[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

                               __________

  Printed for the use of the Committee on Environment and Public Works
  
  
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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:]
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    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:]
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    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:]
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    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:]
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    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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