regulatory activities. It
recognizes that in any system, whether it is a nuclear power
plant, a petrochemical refinery, or an interplanetary space
vehicle, every system is not equally important to safety. So
using a risk-informed performance-based approach allows you to
prioritize what are the most critical components and focus your
regulatory process toward those.
Mr. Latta. Well, thank you very much.
And, Mr. Chair, I see my time is about ready to expire, and
I yield back.
Mr. Whitfield. The gentleman yields back.
At this time, I recognize the gentleman from Illinois, Mr.
Rush for 5 minutes.
Mr. Rush. I want to thank you, Mr. Chairman.
Mr. Fertel, last week at the NRC's fiscal year 2017 budget
hearing, the subcommittee examined the agency's request of
almost $20 million less this year than what was enacted in last
year's budget. These cuts were said to be in line with the
agency's Project AIM initiative designed to streamline
operations and better reflect the Commission's increased
workload.
However, in your statement you said that those reductions
are not sufficient and that industry continues to see
regulatory inefficiencies. Can you discuss why the new fee
structure, as outlined in the discussion draft, is necessary?
However, how would the change in the outline in the bill
impact safety standards and protocols in these nuclear
facilities.
And if there are any other witnesses who would like to
address any of these questions that I have asked, please chime
in.
Mr. Fertel.
Mr. Fertel. Thank you for the question, Congressman.
First of all, we never want to see either NRC's
effectiveness as a regulator or their credibility as a
regulator undermined. We think they are the best regulator in
the world, and it is very important to us, from a commercial
industry standpoint, for them to be very effective and credible
in what they do.
They have Project AIM going. We think Project AIM is a very
significant and sincere effort on their part to look at
rebaselining what they are doing. The scope of what they have
as responsibilities has dramatically decreased. They had
staffed up for 20-plus new plants. They were operating as
though they had 107 existing reactors. We are moving forward
with four new reactors. We currently have 99, and a number of
those are going to be shutting down soon. Their material
licensees have significantly decreased in how many that they
are regulating.
So they have, and they recognize this, a significant
opportunity to rebaseline what they are trying to do with the
basic scope of safety that they have to look at.
They also, as the commissioner mentioned before, are
looking at getting much more safety focused. They were looking
at on the order of greater than 60 new rulemakings, which now
the Commission is saying they are not going to do all of them,
for an industry that is performing exceptionally well and for
an industry that they have been regulating now for 50-plus
years.
So we see a significant opportunity for them to continue to
do what they are doing, and we think that as they do what the
industry is doing, as you deal with turnover due to
retirements, you deal with a lot of this through attrition. And
basically, you have an opportunity to hire critical resources,
but probably not replace all resources. That is what we are
doing on our side really religiously right now, unfortunately,
because of the challenges that our plants face.
On the corporate overhead and the approach in the bill that
Congressman Kinzinger has proposed, what we see is really a
tremendous benefit of having Congress provide some
accountability and oversight to the corporate overhead. Their
corporate overhead, based upon the study that they commissioned
with Ernst & Young, is much higher than all their peer agencies
that they looked at.
I don't think they are evil for doing that, but there is
not a lot of accountability for them to do less because we pay
for it. It is not appropriated money, there is not a lot of
oversight put to it, and there is very little transparency from
our side to seeing what we are paying for and why.
So we see a significant opportunity. But to your point, we
do not want to hurt their credibility or their effectiveness,
but we think that they can continue going down their path. Now,
we may push harder because we know they won't go as fast, but
we think that that helps them go in the right direction.
Mr. Merrifield. Congressman, to that point, I mean, I was
very proud to serve as a commissioner of the NRC, and I agree
with the characterization. It contains an extraordinary group
of hard-dedicated individuals.
Having said that, as I related in my testimony, we went
through a similar process when I was a commissioner to the
process that they are undergoing today. There was a decreasing
workload, and there was a need to appropriately align the size
of the workforce and the task and make it more risk informed.
We were able to do that, and I think it resulted from a
couple of things. One, we had a significant amount of oversight
from Congress. We had to provide monthly reports to Congress on
the progress of the licensing activities that we had underway.
And that drove the Commission, in its budget process, in what
it presented to Congress, to conduct a line-by-line review of
how it was spending money, what the priorities were, and to
make sure that it was doing the most important stuff and
recognize that some things just simply didn't need to be done.
I think the Commission certainly needs to have that level of
engagement, and I trust they should right now.
The one thing I would mention on corporate overhead
support--we didn't have this term when I was a commissioner--I
think there has been a lot of growth in things like IT and
other things which may drive some of this. There is one program
I think this committee needs to be aware is important that
isn't overhead, and that is international programs. There are
countries around the world that look to the NRC to help them
craft their regulatory programs. It is very important, as
Congress looks to oversee these programs, that that one, in
particular, is not hurt.
Those are important investments, they should come from
general revenues, but it is assistance that that agency
provides around the world, and it is critical.
Mr. Fertel. The industry would certainly support what
Commissioner Merrifield recommends on them helping
internationally from a safety standpoint.
Mr. Rush. I yield back, Mr. Chairman.
Mr. Whitfield. At this time, I recognize the gentleman from
West Virginia for 5 minutes, Mr. McKinley.
Mr. McKinley. Thank you, Mr. Chairman. And in deference to
time, I will try to keep this short, so I am going limit to
maybe one or two questions on it.
Mr. Fertel, with you with the NEI, we understand with the
new nuclear technologies that will come as a result of
legislation like this, we know that there are going to be
developments that will probably reduce the amount of waste
product that comes from the spent fuel rods. But nevertheless
the whole process of making nuclear energy is going to develop
a waste product, maybe less than we are currently doing, but
nevertheless there still will be a waste product.
So does NEI have a position? Do you support the Yucca
Mountain as a permanent site for the disposal of nuclear fuel
waste as required by law?
Mr. Fertel. Congressman, we have always supported going
forward, finishing the licensing on Yucca Mountain to determine
it is licensed, which we think it would be, and then to move
forward with Yucca Mountain. We also support, in parallel, the
necessity of having centralized interim storage, because we
don't think you can get to Yucca and do everything fast enough
for the fact that we have plants that are shutting down. And
our support also goes to making sure that there is access to
the Nuclear Waste Fund. There is over $30 billion in it, and we
don't have access right now.
Mr. McKinley. Of the 99, I guess, reactors we have
functioning, I am curious about what is being done currently to
safeguard those spent fuel rods in those water baths. We know
the potential with all the fear of terrorism and other activity
for national security. Is there something being done on this
nuclear waste management that can give us a greater comfort
than the way we are doing it now? If we are not using Yucca
Mountain yet, how safe should we feel?
Mr. Fertel. Yes. I am sure Commissioner Merrifield will add
to this.
Mr. Merrifield. I will.
Mr. Fertel. But the NRC heavily regulates what we do with
used nuclear fuel, both while it is in the spent fuel pool and
then when we put it in dry cast storage on site. We obviously
have stringent security plans to make sure that not just the
used fuel is protected, but the active fuel and other things at
our plants. And based upon the Fukushima lessons learned, there
has even been enhancements to what we do with used fuel at our
sites because of what we learned from what went on in Japan.
So I think to some degree the problem with used fuel is
that it is managed very well on sites, which doesn't create the
crisis to cause our country to try and implement the Nuclear
Waste Policy Act or any other law related to it. So the good
news is we manage it very well and it is regulated very well.
The bad news is it doesn't move it very quickly to where you
want it to go.
Mr. McKinley. Thank you.
Mr. Merrifield. Congressman, on the issue of security, I
was a commissioner during 9/11. I was in front of this
committee talking about the things that needed to be
accomplished to protect the U.S. fleet of nuclear units.
I can say without reservation, I have been on nuclear sites
within the last week looking at security issues, and I can
assure you these are the safest industrial facilities in the
United States. The level of security that we have at the
nuclear power plants in the United States is well beyond what
is even needed to protect that fuel from the adversaries that
we face today.
Mr. McKinley. Thank you.
And, Chairman, I yield back the balance of my time.
Mr. Whitfield. We have two votes on the floor. We have got
about 10 or 11 minutes left. So if you all would be in
agreement, we will recognize you for 3 minutes, and we will
just get as far as we can, and then if somebody wants to come
back, we can talk about that.
So, Mr. McNerney, you are recognized for 3 minutes.
Mr. McNerney. Thank you, Mr. Chairman.
Mr. Fertel, do you believe that we need to include fusion
specifically in the H.R. 4979 framework?
Mr. Fertel. Was the question about fusion?
Mr. McNerney. Yes.
Mr. Fertel. To be honest, I hadn't thought about that, but
my reaction is I think it is a whole different regulatory
regime that we would have to look at for fusion, and the
availability of fusion is still far enough off that I wouldn't
rush it in and distract the NRC from paying attention to being
able to put a regulatory process in place for the other
technologies that are deployable sooner than that. I wouldn't
eliminate it as something you should look at for the longer
term, Congressman.
Mr. McNerney. OK. Thank you.
Mr. Allen, the Third Way report that identified 50
companies developing plans for new nuclear plants in the U.S.
and Canada, how soon are some of these technologies going to be
available and is the NRC ready for that?
Mr. Allen. I think they are on a big spectrum, depending on
how much technology development has been done in the past. I
would say the quickest, assuming that we do the types of things
we need in the regulatory space, would be on the order of 10 to
15 years. Some of them are much further out than that.
And I think that the NRC has a strong regulatory function,
but as we talked about, it could do some things to be better
receptive to these types of companies and to build staff depth
in areas that they are not used to regulating.
Mr. McNerney. Mr. Merrifield, do you think there is a risk
of agencies blocking heads against each other, the NRC and the
DOE, with respect to the new technology?
Mr. Merrifield. There were a lot of discussions between the
DOE and NRC on earlier advanced reactor-like programs. That did
not get as far as I think we had hoped it would have gotten. I
think with the focus that this committee and your counterparts
in the Senate have on advanced reactor technologies, the
legislation that you have before you will give the framework
and the encouragement for the NRC to move forward.
They are an agency which, when focused on a mission, do a
great job of accomplishing it. I sometimes refer to them as the
Boy Scouts of Federal agencies. They need the focus, they need
the encouragement of this committee. But I think they can
accomplish the mission to appropriately and safely license and
regulate advanced reactors in a timely and effective way.
Mr. McNerney. And an MOU would be sufficient to cause that
to happen?
Mr. Merrifield. I believe so, yes, Congressman.
Mr. McNerney. Thank you.
Mr. Chairman, I will yield back.
Mr. Whitfield. Mr. Kinzinger, you are recognized 3 minutes.
Mr. McKinley. Thank you, Mr. Chairman.
The NRC has previously informed Congress that it believes
amending the Atomic Energy Act to eliminate the mandatory
uncontested hearing on combined license and early site permit
applications could enhance the efficiency of NRC operations.
Section 4 in my draft allows the Commission, if a hearing
isn't requested by an affected person, to issue a construction
permit, operating license, or amendment to such permits and
licenses without holding a hearing.
Mr. Fertel, in your view, how would this provision improve
regulatory efficiency at the NRC?
Mr. Fertel. I think what it would do is allow both the
licensee and the NRC staff to move forward on issues while a
hearing is being done, which is, to be honest, very similar to
a situation for the operating plants. So it would not delay the
startup of a facility that might be critical to electricity,
but certainly would not be making any revenue while it is
sitting there.
If there was a true safety issue that it shouldn't start
up, they are not going to allow it to do that. So it doesn't
allow you to do something that is going to provide unsafe
conditions.
Mr. Kinzinger. And what kind of regulatory and economic
burdens are associated with the mandatory hearing requirement?
How much can an uncontested mandatory hearing delay the
process?
Mr. Fertel. There is not great data. We have looked at that
based upon the Vogtle experience and some of the other
projects, and it is hard to decipher exactly because there was
the design cert going through at the same time. But our
estimate was it could have been an 80- to 120-day delay as a
result with, to be honest, not significant value added by that
because of all the other reviews.
Mr. Merrifield. If I can just answer for a second on that
one.
Mr. Kinzinger. Yes.
Mr. Merrifield. Congressman, I think there are two issues
associated with mandatory hearings. One of them is an issue of
the extra time it takes. The other portion is the amount of
staff activity that ultimately has to be borne by the applicant
and the distraction it gives to actually getting to the
ultimate decision. The staff, in preparing for those hearings,
wants to make sure that everything they send up to the
Commission is in a certain way. That eats up a huge amount of
time.
As a commissioner, I recognized that there were
extraordinary opportunities for the public to comment on the
process that even led to the ultimate licensing, and indeed the
mandatory hearing was an antiquated legacy of the 1950s that
was not needed.
Mr. Kinzinger. Thank you.
And a lot more to ask, but duty calls, and I will yield
back. Thank you all for being here.
Mr. Whitfield. The gentlemen yields back.
At this time I recognize the gentleman from Texas, Mr.
Green, for 3 minutes.
Mr. Green. Thank you, Mr. Chairman.
I am a supporter of nuclear power, and I think to get to a
carbon-free environment that is where we need to get to. I
believe increased cooperation between DOE and NRC would create
efficiencies and expedite the process of approving new
reactors. Combined with the President's GAIN initiative, I
think we can revitalize our nuclear sector and secure
additional baseload power.
I do have some concerns about the Nuclear Utilization of
Keynote Energy Policies Act. And I would like to ask some
questions.
Mr. Merrifield, in your testimony you made reference to a
2016 white paper released by your organization that discussed
framework for licensing modernization. The white paper listed
five recommendations for Congress: proactive oversight of NRC's
design review and licensing process; providing sufficient
resources--and I am guessing that means money; encouraging NRC
to meet a 36-month deadline for review; and directing NRC to
identify roadblocks to expedite approvals and submitting annual
updates.
In your opinion, does the legislation before the
subcommittee today adequately address these recommendations?
Mr. Merrifield. In the main, I think it does. We actually I
think focused on a couple of things that we would ask for
improvement in the two bills that you are looking at today. One
is to be really specific in requiring a pre-application vendor
design review process. The other one was to providing a greater
opportunity for engagement between the developers of advanced
reactor technologies and the NRC at no cost early stages in the
process to really enhance the level of understanding on the
part of the agency and the developer.
Mr. Green. During your service as a commissioner, do you
recall how many licensing reviews the NRC completed?
Mr. Merrifield. How many licensing reviews?
Mr. Green. Yes.
Mr. Merrifield. I would have to go back and do some
research on that.
Mr. Green. If you could get that, I would appreciate it.
With respect to these reviews, do you have a sense of how
many hearings did the Commission grant upon request under
section 189 of the Atomic Energy Act?
Mr. Merrifield. I would have to go back and review that
one.
Mr. Green. OK. If you could get that for us.
And also under section 189, are formal adjudicatory
procedures required of the Commission or do they have
discretionary authority? Are they required to have those
procedures or is it discretionary with the Commission?
Mr. Merrifield. I am sorry, Congressman, I didn't hear
that.
Mr. Green. Under section 189, are the formal adjudicatory
procedures required of the Commission or do they have
discretionary authority?
Mr. Merrifield. Congressman----
Mr. Fettus. I can answer that.
Mr. Merrifield. I would like to have the opportunity to
review those procedures and provide an appropriate response to
the committee.
Mr. Green. OK.
Mr. Chairman, I will be glad to submit the questions.
And if you could get back to us.
Because, again, if we can move the process along. And
coordination between agencies is never bad.
Thank you, Mr. Chairman.
Mr. Whitfield. Well, thank you.
And we appreciate you all being with us today. I am going
to ask just a couple of questions.
We still have 3 minutes before we have to vote, Bobby, so
no rush.
NuScale Power has stated their plans to submit its design
certification application to the NRC by the end of 2016 for a
so-called small modular reactor. And, Mr. Merrifield, I would
just ask you, what is your outlook for NRC's readiness to
accept a high-quality application and review it in a timely
manner?
Mr. Merrifield. Congressman, I think the NRC has been
preparing, as far as I can tell, I believe the NRC has been
preparing itself to receive that application. It is a light-
water reactor technology. It is something that the NRC is
familiar with. And I think they will do their level best to
accept it and review it in due course.
Mr. Whitfield. Do you agree with that, Mr. Fertel?
Mr. Fertel. Yes, I think the way Jeff Merrifield answered
is probably accurate. And I think that the division director
there is a very competent young woman who I think is making
sure that they are as prepared as they can be. So we would
expect they will do as good a job as they can.
Mr. Merrifield. Yes, I agree with that. Mr. Fertel
references Jennifer Uhle, who is the director of the Office of
New Reactors. She is a very talented young woman I think will
do an exceptional job for that team.
Mr. Whitfield. Well, we hear a lot of discussion about
small nuclear modular reactors and great hope for them. And
some are sodium cooled, some are lead cooled, light water. How
many of these so-called small modular reactors are there
operating today around the world? Does anybody have any idea?
Mr. Fertel. I don't think that from a commercial standpoint
thereis hardly any. But all of our submarines are using small
modular reactors and our aircraft carriers. So there is
experience with them. Now, they are different, but there is a
lot of experience.
And in our country right now, Mr. Chairman, electricity
growth, thanks to really very good efficiency and things like
that, and also probably being hurt by our economy a bit, but
our electricity growth is really very small. So small modular
reactors are becoming actually even more important
domestically. We always thought they were important
internationally. But even domestically they are becoming very
important, particularly as you replace older smaller coal
plants and eventually even gas plants.
Mr. Merrifield. Mr. Chairman, one thing I think is
important to remember, particularly about advanced reactor
technologies, we talk about traditional utility uses for
generating electricity. What is important to remember is these
technologies also provide very high sources of heat. So the new
users of these technologies may not necessarily be just our
traditional utilities. It may be also for other industrial
processes that can utilize that heat and power.
Mr. Whitfield. Anybody else have any comment? OK.
Mr. Allen. Yes, I would just agree that they are looking at
a large number of different commercial products than just
gigawatt-scale nuclear.
Mr. Whitfield. So when we talk about small, are we talking
about below 300 megawatts or so?
Mr. Merrifield. Yes. Some of them that are conceptualized
could be as small as 3 to 10 megawatts. Some of them are in the
range of 80 to 100. Others are on sort of the verge of 300. So
there is a range of the potential reactors being proposed.
Mr. Fettus. Chairman Whitfield, though, there is one
caution. The only ones that we have seen that have had any
indication of any economic viability have been coupled together
in the several-hundred megawatt range to allow for some economy
of scale to actually be able to compete in a market. And none
of these are built around the world. The number is actually
zero. And the question of whether or not they will have any
chance in a competitive marketplace in 10, 12, 15 years, no one
has a crystal ball here.
Mr. Merrifield. Well, no one has a crystal ball, but at the
end the market is going to resolve that. That is what we are
asking for, a predictable regulatory regime that those reactors
can be licensed through. If they can't come up with the
economics that the market will bear, those reactors will not go
forward.
Mr. Whitfield. Well, listen, thank you all very much. We
look forward to working with you as we consider these two
pieces of legislation and other issues as well.
We will keep the record open for 10 days.
And once again, thank you. And that concludes today's
hearing.
[Whereupon, at 10:41 a.m., the subcommittee was adjourned.]
[Material submitted for inclusion in the record follows:]
Prepared statement of Hon. Fred Upton
With two nuclear power plants just miles from my home in
Southwest Michigan, I know firsthand the importance of safe,
clean nuclear energy to the nation's energy portfolio, as well
as the economic benefits nuclear brings to local communities.
Nearly thirty percent of Michigan's electricity is generated by
nuclear power and the industry supports more than 2,900 highly
skilled employees in the state. Because of the large role
nuclear energy plays in Michigan and across the country, it's
imperative that folks have confidence in the Nuclear Regulatory
Commission's mission to protect public health and safety. This
mission can, and should, be achieved while also providing
regulatory certainty for NRC licensees and stakeholders. And
the simple fact is we can't have nuclear power without the NRC.
As a fee-based organization, Michigan ratepayers fund the
NRC through utilities in annual fee assessments. This structure
requires continued Congressional oversight to assure the NRC
diligently manages its operations and continually strives to
become more efficient. The proposed legislation for review this
morning seeks to do just that.
Over half of today's nuclear power plants commenced
operation over thirty years ago and many are likely to enter
the decommissioning process in the next decade. The age of the
existing fleet should encourage policymakers to look to the
next generation of nuclear energy technologies. The NRC's
existing regulatory structure was designed to license and
oversee light water reactor technology that was developed as a
result of a policy choice due to our nuclear navy. Today,
innovative engineers are developing promising new nuclear
technologies that could bring significant design improvements
to take us beyond the current fleet of nuclear power plants.
In order to achieve this goal, private stakeholders must
understand the criteria by which the NRC will accept non-light
water reactor designs. It is also important for the NRC be
prepared to receive and review these designs in a timely
manner. Congressman Latta's bill, the Advanced Nuclear
Technology Development Act, will direct NRC to fulfill those
obligations. I thank him for his forward thinking on this
issue.
Representative Kinzinger's discussion draft highlights the
importance of NRC licensees to maintain confidence that
licensing and other regulatory activities are resolved in a
timely, efficient, and safe manner. The proposed legislation
would maintain the existing ``gold standard'' of safety
regulation by the NRC, while implementing some commonsense
policies and process changes. I recognize that there may be
differing viewpoints in how to achieve this high standard and I
hope today's hearing is a constructive step in facilitating
those discussions. I look forward to exploring these issues in
greater detail as we have an eye toward our nuclear future.
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Prepared statement of Hon. Frank Pallone, Jr.
Thank you, Mr. Chairman. I appreciate the opportunity today
to examine two pieces of legislation related to the licensing
and review of nuclear power reactors here in the United States.
The first bill under consideration is H.R. 4979, the
Advanced Nuclear Technology Development Act of 2016, introduced
by Representatives Latta and McNerney. The bill seeks to
enhance coordination between NRC and the Department of Energy
through a memorandum of understanding on issues related to
advanced nuclear reactor technology. This is a worthy goal and
a commonsense way for the federal government to support the
advanced nuclear power industry.
The bill also requires NRC to develop an advanced reactor
regulatory framework to evaluate the options to expedite
advanced reactor licensing and make it more predictable. NRC
would have 270 days from the date of enactment to submit this
plan to the Energy and Commerce Committee. The plan must also
seek input from interested stakeholders, which is crucial. I
support this approach, but want to hear more about whether 270
days is a realistic timeframe.
The second proposal before us, is a discussion draft put
forth by Representative Kinzinger entitled the Nuclear
Utilization of Keynote Energy Policies Act.
I believe nuclear power must play a continued role in our
energy future. It is a clean source of power that has helped
reduce our dependence on fossil fuels. Today the industry faces
the dual challenges of working to extend the life of our
country's existing reactors--many of which are reaching the end
of their 40 year licenses--while also pursuing innovative
advanced nuclear technologies that could be more cost-
effective, efficient and produce less waste.
Members on both sides of the aisle believe that this is an
important issue for our committee to consider, and I want to
commend Mr. Kinzinger for putting forth this draft and
beginning this critical discussion.
However, while we should explore opportunities to support
and sustain nuclear power in the U.S., we cannot lose sight of
the critical importance of maintaining robust nuclear safety
and oversight to protect public health and the environment. We
must strike the right balance. This week marks the 30th
anniversary of the Chernobyl nuclear disaster, which provides
us with a sober reminder of the dangers posed by nuclear
technology if not properly regulated and controlled.
So, I am concerned that, in its current form, this proposal
goes too far in one direction, minimizing public input into the
licensing process, eliminating critical hearings on the
licensing process, unrealistically shortening the licensing
review timeline, and drastically reducing the portion of NRC's
budget that is covered by licensee fees.
Currently, NRC recovers 90 percent of its budget from
licensee fees. Section 2 of the discussion draft would shift a
number of commission activities out of the portion of the
budget covered by fees. One of those areas would be
``infrastructure and corporate support,'' which includes
administrative services, acquisitions, training and travel.
This section alone is funded at over $300 million in the Fiscal
Year 2017 Energy and Water Appropriations bill that has passed
committee. So, this provision would shift over $300 million to
taxpayers instead of industry.
Further, this discussion draft eliminates the mandatory
public hearing that is held before a combined license is
approved, which allows construction of the facility to move
forward. This hearing is a one-day proceeding that provides a
holistic review of the license application, and it is a
valuable tool for the NRC commissioners to evaluate the staff's
review of the license application. The mandatory hearing also
provides an important opportunity for the public to become
involved in the licensing process. In fact, just last month, a
mandatory hearing was held on the early site permit application
for a site adjacent to the Salem and Hope Creek nuclear power
plants in New Jersey and that permit was issued yesterday. Past
mandatory hearings have brought to light serious issues that
may have otherwise gone unchecked.
I will say that it is unfortunate that the NRC was not
invited to testify today. Both proposals would make significant
changes to the way NRC addresses nuclear licensing, and I
believe it is critical for us to hear from the Commission as we
continue with this process.
That said, I would like to thank the Chairman for holding
today's hearing. While I have raised some concerns today, I do
look forward to working together with my colleagues on these
issues.
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