    [Senate Hearing 114-298]
    [From the U.S. Government Publishing Office]

                                                         S. Hrg. 114-298

     ENABLING ADVANCED REACTORS AND A LEGISLATIVE HEARING ON S. 2795, THE
                NUCLEAR ENERGY INNOVATION AND MODERNIZATION ACT

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

                                    HEARING

                                   BEFORE THE

                           SUBCOMMITTEE ON CLEAN AIR
                               AND NUCLEAR SAFETY

                                     OF THE

                                  COMMITTEE ON
                          ENVIRONMENT AND PUBLIC WORKS
                              UNITED STATES SENATE

                        ONE HUNDRED FOURTEENTH CONGRESS

                                 SECOND SESSION

                                   __________

                                 APRIL 21, 2016

                                   __________

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                   COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS

                        ONE HUNDRED FOURTEENTH CONGRESS
                                 SECOND SESSION

                      JAMES M. INHOFE, Oklahoma, Chairman
    DAVID VITTER, Louisiana              BARBARA BOXER, California
    JOHN BARRASSO, Wyoming               THOMAS R. CARPER, Delaware
    SHELLEY MOORE CAPITO, West Virginia  BENJAMIN L. CARDIN, Maryland
    MIKE CRAPO, Idaho                    BERNARD SANDERS, Vermont
    JOHN BOOZMAN, Arkansas               SHELDON WHITEHOUSE, Rhode Island
    JEFF SESSIONS, Alabama               JEFF MERKLEY, Oregon
    ROGER WICKER, Mississippi            KIRSTEN GILLIBRAND, New York
    DEB FISCHER, Nebraska                CORY A. BOOKER, New Jersey
    MIKE ROUNDS, South Dakota            EDWARD J. MARKEY, Massachusetts
    DAN SULLIVAN, Alaska

                     Ryan Jackson, Majority Staff Director
                   Bettina Poirier, Democratic Staff Director

                                  ----------

                  Subcommittee on Clean Air and Nuclear Safety

                 SHELLEY MOORE CAPITO, West Virginia, Chairman
    DAVID VITTER, Louisiana              THOMAS R. CARPER, Delaware
    JOHN BARRASSO, Wyoming               BENJAMIN L. CARDIN, Maryland
    MIKE CRAPO, Idaho                    BERNARD SANDERS, Vermont
    JEFF SESSIONS, Alabama               SHELDON WHITEHOUSE, Rhode Island
    ROGER WICKER, Mississippi            JEFF MERKLEY, Oregon
    DEB FISCHER, Nebraska                EDWARD J. MARKEY, Massachusetts
    JAMES M. INHOFE, Oklahoma (ex        BARBARA BOXER, California (ex
        officio)                             officio)

                                C O N T E N T S

                                  ----------
                                                                       Page

                                 APRIL 21, 2016
                               OPENING STATEMENTS

    Capito, Hon. Shelley Moore, U.S. Senator from the State of West
      Virginia.......................................................     1
    Carper, Hon. Thomas R., U.S. Senator from the State of Delaware..     2
    Inhofe, Hon. James M., U.S. Senator from the State of Oklahoma,
      prepared statement.............................................     4
    Booker, Hon. Cory A., U.S. Senator from the State of New Jersey..     5
    Crapo, Hon. Mike, U.S. Senator from the State of Idaho...........     6
    Whitehouse, Hon. Sheldon, U.S. Senator from the State of Rhode
      Island.........................................................     7
    Cardin, Hon. Benjamin L., U.S. Senator from the State of
      Maryland, prepared statement...................................   130

                                   WITNESSES

    Back, Christina A., Division Director, Inertial Fusion and
      Advanced Fission, General Atomics..............................     8
        Prepared statement...........................................    11
    Finan, Ashley E., Policy Director, Nuclear Innovation Alliance...    26
        Prepared statement...........................................    28
        Responses to additional questions from Senator Whitehouse....    39
    Korsnick, Maria, Chief Operating Officer, Nuclear Energy
      Institute......................................................    43
        Prepared statement...........................................    45
        Responses to additional questions from Senator Inhofe........    53
    Lyman, Edwin, Senior Scientist, Global Security Program, Union of
      Concerned Scientists...........................................    56
        Prepared statement...........................................    58
        Responses to additional questions from Senator Whitehouse....    72
    McCree, Victor, Executive Director of Operations, U.S. Nuclear
      Regulatory Commission..........................................    73
        Prepared statement...........................................    75
        Responses to additional questions from Senator Inhofe........    80
    Merrifield, Hon. Jeffrey S., Chairman, Advanced Reactors Task
      Force, U.S. Nuclear Infrastructure Council.....................    97
        Prepared statement...........................................   100
        Responses to additional questions from Senator Inhofe........   107

     ENABLING ADVANCED REACTORS AND A LEGISLATIVE HEARING ON S. 2795, THE
                NUCLEAR ENERGY INNOVATION AND MODERNIZATION ACT

                                  ----------

                            THURSDAY, APRIL 21, 2016

                                   U.S. Senate,
             Committee on Environment and Public Works,
                  Subcommittee on Clean Air and Nuclear Safety,
                                                        Washington, DC.
        The subcommittee met, pursuant to notice, at 9:45 a.m. in
    room 406, Dirksen Senate Building, Hon. Shelley Moore Capito
    (chairwoman of the subcommittee) presiding.
        Present: Senators Capito, Crapo, Wicker, Fischer, Inhofe,
    Carper, Whitehouse, Markey, and Booker.

            OPENING STATEMENT OF HON. SHELLEY MOORE CAPITO,
              U.S. SENATOR FROM THE STATE OF WEST VIRGINIA

        Senator Capito. I would like to welcome all of our
    witnesses today, but a particular welcome to an alumnus of this
    committee, Mr. Merrifield, who told me he began here in 1986. I
    appreciate your returning.
        Each witness has been asked to give a 5-minute oral
    statement and then take questions.
        We are here to examine an exciting topic: advanced nuclear
    reactors. I would like to thank Senator Carper because I know
    he has a great interest in this. While nuclear issues may be
    somewhat new to me, I am learning that these technologies have
    the potential to make great strides in advancing nuclear
    technology.
        This is a topic many of us are very interested in because
    nuclear energy is an essential component of our all-of-the-
    above energy strategy. Our current nuclear plants provide
    clean, safe, reliable, and affordable energy to power our
    economy while providing thousands of jobs and millions of
    dollars in benefits to local communities.
        They have made vital contributions to our energy security
    for years, but we need to look forward to what comes next.
    Advanced reactors have the potential to be cleaner, safer, and
    more secure.
        One purpose for this hearing is to better understand these
    technologies and the barriers to their development as
    commercial energy sources. The other purpose of this hearing is
    to examine S. 2795, the Nuclear Energy Innovation and
    Modernization Act, introduced last week by my colleagues,
    Senators Inhofe, Booker, Whitehouse, and Crapo. S. 2975 directs
    the NRC to develop a regulatory framework under which license
    applications for a variety of technologies can be reviewed, in
    keeping with the NRC's safety and security mission.
        The NRC's existing regulations were designed around one
    technology and are not well suited to the innovations that are
    underway. This is clearly an issue our committee needs to
    address, and I am glad my colleagues have come forward with a
    solution.
        Efficient and timely decisionmaking at the NRC is crucial
    for our existing plants and for emerging technologies. The bill
    modernizes the NRC's budget and fee structure to ensure funds
    are available to complete reviews that the existing industry
    needs to remain economically competitive and that will also
    allow emerging technologies to grow.
        The NRC's safety and security mission is a vital one but
    must be accomplished efficiently and with fiscal discipline.
    According to the NRC's Principles of Good Regulation, the
    American taxpayer, the rate paying consumer, and licensees are
    all entitled to the best possible management and administration
    of regulatory activities.
        This bill aligns with that principle, and I thank my
    colleagues for their hard work and bipartisanship to advance
    innovative new energy technologies. These are technologies
    where our Nation should lead the way, not just for our energy
    security but also in the interest of national security. Only by
    leading can we hope to advance our nonproliferation goals.
        With that, I am eager to hear Senator Carper's remarks and
    those of our witnesses.
        Senator Carper.

              OPENING STATEMENT OF HON. THOMAS R. CARPER,
                U.S. SENATOR FROM THE STATE OF DELAWARE

        Senator Carper. Thank you, Madam Chairman.
        Thanks for letting me be your wing man. It is good to be
    here with all our colleagues, particularly with Senator Inhofe
    and Senator Crapo who have a huge interest and a lot of
    expertise in these issues.
        I want to welcome each of you. It is nice to see one of you
    again for many years now, have a chance to welcome back others
    and to meet some of you for the first time.
        When our country began exploring nuclear power, I think it
    was more than 60 years ago. I do not know how many had much of
    an idea how important this technology could be to the future of
    our Nation's energy supply. Serious incidents in places like
    Chernobyl, Three Mile Island and Fukushima caused a number of
    people, both at home and around the world, to question the
    viability of nuclear power, but I think support for this clean,
    reliable technology has begun to grow again in recent years.
        Given that development, Congress has an important role to
    play in ensuring that our Nation invests wisely in nuclear
    while at the same time maintaining our focus on safety. Many
    Americans may be unaware that nuclear technology was actually
    invented in the United States. In fact, for a number of years,
    our Nation led the world in nuclear manufacturing, construction
    and production.
        The jobs and the economic benefit of this growth stayed
    here at home for the most part. Unfortunately, this is no
    longer the case. Many nuclear components are now only available
    from our international economic competitors, including the
    French, South Koreans, Japanese and now the Chinese.
        While the United States continues to have more nuclear
    power plants than any other country, other nations, China in
    particular, are gaining quickly. At the same time, our
    country's nuclear reactors are getting older, and many will
    need to be replaced in the years to come.
        Some people believe that our Nation's nuclear success story
    may be winding down. But I believe that like a distance runner,
    nuclear power in America is just getting its second wind.
    Albert Einstein used to say with adversity lies opportunity. He
    was right then, and he is right today.
        While this industry has faced a good deal of adversity in
    recent years, there appears to be a fair amount of opportunity
    ahead of it now. If we are smart, we will seize the day and
    begin to replace our aging nuclear reactors with new ones in
    the years ahead that are safer, produce less spent fuel and are
    less expensive to build and operate.
        If we are smart about it, I foresee an opportunity to
    develop and build the next generation of nuclear reactors on
    American soil. I foresee a chance to have some of our closed
    manufacturing plants reopen, construction crews will be called
    back to work, and colleges will face a new demand from industry
    for skilled nuclear technicians.
        In short, I foresee an opportunity for the United States to
    once again lead the world in nuclear technology. Today's
    hearing is about how we seize this opportunity. Decisions we
    make today will impact what types of nuclear reactors will be
    operating in this country 10, 20 even 50 years from now.
        Fortunately, there has been good progress of late, and we
    are beginning to deploy new nuclear technology. Several years
    ago, the NRC approved construction to build four new reactors
    in Georgia and South Carolina that will incorporate some of the
    most up-to-date safety technology.
        Construction of these new reactors is creating thousands of
    new jobs for the economies in those States. It is becoming
    increasingly likely that small modular reactors will become a
    reality in this Nation with the first reactors expected to
    become operational within the next decade. This is an
    encouraging start, but I know we can and need to do better.
        I have also heard from U.S. businesses who believe that we
    can do better. Over 50 companies are investing in next
    generation nuclear technologies. Today, we are going to hear
    directly from a company that is making some of those
    investments.
        As these companies make advances in technology, we need to
    make sure that our regulatory framework can keep pace. The NRC
    is considered the world's gold standard of nuclear regulatory
    agencies. However, as science and technology evolve, so must
    the NRC.
        In closing, let me say I believe that Government in this
    country has a number of roles to play. I am sure you agree.
    Among them, few are as important as helping to create a
    nurturing environment for job creation and job preservation.
    That includes making sure that we have affordable, dependable
    energy, that we produce it safely in this country, and in ways
    that diminish the threat of climate change rather than
    increasing it.
        Advances in nuclear energy can help us attain that more
    nurturing environment and provide a more promising future for
    our Nation, for its people and for our planet. I hope we will
    learn today about the roles the NRC and other agencies need to
    play if that promising future is to be realized.
        Thank you, Madam Chair.
        Senator Capito. Thank you.
        With that, I think the Chairman has requested time.
        Senator Inhofe. Just unanimous consent that my statement be
    placed in the record.
        Senator Capito. Without objection, so ordered.
        [The prepared statement of Senator Inhofe follows:]

                      Statement of Hon. James M. Inhofe,
                    U.S. Senator from the State of Oklahoma

        I have been a strong supporter of nuclear energy since I
    became Chair of this subcommittee almost 20 years ago. It is a
    vital source of clean, safe, and affordable energy which helps
    power this machine called America.
        Our existing nuclear plants have run safely for decades and
    will operate for years to come. However, I believe we also need
    to look to the future.
        Innovation has come to the nuclear industry. There are many
    new companies, nuclear ``startups,'' in fact, that are pursuing
    concepts that advance safety, security, and efficiency.
        I strongly support this progress and am eager to see these
    innovators succeed.
        That is why I joined my colleagues--Senators Booker,
    Whitehouse, and Crapo--to introduce the Nuclear Energy
    Innovation and Modernization Act.
        Advanced reactor innovators must have an efficient
    regulatory process at the Nuclear Regulatory Commission in
    order to bring these new technologies into operation.
        The NRC's existing processes were designed around one
    particular technology: light water reactors. These processes
    are poorly suited for the wide range of advanced technologies
    currently being pursued.
        Our bill directs NRC to develop ``technology inclusive''
    regulatory processes in an effort to enable the growth of the
    new, exciting industry.
        Our section to modernize NRC fees reflects oversight work
    done by the EPW Committee over the last few years.
        One need that is shared between advanced reactor innovators
    and existing reactor operators is the need for timely
    decisionmaking from the NRC.
        Our bill directs the NRC to budget for industry requested
    work and to preserve those funds solely for those purposes to
    improve the NRC's timeliness.
        Altogether, these provisions represent a solid, bipartisan
    effort to modernize the cost and regulatory frameworks and
    enable the development of new generations of reactors with bold
    new technologies.
        Other countries like China and Russia are proceeding to
    develop advanced technologies regardless of what we do here in
    the U.S. We cannot forgo advancements in reactor technology or
    we forgo our economic competitiveness and worldwide influence
    on nuclear non-proliferation.
        We need to enable advanced reactor innovators by providing
    a regulatory framework that is predictable and cost effective
    while maintaining the NRC's safety and security mission. This
    bill does that.
        In a time when people question whether Congress still knows
    how to be bipartisan, this bill is proof that we can find
    common ground and craft important solutions to benefit the
    Nation.
        This legislation was the product of teamwork with my
    friends, Senators Booker, Whitehouse, and Crapo. I'm proud to
    be part of that team.

        Senator Capito. Again, I would like to thank the witnesses
    and welcome you to give a 5-minute statement. Your full
    testimony has been submitted for the record. Then we will go
    through a round of questioning.
        Senator Booker, I understand you would like to make a
    comment about the bill in advance of the testimony.

               OPENING STATEMENT OF HON. CORY A. BOOKER,
               U.S. SENATOR FROM THE STATE OF NEW JERSEY

        Senator Booker. I am very grateful, Madam Chairman, for
    this opportunity, and thank you for giving me a chance to say a
    few words.
        I am a Senator today with no name today, or a Senator whose
    name shall not be mentioned.
        Again, thank you, Chairman Capito. I want to thank Senators
    Inhofe, Whitehouse and Crapo for their partnership on this
    really important bill.
        American leadership on nuclear energy is absolutely
    critical. The historic Paris Climate Agreement set ambitious
    goals to target and limit global warming to 1.5 centigrade
    above pre-industrial levels. However, scientists agree that
    even if all countries meet their commitments under this pact,
    we are not on track to meet these ambitious targets, not even
    close. Meeting the rising global demand for energy while
    simultaneously slashing carbon emissions presents a very
    difficult challenge for this generation.
        Think about this. By 2050, meeting the Paris targets would
    require us to cut emissions by up to 70 percent while producing
    70 percent more electricity. That is an incredibly difficult
    thing to do, to produce 70 percent more electricity than we do
    today while at the same time emitting 70 percent less carbon.
        I am a big believer in energy efficiency and renewable
    energy. I fought with other Senators to expand the tax credits
    last year for renewable, but in order to avert the worst
    effects of climate change, we do not see any way around the
    idea that we must substantially increase our nuclear energy
    capacity in the coming decades. We have no choice but to
    increase nuclear capacity.
        Nuclear energy, which provides a critical baseload power,
    currently comprises more than 60 percent of our Nation's carbon
    free electricity generation. Right now in the United States we
    have five new reactors under construction, the first new
    commercial units in 30 years, but several existing reactors
    have already been shut down prematurely, and many more are at
    risk.
        We need to make sure that we see dozens of more private
    sector companies beginning to move into this area and help to
    produce an environment where they are making their billion
    dollars of investment.
        We desperately need sound, long term Government policies
    that will support our existing fleet and also support a
    sustained commitment by the private sector to advance nuclear
    reactors that can be commercialized in the future.
        This bill, S. 2795, takes several positive, bipartisan
    steps in that direction. First, the bill would direct NRC to
    develop new staged licensing processes for advanced nuclear
    reactors. Second, the bill would, over longer terms, put in
    place new technology, inclusive regulatory framework and would
    make licensing of advanced nuclear more efficient, flexible and
    predictable while maintaining the NRC's safety and security
    missions.
        Third, the bill would authorize a new cost sharing grant
    program at the Department of Energy that would help the first
    advanced reactor projects that move forward to pay for some of
    the licensing costs at NRC.
        This bill would place a cap on the annual fees that
    existing nuclear reactors pay to the NRC. While this cap may
    never be hit, putting it in place will provide certainty and
    protection for the existing fleet.
        This is a critical challenge we have in our Nation right
    now, making sure we are meeting our energy needs, dealing with
    the realities of climate change and empowering business and
    innovation.
        I am very happy to have worked in a bipartisan fashion on
    what is a solid bill that will help us to take a step forward.
        Thank you, Chairman, for providing me this opportunity to
    make an introduction to the bill. I look forward to hearing
    from all of our witnesses.
        Senator Capito. Thank you.
        Senator Inhofe. Just a 10-second response. Let me assure
    you that while we enjoy this bill, we are co-sponsoring the
    bill, it has nothing to do with global warming. The disaster
    you will see tomorrow of what they call Earth Day in New York
    is an embarrassment. The President is not even going there for
    it.
        My motivation on this is when I say all of the above to
    save this country, all energy, it includes nuclear. Thank you.
        Senator Capito. Thank you.
        Another bill sponsor, Senator Crapo, would like to make an
    introduction to the bill and make some comments.

                 OPENING STATEMENT OF HON. MIKE CRAPO,
                  U.S. SENATOR FROM THE STATE OF IDAHO

        Senator Crapo. Thank you, Madam Chairman. I appreciate the
    opportunity to be here today.
        Senators Inhofe, Whitehouse, Booker and I have introduced
    legislation to ensure the NRC will be ready to license advanced
    reactor designs as companies are ready to commercialize them.
        We have undertaken a deep dive into the inner workings of
    the Commission. Through hearings and discussions with officials
    and stakeholders, we have developed a plan that will help
    modernize the Commission and enable it to stay abreast of
    reactor design advancements in the nuclear industry.
        Our bill, the Nuclear Energy Innovation and Modernization
    Act, NEIMA, increases transparency and accountability in the
    NRC's budget and fee structure through modernizing reforms
    based on years of EPW oversight efforts.
        The measure also directs the agency to develop a technology
    inclusive regulatory framework enabling the Commission to
    review a diverse set of advanced reactor technologies. NEIMA's
    improvements bring a great deal of transparency and
    accountability to the NRC.
        We want the Commission to make changes that allow
    stakeholders of various backgrounds and motivations to look at
    the Commission's actions and understand what it is doing.
        In particular, the agency must be more transparent in its
    budgeting and fee process. This is especially true regarding
    the Commission overhead costs. When the NRC talks about
    overhead costs, it refers to activities that may be categorized
    as corporate support, office support and mission indirect.
        At this point, our bill only captures one portion of these
    overhead costs, the corporate support costs, because that is
    the only portion of the overhead costs that we can get the NRC
    to clearly label and define. The NRC must endeavor to make its
    budgeting information more transparent and accessible.
        Some amount of overhead is necessary for all organizations.
    Nonetheless, the NRC needs to be able to clearly account for
    its overhead costs and for the way it uses fees from licenses
    to support these costs. Clear and transparent budget processes
    are required for effective oversight. This is something I look
    forward to working with my fellow EPA colleagues on, both in
    this bill and in beyond.
        Finally, it is imperative that we licensing process for
    advanced reactors is transparent and takes into account past
    lessons learned. NEIMA enables the NRC to create a technology
    inclusive regulatory framework. By creating a technology
    inclusive framework, we are enabling the NRC to review and
    license any advanced reactor design that it considers to be
    safe and secure.
        We are not forcing the NRC to pick winners and losers among
    reactor designs by forcing it to allocate resources on one type
    of reactor or design. As a whole, NEIMA provides important
    transparency and accountability improvements across the NRC and
    improves the communication between various stakeholder groups
    and the agency.
        Enabling better transparency, accountability and
    communication are critical to ensuring the NRC remains the
    world's preeminent safety and security regulator. Such
    improvements also provide more stability and predictability in
    the industry and among stakeholder groups.
        Increasing the NRC's ability to be transparent and
    accountable will increase its ability to perform its safety
    mission and share information with all stakeholder groups.
        Thank you very much, Madam Chairman.
        Senator Capito. We would like to go to the witnesses, but I
    understand the original sponsor, Senator Whitehouse, has some
    comments.

             OPENING STATEMENT OF HON. SHELDON WHITEHOUSE,
              U.S. SENATOR FROM THE STATE OF RHODE ISLAND

        Senator Whitehouse. Thank you, Madam Chairman.
        Let me first thank Chairman Inhofe, Senators Crapo and
    Booker for the work we have done together to try to streamline
    this process.
        The sense that I have and that brought me to this
    conversation is that the approval process at NRC is an obstacle
    course that is designed for a particular type of technology but
    is not well suited to technologies that are not that
    technology.
        Indeed, the irrelevancy, as I think someone mentioned to
    me, is two plus two equals cheese. It just does not fit or make
    sense at all.
        We do have new technologies that are emerging. They have
    enormous promise for a carbon constrained world. We, in
    America, have done a lot of the leadership design for them, but
    if we cannot get them through a process to where they are
    actually creating electrons, then we have not done ourselves
    any good. I look forward to pursuing this.
        I would add two brief points. One is that it should remain,
    I think, a very high priority goal of this committee and this
    process to continue to point toward ways to reuse spent nuclear
    fuel.
        Some of these technologies hold out at least the promise of
    taking the enormous stockpile of what is now dangerous nuclear
    waste, for which we have no means of disposal and which will be
    very expensive to deal with, and repurpose that into, as one
    person told me, potentially trillions of dollars of virtually
    free power. That, I think, needs to be a significant
    subordinate goal as we go forward in this process.
        The last thing I will say is that I think it is a tragedy
    that we are losing some of our nuclear facilities to an
    economic problem, that there is no payment for their carbon
    free power. If a nuclear plant is not safe, then I am the first
    person to want to shut it down yesterday.
        However, if the only reason it is being shut down is
    because it cannot compete economically with a natural gas
    plant, and the only reason it cannot compete economically with
    a natural gas plant is because it gets no benefit for being
    carbon free when across the country through our corporate
    world, throughout our Government, we recognize there is actual
    value to being carbon free, then we are artificially damaging
    an industry that should be doing better.
        We need to figure out a way to make sure there is, in fact,
    a payment to this industry for the carbon free value of the
    electrons they produce.
        With that, I will close my comments.
        I again thank my colleagues on this bill for their
    leadership. I am delighted to be working with them.
        Senator Capito. Thank you.
        We will proceed to the witnesses. I am going to begin on my
    left with Dr. Christina A. Back, Division Director of General
    Atomics Inertial Fusion and Advanced Fission.
        Welcome.

          STATEMENT OF CHRISTINA A. BACK, DIVISION DIRECTOR,
         INERTIAL FUSION AND ADVANCED FISSION, GENERAL ATOMICS

        Ms. Back. I would like to thank Chairman Capito and Ranking
    Member Carper for holding this hearing and Chairman Inhofe,
    Senators Crapo, Whitehouse and Booker for their legislation.
    Also, thanks to my home State Senator, Ranking Member Boxer.
        My name is Christina Back, and I am the Vice President of
    Nuclear Technologies and Materials at General Atomics. General
    Atomics is a privately held company with over 60 years of
    experience in nuclear energy, one where we continuously push
    the technological envelope.
        I was asked to describe what nuclear reactors are and what
    we believe may be appropriate issues for you to consider when
    developing public policy for encouraging the development of new
    reactors. We believe advanced reactors are vital to making
    nuclear power economically competitive and vital to reversing
    the current decline of the nuclear industry.
        In order to be helpful to the committee's efforts, I would
    like to start by noting that the term advanced reactors is
    somewhat loosely used. Some people consider them to be non-
    light water reactors, while others mean new light water
    reactors.
        We believe an advanced reactor concept is one whose design
    is guided by the four core principles that help ensure economic
    success. These principles are to produce significantly cheap
    electricity, to be safer, to produce significantly less waste,
    and reduce proliferation risk. We believe every worthy reactor
    concept must address these four core principles jointly if it
    is to be an advanced reactor. It is not sufficient to excel in
    just one with disregard to the others.
        I would like to discuss GA's reactor concept. This is one
    of many of the advanced reactor concepts referred to before. GA
    has a concept which is an energy multiplier module or EM2. As a
    way of illustrating what advanced can mean, I would like to
    discuss this reactor.
        GA chose to employ innovative design and engineered
    materials to meet the four core principles. What makes it
    compelling to think about nuclear reactors and advanced
    reactors now is that in the last 30 years scientists have made
    unprecedented advances in understanding materials.
        We at GA know how to manipulate these materials and are
    trying to revitalize the nuclear industry with them. Now let us
    consider each of the principles I mentioned.
        First is cost. The drive to make a cheaper reactor led us
    to design a much smaller reactor that would produce up to 60
    percent more power than today's reactor from the same amount of
    heat.
        Second is safety. For a radical improvement in safety, EM2
    uses engineered, ceramic materials to hold the fuel that work
    in intense radiation and withstands more than two times higher
    temperatures than current reactor materials today. They would
    not be subject to failure like those in Fukushima.
        Third is waste. EM2 will reduce the amount of waste by at
    least 80 percent. The reactor can also use spent light water
    reactor waste as fuel, thus turning this waste into energy.
        Fourth is nonproliferation. EM2 keeps the fuel in the
    reactor for 30 years without the need for refueling or
    repositioning the fuel rods. This means we access the core
    once, much less than the 20 times the current reactors need for
    existing refueling. We calculate that EM2 will produce power at
    approximately 40 percent lower costs than today's reactors and
    be passively safe.
        As for any new reactor design, this one will require
    extensive interactions with the NRC, and we think involving the
    NRC early in this process is important to inform the design for
    a safer reactor. Radically new concepts require up front
    investment involving risk. Some of these investments may not
    pay off, and even those that are successful could take up to 10
    years to produce revenue.
        While GA has already invested $40 million in EM2, it is
    hard to divert scarce dollars from R&D to NRC considerations at
    this early point in time. If this committee's objective is to
    stimulate the development of new advanced reactors, hopefully
    as we have defined and outlined here, we suggest that it would
    be relatively inexpensive to involve the NRC early in the
    consultations with potentially very high impact.
        We suggest the committee consider authorizing the
    appropriation of $5 million at first to provide NRC services to
    developers of advanced reactors and perhaps with a relatively
    low cost share of, say, 3 percent. The NRC is important and
    necessary for ensuring nuclear power is safe. Therefore, it
    plays a critical role in nuclear power innovation.
        In closing, I would like to say right now is a very
    exciting time in nuclear energy. I love that I get to put
    science in practice and engage the next generation of
    scientists and engineers and help meet the Nation's energy
    needs by creating a new, innovative way to produce clean and
    safe power.
        Thank you for the efforts of this committee. Thank you for
    the opportunity to speak to you. I would be pleased to answer
    questions.
        [The prepared statement of Ms. Back follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Senator Capito. Thank you.
        Our next witness is Dr. Ashley E. Finan, Policy Director,
    Clean Air Task Force, Advanced Energy Systems.
        Welcome.

        STATEMENT OF ASHLEY E. FINAN, POLICY DIRECTOR, NUCLEAR
                          INNOVATION ALLIANCE

        Ms. Finan. Chairman Capito, Ranking Member Carper, and
    distinguished members of this subcommittee, thank you for
    holding this hearing and for giving me the opportunity to
    testify.
        My name is Ashley Finan, and I am Policy Director for the
    Nuclear Innovation Alliance, NIA, a non-profit organization
    dedicated to leading advanced nuclear energy innovation.
        The NIA was established by a cross cutting group who
    believe that advanced nuclear energy is needed to ensure a
    better future. This group includes innovators, academics,
    environmental organizations, industry groups and other experts
    and stakeholders.
        The world will double or triple its energy demand in 30
    years, driven by a growing middle class in the developing world
    and the need to bring electricity to 1.4 billion people who
    lack it today. At the same time, many analyses point to the
    pressing need to reduce global carbon emissions by 80 percent
    or more by 2050 if we are to avoid the worst impacts of climate
    change. A more rapid expansion of nuclear power is an essential
    part of the solution.
        In the United States and elsewhere, dozens of innovative
    startup companies and other stakeholders are pioneering designs
    that promise to lower risk and cost and reduce deployment
    barriers, but the transition from design to commercialization
    and deployment, both in the U.S. and globally, has been slow.
        Current NRC regulation confronts the licensing of advanced
    technologies with two major challenges. First, NRC design
    certification or approval calls for enormous front loaded
    investment during a protracted development and licensing phase
    without a staged structure to provide applicants with clear,
    early feedback on an agreed schedule.
        Second, current regulation primarily evolved to oversee
    light water reactor technologies. It must be adapted to the
    features and performance characteristics of advanced reactors,
    which rely on substantially different fuels, cooling systems,
    and safety strategies, and require novel operating strategies.
        Over the past 2 years, the NIA has been developing
    strategies to facilitate the efficient, cost effective, and
    predictable licensing of advanced nuclear power plants in the
    United States. These strategies are based on consultations with
    nuclear innovators, safety experts, regulators and investors,
    key stakeholders of the nuclear industry.
        We compiled the results of our work into a report called
    Enabling Nuclear Innovation: Strategies for Advanced Reactor
    Licensing, which was issued on April 12. The report has been
    provided to the committee and is available to the public on the
    NIA Web site. It discusses in much greater detail the points
    that I am touching on today.
        To address the LWR-centric nature of the current
    regulations, a more technology inclusive approach is needed. A
    risk informed, performance based licensing approach will allow
    the NRC to review a diverse set of advanced reactor
    technologies.
        This would incorporate both modern methods of risk
    assessment and traditional deterministic approaches to provide
    an exhaustive safety review. S. 2795 provides for the NRC to do
    work in this area without impacting the costs incurred to the
    existing plants.
        To illustrate the investment challenge, I would like to
    direct your attention to Figure 1. This shows schematically the
    risk/investment profile of nuclear energy projects relative to
    the licensing process today and the large monetary and temporal
    hurdle of obtaining design approval.
        Figure 2 illustrates a staged approach that provides
    interim feedback and opportunities for risk reduction. It
    better aligns with private sector development of innovative
    technology using a licensing project plan, topical reports, and
    other mechanisms. It can provide clear and early feedback to
    investors and developers through a statement of licensing
    feasibility process. This approach maintains the rigor and high
    standards of the NRC and facilitates the development of
    advanced nuclear technology that produces less waste or even
    consumes it.
        S. 2795 authorizes the NRC to do the crucial work to
    develop and implement this staged licensing process with
    dedicated funding. This is important for two reasons. It helps
    the NRC to develop the rigorous, technology inclusive
    regulatory infrastructure to support the review of advanced
    nuclear energy technologies.
        Significantly, it does this without diluting funds used to
    regulate operating plants. It also allows for immediate
    adjustments that will provide a more efficient, predictable,
    and effective process.
        Thank you for this opportunity to testify. S. 2795 is
    needed to enable progress and advance nuclear energy.
        I would be pleased to respond to any questions you might
    have today or in the future.
        [The prepared statement of Ms. Finan follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Senator Capito. Thank you.
        Our next witness is Maria Korsnick, Chief Operating Officer
    of the Nuclear Energy Institute.
        Welcome.

     STATEMENT OF MARIA KORSNICK, CHIEF OPERATING OFFICER, NUCLEAR
                            ENERGY INSTITUTE

        Ms. Korsnick. Thank you very much, Chairman Capito.
        On behalf of the commercial nuclear energy industry, I want
    to thank the committee for considering S. 2795. Introduction of
    this bill is particularly well timed.
        Nuclear energy makes a significant contribution to our
    clean air quality, the reliability of our electricity supply
    and our national security. Yet, regulatory inefficiency and
    costs are constraining our use of this valuable national
    resource. If not addressed in the very near term, those issues
    will impede deployment of even more innovative reactor
    technologies here and around the world.
        Despite NRC's effort to reduce its budget and right size
    the agency, fees continue to be excessive, and the limitations
    of the mandated 90 percent fee rule create fundamental
    structural problems. The NRC's budget continues to hover at
    approximately $1 billion a year, despite significant declines
    in its workload as plants have shut down. In particular,
    according to Ernst & Young, the NRC spends 37 percent of its
    budget on support costs. That is more than 10 percent higher
    than some of its peer agencies.
        Because the NRC must collect 90 percent of its budget from
    licensees, and the NRC's budget has not correspondingly
    declined, remaining licensees are responsible for paying these
    higher annual fees. With several recent premature shutdowns and
    additional reactors decommissioning in the coming years, the
    current fee structure virtually guarantees that remaining
    licensees will continue to bear even higher annual fees.
        The cost of licensing actions also continues to increase
    well beyond the cost of living. For example, since 2000, the
    NRC review fees at license renewals have been an eight-fold
    increase in review costs.
        Objectively, one would expect a decrease based on
    efficiencies gained in the review process. This is particularly
    notable as we look ahead and want second license renewal for
    some of our plants. These illustrate that a fundamental change
    to the NRC fee recovery structure is needed. S. 2795 repeals
    the 90 percent fee recovery requirement and replaces it with a
    much more rational approach.
        It requires the NRC to expressly identify annual
    expenditures anticipated for licensing and other activities
    requested by applicants. The legislation would also help drive
    greater efficiency in the NRC's operations.
        In turn, it would drive down annual fees by limiting
    corporate support percentages, although we do recommend that
    the cap be lower than the 28 percent level proposed by this
    legislation. Complementing the limit on corporate support, the
    bill would cap annual fees for operating power reactors at the
    fiscal year 2015 level. We also recommend that it apply to all
    licensees so non-reactor licensees as well.
        S. 2795 also affirms Congress' view that this country can,
    and in fact should, be a leader in advanced reactor technology.
    The bill effectively directs the NRC to think differently about
    reactor licensing.
        It requires that the NRC's regulatory regime accommodate
    large light water reactors as it does today, small light water
    modular reactors and advanced non-light water reactors, in
    short, an all of the above approach.
        The bill's call for a technology inclusive licensing
    framework, use of a risk informed performance based licensing
    technique and a staged licensing process will, in fact, be a
    good and helpful step forward. Developers will be able to
    demonstrate progress to investors in this first of a kind
    project, thus obtaining necessary capital resources as they
    achieve milestones.
        Too often we hear from our members that regulatory
    uncertainty is the greatest impediment to new plant deployment
    in the United States. S. 2795 tackles top line issues now
    standing in the way of innovation.
        In sum, we must be thoughtful and deliberate in the way we
    plan for advanced reactor technologies, but we must also begin
    today if we are to meet the potentially enormous demand by 2030
    for U.S. technology not only here but in the international
    market.
        Senators Inhofe, Crapo, Whitehouse and Booker, on behalf of
    the industry, I want to thank you very much for taking a strong
    leadership role. NEI supports S. 2795, and we look forward to
    continuing to work with you and your staffs as it progresses
    through Congress. I hope it is enacted expeditiously.
        Thank you very much.
        [The prepared statement of Ms. Korsnick follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Senator Capito. Thank you.
        Our next witness is Dr. Edwin Lyman, Senior Scientist,
    Union of Concerned Scientists Global Security Program.
        Welcome.

      STATEMENT OF EDWIN LYMAN, SENIOR SCIENTIST, GLOBAL SECURITY
                 PROGRAM, UNION OF CONCERNED SCIENTISTS

        Mr. Lyman. Thank you, Chairman Capito, Ranking Member
    Carper and distinguished members of the subcommittee.
        My name is Edwin Lyman. I am a senior scientist at the
    Union of Concerned Scientists. On behalf of my organization, I
    would like to thank you for the opportunity to provide
    testimony on this very important subject, nuclear energy
    innovation and the critical role of effective regulation to
    ensure nuclear safety and security.
        UCS is neither pro- nor anti-nuclear power. We are a
    nuclear safety watchdog, and we work to ensure that U.S.
    reactors are adequately safe both from accidents and secure
    from terrorist attacks. Our position on nuclear power is not
    ideological but pragmatic. We do believe nuclear power could
    have a role to play in helping to mitigate the threat of
    climate change, but this really can only happen if nuclear
    power is sufficiently safe and secure.
        That means if nuclear power is to grow, then there must be
    a corresponding increase in safety and security. Otherwise the
    risk to public health and the environment will increase.
    Nuclear power could take itself out of the running if there is
    another event like the March 2011 Fukushima Daiichi disaster.
        Just over 5 years ago, Japan was a world leader in nuclear
    energy with over 50 operating nuclear power plants, but its
    nuclear establishment was too complacent about the dangers
    their reactors faced. Today, only two of those reactors are
    running, and a battle is raging in the courts over the restart
    of two others. The United States needs to do everything it can
    to avoid repeating Japan's mistakes.
        Therefore, Congress must ensure that the Nuclear Regulatory
    Commission continues to serve as a thorough and rigorously
    independent regulator for overseeing both the operation of
    existing plants and the licensing of new ones.
        We believe the most efficient and cost effective way to
    enhance reactor safety and security in the near term is making
    evolutionary improvements in current designs and strengthening
    regulatory oversight, but we do acknowledge new and novel
    reactor technologies have the potential to achieve these goals
    in the longer term.
        However, experience has shown that there are no quick or
    easy fixes to make nuclear power safer. Although each new
    reactor type has advocates who make claims about the benefits
    of their preferred designs for improving safety, proliferation
    resistance or economic competitiveness, such assertions rarely
    stand up to scrutiny. Reality is a lot messier.
        Given the proliferation of new reactor designs and the
    massive investment needed to commercialize just one of them,
    private and public investment in nuclear development should be
    focused on those concepts that have the greatest chance of
    meeting goals for enhanced safety, security, proliferation
    resistance, and economic viability. Cutting through the hype
    and identifying the best prospects is a major challenge.
        For this reason, a thorough and independent technical peer
    review process needs to be part of any Government program that
    provides support to new nuclear projects, whether at the
    national labs or in the private sector.
        Now I would like to focus my remarks on the matter at hand,
    S. 2795. Fundamentally, UCS believes that the NRC's regulations
    and procedures governing both operating plants and new plants
    are not strong enough today to achieve the level of safety and
    security needed in the post-Fukushima era.
        Correspondingly, we do not agree with the notion that the
    NRC's licensing processes for advanced reactors are too
    stringent and need to be weakened to facilitate deployment.
    Some argue that the NRC's regulations impede U.S.
    competitiveness, allowing other countries like China to get
    ahead of us. We think the opposite is true; the reputation of
    the NRC for being a gold standard, as Senator Carper pointed
    out, is a good brand.
        The NRC's reputation for rigorous safety reviews only
    enhances that brand. We do not think we should be engaged with
    China and other countries in a regulatory race to the bottom
    just to secure customers.
        We believe that the focus of the bill on NRC licensing is
    misplaced and will do little to facilitate the deployment of
    advanced reactors in the United States. The NRC licensing
    process may be a convenient target, but we think the NRC is
    being scapegoated for the far more formidable institutional
    barriers.
        These barriers include a lack of support for Government-
    funded energy R&D, the enormously high cost and long time
    needed for commercializing any advanced reactor, the lack of
    utility interest in making those investments, and the failure
    of nuclear power entrepreneurs to put any significant money
    into the projects they espouse.
        We do not think the NRC's licensing process is a
    significant factor in inhibiting advanced reactor deployment.
    As a result, we do not think that the prescriptions in S. 2795
    are the problem. The problem is the cost and difficulty of
    obtaining the analyses and experimental data sufficient to
    satisfy the regulatory requirements ensuring the reactors can
    be licensed and safely operated. This is the fundamental issue
    we think Congress needs to address.
        In summary, we think the legislation is premature. We would
    offer that the National Academy of Sciences first review the
    systemic obstacles to licensing and deployment of advanced
    reactors, including all the issues we mentioned and whether the
    specific prescriptions in changing NRC regulations would be
    efficient and effective in achieving these goals.
        In conclusion, the future of nuclear power depends
    crucially on the NRC's credibility as an effective regulator,
    so we think Congress should reject any attempt to short circuit
    NRC safety reviews and help ensure that oversight and licensing
    will result in clear improvements in safe and secure
    operations.
        Thank you for your attention.
        [The prepared statement of Mr. Lyman follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Senator Capito. Thank you.
        Our next witness is Mr. Victor McCree, Executive Director
    of Operations, Nuclear Regulatory Commission.
        Welcome.

     STATEMENT OF VICTOR MCCREE, EXECUTIVE DIRECTOR OF OPERATIONS,
                   U.S. NUCLEAR REGULATORY COMMISSION

        Mr. McCree. Thank you, and good morning.
        Chairman Capito, Ranking Member Carper, and distinguished
    members of the subcommittee, I appreciate the opportunity to
    testify this morning. I appear before you today representing
    the technical staff of the U.S. Nuclear Regulatory Commission.
        I plan to briefly discuss the NRC's current and planned
    activities to prepare to review an application for an advanced
    non-light water reactor design and to offer NRC staff views on
    S. 2795, the Nuclear Energy Innovation and Modernization Act.
        A number of advanced non-light water reactor designs that
    employ innovative design features are under development. The
    NRC has the necessary licensing and oversight authority over
    commercial advanced reactors and is ready to work with the
    potential applicants to prepare for and review applications for
    these reactors. However, the NRC is also considering the extent
    to which enhancements to the existing licensing framework could
    increase the efficiency, timeliness and predictability of our
    safety and environmental reviews.
        Our objective for the activities I will discuss with you
    today is to strategically prepare for non-light water reactor
    applications commensurate with the development of vendor and
    industry plans. However, our overall goal is to create a more
    effective, efficient, clear and predictable licensing process
    for advanced reactor safety reviews.
        With this in mind and within available resources, the NRC
    staff is pursuing a multipart strategy to prepare for our
    review of non-light water reactor technologies. The President's
    fiscal year 2017 budget request includes $5 million in non-fee
    recoverable activities to execute this strategy. If Congress
    appropriates this funding, it will be used to facilitate the
    NRC's preparation to undertake efficient and effective safety
    reviews of advanced reactor technologies.
        We plan to pursue activities in three primary areas:
    licensing infrastructure, technical preparation, and
    stakeholder outreach.
        First, within licensing infrastructure activities, we will
    optimize the regulatory framework and licensing process for
    advanced reactor safety reviews.
        Second, our technical preparation activities will evaluate,
    clarify and resolve critical technical and policy issues that
    need to be addressed for effective, efficient advanced reactor
    safety reviews.
        Finally, we will expand upon our outreach activities to
    proactively engage key stakeholders to ensure all parties will
    be ready to proceed in the development and review of new
    reactor designs.
        Our strategy reflects insights we have gained from many
    years of interaction with the Department of Energy and the non-
    light water reactor community. We believe this strategy will
    enable the resolution of novel policy issues and lead to the
    development of design criteria, regulatory guidance and
    industry codes and standards for non-light water reactor
    designs.
        By enhancing the efficiency and effectiveness of non-light
    water reactor reviews, this strategy will reduce uncertainty
    and business risk.
        The NRC's Advanced Reactor Program is one of several topics
    addressed in S. 2795. Consistent with my role as the NRC's
    Executive Director for Operations, my comments represent the
    NRC staff's assessment of factual issues associated with a
    draft version of the bill.
        Based on our preliminary review, the bill would require the
    NRC to undertake a number of activities related to developing
    plans, strategies and rulemaking associated with the licensing
    of advanced reactors and of research and test reactors and
    report on those to Congress. Significant time and resources
    would be required over several years to implement the full
    range of additional activities described in the bill,
    particularly with regard to the rulemaking required by the
    bill.
        Another area covered by the bill is performance and
    reporting. These provisions would require the NRC to develop
    performance metrics and milestone schedules for any activity
    requested by a licensee or applicant and to report to Congress
    for certain delays.
        This would require NRC to develop performance metrics and
    milestone schedules for many activities beyond those for which
    such metrics and milestones are currently prepared. We believe
    we currently have appropriate performance metrics to provide
    the desired outcome.
        These measures recognize the need to adapt to schedule
    changes that may arise to an applicant, licensee or NRC
    performance and account for emerging safety or security issues,
    changes in licensee plans and so forth. As written, the
    proposed requirements may limit NRC's flexibility in this area.
        In closing, I welcome the committee's interest in and ideas
    for enhancing the NRC's performance and the success of our
    mission.
        Chairman Capito, Ranking Member Carper and distinguished
    members of the subcommittee, this concludes my formal remarks.
    I thank you for the opportunity to appear before you and would
    be pleased to respond to your questions.
        [The prepared statement of Mr. McCree follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Senator Capito. Thank you.
        Our final witness is Hon. Jeffrey S. Merrifield, Chairman,
    USNIC Advanced Reactor Task Force.
        Welcome.

      STATEMENT OF HON. JEFFREY S. MERRIFIELD, CHAIRMAN, ADVANCED
        REACTORS TASK FORCE, U.S. NUCLEAR INFRASTRUCTURE COUNCIL

        Mr. Merrifield. Chairman Capito, thank you very much.
        It is indeed a pleasure to be here today before a committee
    on which I used to work as a counsel, and on which I testified
    on many occasions as an NRC Commissioner.
        I am appearing here today in my role as Chairman of the
    U.S. Nuclear Infrastructure Council Advanced Reactors Task
    Force, although my full time occupation is as an attorney and
    partner with the Pillsbury law firm.
        In addition to my full testimony, I would ask that letters
    from seven advanced reactor developers supporting this
    legislation be included in the record.
        [The referenced letters were not received at time of
    print.]
        Mr. Merrifield. My testimony on S. 2795 will focus on how
    the NRC conducts its business as well as mixed views regarding
    the advanced reactor portion of the bill.
        NIC applauds the overhead and fee caps within S. 2795 as
    well as the elements supporting the development and deployment
    of advanced reactor technologies. On February 22, 2016, NIC
    issued a framework for advanced reactor licensing modernization
    white paper which outlined many of the advanced reactor
    provisions contained in the bill.
        While we will suggest a few additional areas for
    improvement not included in the legislation, we are committed
    to working with the committee and its staff to promptly move
    this legislation forward.
        When I first became a Commissioner in 1998, the then
    Chairman of this committee, Senator Inhofe, led the way in
    efforts to oversee NRC. Consistent with maintaining the NRC's
    mission of protecting people and the environment, the
    Commission, with the full support of this committee, worked to
    right size the agency consistent with the level of licensing
    activities before the NRC.
        At that time, the agency had approximately 3,400 employees,
    and within the next few years we were able to reduce it to
    about 2,800, principally through attrition yet with no
    sacrifice to the mission of the agency. Today, the agency faces
    the same challenge. I understand and sympathize with the
    concerns voiced by this committee regarding the size of the
    agency, the increase in licensing review time and the growth in
    overhead activities at the agency which is inconsistent with
    the current number of NRC licensees.
        While the NRC has made great strides in right sizing the
    agency through Project AIM, I believe further reductions can be
    accomplished while at the same time effectively maintaining
    safety and inspection activities and improving the timeliness
    of licensing actions.
        I support the provisions of S. 2795 which would limit the
    overhead of the NRC and place appropriate caps on the growth of
    agency fees. As was the case when I appeared before this
    committee over 15 years ago, I believe the amount of fees
    placed on individual licensees is not appropriate and should
    not cover inherently governmental functions and overhead.
        I believe the fee provisions of S. 2795 appropriately
    balance the important non-licensee activities which should be
    borne by general revenues and those licensee activities that
    should be borne by user fees.
        During the past decade, the U.S. has maintained its
    technology leadership through progressive light water reactor
    designs including passive Generation III+ reactors currently
    being deployed in Georgia and South Carolina as well as small
    modular light water nuclear reactors now headed toward
    deployment.
        If the U.S. is to be successful in maintaining its lead in
    developing and deploying a new advanced reactor fleet in the
    late 2020s and 2030s, Congress must consider significant new
    policy changes.
        In addition to funding an infrastructure, a modern
    licensing framework is needed to enable development and
    deployment of advanced reactor technologies. Currently, the
    licensing process of the agency is perceived as one of the
    largest risk factors confronting private developers of advanced
    reactors.
        The proposed licensing process changes envisioned by S.
    2795 will help to address this gap. Additionally, Congress
    should provide additional resources to both NRC and DOE as well
    as direct them to focus and mobilize their resources and
    expertise to enable the deployment of advanced reactors.
        We believe section 7 will allow the agency to create a
    modern, risk informed, technology neutral framework to enable
    the development of appropriate advanced reactor regulations
    without passing these costs to the existing utilities or
    advanced reactor developers.
        Advanced reactor technical performance criteria are also
    critically required to finalize advanced generic design
    criteria as well as short term emergency planning and similar
    requests.
        We believe there are two areas where further enhancements
    are warranted: appropriate funding to reduce the licensing fees
    borne by advanced reactor developers and a specific pre-
    licensing review program.
        While the NRC is not a promoter of nuclear technologies, it
    is appropriate for the Commission to engage in early, enhanced
    dialogue with advanced reactor developers. Currently, the NRC
    has very limited communication with these developers, and when
    it does, it must charge hourly fees, $268 per hour, per NRC
    staff member who attends these meetings. As members of the
    advanced reactor community are early stage and
    entrepreneurially driven private companies, they lack the
    resources necessary to finance these activities.
        NIC supports section 9 of the bill regarding the DOE
    licensing cost share grant program. We believe this is an
    appropriate development. We would say we think it could be
    further enhanced by allowing for early stage engagement with
    the advanced reactor community at no cost with perhaps a 50/50
    share in later stages of the licensing process.
        Collectively, we believe this will allow the free market to
    pick winners and losers rather than DOE and the NRC. While
    section 7(b) calls for the NRC to ``establish stages in the
    commercial advanced nuclear reactor licensing process,'' we
    believe, and it is generally consistent with our white paper,
    the bill would be strengthened by incorporating specific
    language requiring that the NRC provide a pre-licensing design
    review.
        A process which requires the NRC to clearly and promptly
    articulate where advanced reactor designs do and do not need
    additional work would enable developers and investors to have a
    clearer picture of where they stand in meeting NRC
    requirements.
        Finally, we support the elimination of the mandatory
    hearing requirements contained in section 8. I would be pleased
    to discuss my views on this during the question and answer
    portion.
        We believe it is time to make appropriate reforms to the
    NRC overhead and fee process as well as to modernize the
    agency's licensing program to spur innovation and enable
    advanced reactor technologies to achieve their full promise. We
    believe S. 2795 makes significant progress toward achieving
    that goal. We are committed to working with this committee
    toward prompt and successful passage.
        Thank you for allowing me to testify today.
        [The prepared statement of Mr. Merrifield follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Senator Capito. Thank you. Thank you all very much.
        I will begin the questioning with asking Mr. McCree, a lot
    of what we heard in the testimony and certainly what is
    contained in the bill has to do with right sizing the agency in
    terms of license fees and support.
        In 2006, the NRC spent $208 million on corporate support
    spending which amounts to 28 percent, you can see it on the
    chart, of the NRC's budgetary authority. This was at a time
    when the NRC was regulating more reactors and materials,
    licensees, with fewer people and resources.
        Mr. McCree, I would say, do you recall any impairment of
    the NRC's safety and security mission in 2006 as a result of
    this level of corporate support?
        Mr. McCree. Chairman, thank you for your question. In
    response to your question about impairment of our safety and
    security mission, I would indicate that answer is no.
        Senator Capito. Thank you.
        I would say, if corporate support spending equaled 28
    percent of the NRC's budget, the amount would be $275 million,
    which is only $30 million less than what the NRC is expecting
    on corporate support.
        I would ask, in light of the fact that there was more work
    and more licenses in 2006 with this 28 percent, do you have any
    reason to believe this amount of corporate spending at the top
    part, which would be $30 million less than what you would
    expect, could impair the NRC's ability on safety and security?
        Mr. McCree. Comparing NRC now to 2006, we are certainly a
    different agency. While there are about 100 more operating
    reactors than there were in 2006, there is additional work that
    we have now that we did not have then with the four AP1000s
    that we are overseeing as well as completion of oversight of
    Watts Bar Year 2. The workload is different than in 2006.
    Certainly our staff size is different as well.
        Senator Capito. Are you saying you think if it were to be
    right sized to the 28 percent, there could be some concerns
    over safety and security?
        Mr. McCree. That is not what I am saying. I am simply
    saying that we are comparing a different agency now in 2016 to
    2006. As far as right sizing, we are taking under Project AIM
    significant steps to right size the agency for the work that we
    have and the work we anticipate in the future.
        That right sizing includes right sizing our corporate
    support area where we have taken significant reductions, about
    $30 million in reductions this year, in 2016. Additionally, the
    Commission just acted on a number of recommendations under the
    Project AIM re-baselining that will result in additional
    reductions in 2017.
        Several weeks ago, the Chief Financial Officer and I
    assigned a tasking for several of our larger corporate support
    offices to look at additional reductions that we would plan to
    submit to the Commission in planning for our fiscal year 2018
    budget.
        As the Chairman noted yesterday in the House hearing, we
    are not done. The Project AIM right sizing continues. I do
    believe the corporate support portion of our budget will
    continue to go down.
        Senator Capito. Ms. Korsnick, you spent a lot of your
    testimony addressing this issue. Do you have a reaction to what
    the gentleman testified in answer to my question?
        Ms. Korsnick. Yes, and I think I included in my testimony
    the fact that when we looked at the peer agencies to the
    Nuclear Regulatory Commission, we would like even more
    attention paid to those peer agencies which appear to be
    effective at the corporate support level even less than 28
    percent.
        The other thing in this fee structure we are very
    interested in is the way the current bill is structured. It not
    only asks for the NRC to allocate for certain licensee
    requests, but that the money needs to be spent on that and on
    that alone.
        Right now, there is the ability to move some money around,
    if you will, and in fact, move it to corporate support. We
    would like a stronger fiscal responsibility on that.
        Senator Capito. Thank you.
        Dr. Back, in your testimony you mentioned the four
    principles: cost competitiveness, safety, less waste and
    reducing proliferation risk as your four corners of developing
    an advanced reactor. I think I am hearing that the NRC would
    get in on the front end, maybe raise red flags in the beginning
    of the licensing procedure rather than at the back end where
    the timelines are leaking and making even incurring more
    expense.
        It would be more helpful to you in order to reach these
    four benchmarks? Is that a correct assumption?
        Ms. Back. Yes, although it is not at the point where the
    reactor is not performing well. We are looking for input early
    because the technologies are different, so the way you evaluate
    the kind of metrics you assess, the safety, cost
    competitiveness and other factors of the reactor are different.
        Senator Capito. At this point in your development, you have
    had no internal conversations with the NRC on your advanced
    reactor?
        Ms. Back. We have had one conversation because we are
    allowed one conversation which is free, so to speak, before the
    hourly rates come up. In our development of the reactor,
    because of the way it is structured now, it is not well suited
    for our particular technologies.
        When we looked at where we were investing our research
    dollars versus funds to try and get input from the NRC because
    we now it is a long path, there has been a history with NGNP
    with many white papers without a clear decision.
        There is an uncertainty that is very difficult to manage at
    this early, early stage. That is why a very small investment
    from NRC funds in the beginning would be very helpful.
        Senator Capito. Thank you.
        Senator Carper.
        Senator Carper. I would be happy to yield to others who may
    have urgent business to attend to. I will be here for the
    duration. Is anyone in a tight squeeze right now? If not, who
    would be next under the early bird rule?
        Senator Crapo.
        Senator Crapo. Thank you very much, Senator Carper.
        Madam Chairman, at this point, we have received 19 letters
    of support for this legislation. I would like to ask unanimous
    consent that these letters of support be included in the
    record.
        Senator Capito. Those will be included in the record,
    without objection.
        [The referenced letters were not received at time of
    print.]
        Senator Crapo. Thank you very much.
        I would like to direct my first question to you, Mr.
    McCree. As you know, we have been working very hard to
    understand the budget of the NRC and its inner workings. There
    is, in my view, a relative consensus that the NRC budget
    process is very opaque.
        In addition to concerns about fee structure, I am deeply
    concerned about lack of clarity on how the NRC budgets for its
    overhead functions. Will you commit to working with my staff
    and the staffs of other Members to provide timely and clear
    responses to our questions about your overhead functions and
    your budget requests?
        Mr. McCree. Yes, absolutely.
        Senator Crapo. I appreciate that. We really need a
    commitment to provide more detail about how the NRC allocates
    and spends its resources so that we can more effectively
    understand how the budget works.
        I want to use the rest of my time to talk to the whole
    panel. I know that is going to be hard in 4 minutes. The point
    I want to get at is Dr. Lyman, in his testimony, has two points
    and many more. One of them was that we should not weaken the
    NRC regulatory structure. It is the gold standard, and we need
    it to continue to be the gold standard.
        I do not view this legislation as weakening the regulatory
    structure in any way. I view it as increasing transparency and
    efficiency. Maybe I will turn to you first, Mr. Merrifield.
    What is your view of that issue?
        Mr. Merrifield. I fundamentally disagree with Mr. Lyman in
    that regard. What we are really asking for and what I think
    this legislation will accomplish is risk informing the
    regulatory activities of the NRC and tailoring those activities
    to be appropriate for the licensing of advanced reactor
    technologies.
        This will in no way reduce the level of safety. In fact,
    arguably, it will allow the agency to appropriately tailor
    resources to make sure these technologies are regulated in the
    right way. It will also hopefully have the successful
    accomplishment of doing it at lower cost which is important as
    well.
        Senator Crapo. The earlier that the agency is involved in
    the development of the technologies and the understanding of
    them, the more efficient and effective the regulation can be.
        Mr. Merrifield. That is exactly right. I think it would
    allow much better utilization of resources. I would say a
    couple things.
        One, I think what Mr. McCree's staff really needs to do is
    elevate, as quickly as possible, many of the generic
    policymaking decisions that can be made to the Commission and
    by the Commission to reduce the uncertainty for advanced
    reactor technologies.
        Second, we talked a bit about the fee process. It is very
    important to provide fee relief in the early stages of the
    program to allow active discussion between the developers and
    the NRC.
        As discussed by one of the other witnesses, there is a lack
    of engagement because once you start talking to the NRC besides
    your initial meeting, the $268 per hour fee is going to start
    triggering. That is not good. We really should be encouraging
    very active discussion between the developers and the NRC right
    now.
        Senator Crapo. Thank you.
        I probably only have time for one of the other witnesses. I
    will turn to Dr. Finan because of your charts.
        The other issue that was raised which I focused on is the
    probably really is not the regulatory system but the fact we
    cannot get investment at the early stages of the development of
    these new technologies.
        To me that seems to be exactly the point that because of
    our regulatory structure, at least a big part of that issue is
    if you do not have the staged development or something like
    that, which this bill contemplates, you have a situation in
    which it is very hard to get early investment in these
    expensive technologies. Could you address that?
        Ms. Finan. That is right. I think there are a lot of other
    challenges to deploying advanced reactors as there are for
    renewable and carbon capture and other energy options. The
    investors and innovators have made it very clear that their
    most immediate and pressing concern is regulatory uncertainty.
        I do not think we need to have another study. There have
    been a lot of studies on that. I would be happy to provide a
    list of references but climate change is urgent. The private
    sector is engaged and eager. The time to fix this is really
    right now.
        Senator Crapo. Thank you very much.
        My time has expired. It looks like I am now chairing the
    hearing.
        Senator Carper. I think you are doing a great job.
        Senator Crapo [presiding]. I would turn, Senator Booker, to
    you next.
        Senator Booker. Mr. Chairman, thank you for that.
        My staff and I were just talking about how incredible your
    staff has been, not just in working on the bill, but in
    reaching out to all these groups. The letters you submitted are
    really a testimony to the kind of inclusion that you have had
    in this process. Thank you very much.
        Ms. Korsnick, in your testimony you make the point that a
    reduction in the number of existing licensees increases the fee
    burden on the remaining licensees. I think we all hope we do
    not see this rash of additional premature closings within our
    nuclear fleet. That would be bad for the overall energy picture
    in the United States.
        That said, if we did, can you explain how, under current
    law, that would impact the reactors that remain and whether
    this bill would alleviate that scenario?
        Ms. Korsnick. In fact, the current bill is structured to
    alleviate that very concern. As the current structure is in
    place with the obligation to collect 90 percent of the budget,
    it is 90 percent of whoever is there to pay.
        If those plants close down and are no longer part of that
    fee structure, then the remaining plants, remaining operating
    reactors, have to pay that 90 percent bill. Our experience has
    been, based on the chart you just saw and our experience with
    the NRC budget historically, the budget has not reduced
    commensurate with the operating reactors shutting down.
        Senator Booker. Thank you.
        Dr. Finan, besides the fact you mentioned those two
    terrible words, climate change, I will forgive you for that, I
    am into innovation and innovators. I have a problem since I
    have been 2 years in the Senate from the FAA to the Patent
    Office; we do a lot to constrict innovation. In this space,
    innovation is I think critically important.
        The GAO last year did an incredible report that looked at
    the challenges facing companies attempting to deploy new
    reactor concepts. In this report, the GAO noted that for first
    of a kind technologies, the design review costs for these folks
    can be exceptionally higher than for subsequent projects.
        Do you believe this is a real problem as noted in this
    report? Do you think the DOE matching grant program in the bill
    can help solve the problem?
        Ms. Finan. I agree. I think that is a critical problem for
    innovators. There is really a need not only to make sure the
    costs are under control but also to make them more predictable
    so that investors and innovators can plan accordingly. I think
    the DOE matching program could certainly assist them in that
    immensely.
        Senator Booker. These are innovators who are really
    critical for advancing nuclear in terms of the safety, in terms
    of being able to better deal with challenges we have like the
    waste from current light water reactors as well as deal with
    problems we have including proliferation of this material, is
    that correct?
        Ms. Finan. That is right. I actually think this is very
    exciting because in the past nuclear was developed initially
    for the Navy for submarines. Then it was adapted to land.
    Today's innovators are really putting a priority on our values
    today, those key values being safety, proliferation, cost and
    all of the other things that nuclear can provide.
        I think these new designers and innovators are going to
    bring that to the table, and we need to help them move forward.
        Senator Booker. We need to create a Government regulatory
    climate where these folks can flourish, and we are not putting
    undue cost burdens on them, correct?
        Ms. Finan. Absolutely.
        Senator Booker. Can you expand a bit on your testimony in
    the little bit of time I have left as to why the existing
    nuclear framework is really problematic for reactors, a bit
    more about specifically what is so problematic about the
    framework?
        Ms. Finan. As an analogy, if we looked at our emission
    standards for vehicles, those are very performance based. They
    set maximum emission levels. If instead they were prescriptive
    and required particular catalytic converter technologies,
    TESLA, with an electric car, would have to come in and seek
    exemptions to those technology requirements.
        For a nuclear reactor, that is much more complex and has a
    lot more regulation. Those exemptions would be multiplied and
    have a lot of issues where you need to come in and seek
    different treatment.
        That is something that is a big barrier for new
    technologies because every time they have to do that, that is
    an uncertain process that has not been done before. That
    uncertainty creates a great problem for investors and
    innovators.
        Senator Booker. I appreciate that.
        In the minute I have left, obviously Senators Crapo and
    Inhofe come at this from a different direction than we do. It
    is beautiful how we were able to meet and make this a
    bipartisan bill.
        Senator Whitehouse and I, however, come at this with real
    concerns and fears about overall climate change. There is a
    massively expanding demand for energy globally which is rapidly
    expanding, as I said in my opening remarks, at a rate that
    people like me have visions for solar, wind, and battery
    storage.
        There is no way that renewable pace will keep up with the
    demands we are having. Right now, 60 percent of our clean
    energy is being produced by nuclear. Do you believe this is a
    place where we have to actually expand innovation if we are
    going to deal with the overall problem Senator Whitehouse and I
    see of climate change?
        Ms. Finan. Absolutely. That is very important because this
    is not just a political issue; it is not even just about
    climate change or energy security. This is a humanitarian
    issue. There are a billion-plus people on this earth who do not
    have electricity. We need to provide that energy. We need to
    have all the tools on the table and that has to include
    nuclear, so I think this is critical work.
        Senator Booker. Thank you very much, Dr. Finan.
        Senator Crapo. Thank you very much, Senator Booker. It
    looks like I still have the gavel.
        Senator Inhofe.
        Senator Inhofe. Confession is good for the soul. I confess
    that you did a much better job of pointing out something than I
    did.
        The interesting thing about this is there are those on your
    side whose lives are driven by climate change and those on this
    side who are realists, but we still agree on this bill. We know
    this is going to serve everyone's best interest.
        I am not sure what all was covered because I had to go down
    to Armed Services which is one problem we have on this
    committee. We have nine members on both this committee and
    Armed Services. Somehow I have never been able to convince John
    McCain that we are a committee, too.
        I have a chart. Ms. Korsnick, I want you to look at this.
    The fees on reactors increased substantially over the last few
    years. In this bill, we capped the annual fee for operating
    reactors at the 2015 level based on the most recent fee
    recovery rule.
        This level is very near the all time highest amount that
    reflects the post-Fukushima workload. That workload is now
    declining. We also provide for inflation adjustment.
        Ms. Korsnick, do you believe this amount is an appropriate
    ceiling to ensure the NRC is adequately resourced to execute
    the safety and security mission?
        Ms. Korsnick. Yes. In fact, as you just described, we think
    fiscal year 2015 is the high water mark, quite frankly, for the
    agency. We feel, in fact, that it should not need to approach
    that ceiling.
        As you described, some of that workload, in fact, is
    declining from post-Fukushima, and we feel a more efficient
    agency should be able to operate with a corporate spending more
    in line with their peer agencies.
        Senator Inhofe. Whether or not you would want to reach that
    cap, it is adequate to take care of what our needs are now?
        Ms. Korsnick. It is adequate, yes, Senator.
        Senator Inhofe. Under S. 2795, the amount of annual fees
    the NRC collects would increase when newly operated plants
    begin to pay their fees or would decrease when reactors close.
    Do you believe that is an appropriate way to account for
    increases and decreases?
        Ms. Korsnick. Yes, Senator, we do. It obviously speaks
    directly to workload. We think that is a fair process.
        Senator Inhofe. I would agree with that.
        When companies decide to close nuclear reactors, do they
    give the NRC adequate notice such that the NRC can account for
    the decrease in fees in their budget process?
        Ms. Korsnick. We believe so, Senator. The individual plants
    also need to go through a planning process. They need to inform
    the regional transmission operator in advance. It is typically
    a 12- to 18-month timeframe that you are making these types of
    announcements.
        Senator Inhofe. Mr. Merrifield, I think back to when you
    first started or actually I first chaired this committee, you
    were then the attorney here. You were not a Commissioner at
    that time?
        Mr. Merrifield. No, I was a counsel to this committee.
        Senator Inhofe. You might remember at that time this
    committee had no oversight for 4 years.
        Mr. Merrifield. That is true. You did a very good job of
    correcting that problem.
        Senator Inhofe. We did correct it. We got busy, set goals
    and priorities as to when we would be coming in and what we
    were supposed to be doing. I think that did work.
        Mr. Merrifield. It did, Senator.
        Senator Inhofe. During your tenure as Commissioner, you led
    an effort to improve the efficiency of new plant licensing. One
    of your recommendations was to eliminate the mandatory hearing,
    is that true?
        Mr. Merrifield. That is true, Senator.
        Senator Inhofe. Would you explain what that was all about?
        Mr. Merrifield. The mandatory hearing process the agency
    has right now dates back to the early days of the Atomic Energy
    Commission. When you look at the legislative history, the
    reason for its imposition was because the AEC actually approved
    several reactors with no public involvement whatsoever. The
    outcry caused Congress to impose a mandatory hearing
    requirement which was appropriate at the time.
        Over the years, with changes under the Administrative
    Procedures Act and the wide number of opportunities for the
    public to be involved in the many steps of the licensing
    process, in my view is, then as it is now, that is an
    antiquated notion that is no longer necessary.
        If there are specific issues, those can be brought up in a
    contested proceeding that the Commission can go over, but I
    believe a mandatory hearing is not necessary. Indeed, frankly
    the requirement right now causes significant staff resources,
    which ultimately must be borne by a combination of the Federal
    Government and the licensees, to deal with the mandatory
    hearing. It would be a significant reduction of fees if that
    was eliminated.
        Senator Inhofe. I have one last question. I would like a
    short answer because my time has expired.
        I described the lax situation that was there having gone 4
    years. Oversight is important. Do you think since that time we
    have slipped a little and need to become a bit more forceful in
    overseeing the NRC?
        Mr. Merrifield. As a Commissioner, I welcomed involvement
    with the committee.
        Senator Inhofe. I know you did. You were very helpful.
        Mr. Merrifield. It was helpful to us to have our feet held
    to the fire; it gave us the discipline to make sure we oversaw
    the agency and its mission. The Commissioners have the
    responsibility to oversee what Victor McCree and his staff
    does.
        I think further reductions of staffing are appropriate, and
    I think the involvement of this committee in oversight is
    welcome.
        Senator Inhofe. Thank you, Mr. Merrifield.
        Senator Crapo. Thank you, Senator Inhofe.
        Senator Whitehouse.
        Senator Whitehouse. Let me say first how happy I am that
    the Chairman had a twinkle in his eye when he made that comment
    about Senator Booker and me.
        Second, let me say to Dr. Lyman that it is very much not
    our intention in this bill to short circuit the safety review
    of any nuclear facility.
        My concern is the review process at the NRC has become so
    light water reactor specific that another technology looking at
    getting through that obstacle course is facing hazards that
    have nothing to do with short or long circuitedness, but simply
    not being appropriate to the technology in the same way that if
    you had to pass a test for how solid the canvas was on the
    wings of your proposed aircraft when you were actually
    proposing an aluminum winged aircraft, or where the pilot's
    goggles needed to be and what they needed to be made of, when
    in fact you were proposing a closed cockpit aircraft. It is an
    issue of relevancy, not of shortcuts.
        I would invite you and any other member of the panel who
    wishes to put in writing some benchmarks for us you think would
    indicate the departure from moving the regulatory process more
    toward relevance to new technologies and into simply short
    circuiting safety because I do not think there is a person who
    supports this bill who wants to short circuit safety.
        It would be helpful to have this conversation in a more
    specific way about what the red flags might be rather than
    speaking generally about that.
        I worry that we have technologies that effectively are
    smothered in the crib because they cannot figure out what their
    regulatory process is going to look like, and therefore they
    cannot raise capital and proceed. There is a big X factor, a
    big question mark around the process if you are not a
    traditional light water reactor.
        That is how I think of the problem. I would be interested
    in not only your response but everyone else's in writing, if
    you care to make that known.
        The last point I will make goes back to something I said in
    my opening remarks. I think it is a tragedy in a carbon
    constrained environment to have nuclear plants closing that are
    producing carbon free power for no other reason than no one has
    figured out how to pay them for what we all almost agree is the
    value of the carbon freeness of their power.
        We have an Administration that has an Office of Management
    and Budget that has a $42.50 per ton social cost of carbon. If
    someone has a suggestion as to how we can figure out a way to
    pay the existing nuclear fleet $42.50 per equivalent of voided
    ton of carbon, I am down for that. We need to find the
    revenues.
        I do not think it is a good thing to run up the deficit,
    but I do think there ought to be a way to provide that revenue
    stream to these facilities so that artificially driven economic
    decisions that are in fact wrong from both an environmental and
    economic perspective are not being driven across this industry
    by this market failure.
        I know that is a bit beyond the scope of this particular
    bill, but if any of you have ideas on that, I would encourage
    you to please go ahead and offer them. I would offer that
    solicitation to my colleagues as well.
        Again, Mr. Chairman, thank you very much.
        Mr. Merrifield. Senator, if I may, on the first point you
    made.
        Senator Whitehouse. The one about Chairman Inhofe?
        Mr. Merrifield. Not that one.
        Senator Whitehouse. You saw the twinkle in his eye, too?
        Mr. Merrifield. I did see the twinkle in his eye.
        Senator Whitehouse. There you go.
        Mr. Lyman. I would like an opportunity to respond.
        Senator Whitehouse. You will have an opportunity to
    respond. I would just like it in writing because I think it is
    going to be a long response. This is a continuing conversation
    that I think we need to have to make sure we stay on the right
    track.
        Mr. Merrifield. On your first point, I think you were
    entirely correct. I think the process does need to be tailored
    for these advanced reactor technologies.
        As a country, we have had a leadership role historically in
    the nuclear energy field. It is a different world today. There
    are lots of opportunities for advanced reactor developers to
    work with regulators around the world.
        If we do not maintain our lead in having them come before
    the NRC for review, they may well decide there are other
    countries better suited to have those licensed. That is not in
    the best interest of our country.
        Senator Whitehouse. I have been to China and heard the
    reports on the facilities that were designed in the United
    States but are being constructed over there.
        My time has expired.
        Senator Crapo. Senator Fischer needs to go next. I do not
    know if anyone else wants a second round but I have one more
    question. Then I will give you a chance, Dr. Lyman, to respond
    at that point.
        Senator Whitehouse. I do look forward to working with you.
    I am not trying to be hostile; I am trying to open a
    conversation that separates what I think is a good way point
    that you have indicated for us.
        Mr. Merrifield. I appreciate that.
        Senator Crapo. Senator Fischer.
        Senator Fischer. Thank you, Mr. Chairman.
        Nebraska hosts two nuclear reactors that provide clean,
    affordable, reliable energy to our ratepayers and also our
    families. This important legislation we are discussing today
    will provide our nuclear innovators the transparent framework
    that is necessary to launch this nuclear fleet into the future.
        It will also enable our utilities to continue to provide
    affordable and reliable energy. I am appreciative of the
    discussion we are having today and also that we are recognizing
    the outstanding job that our nuclear reactor utilities perform
    every single day.
        Mr. McCree, the legislation we are considering today
    creates an Advanced Nuclear Energy Cost Share Grant Program
    that enables the Department of Energy to establish a grant
    program.
        I understand there have been criticisms regarding the DOE
    grant programs that share the costs of NRC licensing as picking
    winners and losers. In your experience, do you believe it would
    be appropriate for the NRC to manage such a grant program to
    reduce review fees for applicants, or would the NRC consider
    that promotional and in conflict with its role as a regulator?
        Mr. McCree. Again, we reiterate that the Commission has not
    expressed its view on the bill, but I would note as written,
    NRC would not manage the grant program but the DOE would. In
    that sense, it is not too dissimilar from a grant that the DOE
    made available for the combined operating license holders for
    the AP1000s in Georgia and South Carolina.
        To that extent, it has worked well and has not impacted our
    fundamental safety and security mission or our independence
    principle to which the Chairman referred earlier.
        Senator Fischer. You would not be supportive of the NRC
    becoming involved in the grant program in any promotional way?
    You do recognize there is a conflict there?
        Mr. McCree. Yes, ma'am, I do. Again, although the
    Commission has not weighed in on this, it would appear, I
    believe, to represent a conflict. Again, I would feel confident
    that the Commission would weigh in on that with a similar view.
        Senator Fischer. Thank you.
        Ms. Korsnick, in your testimony you stated that the cost
    and duration of reviews for license renewals and new plants
    have dramatically increased rather than decreased as the NRC
    and the industry gains experience with processes.
        S. 2795 directs the NRC to ensure funds are available to
    complete reviews that the industry needs. The bill also has
    provisions, as you know, requiring performance metrics and
    reporting.
        Do you believe this two-pronged approach will improve the
    efficiency and the timeliness of these reviews?
        Ms. Korsnick. Yes, Senator, we do. The fact that the NRC
    will budget specifically for licensing requests of the
    industry, we think will help provide the necessary focus and
    attention on those. We do think this bill will be helpful in
    that area.
        Senator Fischer. Do you believe it will also help lay the
    groundwork so we can have more predictable reviews in the
    future?
        Ms. Korsnick. I think so. The challenge is when we say
    performance metrics and reporting. Of course the devil is in
    the detail on that in terms of what performance metrics are
    developed, but in concept, I think having metrics and reporting
    is absolutely helpful in demonstrating the success. Quite
    frankly, if the NRC is so successful, it is an opportunity to
    share that.
        Senator Fischer. As we look at developing those metrics,
    how important is it that we have all the stakeholders at the
    table? You said it is very important, and the devil is in the
    details. Can you give me an example where you would be
    representing a view that might not be available that other
    stakeholders would present?
        Ms. Korsnick. I think stakeholder engagement would be very
    helpful in that way. As with any performance metric, you get
    what you measure. You can perform in a way that you say we are
    making the metric look good but it is actually not satisfying
    the greater good.
        I think the way to avoid that is to get stakeholder
    engagement and review what the metrics would be to make sure
    all of the stakeholders' concerns would be reflected
    appropriately in the metric.
        Senator Fischer. Thank you.
        Mr. Merrifield, during your service as a Commissioner, you
    helped prepare the NRC to review new plant applications. This
    bill directs the NRC to undertake several activities to develop
    a regulatory framework and get prepared to review the
    applications.
        Do you think the scope of this work is too ambitious, or do
    you think it is feasible?
        Mr. Merrifield. I think it is absolutely feasible. Credit
    to the NRC staff, I think they will throw themselves at making
    this work. They are talented people led by Vic McCree, who is a
    talented gentleman.
        I think it is very achievable for the agency to do this. I
    think they can come up with a process that is risk informed,
    predictable, transparent and done in such a way as to allow
    these technologies to move forward. I think the bill encourages
    that.
        I have one point on the earlier issue I would like to
    mention given my having been on the Commission. I do think the
    oversight this committee provides on the timing of various
    activities of the agency, license renewals and new license
    applications, are important metrics to look at.
        The timing of those has increased since I left the
    Commission. That is an area of productivity I think certainly
    needs some attention.
        Senator Fischer. Thank you.
        Thank you, Mr. Chairman.
        Senator Crapo. Thank you, Senator Fischer.
        Senator Markey. Thank you so much, Mr. Chairman.
        Mr. McCree, sequestration and the early closure of a number
    of nuclear plants have already put the NRC in a declining
    budget environment. At the same time, the revelation that ISIS
    recorded video at the home of a Belgian nuclear official
    underscores the need for additional resources for security and
    safety at U.S. nuclear power plants. It is at the top of the
    terrorist target list for ISIS.
        Instead, the bill under consideration in this committee
    would constrain the NRC's resources by imposing a blanket cap
    on fees for operating reactor licensees.
        Do you agree there is a possibility that such a cap could
    adversely impact safety and security by reducing resources and
    support for NRC staff working to protect reactors against
    insider threats or physical attacks?
        Mr. Merrifield. I would reiterate that the Commission has
    not weighed in on the proposed bill including the caps
    described in the bill. If they would become law, of course then
    the NRC would abide.
        Senator Markey. Fewer resources are not good for the agency
    in protecting against a potential terrorist attack, is that
    true?
        Mr. Merrifield. Quite frankly, Senator, we are in a
    declining budgetary environment, and we are doing our due
    diligence to assure that our resources are appropriately
    allocated to ensure our safety and security.
        Senator Markey. Now you are pulling it away from other
    nuclear and safety issues in order to deal with a terrorist
    attack when both are very real in our country. I just think we
    have to be realistic, that the Belgian warning that they were
    looking at a nuclear power plant and that they were trying to
    attack it is clearly something we have to take into account
    here in the United States.
        When we talk about the Nuclear Regulatory Commission's
    budget, yes, we might want to do a favor for utilities and
    reduce their fees, but where is the money to come from in order
    to produce the level of safety we are going to need in our
    country?
        The findings in this bill state that nuclear energy
    provides for just short of 20 percent of electrical generation
    in the United States. There are currently 99 reactors producing
    electricity in our country. At least three are closing very
    soon, Fitzpatrick, Oyster Creek and Pilgrim.
        According to the Department of Energy data for nuclear
    energy to stay at 20 percent of total energy generation by
    2025, we need to bring 13 large reactors online in the next 9
    years. We are currently building four and one more. Watts Bar 2
    is scheduled to produce electricity this year. That leaves us
    at least eight reactors short of the goal.
        Do any of you disagree that there is little or no
    possibility that eight additional new reactors that we have not
    begun to build will come online by 2025? Do any of you disagree
    that there are not going to be eight new plants operating
    between now and 2025? Do any of you disagree with that?
        Mr. McCree. No, sir.
        Senator Markey. Let the record reflect that no one
    disagreed with that. Remember, eight new nuclear reactors are
    what we need to maintain nuclear share of electricity
    generation in our country.
        There would be a need to replace even more of that to
    replace fossil fuel generation as coal plants go offline. We
    need even more electrical generation capacity. The two reactors
    under construction at Vogel have experienced years of long
    delay, billions of dollars in cost overruns, and it took 43
    years to complete construction of Watts Bar 2.
        Do any of you disagree that problems that caused the cost
    and schedule overruns at Vogel would need to be solved before
    any significant number of new reactors could be built in the
    next 10, 15 or 20 years? Do any of you disagree with that?
        Let the record reflect that no one disagrees.
        In recent years, the price of renewable energy sources has
    declined considerably. Here is the big number. Since 2010, the
    price of solar panels has declined by 80 percent. We are
    talking 5 years, an 80 percent decline.
        By contrast, the cost of constructing nuclear plants has
    remained stubbornly high. In light of these facts, it simply is
    not realistic to expect that nuclear power will continue to
    provide the majority of emission free electricity in the United
    States let alone be part of a solution for climate change.
        In 2005 in the United States, there was 79 total new
    megawatts of solar installed. This year, it is 16,000 new
    megawatts of solar, in 1 year. You can see where the trend
    lines are. Increase solar deployment and wind deployment as the
    price of both declined radically in total cost where stubborn
    regulatory issues in terms of safety and design still plague
    the nuclear industry.
        Dr. Lyman, this bill would scrap the requirement that the
    Nuclear Regulatory Commission hold a mandatory hearing on each
    application for a construction permit or operating license.
    Instead, such hearings would only occur if they are requested
    by a person whose interest might be affected.
        Is there any evidence that mandatory hearings have
    uncovered weaknesses in NRC staff evaluations of construction
    permits or operating license applications that otherwise would
    never have come to public view?
        Mr. Lyman. In our view, the mandatory hearing does
    establish a unique and important role in filling a gap in the
    event that a contested hearing does not occur. Even if a
    contested hearing does occur, the mandatory hearing scope
    examines other issues including the adequacy of the NRC staff
    review.
        A colleague of mine, a lawyer, Diane Kern, has compiled a
    number of instances where the mandatory hearings have uncovered
    significant inadequacies in the NRC staff review. I would offer
    that list for your inspection.
        We believe the mandatory hearing process is important. It
    is also important for transparency. We heard a lot about the
    need to maintain transparency in the NRC review process.
        The fact is the public does not always have the resources
    to be able to contest a hearing even if there are very
    important safety issues that need adjudication. For those
    reasons, we think the mandatory hearing should be preserved.
        Senator Markey. I agree with you. There are mandatory
    hearings if you want to build a new house next door to someone
    else. We had public hearings at town hall. They were building a
    nuclear power plant and mandatory hearings for a construction
    permit, for an operating permit would no longer be mandatory.
    That makes no sense whatsoever. That is an inherently dangerous
    technology that needs all kinds of tough questions to be asked
    about it.
        I understand the wish list of the industry would say no
    more hearings, no more public input, no more questions asked by
    the Union of Concerned Scientists in public hearings
    questioning the underlying premise of building a nuclear power
    plant in somebody's neighborhood.
        I do not think the public will be happy when they are told
    no hearings on this dangerous technology. Again, it still needs
    insurance protection from the Federal Government. That is how
    inherently dangerous it is. The private sector still is not
    willing to provide the insurance. You need the Government to
    intervene, to provide that insurance coverage.
        I thank you for your indulgence, Mr. Chairman.
        Senator Crapo. Thank you.
        Senator Carper.
        Senator Carper. If I were the Chairman, you never would
    have gotten those extra 3 minutes and 6 seconds.
        Mr. Chairman, I would say it is probably safe to assume
    that Senator Markey is probably not going to co-sponsor this
    legislation any time soon.
        Senator Crapo. I got that figured out.
        Senator Carper. One of our colleagues is not here today,
    Mike Enzi. He and Ted Kennedy used to lead the Committee on
    Health, Education, Labor and Pensions for a number of years.
    Enzi was a very conservative Republican, and Kennedy was a very
    liberal Democrat. Somehow or other, they managed to get a huge
    amount done.
        I used to say to Mike Enzi, how are you and Ted Kennedy
    able to bridge the divide and get so much done? He always
    talked about the 80/20 rule. I said what is that? He said, Ted
    and I agree on 80 percent of the stuff; we disagree on 20
    percent. What we decide to do is focus on the 80 percent on
    which we agree.
        Chairman Inhofe and I have co-sponsored legislation, and I
    used to do this with George Voinovich on diesel emission
    reduction, and we are making great progress on that front. We
    decided to focus on what we agree on.
        In the spirit of the 80/20 rule, I want to ask this panel,
    we will start with you Dr. Back, what is the 80 percent where
    you folks agree, or maybe 70 or 60 percent? Where is the
    agreement of this panel on some of the important issues? Just
    take a minute, nor more than a minute.
        Ms. Back. I am not quite sure I understand the question.
        Senator Carper. I am asking you what are the points of
    consensus for this panel. Where do you think you guys agree?
        Ms. Back. I believe we agree that early interaction with
    the NRC is helpful for new technologies for advanced reactors.
    I believe a staged approach is also very helpful. I believe
    some kind of cost share to help with the fees or change the
    burden of having an all fees due for the design certification
    or licensing application is maybe not appropriate.
        Senator Carper. Thank you.
        Dr. Finan.
        Ms. Finan. I think there is a very important area where we
    all agree. Even Senator Markey laid out some of the challenges
    faced by nuclear.
        This is an industry that desperately needs innovation to
    address those challenges. Solar and wind have done really well
    and benefited from a great deal of innovation in that space.
    Nuclear energy is ready. There are innovators and investors who
    are ready to really take on that innovation challenge.
        I think we need to have a more efficient and transparent
    regulatory framework to enable the work we need to do to
    address those challenges that Senator Markey outlined.
        Senator Carper. Thank you.
        Ms. Korsnick. I think we all agree that nuclear power is
    very important and very necessary for a baseload, carbon free
    future for how we generate electricity. I think we also agree
    that we need a strong, effective regulator.
        Earlier, we used the term gold standard. I think we do not
    want the NRC to be a weakened regulator. I do not think that is
    helpful for the industry. We do feel that we can have an
    efficient and strong regulator, a regulator that is more
    transparent from a cost perspective.
        Senator Carper. Thank you.
        Dr. Lyman, where is the consensus?
        Mr. Lyman. I would hope the consensus is that there needs
    to be a structured process to ensure that NRC safety reviews of
    new reactors are not spent, that those resources are actually
    used to end up with a product that generates electricity and
    are not just academic exercises. That is one concern we have
    with the bill, and we hoped the panel would agree.
        Also, I would point out that we do not agree that the stage
    process outlined in the bill necessarily would be helpful.
        Senator Carper. Dr. Lyman, I was looking for points of
    agreement. We will come back to the 20 percent in some other
    hearing.
        Commander McCree, a Navy captain, right?
        Mr. McCree. Yes, sir.
        Senator Carper. Naval Academy?
        Mr. McCree. Yes, sir.
        Let me first agree with my fellow panel, Ms. Korsnick, on
    NRC remaining a strong and credible regulator is essential. We
    are committed to our efficiency principle of good regulation
    and are making strides to become more efficient in this
    important area. The most important thing we do is assure the
    safety and security of the 100 operating nuclear power plants
    and the materials license holders.
        Within that, earlier, I alluded to the three-pronged
    strategy, the multipart strategy. I believe that is in perfect
    alignment. NRC needs to improve its regulatory infrastructure
    to make the prospective reviews of advanced non-light water
    reactors more efficient, more effective, more clear and
    predictable.
        We are committed to build that framework, to have it in
    place, by 2019 so that if, and, or when an application is
    submitted for advanced non-light water reactors, we can conduct
    those reviews in a timely, efficient and effective manner.
        We are on path to do that including considering stage
    reviews, conducting additional outreach with folks at the
    table, as well as other stakeholders, both domestically and
    internationally to make sure we are ready.
        Senator Carper. Thanks very much.
        Mr. Merrifield.
        Mr. Merrifield. I think there is a consensus that we can
    build safer nuclear reactors.
        Going forward, I do also want to mention there are small
    modular reactors in the pipeline contemplated to be built by
    2023. As a country, we have the capability of building more
    nuclear reactors by 2025.
        We can have savings in the building of new reactors if we
    replicate and learn from the experiences at Summer and Vogel.
        Obviously we need to make sure that the NRC has the
    resources necessary to protect public health, safety and
    security. Ultimately, it is the nuclear power plants that
    physically have to defend against potential ISIS threats.
        From my view as a former Commissioner, those are the safest
    industrial facilities in the United States from a security
    standpoint and would well be able to defend against the kind of
    threats we have from that particular adversary.
        Senator Carper. Mr. Chairman, let me go back to you. Maybe
    you can give me some more time later.
        Senator Markey, I did not take my earlier time so I am
    catching up.
        Senator Crapo. Do you have more questions, Senator Markey?
        Senator Markey. It would just be a comment, Mr. Chairman.
        Dr. Lyman, do you agree that granting safety exemptions to
    advanced reactor licensees could lead to a net reduction in
    overall safety?
        Mr. Lyman. Yes. To elaborate on that concern, the industry
    is pressing for generic decisions to be made on certain policy
    issues including the size of emergency planning zones for
    advanced reactors or small modular reactors, the level of
    security that is needed, whether or not the containment needs
    to be robust against large pressure increases and whether the
    number of operators needed to staff a nuclear reactor complex
    should be reduced. They want these decisions to be made based
    on the expectation or the assertion that advanced reactors are
    so much safer than current reactors that we do not need these
    extra levels of protection.
        Our concern is that assertion is not always based on a full
    enough body of evidence and experimental data to justify making
    those decisions, so there could be a net reduction in safety if
    exemptions and other relaxations in safety procedures are
    granted based on a presumption that a nuclear reactor is safer
    without a full examination of that claim.
        Senator Markey. Mr. Chairman, laced throughout the bill as
    it is drafted is an assumption that there are inherent safety
    features built into advanced design reactors that make it safer
    automatically.
        That is a nice assumption to make. It is a nice assertion
    to make, but that is going to be tested. We have to make sure
    that any one additional, potentially successful safety feature
    interacts with the totality of the rest of the nuclear power
    plant in terms of assuming the power plant is safer.
        We do not know that. That is an assumption built into the
    language of the bill. This just goes to the question, and it is
    an 80/20 question, what are the big issues that we have to deal
    with. Eighty percent is still going to remain is there enough
    money for the NRC to do their job, having enough personnel
    asking all the right questions, having the right supervision
    and the fees are going to be reduced.
        Are these new technologies actually inherently safer? We
    have to have the capacity to be able to determine that. Will
    the public be able to ask questions? The industry has always
    tried to get the public out but after Three Mile Island,
    Chernobyl and any number of other incidents, the people do not
    trust the experts anymore. They want to be able to ask
    questions too because these power plants are going into their
    neighborhoods. You cannot wall out whole areas of the country.
        These have historically always been big questions. From my
    perspective, public input is vital and should actually be
    strengthened. The new reactors should not be exempted from
    important safety requirements that historically have been
    required and that the NRC budget should not be capped.
        These are the central areas, the big questions that we are
    going to have to answer in this legislation. It is going to
    keep coming back to the same questions we have asked for the
    last 7 years on technology. The questions do not change. We
    will be the ones that have to decide.
        I thank you, Mr. Chairman, for having this very important
    hearing. We know one thing, that these power plants are now 20,
    30 and 40 years old. You have to go to the doctor more the
    older you get. There are more things that can go wrong the
    older you get.
        To reduce the budgets of these aging power plants in
    densely populated areas all across the country and say at the
    same time we are going to have lower numbers of personnel,
    lower amount of fees and revenues going in is totally contrary
    to how we think about it.
        There are issues like embrittlement in nuclear power plants
    that are the same as cholesterol going through the veins of
    older Americans. They cause issues that require a lot of
    additional attention.
        To say that is not as accurate for technology as it is for
    humans just belies the reality of what we have already learned
    about nuclear power plants in our country.
        I thank you for the courtesy, Mr. Chairman, and the
    additional time to question.
        Senator Crapo. Thank you, Senator Markey.
        I will take my last round right now, and then you will be
    able to finish, Senator Carper.
        I just want to make the comment that this legislation does
    not make assumptions. It sets forward a new process, a more
    transparent and I think effective process for the decisions you
    are talking about to be made.
        It definitely does not give any exemptions to any
    technology. It puts the NRC directly in charge of improving and
    strengthening our safety. I would actually like to use my time
    to ask Mr. Merrifield and Ms. Korsnick to respond to that very
    issue.
        Mr. Merrifield. I think the NRC is going to be able to
    continue to meet its mission of appropriately looking at these
    technologies and ensuring they are assured that they are safe.
    I think it will be able to do so in a way which is risk
    informed such that it will be able to judge is there a need for
    a large, emergency planning zone, where the amount of radiation
    in that reactor zone may be much less.
        Senator Crapo. This legislation does not choose
    technologies. It does not define standard.
        Mr. Merrifield. No, it does not. Those tools remain with
    the NRC.
        The other point I would make is it is not as if these
    technologies are entirely new. Indeed, most of the advanced
    reactor technologies being brought forward today were
    originally developed by the Atomic Energy Commission and DOE
    during the 1950s and 1960s.
        There is a significant amount of research information
    available to demonstrate the safety of these reactors today and
    justify the NRC making changes which would more appropriately
    tailor their regulations for advanced reactor technologies
    fully consistent with public health and safety.
        Senator Crapo. Thank you.
        Ms. Korsnick.
        Ms. Korsnick. I have a couple of comments. Clearly the
    industry and the folks representing advanced reactors, none of
    us are interested in reducing safety margins. The conversation
    and structure in this bill that provides a licensing process
    really informs that licensing process that these safety margins
    might in fact be met in a new and different way with this
    innovative technology. That needs to be acknowledged through
    the licensing process.
        We are not in any way lowering the bar or lowering the
    standard. Quite frankly, we are meeting or maybe even exceeding
    the standard but just in a new way.
        The other item I wanted to mention, and I appreciate
    Senator Markey is not here, but the mandatory hearings that
    were mentioned earlier, these are uncontested hearings. That
    means the public does not participate.
        The hearings that are referenced in this bill in fact are
    held between the Commission and the staff on construction
    permits and combined license applications. It is not cutting
    the public out, if you will, of any conversation. We are very
    interested in the public being involved in dialogue.
        Senator Crapo. If there is any public interest, the bill
    allows for a hearing to be held.
        Ms. Korsnick. Absolutely. There are many ways the public
    can request a hearing on an application and be involved. This
    does not take away any of the public engagement and
    involvement.
        I just wanted to make that clear because I felt a different
    impression was left with the committee.
        Senator Crapo. Thank you very much.
        Senator Carper.
        Senator Carper. Thank you, Mr. Chairman. You are doing a
    great job, by the way. I look forward to the day when you chair
    this more often.
        Senator Crapo. Thank you for that, too.
        Senator Carper. Unless, of course, I could be the Chairman.
    In the meantime, I will be your wing man.
        I have an old car. In 2001, I stepped down as Governor and
    became a Senator. I went out with my oldest son, Chris, who was
    then 12, to buy a new car. We drove Porches, Mustangs and
    Corvettes. We bought a Chrysler Town and County minivan. He
    said it was bait and switch.
        Yesterday, I was driving back to Delaware. We usually take
    the train, but we drove back last night to Delaware in my 2001
    Chrysler Town and Country minivan. Along the way, the odometer
    crossed 419,000 miles.
        When I first got my minivan, there were some warranty
    clauses, things that needed to be fixed from the factory, so we
    had a warranty to pay for that stuff. For a long period of
    time, we almost spent no money on it. I could get it washed
    every 2 weeks and maybe change the oil. In recent years, to be
    honest with you, I spent more and more money on my minivan.
        We have all these old nuclear power plants out there. My
    guess is when they first came online there were some problems
    with them sort of like the warranty stuff. We dealt with that
    and continued to monitor them as time goes by.
        Like Ed Markey said, your body gets old, and you have to
    spend more money. I always spend more money on my minivan. I
    will say this. About a month ago, I went out to start it one
    night down in southern Delaware after a meeting, and it would
    not start.
        The guy came from AAA and he said, you need a new battery.
    I said OK. He said, we have a 2-year and a 6-year, which would
    you prefer. I said the 6-year. Some people say that is
    confidence. That is optimism. I am Mr. Glass Half Full.
        Here is where I am going with this. If I am a utility, and
    I am paying 90 percent of the cost for running NRC. I see the
    NRC having fewer reactors because we are shutting down reactors
    and have fewer reactors to monitor.
        We are adding four new ones, but it is not a huge increase.
    Why does the NRC continue to need all this money? I think you
    knocked your budget down by $5 million. That is not very much
    in the scheme of things. I am trying to figure it out. Maybe
    you can help me with this, Commander.
        In terms of cost, four new power plants, monitoring and
    shepherding them through is not cheap. You have, as I
    understand, closures.
        I had a Ford Explorer about a year or two ago and was going
    to retire it or decommission it, if you will. We just took it
    to a place, and in 1 minute, they squashed my Explorer. That
    was it, and they gave me a check.
        It does not work that way with these nuclear power plants.
    It is an expensive process to decommission them. I guess that
    is a cost for you.
        Fukushima, we have all these recommendations from Fukushima
    that we are implementing. We are making some progress, but we
    had a hearing a week or two ago and said we are not there yet.
        Plus, you have all these advanced technologies, all these
    people with brilliant ideas, I hope, who are saying look at my
    idea, so it takes money to pay for all this.
        After thinking about it a bit, my sense is that what you
    are asking for in the budget is not unreasonable, but this guy
    here is interested in how we get better results for less money
    and finding out how to save some more money.
        If I was the utilities, I would say you guys have to
    sharpen your pencils a little bit more and figure out how to
    save some money if you expect us to continue to pay through the
    nose. React to that for me, if you will.
        Mr. McCree. I appreciate the analogy to your minivan.
        Senator Carper. Never tell my wife I bought a 6-year
    battery, she would die.
        Mr. McCree. A nuclear power plant is much more complex.
        To your point, the NRC is reducing its costs. We are
    committed to doing so. If you look at the trend from 2014, we
    are reducing our costs. Our fiscal year 2017 budget request is
    another $20 million below our fiscal year 2016 request.
        The Commission has accepted a number of the recommendations
    from our Project AIM re-baselining which will enable us to
    reduce our fiscal year 2017 appropriation request by at least
    another $31 million. Those are significant reductions. We are
    still not done.
        Lowering our costs will translate to reduced fees, both the
    user fees and the annual fees to this industry that we
    regulate. While there may be a delay or reaction, there is a
    commitment to reducing our fees. It is tangible. I believe the
    industry will recognize those reduced costs.
        Senator Carper. Thank you.
        I have one last quick question. As the budget is reduced in
    the future, would the work force reflect the reduced workload?
    Take a minute to talk about the ramifications of cutting
    nuclear engineers today which might arguably be needed for
    tomorrow's advanced nuclear applications.
        Mr. McCree. One of the more significant challenges I think
    any organization experiences, one that is human capital
    dependent and dependency on people to get work done, that is
    certainly NRC, is to manage cost reductions, reductions in
    staffing in a way that you retain your core capability to
    fulfill your mission.
        Of course our mission is safety and security, so we are
    working very closely, as a leadership team, using a strategic
    work force plan, to make sure the work we have now and the work
    we predict in the future will have the right people in the
    right place at the right time with the right skills.
        Again, that is our commitment. We are working very closely
    to get that done, including nuclear engineers who are one
    capability, one competence that we need within the NRC.
        Mr. Merrifield. Senator, may I make a comment about
    planning?
        Senator Carper. Real short.
        Mr. Merrifield. Seventy-three of the nuclear power plants
    in the United States have sought and received an extension to
    run for 60 years. That has allowed the utilities to invest
    large amounts of money to make sure those plants are up to date
    and fully meet the safety requirements.
        Like your minivan, they have been making a lot of
    investments along the way to make sure those are useful.
    Similar to the way the U.S. Air Force 1950s era B-52s are
    currently being deployed in the Middle East in the right shape
    to do their mission, nuclear power plants are doing the same
    here in the U.S.
        Senator Carper. Mr. Chairman, I want to make sure I get my
    6 years' worth out of that battery I just bought. We will see
    how it works.
        Mr. McCree. For the record, that would be 83 licenses, 11
    under review and 6 expected to come in. The NRC is a bit more
    successful.
        Senator Carper. Thank you for that clarification.
        Thank you all for being with us today. Let us continue to
    look at that 80 percent and see if we can build on that.
        Thank you very much.
        Senator Crapo. Thank you, Senator Carper.
        I do appreciate your constant focus on trying to find
    solutions and get to that 80 percent. I agree with it.
        Dr. Lyman, I indicated I would give you a chance, but I
    think you got your chance to make your comment. Do you feel you
    have not fully had that opportunity yet?
        Senator Carper. I think we have heard enough from him.
        Senator Crapo. Go ahead.
        Mr. Lyman. I would like just a very short time to explain
    why we think some of the language in the bill could potentially
    be interpreted as a reduction in safety standards. That
    primarily has to do with the language ``risk informed'' and
    ``performance based.''
        In my experience with the NRC in its attempts to implement
    what it calls ``risk informed'' regulation, it often implies
    trying to justify what is called a reduction of unnecessary
    conservatism. Unnecessary conservatism means different things
    to different people.
        Our concern is that this bill would put pressure on the NRC
    to develop processes that would essentially force them to
    accept lesser standards for the experimental data for the
    analytical work that is needed to support an advanced reactor
    application.
        In particular, if you have designs based just on paper
    studies, the risk analyses do not have operational data to
    actually validate the studies. There is a concern that over-
    reliance on or over-confidence in paper studies insufficiently
    validated to meet say less restrictive safety criteria could
    lead to an overall reduction in safety. That is our concern.
        On the question of innovation, Mr. Merrifield pointed out
    many of the reactor types currently being considered were
    developed by the Atomic Energy Commission decades ago. We agree
    with that. Actually there is less innovation today than meets
    the eye.
        I would submit that argument could also be used to say the
    NRC has considerable expertise and experience in those reactor
    types. We think the concern that the NRC is not ready to
    license non-light water reactors is somewhat exaggerated for
    that very reason. For the most part, these are old
    technologies.
        Mr. Merrifield. If I may respond quickly, when I was on the
    Commission, we did create about $5 million in funding to better
    understand pebble bed reactors but molten salt reactors, lead
    bismuth and some of the others being proposed are significantly
    different from what the NRC has experience in, so they do need
    additional funding and resources to bridge that gap.
        Senator Crapo. Thank you. I know we have opened some issues
    here that everyone would like to jump into more, and I would,
    too, but I believe we just had a vote called or will shortly
    have a vote called, so we are going to have to wrap this up.
        I do want to remind all of the witnesses that Senator
    Whitehouse had asked each of you to respond in writing to the
    question about the safety implications of the legislation on
    the NRC's capacity to protect safety in its regulatory
    structure. I would encourage you to do that and respond to
    these issues.
        Each of the Senators may have further questions. It is
    customary for them to submit those in writing. Since this is a
    legislative hearing, and we expect committee action on S. 2795
    next week, I am asking our Senators and committee staff to
    provide those questions regarding this bill to the majority
    office by 4 p.m. tomorrow, Friday.
        I am asking the witnesses to be sure to respond in writing
    by 5 p.m. on Monday, April 25. I know that is a short time, but
    we are going to be moving ahead. If you can respond to those
    questions quickly, we would appreciate it.
        All questions for the record regarding the general topic of
    advanced reactors will be due within the usual 2-week deadline.
        To our witnesses, again, I want to thank you all for coming
    and sharing your views.
        This hearing is adjourned.
        [Whereupon, at 11:52 a.m., the subcommittee was adjourned.]
        [An additional statement submitted for the record follows:]

                     Statement of Hon. Benjamin L. Cardin,
                    U.S. Senator from the State of Maryland

        Madam Chair, Ranking Member Carper, thank you for holding
    this hearing. Nuclear power provides a critical share of the
    Nation's electricity--about 20 percent of the total--and an
    even larger share--about 60 percent--of our carbon-free
    electricity. It is a crucial supplier of baseload power.
        Nuclear power will be part of the energy mix for the
    foreseeable future: there are nearly 100 reactors currently
    operating in the U.S., including the two units at Calvert
    Cliffs.
        In 1954, Lewis L. Strauss, who was Chairman of the Atomic
    Energy Commission (AEC), famously said, ``It is not too much to
    expect that our children will enjoy in their homes electrical
    energy too cheap to meter.''
        Chairman Strauss, who was addressing the National
    Association of Science Writers, was making a general prediction
    that science would continue to improve the human condition. But
    his statement came to be misinterpreted as referring to nuclear
    power specifically. It is, perhaps, an understandable mistake,
    given his affiliation with the AEC, which was charged with
    promoting nuclear energy as well as regulating it.
        Nuclear energy isn't too cheap to meter, as it turns out,
    but there are ways to reduce its cost while protecting human
    health and the environment.
        The current fleet of commercial light water reactors has
    reached or is reaching its original ``design basis'' of
    operating for 40 years. While the Nuclear Regulatory Commission
    (NRC) has determined that it is safe to allow these reactors to
    continue operating, scientists and engineers are coming up with
    new reactor designs that will improve or replace existing light
    water reactor (LWR) technology.
        As existing reactors are retired over the next several
    years or decades, we have the opportunity to replace them with
    safer, less costly, modular reactors utilizing either enhanced
    LWR technology or advanced non-LWR technology.
        I am confident the nuclear industry can solve technical
    problems. Scientists and engineers are problem solvers; it's
    what they do and what they do well.
        The question is whether the NRC has the resources and
    regulatory framework to review and license the new designs in a
    fashion that encourages--or at least doesn't discourage--the
    large private capital investments that will be necessary to
    commercialize advanced reactor technology.
        Of course, the NRC will have to continue its oversight of
    the existing fleet, too.
        The NRC's job as an independent agency is neither to
    promote nor hinder the nuclear power industry or a particular
    technology but rather to regulate it, as effectively and
    efficiently as possible, in a manner that protects human health
    and the environment.
        The NRC's mission is enormously important and technically
    challenging. For that reason, and because the Commission is
    headquartered in Rockville and much of its staff lives in
    Maryland, I would like to focus on workforce issues during
    today's hearing.
        Statistics the Commission provided to my staff indicate
    that 19 percent of the NRC's employees are over the age of 60,
    and another 33 percent of the employees are between the ages of
    50 and 59. Conversely, just 27 percent of NRC's employees are
    39 or younger. Twenty-two percent of NRC's employees are
    eligible to retire this year; on a cumulative basis, that
    number rises to 37 percent by fiscal year 2020.
        The NRC has a highly educated and skilled workforce with a
    strong esprit de corps. The Commission's older workers
    especially have vast experience and expertise.
        The Commission has embarked on ``Project AIM 2020'' to
    ``right size'' its workforce relative to its workload. As long
    as safety isn't jeopardized, that's a logical step, considering
    that the ``nuclear renaissance'' many people predicted with
    respect to conventional light water reactors a decade ago
    hasn't occurred--at least not yet. But now small modular
    reactors (SMRs) and advanced reactors are coming down the pike.
        The number of NRC FTEs--``full-time equivalents''--was over
    3,700 in fiscal year 2014; that number would decline to fewer
    than 3,500 under the President's fiscal year 2017 budget
    request.
        I'm hopeful that the Commission can meet its workforce
    reduction targets through voluntary attrition since so many NRC
    employees are eligible to retire now or in the near future.
        But even if the targets are met in the least disruptive
    fashion possible, the Commission must avoid a ``brain drain.''
        Nearly 1,300 NRC employees will be eligible to retire over
    the next 5 years. Will retirements over the next several years
    exceed the planned reduction in the size of the workforce? If
    so, what measures is the Commission taking to attract, train,
    and retain the next generation of our ``best and brightest''?
    How is knowledge being transmitted to younger NRC staffers and
    new hires?
        The current fleet of nuclear power reactors may not be
    growing as previously envisioned, but it is aging--that much is
    certain.
        An aging fleet presents unique safety challenges that will
    require continued diligence by the NRC to protect human health
    and the environment.
        And reviewing the designs and license applications of SMRs
    and advanced reactors will present a different set of
    challenges.
        I look forward to learning how the NRC plans to maintain
    the workforce capable of addressing these twin challenges in
    the face of a likely retirement wave.
        Thank you, Madam Chair.

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