[House Hearing, 114 Congress]
[From the U.S. Government Publishing Office]
THE NUCLEAR WASTE FUND: BUDGETARY, FUNDING, AND SCORING ISSUES
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HEARING
BEFORE THE
SUBCOMMITTEE ON ENVIRONMENT AND THE ECONOMY
OF THE
COMMITTEE ON ENERGY AND COMMERCE
HOUSE OF REPRESENTATIVES
ONE HUNDRED FOURTEENTH CONGRESS
FIRST SESSION
__________
DECEMBER 3, 2015
__________
Serial No. 114-106
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Printed for the use of the Committee on Energy and Commerce
energycommerce.house.gov
______
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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 Environment and the Economy
JOHN SHIMKUS, Illinois
Chairman
GREGG HARPER, Vice Chairman PAUL TONKO, New York
Vice Chairman Ranking Member
ED WHITFIELD, Kentucky KURT SCHRADER, Oregon
JOSEPH R. PITTS, Pennsylvania GENE GREEN, Texas
TIM MURPHY, Pennsylvania DIANA DeGETTE, Colorado
ROBERT E. LATTA, Ohio LOIS CAPPS, California
DAVID B. McKINLEY, West Virginia MICHAEL F. DOYLE, Pennsylvania
BILL JOHNSON, Ohio JERRY McNERNEY, California
LARRY BUCSHON, Indiana TONY CARDENAS, California
BILL FLORES, Texas FRANK PALLONE, Jr., New Jersey (ex
RICHARD HUDSON, North Carolina officio)
KEVIN CRAMER, North Dakota
FRED UPTON, Michigan (ex officio)
C O N T E N T S
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Page
Hon. John Shimkus, a Representative in Congress from the State of
Illinois, opening statement.................................... 1
Prepared statement........................................... 3
Hon. Fred Upton, a Representative in Congress from the State of
Michigan, prepared statement................................... 44
Hon. Frank Pallone, Jr., a Representative in Congress from the
State of New Jersey, prepared statement........................ 45
Witnesses
David Bearden, Specialist in Environmental Policy, Congressional
Research Service............................................... 5
Prepared statement........................................... 8
Answers to submitted questions............................... 46
Kim P. Cawley, Chief of Natural and Physical Resources Cost
Estimates Unit, Congressional Budget Office.................... 14
Prepared statement........................................... 16
Answers to submitted questions............................... 51
Travis Kavulla, Commissioner, Montana Public Service Commission,
President, National Association of Regulatory Utility
Commissioners.................................................. 23
Prepared statement........................................... 25
Answers to submitted questions............................... 55
THE NUCLEAR WASTE FUND: BUDGETARY, FUNDING, AND SCORING ISSUES
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THURSDAY, DECEMBER 3, 2015
House of Representatives,
Subcommittee on Environment and the Economy,
Committee on Energy and Commerce
Washington, DC.
The subcommittee met, pursuant to call, at 9:59 a.m., in
room 1100, Longworth House Office Building, Hon. John Shimkus,
(chairman of the subcommittee) presiding.
Present: Representatives Shimkus, Harper, Murphy, Latta,
Johnson, Bucshon, Flores, Hudson, Tonko, Schrader, Green, and
McNerney.
Staff Present: Nick Abraham, Legislative Associate, Energy
and Power; Will Batson, Legislative Clerk, Energy and Power,
Environment and the Economy; Jerry Couri, Senior Environmental
Policy Advisor; David McCarthy, Chief Counsel, Environment and
the Economy; Andy Zach, Professional Staff, Environment and the
Economy; Rick Kessler, Minority Senior Advisor and Staff
Director, Energy and Environment; and Timia Crisp, Minority
AAAS Fellow.
OPENING STATEMENT OF HON. JOHN SHIMKUS, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF ILLINOIS
Mr. Shimkus. I am going to ask my colleagues who are here
to take seats. And for those here, we want to, first of all,
thank the Ways and Means Committee for their allowing us this
palatial committee hearing room. We also want to move rapidly,
because they are going to call votes real soon. So we want to
get this thing started so we can get back here and get to the
meat and potatoes of the hearing.
Good morning, and welcome to today's hearing to examine
funding, budgetary, and scoring issues associated with efforts
to manage and dispose of our Nation's spent nuclear fuel and
high-level radioactive waste. As Congress deals with the
yearend budget issues, today's testimony is timely.
This subcommittee is continuing to examine specific
challenges managing used fuel and national defense waste.
Central to this discussion is providing adequate financial
resources for a multigenerational repository program. In 1982,
Congress passed the Nuclear Waste Policy Act, deciding
commercial nuclear fuel consumers would fund permanent disposal
of spent nuclear fuel through a one mil per kilowatt hour tax
on nuclear-generated electricity to be paid into the Nuclear
Waste Fund, and managed by the Department of Energy.
A DOE audit of the fund released just this morning projects
its total current value is $34.3 billion, an increase in $1.4
billion over last year, and an $11 billion increase since 2009.
This includes consumer payments, plus an interest calculation.
Since the fee was instituted over 30 years ago, ratepayers in
my home State of Illinois have contributed more than any other
state at over $2.3 billion to the Nuclear Waste Fund. And I
have paid some of that personally myself.
The repository program was designed to be a
multigenerational effort, which required long-term stability,
so funding would be available at the most critical times of the
program. The 1982 outlook for nuclear power was more optimistic
than today's. That means a shrinking fleet of operating
reactors must provide adequate financial resources for a 100-
year program. Meanwhile, the budgetary and scoring treatment of
the Nuclear Waste Fund is broken. Comprehensive budget
reconciliation measures enacted after 1982 counted revenues
from the fee as reducing the budget deficit in the fiscal year
they were paid. Yet programmatic outlays remained on the
discretionary side of the budget ledger and counts against
annual budget caps. That means spending on the repository
competes every year with other Federal budget priorities, such
as maintaining our nuclear defense capability, or building Army
Corps water projects.
Today, we will get a better perspective as to how and why
these budget changes have complicated the program to
permanently dispose of used fuel. The Nuclear Waste Policy Act
required the Federal Government to begin accepting fuel from
commercial power plants by 1998, and DOE entered into contracts
with plant operators to do just that, but DOE was not ready in
1998. As a result, commercial utilities started suing DOE for
breach of contract, and the courts sided with the utilities.
The damage payments are drawn from a permanent indefinite
appropriation known as the Judgment Fund. Payments from the
Judgment Fund don't count against total spending caps. So
policy makers have little incentive to stop the bleeding.
Three weeks ago, DOE updated its annual cost estimate of
liability for failure to fulfill its obligations as required by
the Nuclear Waste Policy Act, which will ultimately all be paid
from the Judgment Fund. DOE estimates lifetime liability to
reach $23.7 billion. This is $1 billion increase over last
year, and a $10 billion, or 50 percent increase since President
Obama shuttered the Yucca Mountain project.
In 2014 the Federal Government paid out over $900 million
from the Judgment Fund while not appropriating any money from
the Nuclear Waste Fund for the Nuclear Regulatory Commission
and DOE to work on the Yucca Mountain license application. That
annual legal payment is nearly three times as much funding as
the total amount the NRC needs to complete its review of the
Yucca license. DOE's projection is predicated on the ability to
begin taking title of commercial spent nuclear fuel in 5 years.
Recently, the subcommittee received testimony it would take at
least 7 to 9 years to just begin transporting used fuel,
regardless when a site is available. It is likely the liability
will continue to skyrocket until we get the stalled program
back on track.
Budgetary and funding challenges have been further
complicated by President Obama's legally dubious decision to
walk away from Yucca Mountain. When DOE stopped work on the
repository program, the National Association of Regulatory
Utility Commissioners filed suit to halt collection of nuclear
waste fee. The courts found DOE's required financial
projections absolutely useless, and based on pie-in-the-sky
analysis. The decision stated the government's argument was
flatly unreasonable, and obviously disingenuous. The court
directed DOE to halt the annual collection of $750 million from
ratepayers, but the payments by taxpayers for DOE's breach of
contract continue.
I look forward to hearing from NARUC today about their
experience with the Nuclear Waste Fund. I welcome all our
witnesses and urge my colleagues to take advantage of their
expertise as we prepare to sort this out, and hopefully in the
future, fix it. Thank you. And I yield to Mr. Tonko for his
opening statement.
[The prepared statement of Mr. Shimkus follows:]
Prepared statement of Hon. John Shimkus
Good morning and welcome to today's hearing to examine
funding, budgetary, and scoring issues associated with efforts
to manage and dispose of our nation's spent nuclear fuel and
high-level radioactive waste. As Congress deals with year-end
budget issues, today's testimony is timely.
This subcommittee is continuing to examine specific
challenges managing used fuel and national defense waste.
Central to this discussion is providing adequate financial
resources for a multigenerational repository program.
In 1982, Congress passed the Nuclear Waste Policy Act,
deciding commercial nuclear power consumers would fund
permanent disposal of spent nuclear fuel through a one mil per
kilowatt hour tax on nuclear generated electricity to be paid
in to the Nuclear Waste Fund and managed by the Department of
Energy.
A DOE audit of the Fund released just this morning projects
its total current value at $34.3 billion, an increase of $1.4
billion over last year, and an $11 billion increase since 2009.
This includes consumer payments plus an interest calculation.
Since the fee was instituted over 30 years ago, ratepayers in
my home State of Illinois have contributed more than any other
state at over $2.3 billion to the Nuclear Waste Fund.
The repository program was designed to be a multi-
generational effort, which required long-term stability so
funding would be available at the most critical times of the
program. The 1982 outlook for nuclear power was more optimistic
than today's. That means a shrinking fleet of operating
reactors must provide adequate financial resources for a 100
year program.
Meanwhile, the budgetary and scoring treatment of the
Nuclear Waste Fund is broken. Comprehensive budget
reconciliation measures, enacted after 1982, counted revenues
from the fee as reducing the budget deficit in the fiscal year
they were paid. Yet programmatic outlays remained on the
discretionary side of the budget ledger and counts against
annual budget caps. That means spending on the repository
competes every year with other Federal budget priorities, such
as maintaining our nuclear defense capability or building Army
Corps water projects. Today we will get a better perspective as
to how and why these budget changes have complicated the
program to permanently dispose of used fuel.
The Nuclear Waste Policy Act required the Federal
government to begin accepting fuel from commercial power plants
by 1998, and DOE entered into contracts with plant operators to
do just that. But DOE was not ready in 1998. As a result
commercial utilities started suing DOE for breach of contract,
and the courts sided with the utilities. The damage payments
are drawn from a permanent, indefinite appropriation, known as
the Judgment Fund. Payments from the Judgment Fund don't count
against total spending caps, so policymakers have little
incentive to stop the bleeding.
Three weeks ago, DOE updated its annual cost estimate of
liability for failure to fulfill its obligations as required by
the Nuclear Waste Policy Act, which will ultimately all be paid
from the Judgment Fund. DOE estimates lifetime liability to
reach $23.7 billion. This is a billion dollar increase over
last year, and $10 billion dollar--or fifty percent--increase
since President Obama shuttered the Yucca Mountain program. In
2014 alone, the Federal government paid out over $900 million
from the Judgment Fund, while not appropriating any money from
the Nuclear Waste Fund for the Nuclear Regulatory Commission
and DOE to work on the Yucca Mountain license application. That
annual legal payment is nearly three times as much funding as
the total amount the NRC needs to complete its review of the
Yucca license.
DOE's projection is predicated on the ability to begin
taking title of commercial spent nuclear fuel in five years.
Recently, the Subcommittee received testimony it would take at
least seven to nine years to just to begin transporting used
fuel, regardless when a site is available. It is likely the
liability will continue to skyrocket until we get the stalled
program back on track.
Budgetary and funding challenges have been further
complicated by President Obama's legally dubious decision to
walk away from Yucca Mountain. When DOE stopped work on the
repository program, the National Association of Regulatory
Utility Commissioners filed suit to halt collection of the
nuclear waste fee. The Courts found DOE's required financial
projections ``absolutely useless'' and based on ``pie in the
sky'' analysis. The decision stated the government's argument
was ``flatly unreasonable,'' and ``obviously disingenuous.''
The Court directed DOE to halt the annual collection of
$750 million from ratepayers, but the payments by taxpayers for
DOE's breach of contract continue. I look forward to hearing
from NARUC today about their experience with the Nuclear Waste
Fund.
I welcome all our witnesses and urge my colleagues to take
advantage of their expertise as we prepare to sort this out and
fix it.
Mr. Tonko. Thank you, Chair Shimkus, and good morning to
our panelists. Thank you all for being here on what has become
a very busy week.
We all know the politics behind nuclear waste disposal are
complicated. So it should come as no surprise that the
budgetary and legislative histories are equally complex.
In 1982, Congress passed its Nuclear Waste Policy Act,
directing the Department of Energy to remove spent nuclear fuel
from commercial nuclear power plants in exchange for certain
fees and transport it to a permanent geologic repository,
beginning no later than January 31, 1998.
Obviously, that deadline has been missed. Utilities that
generate nuclear waste had been paying an ongoing fee of one
mil per kilowatt hour of nuclear-generated electricity. These
fees were deposited in the Nuclear Waste Fund to cover the cost
of the Department of Energy's acceptance, transport, and
disposal of civilian nuclear waste. But the fund has not worked
as intended. I am sure we will get into the recent history and
options moving forward later in this hearing.
More than 60 years after beginning and expanding our use of
nuclear materials, nuclear waste disposal remains a difficult
and an expensive problem. We will have to deal with 74,000
metric tons of commercial spent fuel, with more being added
each and every year. And I agree that we should be looking at
all options for nuclear waste disposal in an effort to find the
safest and the most cost-effective ways for us as a Nation to
move forward. But we must recognize and deal with both the
technical and the political challenges of disposing of all
classes of nuclear waste.
During this Congress, this subcommittee has examined a
variety of nuclear waste disposal issues. I'm glad we are able
to continue that work today. I thank you all again for your
participation in this morning's activities. I look forward to
your testimony and further discussion of what is a very
important issue. And with that, I yield back, Mr. Chair.
Mr. Shimkus. The gentleman yields back his time.
The chair looks to the majority side. No one is seeking
recognition.
Anyone on the minority side?
Seeing none, we want to thank my colleagues for moving
expeditiously, and now welcome our witnesses. And we are going
to admit your full statements into the record. We will ask you
to speak for 5 minutes. And we will hopefully get to questions
and answers.
So I will introduce you one at a time. First it will be Mr.
David Bearden, who has appeared before the subcommittee
numerous times, or the committee as a whole, specialist in
environmental policy for the Congressional Research Service.
Welcome, and you are recognized for 5 minutes.
STATEMENTS OF DAVID BEARDEN, SPECIALIST IN ENVIRONMENTAL
POLICY, CONGRESSIONAL RESEARCH SERVICE; KIM P. CAWLEY, CHIEF OF
NATURAL AND PHYSICAL RESOURCES COST ESTIMATES UNIT,
CONGRESSIONAL BUDGET OFFICE; AND TRAVIS KAVULLA, COMMISSIONER,
MONTANA PUBLIC SERVICE COMMISSION, PRESIDENT, NATIONAL
ASSOCIATION OF REGULATORY UTILITY COMMISSIONERS
STATEMENT OF DAVID BEARDEN
Mr. Bearden. Chairman Shimkus, Ranking Member Tonko, and
members of the subcommittee, my name is David Bearden. I am a
specialist in environmental policy for the Congressional
Research Service, called CRS. Thank you for inviting me to
testify on behalf of the agency. In serving the U.S. Congress
on a nonpartisan and objective basis, CRS takes no position on
any of the issues examined today. CRS has been asked by the
subcommittee to outline the budgetary framework for the
management of the Nuclear Waste Fund. CRS also maintains a team
of policy analysts and legislative attorneys who have prepared
reports on an array of complex issues associated with the
Nuclear Waste Fund, and so we remain available to assist the
subcommittee and the full committee with broader issues than
addressed in my testimony today.
In terms of the statutory framework, as the chairman
mentioned at the beginning in his opening remarks, section 302
of the Nuclear Waste Policy Act of 1982 established the Nuclear
Waste Fund, financed primarily with the collection of fees from
civilian nuclear utilities to fund the permanent disposal of
their spent or used nuclear fuel and related wastes. As
amended, the statute authorizes the Department of Energy, DOE,
to develop a deep geologic repository for the disposal of these
wastes, subject to licensing by the U.S. Nuclear Regulatory
Commission.
The development of a repository and the selection of Yucca
Mountain in Nevada for its location have been the subject of
various scientific, technical, regulatory, budgetary, legal,
and policy debates. The lack of a repository to accept spent or
used nuclear fuel has been an ongoing issue. Nuclear utilities
have paid fees to finance the Nuclear Waste Fund and entered
contracts with the Federal Government for the disposal of their
spent or used nuclear fuel by the statutory deadline of January
31, 1998.
Appropriations acts have made monies from the fund
available to DOE and the Nuclear Regulatory Commission to
support the licensing process, but construction of a repository
could not begin until NRC approves the license pursuant to the
Nuclear Waste Policy Act. Nuclear utilities have filed damage
claims against DOE for partial breach of existing contracts to
cover their spent or used nuclear fuel storage costs in the
interim while a repository has been unavailable since the
statutory deadline lapsed.
The Nuclear Waste Fund is not explicitly authorized to pay
damage claims. So the Judgment Fund of the U.S. Treasury,
therefore, has been the source of Federal funds for the payment
of eligible claims. DOE has reported that a total of $5.3
billion in eligible claims have been paid from the Judgment
Fund as of the end of fiscal year 2015.
Now I will just briefly outline the basic budgetary
framework of the fund itself and existing law. As authorized in
the Nuclear Waste Policy Act, receipts from the nuclear utility
fee collections are deposited in the fiscal year they are
collected into the U.S. Treasury and credited to the Nuclear
Waste Fund as assets available for discretionary
appropriations.
The receipts are not treated as a revenue or offsetting
collections for discretionary spending, though. They are
treated as negative direct spending that has the effect of
reducing total Federal direct spending in the fiscal year in
which the receipts are collected. The accumulated balance of
past collections does not continue to count as a reduction to
direct spending in future fiscal years, though, as it would
result in the double counting of receipts.
The unappropriated balance of the Nuclear Waste Fund is
invested in U.S. Treasury securities that accrue interest
credited to the fund that contributes to the total balance
available for discretionary appropriation. The assets credited
to the Nuclear Waste Fund from the nuclear utility fee
collections are a liability to the general fund of the U.S.
Treasury to provide these assets once discretionary
appropriations are enacted. Regardless of the accumulated
balance, though, appropriations from the fund remain subject to
limitations on annual discretionary spending. And this
framework for the fund is not unique within the Federal budget,
though. Some other examples include the Harbor Maintenance
Trust Fund, the Hazardous Substance Superfund Trust Fund,
Leaking Underground Storage Tank Trust Fund, and the Uranium
Enrichment Decontamination and Decommissioning Fund.
And in its department-wide financial report for fiscal year
2015, DOE reported a balance in the Nuclear Waste Fund of $34.3
billion in net investments and related interest combined. And
those investments refer to fee collections. There have been no
new receipts credited to the fund from nuclear utility fees
since the suspension of the collections on May 16, 2014 as a
result of litigation challenging the present need for the fees.
However, interest has continued to accrue, increasing the
balance each year.
So under current law, and existing budgetary procedural
requirements, the unappropriated balance of the Nuclear Waste
Fund does remain available for appropriation to carry out the
purposes of the Nuclear Waste Policy Act, but it is subject to
applicable limitations on Federal spending. The budgetary
treatment of the receipts does not permit past collections to
be applied as an offset to future spending, but other potential
budgetary options may be dependent upon amendments or
exceptions to current law or existing procedures.
So that concludes the remarks of my prepared statement.
Thank you for the opportunity to appear before the subcommittee
today, and I will be happy to address any questions you may
have.
[The prepared statement of Mr. Bearden follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Shimkus. Thank you very much. We look forward to
answering questions because that was very confusing.
Now, we would like to turn to Mr. Cawley, Chief of Natural
and Physical Resources Cost Estimate Unit of the Congressional
Budget Office. You are recognized for 5 minutes.
STATEMENT OF KIM P. CAWLEY
Mr. Cawley. Mr. Chairman and members of the committee,
thank you for the invitation to present CBO's review of the
status of the Nuclear Waste Fund, and to try to explain the
budgetary treatment of the fund.
I think if we look back over the last 33 years, about $22
billion has been collected from nuclear power ratepayers, and
about one-third of that has been spent on the waste disposal
system. Five years ago, the administration found that
developing the Yucca Mountain site for the disposal of waste
was unworkable, and there has been no significant spending on
the site project in recent years.
Last year, as a result of a Federal court order, the
Department stopped collecting the nuclear waste fee from
electricity ratepayers. Those fees had amounted to about $750
million a year, and they were stopped because the court found
the Department could not demonstrate whether the fee
collections were too small or too large relative to the
expected life cycle cost of the program.
Although the government is not collecting the waste fees,
and is not spending any of the previous fee collections, the
government is incurring another type of cost. Under the
contracts the Department of Energy signed after the 1982 Act,
we were set to begin accepting waste for disposal 17 years ago.
Shortly after the deadline was missed in 1998, utilities filed
claims and won judgments for a partial breach of the disposal
contracts. At this point, the Federal taxpayers, through the
Treasury's Judgment Fund, have paid over $5 billion to
utilities as compensation for the breach. CBO expects that
utilities will collect another $5 billion more in compensation
in the coming decade. In the simplest terms, today the
government is using taxpayer funds to pay for private storage
of waste instead of spending ratepayer fees to permanently
dispose of the waste as authorized in the 1982 Act.
I wanted to make a couple of points about the nuclear waste
program budget and the enforcement procedures that Congress
uses in the congressional budget process.
The fund accounts for both the receipt of fees from
utilities, and amounts provided through the annual
appropriations process. In addition, interest is credited and
it becomes available to be spent for program purposes. In the
congressional budget process, there is a distinction made
between mandatory spending, that operates under permanent law,
and discretionary spending, that flows from annual
appropriations acts.
The waste program has one foot in each of these spending
categories. The fee collections are part of the mandatory
category, and spending on waste disposal activities is in the
discretionary category. To control legislative changes to the
budget, the Congress established the pay-as-you-go system for
mandatory spending, and currently, discretionary spending is
controlled through a system of caps on total spending. As was
mentioned, the split mandatory/discretionary treatment of the
waste program is not unique in the budget. There are other
programs with a similar treatment.
In very practical terms, I think the program's budgetary
treatment means two things: First, any future appropriations
for the waste program will need to compete for funding along
with all other discretionary Federal programs that are
controlled by the caps on spending. The unspent balances in the
fund cannot be used unless those amounts are appropriated. The
collection of those balances in previous years helped to reduce
the deficits in those earlier years, but they have no budgetary
effect in future years.
Second, if the waste fees are reinstated in the future,
they will reduce the deficit. But those mandatory collections
cannot be credited to, or directly offset the cost of
discretionary appropriations for spending on the program.
I think that is a good point for me to stop talking about
the budget, and I would be happy to answer any of your
questions.
[The statement of Mr. Cawley follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Shimkus. Thank you very much.
And just for my colleagues, we will finish the opening
statements, though they have called votes. We will go to the
floor after the opening statements, and then we will return for
the question period.
So last but not least, we would like to recognize Travis
Kavulla, Commissioner, Montana Public Service Commission,
president of the National Association of Regulatory Utility
Commissioners. Welcome, and you are recognized for 5 minutes.
STATEMENT OF TRAVIS KAVULLA
Mr. Kavulla. Thank you, Chairman Shimkus and Ranking Member
Tonko, members of the subcommittee, it is a pleasure to be
before you today. I am the president of the National
Association of Regulatory Utility Commissioners, which has long
been involved in this issue from a policymaking and litigation
front. NARUC applauds this subcommittee's tenacity and
leadership on these issues. Unlike the previous two speakers,
we have a full-throated and unambiguous opinion on this matter
as well, which I will be happy to share with you today.
NARUC is a nonprofit organization founded in 1889. Our
members are the public utility commissions in all 50 states and
U.S. territories. We regulate the retail rates and services of
electric, gas, water, and some telecommunications utilities.
NARUC and its state commission members were at the table when
the Nuclear Waste Policy Act of 1982 was developed and passed.
And at that time and today, state regulators agree that users
of electricity from nuclear power plants should pay for the
Federal nuclear waste management and disposal program. And the
consumers have paid generously into that fund. Since 1982, more
than $40 billion in direct payments and interests have been
paid into the Nuclear Waste Fund. And so far, we have very
little to show for it, just an $11 billion hole in the ground,
to be exact. The Federal Government missed its statutorily-
mandated deadline to start accepting nuclear waste in 1998. In
the late 1990s and early 2000s, at least, the program had shown
progress, notwithstanding that missed deadline.
However, since that time, efforts to block funding for the
geologic disposal of nuclear waste at Yucca Mountain, as well
as the Department of Energy's unlawful refusal to consider the
project's licensing application, has kept the country in the
exact same situation we occupied 28 years ago when Congress
decided that Yucca Mountain should be the first site considered
for the United States' permanent repository. The repercussions
of the administration's failure to take title of nuclear waste
and to develop the Yucca Mountain site have been substantial.
Now taxpayers from each of your constituencies, even those
whose utilities have no stake in nuclear-generated electricity,
continue to fund court-awarded damages from the Department of
Justice's Judgment Fund for DOE's partial breach of contract.
The chairman and ranking member have described very well, I
think, the history of some of these problems. So in the
interest of cutting it short, I will move on to a few things
NARUC views as solutions.
First, access to the billions collected by the Nuclear
Waste Fund is essential for any interim or permanent solution
to nuclear waste disposal to succeed. Appropriations for the
waste disposal program remain under the spending cap applicable
to all domestic programs, even though the NWF is self-financed.
This forces, as you just heard, spending from the NWF to
compete with other spending programs that never have had a
dedicated funding stream. This approach is unfair to
ratepayers, and inappropriate for a fund designed to finance
the extremely protracted life cycle of a capital intensive
disposal program.
It makes no sense to treat funds collected specifically to
support the disposal of used commercial reactor fuel as
discretionary. Over the life of the program, this approach has
led to lower appropriations than were requested to accomplish
this mission. Reduced funding contributed to project and
schedule delays. Inadequate funding can only hamper efficient
scheduling and planning, thereby driving up costs. The program
must have full access to the revenues generated by consumers'
fee payments if they resume, as well as to the balance of the
NWF. This requires legislative changes to the NWPA.
As related above, the U.S. Government has not lived up to
the promises made under the NWPA and subsequent congressional
enactments. This is really not a matter of opinion, but of
legal record. And of particular relevance is the decision that
the chairman cited from the Circuit Court of Appeals regarding
the DOE fee collection. I think this sorry history strongly
suggests that the management of Federal responsibilities for
integrated-used fuel should be more successful if they were
assigned to a new organization with a single-minded devotion to
the cause of permanently storing used fuel. Congress should
charter a new Federal corporation dedicated solely to
implementing the nuclear waste management program and empowered
with the authority and resources, including direct access to
the NWF outside the current appropriations process that is
necessary for such a mission to succeed.
Congress would still have oversight over those, but they
would be separately dedicated to the use by that organization.
If implemented in the near term, these ideas can help create a
solid foundation on which to build a viable spent nuclear fuel
management program. NARUC is certainly open to the idea of
interim solutions where nuclear fuel is stored, but these
interim sites cannot be allowed to be mere parking lots in the
absence of a permanent storage solution.
Thank you very much, and I look forward to questions.
[The statement of Mr. Kavulla follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Shimkus. Thank you very much.
For my colleagues, there are 7 minutes remaining on the
floor to cast our votes. So we will, in a minute, recess. For
our panelists, there are seven votes called. That is a good 45
minutes to an hour. So hang around the building, get coffee,
and we will be back to delve more deeply into this. We thank
you for your time. And with that I am going to recess the
hearing.
[Recess.]
Mr. Shimkus. We will call the hearing back in order. Again,
apologize for the long delay, but we have to do our job, which
is voting on the floor also. Thank you for the opening
statements. We will go into the questions. And I will begin. I
will recognize myself 5 minutes to start the questioning.
The first one is for Mr. Kavulla. And I know, Mr. Kavulla,
you have to leave. I have been informed. So when you have to
go, just get up and go. Hopefully we will direct the questions
that we can to you early enough to get responses, so hence, the
first one.
At a recent subcommittee hearing to examine the issues
associated with transportation of nuclear materials, expert
witnesses testified that pursuing consolidated interim storage
for spent nuclear fuel would likely increase life cycle costs
as a result of having to ship material more than once. The last
DOE life cycle cost analysis for Yucca Mountain estimated total
transportation costs to exceed $20 billion over the associated
70-year national transportation campaign.
You stated your concern with the possibility that
consolidated interim storage would increase the financial
burden on ratepayers without a justifiable return on
investment, such as a reduction in payment from the judgment
fund. What exactly is necessary to provide assurance that any
authorization for consolidated interim storage is in the
interest of electric ratepayers?
Mr. Kavulla. Thank you, Mr. Chairman, for that question. I
think the answer is that there needs to be unambiguously a
cost-benefit analysis done of this. My real concern, on behalf
of NARUC, is that we would establish these consolidated storage
sites as an interim solution, but then they would become de
facto, permanent sites rather than the kind of parking lot that
undergirds the concept.
So there needs to be more costing than has already been
done. The sites, at least one of the sites that has raised its
hand on a consent basis is one in New Mexico, but they have
been very clear in that state that they are unwilling to go
forward without the designation of a permanent repository. So I
would imagine you would have difficulty of the same type you
face in the Yucca Mountain issue with even identifying those
interim locations.
So I think, my own personal opinion on this, is that you
would need to have a clear linkage between the interim site and
the permanent site in the same breadth, acknowledging that it
may be a reasonable idea because, realistically, we are decades
off of creating a permanent repository, one way or another.
Mr. Shimkus. Thank you very much.
Now, for Mr. Bearden and Mr. Cawley, in both your
testimonies, you reference potential issues of double-counting
previous revenue from the nuclear waste fee that has been
collected over the previous 30 years. For clarification, if
Congress were to appropriate funding from the Nuclear Waste
Fund on activities for which it was collected, under our
scoring rules, I guess my question is, would Congress be
increasing the Federal deficit?
Mr. Cawley. Right. If next year, Congress were to
appropriate $100 million from the Nuclear Waste Fund, that
would add to the deficit in that year.
Mr. Shimkus. Mr. Bearden, would you agree?
Mr. Bearden. Well, most certainly I would agree with CBO in
how they would score any impacts on the deficit. If funding
were appropriated out of the Nuclear Waste Fund, within the
discretionary spending caps, it would be part of that
discretionary spending total and the effects it would have on
the deficit.
Mr. Shimkus. What exactly, then, is accounted for in the
Nuclear Waste Fund audit release this morning by the Department
of Energy inspector general?
Mr. Bearden. I am not quite sure I understand your
question. What is accounted for?
Mr. Shimkus. Yes. Obviously, the audit was released today,
so what are they accounting for in the release for that audit
in their numbers?
Mr. Bearden. Well, their numbers are reflecting what is the
total balance of investments, which are the nuclear utility fee
collections and the interest combined. That is available for
discretionary appropriation, that $34.3 billion figure, by the
end of fiscal year 2015. How Congress can use that money and
the amounts each year are going to depend on the priorities
when the discretionary spending caps.
Mr. Shimkus. Great. Let me just finish up with Mr. Kavulla.
NARUC's previous testimony suggested that Congress could
structure payments from the utilities into an escrow account
which would not be provided to the Federal Government until
funding is appropriated by Congress. Please describe how this
would protect the ratepayers?
Mr. Kavulla. So in the other witnesses' testimony, Mr.
Chairman, you heard examples of funds that work in the way this
one does. It's NARUC's testimony that this budget approach for
something like the disposal of nuclear waste really doesn't
make sense when you are talking about a life cycle of many,
many decades, possibly in excess of a century. It shouldn't be
subject to annual appropriation decisions by Congress.
The idea of an escrow account would be to maintain
congressional oversight and authority over spending, even while
making clear that the funding went into a fund available, for
instance, by an independent body charged with oversight
exclusively of used waste disposal. There are other examples of
funds that are similar to this. The universal service fund that
USEC administers is similar, special purpose fund that is
subject in congressional oversight, but which is not subject to
an annual appropriation.
Mr. Shimkus. Great. Thank you. My time has expired.
I was just going to end by saying, mandatory receipts,
discretionary spending with possible deficit implications. That
is why it is very confusing for us.
And I recognize Mr. Tonko for 5 minutes.
Mr. Tonko. Thank you, Mr. Chair.
And, Mr. Cawley, you called the Nuclear Waste Fund an
accounting mechanism. Is it a trust fund as we think of trust
funds in a traditional sense?
Mr. Cawley. It is categorized in the budget as a special
fund. Like other funds in the Federal budget, they are used to
account for moneys. The Treasury manages all of the cash on a
unified basis, so when we want to spend money that has
accumulated in these funds, that requires new spending.
Mr. Tonko. Let me ask this then: The funding collected has
already been used to offset past Federal deficits, so moving
forward, that money would need to be appropriated as
discretionary funding from the current fiscal year at that
time. Do I have that right?
Mr. Cawley. That is right. Yes.
Mr. Tonko. OK. So from CBO's perspective, despite the
collection of fees in the past, would a change in the law that
would allow the waste disposal process to resume score and
score significantly?
Mr. Cawley. I guess I am not sure what the change in the
law would be, but in the simplest terms, allowing the waste
program to go forward could be just the appropriation of X
million dollars, and that would be costed along with all other
discretionary appropriations in that year, presumably under the
cap that controls all discretionary appropriations in that
year.
Mr. Tonko. And, Mr. Bearden, are there other programs that
use this accounting mechanism that are being appropriated
discretionary funding annually based on a user fee paid to the
Treasury?
Mr. Bearden. Yes, some of the examples that I provided in
my testimony with discretionary funding are the Superfund Trust
Fund, Leaking Underground Storage Tank Trust Fund, Uranium
Enrichment Decontamination and Decommissioning Fund, those are
other examples.
Mr. Tonko. Have these funds been as troubled with their
accounting mechanism?
Mr. Bearden. Each of them has had their own set of issues
and viewpoints. For example, the Leaking Underground Storage
Tank Trust Fund receipts accumulated at a faster pace than
Congress appropriated, under the discretionary process leading
to a higher balance than moneys going out. That is an example
of an issue with that particular fund. That has dedicated
receipts, but the use of it is subject to discretionary
appropriations.
Mr. Tonko. Thank you.
Let me toss out a hypothetical, and it would include either
this or a future administration reevaluating Yucca Mountain, or
Congress changing the law about the location of a permanent
geologic repository for the uses of nuclear waste fund fees. Do
you believe the Secretary of Energy, under existing
authorities, could begin reassessing fees, which have been
stopped since May of 2014?
Mr. Cawley. We think the fees could conceivably be charged
again under administrative changes, absent a change in law. The
court found, in our view, that DOE had not done a fee adequacy
study correctly because it couldn't demonstrate if these fees
were sufficient to pay the life cycle cost. Presumably, that
study could be redone in a different way, and demonstrate to
the court that these fees either are sufficient or are
insufficient to pay for the life cycle cost of the program.
In the original Act, DOE has the authority to
administratively change the fee, present that proposed change
to the Congress, and if Congress doesn't act, the fee change
goes forward.
Mr. Tonko. And are there concerns with the existing
contracts, with utilities that might make this more difficult?
Mr. Cawley. Might make a change to the fee difficult or a--
--
Mr. Tonko. Yes. Or the assessing of the fees or----
Mr. Cawley. I can't think of any.
Mr. Tonko. OK. And, Mr. Bearden, can you explain the
process for changing this fee. There is analysis by the
Secretary of Energy that determined the appropriate fee, but
then it must be submitted to Congress, I believe, for
adjustment. Is that----
Mr. Bearden. Yes, for review. Is that what you are asking?
Mr. Tonko. Yes.
Mr. Bearden. Yes. There is a process of a review for that.
Mr. Tonko. Thank you.
And, Mr. Kavulla, the industry estimates $50 billion in
damages for utilities with DOE contracts. DOE's total liability
estimate is $29 billion. Can you explain this discrepancy.
Mr. Kavulla. Mr. Congressman, I really cannot speak for the
industry on this point. I do know that DOE had suggested a
number, I believe, that was nearly $20 billion in size. I am
not sure of the $9 billion exposure, but it is true what you
have said; in my testimony, there is a citation to an industry
estimate of about $50 billion.
I think the bottom line here is that there is a large
amount of exposure, and whatever the ultimate liability may be,
there is a collection of $750 million annually with a lot of
unresolved claims that are still pending.
Mr. Tonko. Thank you.
My time is up, so I yield back.
Mr. Shimkus. I thank my colleague and friend, and I turn to
Congressman Johnson from Ohio for 5 minutes.
Mr. Johnson. Thank you, Mr. Chairman. And thank you,
gentlemen, for joining us today.
Mr. Bearden, in addition to finding a disposal pathway for
commercial spent nuclear fuel, the Nuclear Waste Policy Act
required a determination regarding a management of the nuclear
waste from atomic defense activities. What was the anticipated
disposal path for that material?
Mr. Bearden. Well, there are possible pathways of disposal
for that material, including a separate repository or a
consolidated repository, and the administration had issued its
finding of moving forward with planning for a separate
repository for defense waste, if that is what you are referring
to.
Mr. Johnson. OK. So what would it mean for defense accounts
if we choose to pursue an entirely new disposal pathway for
this type of material?
Mr. Bearden. Well, any disposal facility for defense
nuclear waste would be subject to appropriation by Congress to
have the resources available for certain.
Mr. Johnson. OK. Mr. Cawley, would that funding be subject
to the current caps on defense spending under the Budget
Control Act and, therefore, compete with other defense account
activities as well?
Mr. Cawley. Sounds like it would, yes.
Mr. Johnson. I am sorry?
Mr. Cawley. It sounds like it would, yes.
Mr. Johnson. OK. All right. You know, the Department of
Energy recently found that its estimated liabilities for
failure to accept commercial spent nuclear fuel is over $23
billion. That is an annual increase over $1 billion. This
estimate, of course, is predicated on achieving the
Department's strategy on used fuel management, and their
ability to begin accepting title to stranded spent nuclear fuel
in 5 years.
So, Mr. Cawley and Mr. Bearden, will you describe how the
development and operation of a pilot interim storage as the
administration proposes would impact the overall estimated
liability? And you can choose who goes first. I don't care.
Mr. Cawley. I have heard the Department's estimate of their
liability of some $23, $24 billion described as depending on
their implementation of their strategy which would have a
storage facility during the next 10 years.
Mr. Johnson. So it is safe to say that it is significant?
Mr. Cawley. Yes.
Mr. Johnson. OK. Mr. Bearden, do you have a comment on
that?
Mr. Bearden. Well, as with any strategy of any
administration, it would depend ultimately on implementation
and the assumptions that it would be made for that, for that to
result in the outcomes that they are estimating. And certainly,
that involves a lot of complexities, and CRS would be happy to
work with the committee to discuss those issues and challenges
with you at your convenience.
Mr. Johnson. OK. What portion of DOE's projected liability
is tied to only the dozen sites that are completely
decommissioned, absent removal of the spent nuclear fuel?
Either of you want to comment on that?
Mr. Cawley. I don't have a specific answer to that
question, but I do know that under the original contracts, at
this point, DOE was to have removed approximately 40,000 metric
tons of waste out of the some 72,000 metric tons of waste that
exists. It doesn't address specifically the spent fuel at the
facilities that have closed. Some of that, no doubt, should
have been removed by this time.
Mr. Johnson. Can you take that question for the record,
please, and do some research on that and get back to us?
Mr. Cawley. Certainly.
Mr. Johnson. OK. Thank you.
Mr. Bearden, the Nuclear Waste Policy Act included a number
of provisions to provide financial assistance to State-affected
local and tribal governments. Will you please describe what
this funding was intended to support?
Mr. Bearden. There is a range of funding authorized subject
to appropriation from the Nuclear Waste Fund for affected units
of local government, states, and tribes. Some of that is for
oversight during the licensing process and other assistance,
and some of the totals of that have been approximately $520
million, at least at the end of fiscal year 2009 that I am
familiar with, and so, that assistance partly is to go for the
oversight and the licensing process.
Mr. Johnson. Are you aware of how much funding has
previously been directed to the State of Nevada and local and
tribal governments?
Mr. Bearden. I do not have that figure with me today, but I
would be happy to provide that as a follow-up response for the
record.
Mr. Johnson. Mr. Kavulla, your organization is on record
supporting reasonable economic benefits and incentives for host
states and communities. Would you like to discuss very
briefly--because my time is expired--the nature of those
benefits and the role of Federal-State partnerships?
Mr. Kavulla. Congressman, I would be happy to follow up in
more detail, but briefly, we acknowledge that this is liability
for a State to take on. We agree that there needs to be some
concessions made for units of local government to take them on.
But those need to be tied to, frankly, the scope of the
responsibilities they are shouldering, and not, I think, just
to give away that would ultimately be placed on the consuming
rate-paying public----
Mr. Johnson. OK. My time has expired. Would you provide an
expanded answer to that?
Mr. Kavulla. I would be happy to.
Mr. Johnson. Mr. Chairman, I yield back.
Mr. Shimkus. The gentleman yields back.
We now recognize Mr. Green from Texas for 5 minutes.
Mr. Green. Thank you, Mr. Chairman. I am trying to get used
to this Ways and Means Committee room. You think we could take
some of our jurisdiction when we leave that they took from us
over the years?
But anyway, I want to welcome our colleagues from the
agencies.
The success of our Nation's nuclear waste management
program is dependent on making fees raised from the Nuclear
Waste Fund available as needed for construction,
transportation, and storage of high-level nuclear waste. This
is not the case currently. Congressional action, after the
enactment of Nuclear Waste Policy Act, has sharply limited the
ability of responsible agencies to access the funds to study,
construct a storage facility, be it interim or permanent.
As the committee of jurisdiction, we must begin to process
affixing this broken system, uphold the Federal Government's
contractual obligations to the ratepayers, and ensure a clear
path for the prompt licensing and construction of permanent
storage facility.
Mr. Cawley, what is the current amount of money in the
Nuclear Waste Fund?
Mr. Cawley. Current balance is shown on table 1 in my
prepared testimony. It is about $34 billion.
Mr. Green. Pardon? $34 million or billion?
Mr. Cawley. Billion.
Mr. Green. OK. How much of the money has the Federal
Government currently paid in damages to the electric utilities
for failing to take the title of civilian nuclear waste by the
required date?
Mr. Cawley. So far, we have paid approximately $5.3
billion. In the coming decade, we expect it will be about $5
billion more.
Mr. Green. You note in your testimony, several utilities
have not paid their one-time fee into the Nuclear Waste Fund.
Does CBO know how much these outstanding one-time fees are
valued at?
Mr. Cawley. One-time fees currently have a value of about
$1.6 billion.
Mr. Green. Is the Department of Energy currently doing
anything to collect those outstanding fees from the utilities?
Mr. Cawley. The one-time fees was an option given to
utilities back at the beginning of the Act, and they are due
when their first delivery of waste to a repository is made.
Mr. Green. Mr. Kavulla, is our Nation's current system for
high-level nuclear waste working for the people of your state?
Mr. Kavulla. Well, Congressman, no. Montana has no nuclear
waste and shouldn't be paying, frankly, for any of this. And
the irony of the Federal policy is that through the damages
awarded against DOE, even taxpayers of those States who have no
connection with nuclear-generated electricity are, nonetheless,
paying for this problem.
Mr. Green. As a supporter of nuclear energy and expansion,
and coming from Texas where we are trying to look at a midlevel
waste facility in West Texas that obviously we need--and if you
want nuclear power, we have to have some place, whether it be
the temporary storage on site, the interim storage, or
ultimately the long-term storage, but I can't say we have the
solution, because there is no country in the world that has
long-term storage.
You know, France, who generates a great deal of their
electricity from nuclear. Sweden, actually, has a big hole in
the ground. But I asked how they afforded that, and they said,
well, what they would call their local jurisdiction, it was a
prototype, but they agreed they would never put anything in
there. So, everybody wants their electricity turned on but we
don't know where to put the nuclear waste.
Do you believe the ratepayers in Montana and other states
represented by NARUC have confidence in the Federal Government
and Congress to fix the current system?
Mr. Kavulla. Well, I have confidence, I hope, Congressman,
that your subcommittee will do something about this.
Mr. Green. I wish I had confidence we would fix it.
Mr. Bearden, in the last 50 seconds, how are PAYGO
requirements created under the enactment of the NWPA impacting
the Energy Department's access to funds currently in the
Nuclear Waste Fund?
Mr. Bearden. Well, the access to those funds is dependent
on the appropriations under the discretionary process, so it is
the discretionary spending limits that are affecting the
availability of moneys that Congress can prioritize each year
out of the Nuclear Waste Fund.
Mr. Green. Has the Budget Control Act of 2011 limited the
Federal Government's access to the money in the Nuclear Waste
Fund?
Mr. Bearden. To the extent that there are caps on overall
discretionary spending, that pressure that is on all
discretionary spending and is also on appropriations that would
come from the Nuclear Waste Fund.
Mr. Green. If Congress were to create a single-purpose,
independent corporation for nuclear waste storage, how would
Congress continue to ensure the strong oversight by such an
entity?
Mr. Bearden. That would depend on the legislation that sets
up the agency roles, and how that may be overseen and what the
nature of that entity is, so it would not be possible to answer
that without knowing all those details.
Mr. Green. Thank you, Mr. Chairman.
Mr. Shimkus. Gentleman yields back his time.
And just for a point of information, last month, Finland's
government became the first to approve construction on such a
long-term storage--Finland--a deep underground repository after
more than 30 years of efforts to find a suitable site. So maybe
someday, Mr. Green. Maybe someday.
The chair now recognizes the gentleman from Mississippi for
5 minutes.
Mr. Harper. Thank you, Mr. Chairman.
And thanks to each of you, and for your knowledge and
expertise on what is, overall, a very intriguing and
challenging issue on how we go forward and what we are going to
do. So thank you for your testimony.
And, Mr. Cawley, and I will probably ask you, I will direct
this toward you. When the Department of Energy instituted the
nuclear waste fee in the 1980s, it had to account for the cost
to dispose the spent nuclear fuel generated prior to the
passage of the Nuclear Waste Policy Act. And certainly, as you
know, they did this by providing utilities the option to pay a
one-time fee upfront or defer payment.
And I know, Mr. Bearden, you have discussed some of these
issues on the structure and current value.
Mr. Cawley, with CBO's cash-basis scoring process, can you
explain, how does CBO account for this one-time fee that is yet
to be collected?
Mr. Cawley. So the one-time fee with the current value of
approximately $1.6 billion is due upon delivery of the first
amount of waste from the couple of utilities that chose that
option. It hasn't affected the deficits in the past. It will
affect deficits in the future if we receive that money. We
don't really have an outlook for receiving that money,
certainly in the next couple of years.
Mr. Harper. Gotcha. As we have heard in some of today's
testimony, when Congress appropriates funding by using the
Nuclear Waste Fund authorization, it does not result in the
overall increase in the amount of discretionary spending.
Mr. Cawley, does it make a difference for CBO scoring
purposes whether or not the appropriation from the Nuclear
Waste Fund, regardless of the specific nuclear waste management
activity?
Mr. Cawley. I am not sure I got the question, but----
Mr. Harper. Well, let me just ask this: This concept, would
that concept apply for CBO's scoring of activities to support
consolidated interim storage?
Mr. Cawley. If work on a consolidated interim storage were
authorized, and there were appropriation out of the waste fund
for that, or out of the general fund for that, that would be
scored as additional discretionary spending. And, again,
presumably, that spending would come under current caps.
Mr. Shimkus. Would the gentleman yield?
Mr. Harper. Yes.
Mr. Shimkus. But the authority to spend discretionary
dollars in an interim plan would take a change in the current
law?
Mr. Cawley. That is my understanding.
Mr. Shimkus. OK. Thank you.
Mr. Harper. Mr. Cawley, therefore, is it correct that
proposed legislation to authorize the development of a
consolidated interim storage proposal would potentially be
treated the same, whether or not the activities are authorized
to be supported from the Nuclear Waste Fund?
Mr. Cawley. Spending funds from the general fund versus an
appropriation out of the Nuclear Waste Fund would both have a
cost.
Mr. Harper. Mr. Kavulla, if I could ask you this: Your
testimony calls for the establishment of an independent body to
manage nuclear waste disposal. If Congress cedes its authority
under the appropriations process, how can Congress maintain
control over such an entity to assure it is fulfilling its
legal obligations intended under the law and in the taxpayer
interest?
Mr. Kavulla. Congressman, let me answer the question this
way: Under the appropriations process currently, you have
oversight jurisdiction over the DOE and the NRC, and your
jurisdiction has been flouted, candidly. So I think NARUC's
recommendation is to establish not only oversight of whatever
appropriation you escrow or give under the control of such a
body, but, also, positive timelines and steps to that body so
that you are not essentially ruling by the power of the purse
through negations of agency acts, but directing an agency, this
new independent body, to do specific things that are
enforceable by entities, like NARUC and courts of law, so that
no administration in the future can, again, act to drag its
feet on this important question.
Mr. Harper. Thanks to each of you. My time is almost
expired so I will yield back.
Mr. Shimkus. Gentleman's time--he actually turns the
balance of his time.
Seeing no other members and knowing that people have other
places to go, we want to thank you for your time. And the
record will be open for a couple days should other members want
to submit. We would ask that you would turn those in a timely
manner. And thank you, again, for your time.
And with that, I will adjourn the hearing.
[Whereupon, at 12:05p.m., the subcommittee was adjourned.]
[Material submitted for inclusion in the record follows:]
Prepared statement of Hon. Fred Upton
When President Obama took office in 2009, the national debt
had just surpassed ten trillion dollars. Now, as we approach
the final year of the Obama administration, that number will
soon eclipse nineteen trillion dollars. This long-term
financial burden will be passed along to our children and
grandchildren. I was proud to be a partner in a bipartisan
solution to reduce Medicare's long term liability by three
trillion dollars when Congress fixed the Medicare Sustainable
Growth Rate formula. Now, I look forward to finding a
bipartisan solution to reduce skyrocketing long-term
liabilities in another important policy area, our nation's
nuclear waste management policy.
For over thirty years, ratepayers, including my
constituents back in Michigan who rely on clean nuclear power,
paid a tax on electricity generated from commercial nuclear
power plants to study, license, and construct a permanent
repository for spent fuel. When the current administration
decided the Yucca Mountain project was ``unworkable,'' and
illegally moved to withdraw its license application, it
attempted to abandon a thirty-year, $15 billion investment. In
2013, the D.C. Court of Appeals rightly suspended the federal
government's collection of the nuclear waste fee, reasoning
that the absence of a repository program meant DOE could not
collect the tax. It is time for consumers to get what they paid
for: a decision whether Yucca Mountain can be licensed by the
Nuclear Regulatory Commission. If that decision is yes, the
Department of Energy should proceed with construction of the
facility.
But the ratepayer's financial support is only one aspect of
the funding story. This spring, Secretary Moniz announced a
significant departure from the bipartisan, 30-year nuclear
waste management policy in which both defense waste and
commercial spent nuclear fuel are jointly disposed in a
permanent repository located at Yucca Mountain, Nevada.
DOE is now seeking to redirect defense material, which has
long been destined for Yucca Mountain along with commercial
spent nuclear fuel. Ranking member Pallone and I wrote to
Secretary Moniz to express our concerns about this decision.
Central to our concerns is the potential budgetary impact of
walking away from the scientific and technical work that was
already completed, paid from our national security accounts,
and starting over in a new location. The federal government has
already spent $3.7 billion in defense funding to develop the
Yucca Mountain site. With turmoil in the Middle East and
threats on our homeland, that money would be better spent
addressing these major and immediate national security concerns
instead of grasping in the short term for a new shiny object.
I appreciate the testimony from the experts today about
budget, funding and scoring issues with a nuclear waste
management program.
----------
Prepared statement of Hon. Frank Pallone, Jr.
Thank you Mr. Chairman. Safe disposal of spent fuel from
our nation's nuclear reactors is an important issue in the
realm of our country's energy future. We must find a long term
solution to the issue of nuclear waste and how to finance its
safe storage.
Today's hearing focuses on the Nuclear Waste Fund and its
budgetary, funding and scoring issues. Although the fund was
intended to be ``off budget,'' appropriations from the fund
have scored as expenditures and lead to insufficient funds
being made available to meet the needs of the program. As our
country pursues interim storage solutions--and ultimately a
permanent repository for spent nuclear fuel--it is critical
that we ensure the funds necessary to safely transport and
store this material are available. And we must work to identify
steps we can take now to set the stage for real reform on
permanent disposal in the future, regardless of where the
disposal facility ends up being sited.
Whenever we have a discussion about the Nuclear Waste Fund
and the safe disposal of spent nuclear fuel, it is also
critical for us to consider ratepayers because they have paid
billions of dollars into the fund and received very little in
return. We also need to consider taxpayers who now find
themselves paying for the failures of the program. We need to
be focusing on efforts that can be enacted into law and that
will move us forward over the next few years.
I am very interested in hearing from our witnesses today
about the challenges and state of play regarding the Nuclear
Waste Fund and our efforts to safely store spent nuclear fuel.
Thank you for holding this hearing, and I yield back the
balance of my time.
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