[Senate Hearing 114-159]
[From the U.S. Government Publishing Office]




                                                        S. Hrg. 114-159
 
                            OVERSIGHT OF THE
                     NUCLEAR REGULATORY COMMISSION

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

                                HEARING

                               before the

                              COMMITTEE ON
                      ENVIRONMENT AND PUBLIC WORKS
                          UNITED STATES SENATE

                    ONE HUNDRED FOURTEENTH CONGRESS

                             FIRST SESSION

                               __________

                            OCTOBER 7, 2015

                               __________

  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
                             FIRST 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
               
               
               
                            C O N T E N T S

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                                                                   Page

                            OCTOBER 7, 2015
                           OPENING STATEMENTS

Inhofe, Hon. James M., U.S. Senator from the State of Oklahoma...     1
Boxer, Hon. Barbara, U.S. Senator from the State of California...     5
Sanders, Hon. Bernard, U.S. Senator from the State of Vermont, 
  prepared statement.............................................   198

                               WITNESSES

Burns, Stephen, Chairman, U.S. Nuclear Regulatory Commission.....     7
    Prepared statement...........................................     9
    Responses to additional questions from:
        Senator Inhofe 



        Senator Barrasso 



        Senator Capito...........................................    41
        Senator Crapo............................................    51
        Senator Fischer..........................................    58
        Senator Markey 



        Senator Sanders..........................................    83
        Senator Sullivan.........................................    89
Svinicki, Kristine, Commissioner, U.S. Nuclear Regulatory 
  Commission.....................................................   169
    Response to an additional question from:
        Senator Markey...........................................   170
        Senator Capito...........................................   172
Ostendorff, William, Commissioner, U.S. Nuclear Regulatory 
  Commission.....................................................   173
    Response to an additional question from Senator Markey.......   174
Baran, Jeffrey, Commissioner, U.S. Nuclear Regulatory Commission.   175
    Responses to additional questions from Senator Markey........   176


             OVERSIGHT OF THE NUCLEAR REGULATORY COMMISSION

                              ----------                              


                       WEDNESDAY, OCTOBER 7, 2015

                                       U.S. Senate,
                 Committee on Environment and Public Works,
                                                    Washington, DC.
    The full committee met, pursuant to notice, at 9:34 a.m. in 
room 406, Dirksen Senate Office Building, Hon. James M. Inhofe 
(chairman of the full committee) presiding.
    Present: Senators Inhofe, Boxer, Barrasso, Capito, Boozman, 
Fischer, Rounds, Carper, Cardin, Whitehouse, Gillibrand, 
Booker, and Markey.

          OPENING STATEMENT OF HON. JAMES M. INHOFE, 
            U.S. SENATOR FROM THE STATE OF OKLAHOMA

    Senator Inhofe. The meeting will come to order.
    If you remember the last time we met, I made the comment 
that there are nine people who are on both the Armed Services 
Committee and this committee, so we set up something where we 
are not going to coincide. Historically, we have always had the 
meeting at 9:30 on Armed Services on both Tuesday and Thursday. 
Well, they decided to have one today. So that shows how much 
influence I have over there.
    This hearing is part of an ongoing oversight on NRC's 
decisionmaking on fiscal and policy matters.
    I would like to begin by welcoming our four commissioners. 
We appreciate very much your being here. We have received the 
President's nomination of Mrs. Jessie Robertson for the open 
seat, and I expect to proceed with a hearing on her nomination 
once my colleagues have had a chance to visit with her in 
person. So you might share that with her so we can make that 
happen.
    We will continue with the committee's practice of a 5-
minute opening statement for the chairman and then 2 minutes 
for each commissioner, and then we will be asking questions.
    The NRC's mission is a vital one and must be adequately 
funded. I want our nuclear plants to be safe, and they are 
safe. Following Fukushima, I urged the Commission to perform a 
gap analysis to assess the difference between the basic 
regulations that they had in Japan, as opposed to what we had 
in this country, because a lot of people were laboring under 
the misconception that it was the same, and it wasn't. So we 
were far ahead of them to start with.
    Four and a half years later, the industry has spent more 
than $4 billion and the NRC staff has repeatedly sent proposals 
to the Commission, which they admit are not safe, significant, 
or cost-justified. I believe this shows the NRC's bureaucracy 
has grown beyond the size needed to accomplish the mission.
    Now, this is a chart that we are using here, and those who 
have been on this committee for a while know that we beefed up 
because we are anticipating something that never did happen, 
and then you don't beef up after that. So that is kind of the 
thrust, at least my thrust, in this committee hearing today.
    Ten years ago, the NRC accomplished a lot more work with 
fewer resources. Despite the shrinking industry, the NRC 
continued to grow, and you can see that in this chart. Over the 
last few years we have increased our oversight of the NRC's 
budget and raised concerns about: one, the NRC's extreme level 
of corporate overhead costs; two, the reactor oversight, 
spending increasing, despite the decline in operating reactors; 
three, over-budgeting for the new reactors, work that no longer 
exists; and, four, persistent carryover funds.
    In response to this scrutiny, the Commission initiated 
Project Aim 2020 to right-size the agency, and I would like to 
take the NRC for its word. However, I am struggling to 
reconcile this with the NRC's recent response to the Senate 
appropriators.
    Lamar Alexander spent a lot of time looking at this, saying 
what we should do from an appropriation perspective. Then I 
have the response. I do want to make this response, without 
objection, a part of the record; and I think several of my 
colleagues here are going to be asking some questions about 
that. So it is now part of the record.
    [The referenced information follows:]
    
    
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    Senator Inhofe. Rather than seize this as an opportunity to 
be proactive in the spirit of Project Aim, the NRC took the 
posture of a bureaucracy, fighting to maintain every nickel of 
spending. I consider this irresponsible. The situation is 
strikingly similar to the state of the agency when I took over.
    I took over as chairman of this subcommittee in 1997. At 
that time, there had not been an oversight hearing in 4 years. 
Four years. And that can't happen. So we did, we put targets 
out there as to how often we were going to be having them. I 
think we need to go back to that and pay a little bit more 
oversight attention.
    Now, given the NRC's response to appropriators, I don't 
have confidence that the agency will diligently address the 
need to reform on its own. I believe it is time for oversight 
to take place.
    I intend to draft legislation to reform the NRC's budget 
structure and fee collection in an effort to instill fiscal 
discipline in the agency and ensure that resources are properly 
focused on safety, significant matters, timely decisions are 
made on matters.
    Senator Boxer.
    [The prepared statement of Senator Inhofe follows:]

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

    This hearing is part of our ongoing oversight into the 
NRC's decisionmaking on fiscal and policy matters. I'd like to 
begin by welcoming the four commissioners.
    We have received the President's nomination of Mrs. Jessie 
Roberson for the open seat, and I expect to proceed with a 
hearing on her nomination once my colleagues and I have visited 
with her.
    We will continue with the committee's practice of a 5-
minute opening statement from Chairman Burns and 2 minutes for 
each of the commissioners.
    The NRC's mission is a vital one and must be adequately 
funded. I want our nuclear plants to be safe, and they are 
safe.
    Following Fukushima, I urged the Commission to perform a 
``gap analysis'' to assess the differences between our 
regulations and those of the Japanese, in order to guide what 
regulatory changes might be needed. Instead of taking that 
approach, the Commission empowered the NRC staff to develop a 
wish list of more than 40 items including restructuring the 
regulatory framework.
    Four and a half years later, the industry has spent more 
than $4 billion and the NRC staff has repeatedly sent proposals 
to the Commission, which they admit are not safety significant 
or cost justified.
    I believe this shows the NRC's bureaucracy has grown beyond 
the size needed to accomplish its mission.
    Ten years ago, the NRC accomplished a lot more work with 
fewer resources. Despite a shrinking industry, the NRC has 
continued to grow.
    Over the last few years we have increased our oversight of 
the NRC's budget and raised concerns about:
     The NRC's extreme level of corporate overhead costs;
     Reactor oversight spending increasing despite the decline 
in operating reactors;
     Over-budgeting for New Reactors work that no longer 
exists; and
     Persistent carry-over funds.
    In response to this scrutiny, the Commission initiated 
``Project Aim 2020'' to ``right-size'' the agency. I would like 
to take the NRC at its word.
    However, I am struggling to reconcile this with the NRC's 
recent response to Senate appropriators when asked about the 
impact of a possible $30 million decrease for fiscal year 
2016--a mere 3 percent of their budget.
    Rather than seize this as an opportunity to be proactive in 
the spirit of Project Aim, the NRC took the posture of a 
bureaucracy fighting to maintain every nickel of spending. I 
consider this irresponsible.
    This situation is strikingly similar to the state of the 
agency when I took over as subcommittee chair in 1997.
    Given the NRC's response to appropriators, I don't have 
confidence the agency will diligently address the need for 
reform on its own. I believe it's time for Congress to step in.
    I intend to draft legislation to reform the NRC's budget 
structure and fee collection in an effort to instill fiscal 
discipline in the agency and ensure that resources are properly 
focused on safety-significant matters and timely 
decisionmaking.

           OPENING STATEMENT OF HON. BARBARA BOXER, 
           U.S. SENATOR FROM THE STATE OF CALIFORNIA

    Senator Boxer. Thank you so much, Mr. Chairman. I wanted to 
thank you and the staff because you moved this up to 9:30 
because we asked you to because we thought we had something at 
10, and it turns out we didn't.
    Senator Inhofe. But in Armed Services we do, so that is the 
problem.
    Senator Boxer. It is hard to do all this.
    I respect your looking at the fiscal issues surrounding the 
Commission. As you know, my focus has been really the slow pace 
at which the NRC is implementing measures to protect American 
nuclear plants in the wake of the earthquake, tsunami, and 
nuclear meltdowns that occurred in Japan in March 2011. So we 
have different focuses, which is fine.
    Only one of Japan's 43 nuclear reactors has been turned 
back on since the Fukushima disaster. A recent Reuters analysis 
found that of the other 42 operable nuclear reactors in Japan, 
only 7, only 7 out of 42 are likely to be turned on in the next 
few years.
    For the last 4 years I have been saying that in order to 
earn the confidence of the public, we must learn from Fukushima 
and do everything we can to avoid similar disasters here in 
America. Following the last NRC oversight hearing in April, I 
met with Chairman Burns to discuss the Commission's progress on 
implementation of the Fukushima Near-Term Task Force 
recommendations. I do appreciate the letter that you sent to me 
after our meeting outlining the status of the Commission's work 
and timelines for completing each of the recommendations.
    While I recognize progress has been made in some of the 
areas, I am frustrated and disappointed with the overall slow 
pace. Not one of the 12 task force recommendations has been 
fully implemented, and I think we have a chart that shows this. 
Many of the recommendations still have no timeline for action.
    I am also concerned with some of the decisions NRC is 
making on whether to implement important safety enhancements. 
For example, the Commission overruled staff safety 
recommendations. They overruled their staff and voted not to 
move forward with multiple safety improvements. By a 3 to 1 
vote, the Commission decided to remove a requirement that 
nuclear plants have procedures in place for dealing with severe 
accidents.
    What is wrong? How can we vote that way? How does this make 
any sense?
    This requirement was identified in the aftermath of 
Fukushima, but, after years of work, the Commission chose not 
to move forward. This is unacceptable.
    The Commission, in my view, is not living up to its own 
mission, which I always read to you to instill in you this 
burning desire for safety. This is your mission: ``To ensure 
the safe use of radioactive materials for beneficial civilian 
purposes, while protecting people and the environment.'' That 
is your goal. Not to build new nuclear plants as fast as you 
can, or walk away from your own ideas on how to make plants 
safer.
    We need to look no further than the two nuclear power 
plants in my State. At California's Diablo Canyon Power Plant, 
NRC has repeated declared the plant safe, even after learning 
of a strong earthquake fault near the plant, which wasn't known 
about when the plant was approved. If you asked the average 
person on the street, I don't care if they are Republican, a 
Democrat, a liberal, a conservative, or anything in between, do 
you think you ought to build a nuclear power plant near a 
really big earthquake fault, I think they would say no. And I 
don't think they would need a degree in nuclear science to get 
the fact that that is not safe. So when you hear of a new 
fault, and for you not to take any action is very shocking to 
me.
    At the San Onofre Nuclear Generating Station in San Diego, 
which has closed permanently, the NRC recently issued 
exemptions to emergency planning requirements. We still have a 
lot of nuclear waste there. There are so many millions of 
people who live around that plant. The plant's operator, 
because of your decision, will no longer be required to 
maintain detailed plans for evacuation, sheltering, and medical 
treatment of people residing in the 10-mile zone around the 
plant should something go wrong.
    I am aware that NRC is planning a rulemaking on 
decommissioning issues, but rubber-stamping exemptions the way 
the Commission is the wrong approach. I believe it is wrong to 
relax emergency planning requirements with thousands of tons of 
extremely radioactive spent fuel remaining at the site. The 
millions of people, my constituents, they write to me. They are 
scared. They are really glad that place closed, but they are 
scared because they don't see the kind of attention being paid 
to their safety.
    The NRC owes it to the citizens of California and to the 
Nation to make safety the highest priority, and I urge all the 
commissioners to rethink this, refocus. Think about why you are 
there.
    And I do look forward to discussing these issues with you 
today. I know you don't look forward to it, but I look forward 
to it.
    Thank you.
    Senator Inhofe. Thank you, Senator Boxer.
    We will take a moment to congratulate Victor McCree, hold 
your hand up so everyone knows who you are, on his promotion as 
Executive Director. It is kind of coincidental; last night I 
was at an event and three different people came up to me and 
were singing your praises. So we are looking for great things, 
and I am hoping that after this meeting concludes you won't 
change your mind.
    [Laughter.]
    Senator Inhofe. He is a graduate of the Naval Academy. That 
gives you and Commissioner Ostendorff something to talk to him 
about, so I think you will be a welcome addition there.
    Senator Rounds.
    Oh, I am sorry, we will start with the chairman for your 5 
minutes, and then we will go down and hear from the rest of the 
commissioners. You are recognized.

 STATEMENT OF STEPHEN BURNS, CHAIRMAN, U.S. NUCLEAR REGULATORY 
                           COMMISSION

    Mr. Burns. Thank you, Chairman Inhofe, Ranking Member 
Boxer, Chairman Capito, Ranking Member Carper, and 
distinguished members of the committee. We are pleased to 
provide an update this morning on the Nuclear Regulatory 
Commission's activities.
    As you know, in response to earlier industry plans to 
construct a new fleet of reactors, the NRC recruited staff and 
enhanced our licensing capability. Today, only 6 applications 
remain active, out of 18 combined applications originally 
submitted. Two early site permit requests are under review, not 
the expected four, and two standardized plant design 
certifications, instead of the anticipated four, remain on the 
docket.
    The focus of the NRC's work has also shifted in other areas 
over the last decade. Interest in new reactors is growing. 
There has been a focus on security, of course, after the events 
of 9/11. We are also working on license renewal, looking at 
power uprates, overseeing decommissioning, and, importantly, 
implementing safety enhancements spurred by the Fukushima 
Daiichi Nuclear Power Plant accident.
    To meet the workload challenges, we are instituting 
organizational and budget realignments under Project Aim 2020. 
We are identifying the work most important to our mission, as 
well as the activities that can be shed, deprioritized, or 
performed with a reduced commitment of resources.
    Rebaselining is a central element of the Project Aim 
initiative. The NRC has about 3,628 full-time equivalent staff, 
down from about 3,960 in fiscal year 2010. Our target is 3,600 
by the end of this fiscal year. This excludes the Office of the 
Inspector General in those numbers.
    But, importantly, Project Aim will improve our ability to 
respond to change, to plan and to execute our important safety 
and security mission. But we must monitor attrition and recruit 
with care to retain appropriate expertise in the agency. Our 
success as an agency is due to our highly trained and 
knowledgeable staff and their commitment to our mission has 
established worldwide our reputation as a strong, independent, 
and competent regulator.
    Overseeing the most safety-significant enhancements 
stemming from the Fukushima accident remains a priority. Most 
licensees will complete the highest priority work by the end of 
2016. This will substantially improve the already significant 
capabilities of U.S. nuclear plants and provide further 
assurance that they can cope with extreme natural hazards or 
events.
    The NRC technical staff is reevaluating plans for the 
remaining longer-term or lower priority recommendations and 
will present the Commission with a paper later this month or 
next month, and we will be meeting on that in the near future.
    The Commission has also directed its staff to submit a 
proposal for increasing the Commission's involvement in the 
rulemaking process. The goal is for the Commission to be more 
involved early in the process, before significant resources are 
expended.
    Being prepared to evaluate applications for light water-
based small modular reactors, as well as non-light water 
technologies, presents challenges, but we are prepared to 
review any applications under our existing framework. Within 
budget constraints, the agency is working on advanced reactor 
activities with the Department of Energy, industry standard 
setting organizations, and the Generation IV International 
Forum. We expect to receive a small modular reactor design 
application in late 2016.
    Finally, I would like to touch on this topic of spent 
nuclear fuel. The NRC has received two letters from potential 
applicants indicating intent to apply for a consolidated 
interim storage facility license. The NRC does not have 
resources budgeted for either review this fiscal year but could 
reprioritize work if need be. The NRC has previously issued a 
license to authorize an independent spent fuel storage 
facility--private fuel storage in Utah, but construction of 
that facility did not go forward.
    In conclusion, as I have noted many times since becoming 
chairman, I am very proud to be part of this organization. The 
NRC has a prestigious history and is viewed worldwide as a 
premier regulator. I am repeatedly reminded of the NRC's 
importance and the excellence with which we pursue our work. We 
are in a sustainable path toward reshaping the agency, while 
retaining the skill sets necessary to fulfill our safety and 
security mission.
    Thank you, and I would be pleased to answer your questions.
    [The prepared statement of Mr. Burns follows:]
    
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    Senator Inhofe. Thank you very much, Chairman Burns.
    Commissioner Svinicki.

  STATEMENT OF KRISTINE SVINICKI, COMMISSIONER, U.S. NUCLEAR 
                     REGULATORY COMMISSION

    Ms. Svinicki. Thank you, Chairman Inhofe, Ranking Member 
Boxer, and distinguished members of the committee, for the 
opportunity to appear before you today at this hearing to 
examine policy and management issues pertaining to the NRC.
    The Commission's Chairman, Stephen Burns, in his statement 
on behalf of the Commission, has provided an overview of the 
agency's current activities, as well as a description of some 
key agency accomplishments and challenges in carrying out the 
NRC's work of protecting public health and safety, and 
promoting the common defense and security of our Nation.
    The NRC continues to implement safety significant lessons 
learned from the Fukushima accident in accordance with agency 
processes and procedures while also maintaining our focus on 
ensuring the safe and secure operation of nuclear facilities 
and use of nuclear materials across the country. Concurrent 
with this, the NRC is undertaking a comprehensive reevaluation 
of our agency's structure and processes under the Project Aim 
initiative. This initiative has engaged--and continues to 
solicit the input of--all agency employees, as well as 
interested stakeholder groups.
    I appreciate the opportunity to appear before you today and 
look forward to your questions. Thank you.
    [Ms. Svinicki's responses to questions for the record 
follow:]


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    Senator Inhofe. Thank you, Commissioner Svinicki.
    Commissioner Ostendorff.

  STATEMENT OF WILLIAM OSTENDORFF, COMMISSIONER, U.S. NUCLEAR 
                     REGULATORY COMMISSION

    Mr. Ostendorff. Chairman Inhofe, Ranking Member Boxer, and 
distinguished members of the committee, thank you for the 
opportunity to be here today.
    I am in complete alignment with the chairman's testimony. I 
will expand very briefly on two topics: post-Fukushima safety 
and Project Aim.
    The Commission recently approved what I consider to be the 
capstone of our response to Fukushima, the Mitigation of the 
Beyond Design Basis Event rulemaking. This rulemaking codifies 
significant enhancements for station blackout, spent fuel pool 
safety, onsite emergency preparedness responsibilities, and 
other command and control aspects.
    I look at Senator Carper and note an exchange we had in 
this committee hearing 4 years ago on the half-dozen, and I 
believe that this rulemaking codifies the bulk of that half-
dozen we exchange comments on in 2011.
    Seeing a light at the end of the tunnel, the Commission 
also directed staff to provide a plan and schedule for 
resolving all remaining Fukushima action items. That is due to 
us the end of this month.
    Project Aim is a real opportunity for this agency to take a 
fresh look at how we operate and see where we can improve our 
efficiency and effectiveness in executing our mission. This 
fresh look has new faces leading the change. As Senator Inhofe 
mentioned, we have Victor McCree now leading as the Executive 
Director for Operations. We also announced a number of other 
significant management changes. I have the utmost confidence in 
these leaders.
    In closing, I appreciate the opportunity to be here today 
and look forward to your questions.
    [Mr. Ostendorff's response to a question for the record 
follows:]

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    Senator Inhofe. Thank you, Commissioner Ostendorff.
    Commissioner Baran.

    STATEMENT OF JEFFREY BARAN, COMMISSIONER, U.S. NUCLEAR 
                     REGULATORY COMMISSION

    Mr. Baran. Chairman Inhofe, Ranking Member Boxer, and 
members of the committee, thank you for the opportunity to 
testify today.
    Chairman Burns provided an overview of the agency's current 
activities. I would like to highlight just a few of those 
efforts.
    NRC continues to address post-Fukushima safety enhancements 
and lessons learned. Progress has been made in several areas, 
but a lot of work is still underway. Later this month, as 
Commissioner Ostendorff mentioned, the NRC staff will be 
sending the Commission a plan for how to proceed on the 
remaining Tier 2 and Tier 3 items. There are some significant 
safety issues in these categories, so we will need to do some 
careful thinking about how to best address them.
    The staff has begun work on a rulemaking for 
decommissioning reactors. This rulemaking offers an opportunity 
to take a fresh look at a range of decommissioning issues with 
the benefit of public comment. It is also a chance to move away 
from the current approach of regulation by exemption, which is 
inefficient for both NRC and its licensees.
    The Commission has been working to resolve the policy 
issues raised by the expected applications for small modular 
reactors. Earlier this year, we decided to proceed with a 
rulemaking to establish a variable fee structure for small 
modular reactors which will provide regulatory certainty and 
transparency for potential applicants.
    In addition, the Commission recently approved a rulemaking 
related to the size of emergency planning zones for small 
modular reactors. This will allow the agency to examine novel 
emergency planning issues in a way that engages potential 
applicants and other interested stakeholders.
    As you have already heard, the agency is working to 
increase its efficiency and agility, while remaining focused on 
our core mission of protecting public health and safety. 
Through our Project Aim rebaselining prioritization efforts, we 
will strive to implement NRC's existing scope of work more 
efficiently, identify any outdated and unnecessary initiatives, 
and adjust to declining workloads in some areas. Project Aim is 
not about relaxing regulatory oversight of licensee performance 
and safety; it is about more efficiently focusing on the right 
safety priorities.
    Thank you, and I look forward to your questions.
    [Mr. Baran's responses to questions for the record follow:]
    
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    Senator Inhofe. OK, thank you. Thank you all, 
commissioners.
    The NRC proposes to spend $91 million on research in 2016, 
which is 9 percent of the total budget. Now, three times, 
including the last meeting that we had, I have asked for a list 
of all ongoing research projects. I understand that that is one 
reason that some are saying that the amount of money in my 
opening statement that I talked about should be looked at is 
going to research projects, in writing and once personally with 
you, Chairman Burns, when we met in my office.
    Now, late last night I finally received the list. So that 
has been several weeks ago, and then we get it right before the 
meeting, which makes it very difficult to analyze. But it still 
doesn't have, according to those who have read it, all of the 
cost information or the risk reduction information that we 
asked for.
    So, commissioners, how do you develop a budget and meet 
your responsibility to be good stewards of taxpayer dollar and 
license fees if it takes 6 months and three oversight requests 
to produce a list of what projects this $91 million will be 
spent on? Any one of you want to respond to that, why it should 
take that long? Because it did.
    Mr. Burns. Senator, I will take that, and my colleagues can 
add.
    I think the difficulty that we had in terms of the way that 
the agency tracks some of the research projects and its 
accounting, and our accounting is responsible; it meets 
management requirements. We assure within our process that 
projects are identified, have a user need; they are reviewed by 
management and are undertaken. So we try to do the responsible 
thing.
    But what I have asked our EDO and our CFO to do is to tell 
me how can we, in effect, track some of the data in a way that 
I think we have gotten a request from your staff. So I don't 
think this is a matter that we are irresponsible. I think we 
are quite responsible in terms of how we plan the research of 
the agency, how we account for it, and how we carry it out. But 
there are ways we could make it, perhaps, more transparent for 
you.
    Senator Inhofe. Well, do you disagree with the staff's 
first analysis of the document that we received last night is 
not complete, is not as thorough as it should be?
    Mr. Burns. I think it has the projects that are there. What 
I understand is what we don't have is the granularity at the 
individual project level. I think that is what it is. That is 
what I have asked our EDO and CFO to look at in terms of going 
forward and we have a process in terms of how we bin the data 
that can meet that.
    Senator Inhofe. Well, other members are going to have 
specific questions about that. I would observe that in April I 
asked about the 2005 IG finding that the NRC needed to update 
its budget formulation procedure, and you indicated that the 
revised procedure was complete. Was the 2017 budget that we 
referred to developed using this procedure?
    Mr. Burns. I think, Senator, my understanding is what we 
have was we have a set of management directives that would come 
to the Commission for its review, given its policy, and I think 
by the end of this year, for our approval. Our budget, as I 
understand it, has been developed in accordance with procedures 
that the agency has in place and are consistent with the 
standards that OMB expects as we develop a budget.
    Senator Inhofe. Wouldn't a thorough updated budget 
formulation procedure establish some discipline that there has 
been criticism of before and prevent the sort of thing that we 
are seeing in the Office of Research?
    Mr. Burns. I think the updated procedure can help us 
improve our processes, and I think that is one of the outcomes 
that we are looking for.
    Senator Inhofe. Do you think Senator Alexander, when he was 
making his analysis, is accurate in most of his assertions?
    Mr. Burns. I am sorry; I didn't hear that.
    Senator Inhofe. On the budget, looking at it from an 
appropriator's perspective, Lamar Alexander made 
recommendations and criticism. Well, let's do this. For the 
record, why don't you respond to his criticism. Would you do 
that?
    Mr. Burns. Yes, we will.
    Senator Inhofe. OK.
    Senator Boxer.
    Senator Boxer. Thanks very much, Mr. Chairman.
    Mr. Burns, I was perplexed by the Commission's decision to 
approve exemptions from emergency response planning 
requirements at the San Onofre Nuclear Generating Station. I am 
sure you know millions of people live around it. And the plant 
has been permanently shut down, but significant amounts of 
spent fuel remain at the site. I know you know that as well. 
They are in spent fuel pools.
    I don't understand. Why did you do that? Why did the 
Commission decide it was wise to exempt the plan from emergency 
response planning requirements?
    Mr. Burns. Thank you, Senator. The current framework for 
plants under decommissioning relies, for better or worse, in 
terms of a construct that includes both looking at amendments 
to the license, as well as exemptions. And the exemptions are 
from rules that applied during operations, when there is fuel 
in the reactor, when the reactor may be operating.
    The judgment with respect to emergency planning and the 
exemptions from certain emergency planning requirements was 
based on the staff's analysis that the risks with respect to 
the spent fuel pool are not such that it requires the full 
emergency planning complement. That is the basis for it.
    Senator Boxer. OK, so let me understand. So if something 
were to happen, God forbid, because, as you know, there is a 
lot of storage right there, your answer to the people who are 
exposed to these materials would be, oh, we didn't do it 
because you weren't operational; this happened after you closed 
down? That makes no sense to me.
    Now, I am introducing legislation, or I actually have done 
it, to prohibit emergency planning exemption at decommissioning 
reactors until all the spent fuel has been moved into safer 
drier cask storage. And I understand that NRC is developing a 
rule to address decommissioning issues.
    Will you take another look at this issue or is this your 
final decision? Once a plant is decommissioned, you don't care 
how much spent fuel is there, they don't need a plan? You have 
to be kidding. Are you going to look at this again when you do 
that rule, in terms of decommissioning?
    Mr. Burns. I believe that within the scope of the 
decommissioning rule, we would look at the processes for what 
requirements would remain place and what time frequency.
    Senator Boxer. OK. Well, I am going to talk to you further 
about this, all of you, and make the point. If you are exposed 
to nuclear materials, it is very serious; and people don't care 
if the plant was operational and there was an accident or the 
plant was decommissioned and there is an accident. They get 
just as sick.
    I don't know how many of you have been there. Have all of 
you visited the plant? Can you nod? All of you? One hasn't, 
three have.
    I spoke to the sheriff there and I said, what is the plan 
in case there is an evacuation, and she kind of shrugged her 
shoulders and she pointed to the road, which was backed up 24/
7. That is the way people get away from there. So, please, your 
decision is dangerous, is wrong.
    Now, Mr. Burns, will you commit to respond to me with 
specific timelines for implementation of all the task force's 
recommendations? You did send a good letter and had some 
deadlines, but you left out others. Will you get back to me on 
what the deadlines will be?
    Mr. Burns. Yes. I can look at the gaps that are there and 
make sure we understand what they are and what you are looking 
for. I would be pleased to do that.
    Senator Boxer. OK.
    Mr. Baran, recently, the Commission decided to ignore the 
recommendations of NRC staff and remove safety requirements 
from a proposed rulemaking that were opposed by the nuclear 
industry. In a press release, the Nuclear Energy Institute 
said, ``The measures were not justified using quantitative 
measures.''
    What are the limitations of relying solely on quantitative 
measures to justify new safety enhancements?
    Mr. Baran. Well, I think a purely quantitative approach 
isn't going to do a good job of addressing low probability, 
high consequence events. A Fukushima style or Fukushima type 
event is a very low probability of occurring. So when you run 
the numbers, that makes it difficult for even common sense 
steps to pass a cost-benefit test that looks only at quantified 
benefits.
    In fact, I think it is unlikely that any of the major post-
Fukushima requirements that were instituted by the Nuclear 
Regulatory Commission with broad support would have passed a 
purely quantitative test. The Commission required flex 
equipment and hardened vents both as necessary for adequate 
protection of public health and safety, which is an exemption 
to the back-fit rule. Spent fuel pool instrumentation was 
required under the rule.
    Senator Boxer. OK, I am going to interrupt you. I agree 
with you, but I am running out of time. Are there any other 
rules that don't look at quantitative only, in your knowledge? 
Do they all have to pass that quantitative test? Obviously, the 
staff didn't agree with that.
    Mr. Baran. Well, when you are doing a cost-benefit 
analysis, you need to examine both quantitative factors and 
factors that you can't quantify.
    Senator Boxer. I agree.
    Mr. Baran. So all the costs, all the benefits. You need to 
look at them all. If you can quantify them, that is great; if 
you can't, you do need to still examine them.
    Senator Boxer. You have to examine the worst that could 
happen, is that the point?
    Mr. Baran. Some benefits are not easy to quantify, but you 
still need to consider them when you are making decisions about 
weighing the pros and cons of whether to proceed with the 
requirement.
    Senator Boxer. Thank you. I agree with you completely. 
Thank you.
    Senator Inhofe. Thank you, Senator Boxer.
    Senator Rounds.
    Senator Rounds. Thank you, Mr. Chairman.
    Chairman Burns, five reactors have shut down in recent 
years, and more closures are possible. I think in your written 
testimony you indicate an expectation for Oyster Bay to be shut 
down in 2019. My understanding is that it takes more resources 
to oversee the operating reactors than it does for those that 
have been permanently closed. In spite of this, the budget of 
the Office of Nuclear Reactor Regulation has grown about 42 
percent, if our calculations are correct, since 2012, including 
a $32 million increase in corporate support costs.
    Chairman Burns, do you think it is sustainable to continue 
increasing this section of the budget while the size of our 
reactor fleet continues to shrink? The reason why I am asking, 
it looks to me, while we focus on the safety side of things and 
we understand, as you have heard right here, there is a concern 
on that end of it, the dollars and cents side of it is an 
important part of the oversight as well. I think it is a fair 
question when we start looking at, if we have a shrinking 
number, how do we react to that in terms of the size of the 
entity that oversees these operations.
    Mr. Burns. Well, I would agree with you, Senator, that the 
size of the operation should meet the resource commitments or 
the projects that we would expect to come in. I would note in 
the operating reactor area, though we expect, for example, the 
Oyster Creek Plant in New Jersey, which this has been a 
longstanding plan, to cease operation in, I think, 2019, and 
there may be some others, we also, in the area of the operating 
reactors, we expect the Watts Bar 2 Plant to come online 
sometime next year. We are taking steps to work off the 
licensing backlog and to finish the Fukushima requirements. So 
those are things that I think, responsibly, that we need to 
budget for.
    I agree with the principle that the resources should 
reflect the type of work that we have, and it may shift. It may 
shift. As you get out to 2020 in terms of operating reactors, 
the forecast would be you have four additional units online 
between the Vogtle and the Summer plants.
    Senator Rounds. Let me just continue on a little bit. In 
both 2014 and in 2015 the fee recovery rules, the NRC has 
accounted for the reactor closures so far and the resulting 
loss of those fees by simply billing the remaining reactors 
more, on a per reactor basis to make up the difference.
    For example, the NRC stated in their 2015 fee recovery 
rule, the permanent shutdown of the Vermont Yankee reactor 
decreases the fleet of operating reactors, which subsequently 
increases the annual fees for the rest of the fleet. As I say, 
now you have Oyster Bay, which is planned for decommissioning 
in 2019.
    This is for all of you. Do you believe that this is a fair 
way, an appropriate way to structure the fee collection, to 
drive up the fees on the operating reactors because of a 
closure of a plant currently in existence today? Is this the 
right way to do it or should we be looking at another 
alternative?
    Ms. Svinicki. If I might jump in, Senator Rounds. Not 
speaking to whether or not it is fair, as long as the legal 
requirement exists for NRC to recover 90 percent of its budget, 
by virtue of mathematics, if there are fewer reactors in the 
United States, the fixed costs of our activities will be 
allocated across a smaller number of reactors with, again, the 
mathematical result that the fee would increase. So I think 
there is likely some minimum number of reactors where that 
would become unsupportable, and at that point perhaps Congress 
would then look at options for a different fee allocation.
    Senator Rounds. Do you have any recommendations for this 
committee?
    Ms. Svinicki. I do not, but if I might respond for the 
record, please.
    Senator Rounds. That would be appropriate. Thank you.
    Thank you, Mr. Chairman.
    Senator Inhofe. Thank you, Senator Rounds.
    Senator Cardin.
    Senator Cardin. Thank you, Mr. Chairman.
    Let me thank the commissioners for being here and for your 
service to our country. The mission of the agency is critically 
important to this country. The amount of energy met by nuclear 
electricity is significant, particularly when you look at the 
carbon-free generation. And your mission on safety, as we have 
already talked about several times, is very important to the 
public health of people of this country, not only the design 
and operation, but, as Senator Boxer said, the handling of 
spent fuels. All that is a critically important mission.
    I want to talk about the workforce for one moment.
    Your agency consistently ranks among the top as a best 
place to work. I mention that because I am sure that is because 
of your headquarters location in Maryland. But I want to talk 
about the impact that may have moving forward.
    You have a highly skilled workforce. You are looking at 
Project Aim, with the realities of the reductions in the number 
of applications that you have received. You look at the 
demographics of your workforce and you see a significant 
number, over 20 percent now, are eligible for retirement, and 
that number is going to escalate pretty dramatically in the 
next few years. You look at the average age of your workforce, 
and that is increasing pretty dramatically.
    So as you are looking to rebalance and you are looking at 
the realities of budget here in Washington, what game plan do 
you have to be able to recruit young talent that is needed in 
the agency, maintain expertise so that the mission of your 
agency moving forward can maintain that excellence?
    Mr. Burns. Thank you, Senator. One of the things I think we 
continue to do is have a robust entry level program for 
technical staff, and there is still a lot of excitement about 
that. I have had the opportunity in the last few months to go 
to Penn State University, which does some research for us but 
also has a large nuclear engineering department. They say they 
have an excellent interest in nuclear engineering there.
    We support, through our budget, a grant program that goes 
out to not only universities, but also some craft and trade 
schools that help throughout. So, again, I think what we can do 
is leverage off being a great place to work, having an exciting 
mission that jumps around. That is what kept me there and kept 
me in Maryland for 34 years at the NRC before I left and then 
came back.
    But it is an important area because there is a generational 
shift there, and there are fewer of us folks who were there in 
the late 1970s and early 1980s, and we need to make sure we 
have the next generation and we are able to also transfer 
knowledge to them. So we work at that.
    Senator Cardin. But as you are looking at Project Aim 2020 
and rebalancing, which in many cases is code for downsizing, do 
you have a concern that young people may not see the future of 
the agency and that you may not be able to recruit? Also, 
downsizing numbers. You are going to get hit on both sides, it 
seems to me, retaining the expertise you need, but recruiting 
the new people. Is there any help you need? Any tools that you 
need in order to be able to get this done?
    Mr. Burns. I think we have the tools that we need. What I 
agree with you with is part of it is our communication, because 
what it is, although we are getting smaller, we need to retain 
critical disciplines. Those are our highly skilled workers.
    But we also need lawyers, we need administrative staff, we 
need IT people, and communicating that out so that while we are 
shifting around we expect ourselves to be somewhat smaller, 
again, communicating those opportunities. That communication 
piece is important. I think we have the tools we need to 
recruit and do those types of things.
    Senator Cardin. Thank you, Mr. Chairman.
    Senator Inhofe. Thank you.
    Senator Boozman.
    Senator Boozman. Thank you, Mr. Chairman.
    And thank you all so much for being here. The work of the 
NRC is so very, very important, and we need a Commission that 
is responsive to Congress, collegial, and thorough. The 
Commission must be science-based and quantitative analysis of 
benefits and costs, and it must be focused on the right 
priorities. We need to budget for these priorities.
    First of all, I want to acknowledge the hard work and 
dedication of your staff in Arkansas. We are very proud of 
Arkansas Nuclear One. There was an industrial accident at the 
plant in 2013 that involved contract work that was performed 
onsite in a non-radiation area. This was a very serious and 
tragic accident, but it involved no risk to public health or 
safety.
    The NRC has been very active over the last 2 years, 
reviewing safety measures at the plant. In the meantime, the 
Commission has determined that the plant remains extremely safe 
to operate, and we appreciate the work that has gone into 
fixing issues that were identified.
    Our nuclear plant provides nearly 1,000 really good jobs in 
Arkansas, which is a huge boost to the economy of the city of 
Russellville and the area. In addition to those permanent jobs, 
hundreds of additional contractors regularly work onsite and 
invest in the community.
    The plant has the capacity of over 1,800 megawatts. Our 
nuclear plant truly keeps the lights on in Arkansas, and it 
keeps our industry and manufacturers going. It is the largest 
producer of emissions-free energy in Arkansas by far. In fact, 
each year this plant reduces air emissions by over 13,000 tons 
of sulfur dioxide, it eliminates nearly 10,000 tons of nitrogen 
oxide emissions, and it cuts almost 8.5 million tons of carbon 
emissions. For all these reasons, we are very glad to have 
Arkansas Nuclear One.
    So, again, we are very proud of our nuclear plant. We 
appreciate the potential and all that nuclear energy does.
    Chairman Burns, the NRC's corporate overhead costs have 
risen significantly over the last decade, reaching $422 
million, or 41 percent of NRC's total budget authority, 
according to the NRC's fiscal year 2015 fee recovery schedule. 
I am told that the NRC is considering an accounting 
recommendation that would allow some overhead costs, such as 
the human resources and financial management, to be 
reclassified within the NRC's business lines in order to make 
the costs attributed to corporate overhead appear smaller.
    I guess the question is does the NRC plan to adopt what I 
would call almost an accounting gimmick, or is the Commission 
planning to find ways to actually reduce corporate overhead 
costs, rather than simply placing them in such a way in the 
business line budget that it is harder to get to?
    Mr. Burns. Well, thank you, Senator. We need to be 
transparent in terms of how costs are allocated and where they 
are. We do, as part of Project Aim, we are taking seriously 
looking at efficiencies in terms of the corporate support 
costs, as well as overhead costs in our activities. As directed 
by the Congress in the last appropriation bill or in the report 
on the bill, we used the consultant services of EY, formerly 
Ernst & Young, to look at corporate support.
    My understanding is that we are generally aligned with 
other agencies. But this is an area we are focused on in 
Project Aim to try to reach a better balance and efficiencies 
in how we do it.
    Senator Boozman. So I guess the question is, are you going 
to do that. Are you going to, again, make it such that you 
reclassify some of your costs that shifted away from the 
overhead costs?
    Mr. Burns. I believe that the way we are portraying some of 
the costs will include overhead costs, yes. And I think in 
doing that, again, the idea is not to hide them, we want to be 
transparent about it, but a direct effort of a technical person 
does require some overhead in terms of office space, other 
types of support activities and the like, so that overhead. But 
we want to do it in an appropriate way.
    I fully agree with your principal. This is not sort of hide 
the peanut, move a shell game here. We want to be responsible 
about it.
    Senator Boozman. Good. Thank you, and thank you all for 
being here.
    Thank you, Mr. Chairman.
    Senator Inhofe. Thank you.
    Senator Gillibrand.
    Senator Gillibrand. Thank you, Mr. Chairman.
    I would like to talk a little bit about Indian Point, which 
is one of our reactors in New York. Following the May 8th 
transformer fire at Indian Point, which resulted in oil leaking 
into the Hudson River, I wrote to you expressing concerns about 
the incident and the number of incidents involving transformers 
over the past 8 years, including fires in 2007 and 2010. In our 
correspondence following the incident, we discussed the 
Commission's decision to not require an aging management plan 
for transformers as part of the licensing renewal and instead 
continue to monitor them as part of NRC's ongoing oversight 
inspection and maintenance activities.
    Can you please explain, any of you who have looked at this, 
why, given multiple incidents involving transformers at Indian 
Point over the past 8 years, the Commission believes that the 
current monitoring regime for transformers is sufficient?
    Mr. Burns. Thank you, Senator Gillibrand. As I think we 
discussed when I met with you, I did not participate in the 
Commission's adjudicatory decision related to that because I am 
disqualified from doing that. I think the general principal is 
that in looking at license renewal, the focus is on the aging 
of long-lived passive components, which a transformer generally 
is not considered. I think there is oversight and monitoring 
that the licensee is expected to do through its maintenance 
programs that we monitor. I think that is the basic dichotomy.
    Senator Gillibrand. OK. Despite the fact that Indian Point 
experienced four unplanned shutdowns earlier this year, 
including a shutdown that was a result of the transformer fire, 
the mid-cycle assessment states that NRC plans to conduct 
baseline inspections at Indian Point. What are the criteria for 
a baseline inspection versus other levels of inspection? And 
when making a decision on the level of inspection that a plant 
will be subject to, do you look at the previous violations in a 
cumulative way, or do you only look at a specific period of 
time?
    Mr. Burns. I would like to be able to provide you more 
detailed information for the record. The general approach is we 
do look at a history of operation or performance during the 
time. I have to say I am a little fuzzy in terms of how the 
things will line up, but I would be pleased to provide that for 
you for the record.
    Senator Gillibrand. OK. And for the record, if there is a 
number, if there is a number of incidents or violations within 
a certain period of time that NRC would then require a 
different level of inspection above baseline inspection, please 
let us know.
    Mr. Burns. Yes. Because there is generally, through our 
reactor oversight process, and I just don't have the details in 
my head, in terms of how the levels of inspection and 
expectations are. So we will make sure we get that to you.
    Senator Gillibrand. OK.
    Mr. Ostendorff. Senator, if I may just make a brief comment 
here on your question.
    Senator Gillibrand. Sure.
    Mr. Ostendorff. One of the concerns on tying plant 
shutdowns or trips to performance evaluations is, it could send 
a signal to a licensee that there is going to be a penalty to 
pay if they shut down. And in many cases our licensees will 
take the conservative safety step of shutting down.
    Senator Gillibrand. Right.
    Mr. Ostendorff. We do not want to send a different 
incentive to that licensee.
    Senator Gillibrand. OK.
    On December 12th the license for Indian Point Unit 3 will 
expire. As you know, the license for Unit 2 expired in 2013. 
The reactor has been operating with an unrenewed license for 
the past 2 years in what is called a ``timely renewal period.'' 
Is Unit 3 also expected to enter into a timely renewable period 
when its license expires in December? Have there been previous 
instances where multiple reactors at the same plant were both 
operating without a renewed license? What impact do you think 
this will have on the plant and the NRC's inspection process 
for Indian Point?
    Mr. Burns. I would expect, given the status of the 
adjudicatory proceeding on renewal, that the other unit would 
go into so-called timely renewal. That is a provision under the 
Administrative Procedure Act that is incorporated in our 
regulations.
    What I understand is that the licensee, Entergy, will 
implement the enhancements to the license that are expected 
that have come through the process of staff review. They would 
continue to have the oversight by the NRC. They are still 
expected to follow the license. In a sense, the open item is 
the conclusion, the proceeding on license renewal, but our 
oversight would remain and our ability to do that remains the 
same.
    Senator Gillibrand. Thank you.
    With my remaining 5 seconds, will you just submit for the 
record an analysis about the Fitzpatrick Plant? Because we have 
hear from Entergy that they may shut it down, and I just want 
to know what NRC's role, if any, in being part of these 
decisions, whether you are notified of plans, whether you have 
any input. Because it is a huge community issue right now, and 
I would love to know what your perspective is and if you do 
involve in these decisions on any level.
    Mr. Burns. I will certainly do that. We don't have a role 
in the decision with respect to operation, but if a plant 
decides not to continue operation, there are processes, and we 
can provide you information on that.
    Senator Gillibrand. Thank you.
    Senator Inhofe. Thank you, Senator Gillibrand.
    Senator Capito.
    Senator Capito. Thank you, Mr. Chairman.
    I want to thank all of you all for being here today. I 
would like to ask some questions along some of the same lines 
as my colleagues have. I also would like to mention that I do 
not have a nuclear facility in my State, but I was able, by the 
courtesies of AEP, to visit the Cook Plant in Michigan, which 
has just had a 20-year extension, I believe, on their license. 
So I learned quite a bit there.
    But as I understand it, when companies need to modify their 
plants or alter their procedures, the NRC has to approve that. 
Correct?
    Mr. Burns. For many things. There are provisions in our 
regulations, and perhaps also in our licenses, that allow 
certain types of changes to be made if the licensee does the 
analysis and concludes, for example, under one of our 
regulations, that there is no unreviewed safety question. So 
they have some flexibilities themselves.
    Senator Capito. All right, good. Thanks for that 
clarification. And you budget for about 900 reviews a year. Am 
I correct in assuming that you have stated that you prioritized 
the licensing actions based on safety significance? So the ones 
that would have more impact on safety obviously are going to 
rise to the top? Is that how you prioritize 900 reviews a year?
    Mr. Burns. I think that is generally true. Part of that 
also comes in discussion with licensees who apply for the 
amendments or other types of licenses.
    Senator Capito. OK. So we are going to put the chart back 
up that the chairman used. The first point I would like to call 
your attention to is the number of operating reactors has gone 
down due to economic challenges. So we have gone from 104 to 
100 reactors. But resources for the agency have gone up 15 
percent over that same time period.
    I learned just today, more specifically, that Project Aim 
2020 is aimed at probably that discrepancy, but the second 
thing I would like you to notice is how the workload is down, 
but there is still a backlog in reviewing licensing actions on 
time. So I would say since the NRC prioritizes reviews based on 
safety, which we pretty much just established, any licensing 
action that companies are pursuing for economic reasons but do 
not have a safety nexus, are they the ones that are more likely 
in this backlog? Do you understand my question?
    Mr. Burns. No, I understand the question. I think I would 
have to look at that in terms of the record.
    Senator Capito. Let's talk about the backlog a little bit. 
How extensive is it and what kind of time periods are allowed 
for backlogs? Is there a stop dead date where you can no longer 
be in a backlog, when you have to have a decision made?
    Mr. Burns. Essentially what the objective is, I think, is 
to work through license amendment or licensing action type of 
requests from licensees within a year, and what happened over 
the last few years, particularly after the Fukushima accident, 
is a backlog grew as we focused on the safety significant 
Fukushima enhancements. So that grew.
    What I give credit and credit mostly goes to, I think, our 
current Director of Nuclear Reactor Regulation, Bill Dean, and 
his team in terms of they have been taking steps that are 
working down that backlog, and I think their objective is that 
we basically have it down to zero by fiscal year 2017.
    Senator Capito. OK. And I think the chairman mentioned the 
document the NRC gave to appropriators, I am on an 
appropriations committee, NRC Fiscal Year High Level Impacts of 
Further Reductions. In that document, it indicates that the NRC 
would delay domestic licensing actions prior to suspending the 
review of foreign reactor design for construction in a foreign 
company. How do you justify giving foreign work a higher 
priority than a domestic licensee's operational needs?
    Am I understanding that correctly, the statement that you 
made in that document?
    Mr. Burns. The document that the chairman referred to was 
developed at looking at potential impacts of rolling 
significant cuts to our budget request.
    Senator Capito. Right.
    Mr. Burns. And in one of them, yes, it does identify the 
Korean design certification that is under review. I think what 
we look at in terms of if we have cuts that go along those 
levels, or certain actions that we would have to go to look at 
in terms of the relative priority. I think that when it comes 
to the actual decision, the Commission would look at the 
priority of the particular items and things that are under 
review. Like, for example, on the backlog it may be a question 
of stretching out, again, the review versus saying we are not 
going to undertake that review.
    Senator Capito. And I guess the point of my question is I 
would think, just on the face of it, that one of the priorities 
that we would certainly like to see, and Senator Boxer has 
talked about this in terms of her State, is a domestic 
influence here, or not influence, a domestic priority over what 
might be occurring around the rest of the world.
    Anyway, I thank you for that and I thank you for the 
response.
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    Senator Inhofe. Thank you, Senator.
    Senator Whitehouse.
    Senator Whitehouse. Thank you.
    I would like to follow up on Senator Capito's questions 
about the backlog with some questions about what you might call 
the frontlog.
    People have been talking about modular nuclear reactors for 
decades. So far, not a single one has ever been approved by the 
NRC. I believe that the first likely one is the NuScale project 
coming up next year. There have been significant advances in 
nuclear next generation technology, the traveling wave 
technology. TerraPower is, to a large extent, Bill Gates' 
company. He is no idiot. He has not been able to develop that 
technology beyond the experimental. Not even beyond the 
experimental, beyond the theoretical stage in America. Instead, 
he has signed contracts with China's nuclear commission.
    And we are looking at, at a time when carbon pollution is 
probably going to be the disgrace of our generation, 4.2 
gigawatts of carbon-free power lost just in the last 2 years to 
decommissioning. Now, some of those decommissionings may have 
been necessary for safety purposes. It is obviously a case-by-
case scenario. I know our ranking member is very concerned 
about a plant in her State. But to the extent that these are 
viable plants that are providing carbon-free power and they are 
being decommissioned on economic grounds because nobody has 
bothered to figure out a way to price the carbon savings that 
they provide, we are losing a big piece of our fleet.
    So if you look at those three emerging things, the modular 
power, the next generation power, and the decommissioning that 
we are seeing, it doesn't look to me like you guys even have a 
windshield. You are living looking in your rearview mirrors at 
problems of the past, and I don't get why we seem to be behind 
or not paying attention in all of those three frontlog areas.
    Now, I am probably exaggerating for effect, but I feel some 
real frustration when American technologies get developed in 
China instead of here. I feel some real frustration when 
strategies for modular, which is basically still light water, 
it is not even a new technology, that we have talked about for 
decades, are still backed up; and we are looking at the very 
first certifications a year from now, after decades, and when 
we see these plants being decommissioned with no evident review 
as to the significance of their carbon savings.
    So, great on the backlog. How about the frontlog?
    Mr. Burns. Thanks, Senator. I think we are looking forward 
and we are looking forward in some of those areas. We have to 
ensure the safety, obviously, of the existing fleet. We have to 
ensure that the plants that go into decommissioning are handled 
safely. But there are initiatives and there is work that we are 
doing with respect to both small modular and also advanced 
technology.
    Let me describe that a little bit, but one thing let me 
point out is that with respect to our ability to review or 
take, in effect, licensing type action on those new 
technologies, they have to come in with a sponsor who is ready 
to pay, basically pay the fees as we are required to collect 
under that. That is some of the challenge. I have had some 
discussions with the Department of Energy, because they have a 
role, too, in terms of the R&D part. We are the safety 
regulator; we have to give judgment to say are these types of 
concepts going forward.
    We recently had a very good workshop with the Department of 
Energy where we invited in people who are looking at this type 
of innovation, and there are things we can do with DOE, staying 
in our appropriate roles, that look at what are the types of 
safety issues that are different than the light water 
technology, and we are doing some of that.
    Senator Whitehouse. Would you agree as a general 
proposition that regulatory agencies have ways to preadapt 
regulatory processes to emerging technologies so that the 
emerging technology doesn't have to face a regulatory regime 
that was developed for an old technology but, rather, a more 
welcoming, equally rigorous, but welcoming in terms of fitting 
the new technology? I would love to know what steps you have 
taken to change the manner in which modular reactors will be 
certified in advance of this clearly oncoming means of giving 
us some clean power.
    Mr. Burns. Well, let me make two quick points. First, with 
respect to the NuScale design, they are coming in under what I 
will call the design certification process, and there has been 
a dialog with them as they prepare to submit the application to 
make sure that both sides' expectations meet. So that is one 
thing.
    The second thing I would say, and this is an item that came 
out of that workshop, is whether we are prepared to do more. 
While we are not giving the final license, if you will, the 
final certification, I think we can be responsible about making 
step-wise decisions that signal and indicate to developers and 
investors that we have looked at this aspect of the technology, 
we have issued a topical report or review on it, and that that 
looks OK, you can go to this step. That is the type of thing 
that they are looking for. I think within our framework we can 
do that because I would agree with you, we need to be 
adaptable.
    Senator Whitehouse. Thank you, Chairman.
    Senator Inhofe. Thank you, Senator Whitehouse.
    Senator Fischer.
    Senator Fischer. Thank you, Mr. Chairman.
    On July 15th I joined in a letter with Chairman Inhofe and 
other members of this committee to the Commission expressing 
concerns based largely on defense of NRC's existing backfit 
rule. This rule provides that before a new requirement can be 
added to an existing license facility, the NRC must demonstrate 
that the new requirement would result in a substantial increase 
in the protection of public health and safety, and that the 
direct and indirect costs of implementation for that facility 
are justified in view of this increased production.
    Commissioner Ostendorff, what policies or procedures are in 
place at the Commission level to ensure that the backfit rule 
is consistently applied in staff analysis and recommendations?
    Mr. Ostendorff. Senator Fischer, thank you for the 
question. If I may, let me address this in the context of a 
recent Commission decision I think that is very important. I 
referred to it in my opening statement, and that is the 
Mitigation of the Beyond Design Basis Event rulemaking, which 
brings together in one rule a large number of Fukushima-related 
action items.
    Our regulatory framework is predicated upon two essential 
notions. One, adequate protection. If something is required for 
adequate protection, then we don't take cost into account, 
period. And I wanted to say that because I know there was an 
exchange earlier Commissioner Baran had on this topic with 
Senator Boxer. Added protection, no costs are considered.
    If it is a lower safety issue, such as it does not rise to 
adequate protection, then it becomes under the backfit rule; is 
there a substantial safety enhancement that passes a cost-
benefit analysis. In the Mitigation for the Beyond Design Basis 
Event rulemaking, which overall the Commission approved that 
rule, there is one small part of it that the majority of the 
Commission did not approve because it did not pass the cost-
benefit analysis test using quantitative analyses, which were 
available, and that is the requirement for severe accident 
management guidelines.
    So I would say that the staff made a recommendation to the 
Commission in the spirit of an open collaborative work 
environment. We do not want to stifle the staff coming forward 
with a recommendation. At the end of the day, when it comes to 
the backfit rule, it is the Commission that makes the final 
decision. That is what we have done.
    Senator Fischer. OK. Thank you.
    Commissioner Baran, I see you nodding. Did you have 
comments you wanted to add to that?
    Mr. Baran. I don't think so. Commissioner Ostendorff 
mentioned severe accident management guidelines, and that was a 
situation where I disagreed with my colleagues. I thought the 
staff's analysis was the right one there. What we heard from 
both the staff and from our advisory committee on reactor 
safeguards was that the staff's quantitative analysis wasn't a 
complete picture of all the safety benefits of requiring SAMGS, 
as they are called. In other words, the staff didn't have all 
of the tools they would need to do a complete quantitative 
analysis that captured all the safety benefits.
    So, from my point of view, the staff, therefore, 
appropriately did a qualitative analysis to supplement the 
limited quantitative analysis, and when they did that analysis 
they found that it was a substantial safety enhancement. But as 
Commissioner Ostendorff pointed out, and I completely agree 
with this, it is ultimately a Commission decision about whether 
or not to accept that analysis, accept that recommendation. The 
staff's job is to lay out all of their analysis in a way that 
is transparent and understandable for decisionmakers and for 
stakeholders, and I think they did that here, and then the 
Commission made a decision about it.
    Senator Fischer. Commissioner Burns, as we look at the 
rulemaking process, I think really a critical first step in 
addressing the impacts when we look at a new regulatory 
requirement to be verified is to be safety significant and cost 
justified, and that is required by the NRC's backfit rule. But 
we have seen the NRC staff proposals that fall short of that. 
In fact, the NRC IG has noted, ``The agency may be vulnerable 
to errors, delays, wasted effort, and flawed decisionmaking 
because of the limited experience of its cost estimators. It 
also increases the potential to make less than optimal 
rulemaking decisions because the NRC Commission uses regulatory 
analysis to determine whether to move forward with 
rulemaking.''
    Do you agree that the Commission should, I guess, more 
closely scrutinize rulemaking initiation and how those 
rulemaking processes are prioritized so that you can better use 
staff time and resources on proposals that are brought forward 
by the staff?
    Mr. Burns. There is certainly an important role for the 
Commission in rulemaking, and one of the things I have done, we 
are expecting a paper from the staff very shortly, is taking a 
look at steps to assure greater involvement at more critical 
points in time of the Commission and rulemaking. So we will be 
deliberating on that over the next few months. But I would 
agree with you, Senator, it is important for our leadership 
role to assure that we take as a Commission a hard look at 
rules that we propose to impose.
    Senator Fischer. Well, I thank you for that, and I agree 
with you. I think it is especially important that the 
Commission provide scrutiny at the initiation of the rulemaking 
process. So thank you very much.
    Thank you, Mr. Chairman.
    Senator Inhofe. Thank you, Senator.
    Senator Markey.
    Senator Markey. Thank you, Mr. Chairman, very much.
    More than a year ago Senator Sanders and I wrote the 
Commission about why NRC's economists were improperly prevented 
by their supervisors from asking Entergy questions about 
whether Entergy had the financial resources to, if needed, deal 
with the safe operation of its reactors. In the Commission's 
response to us, NRC maintained that there was no ``direct link 
between safety and finances.'' It is time to revisit that 
statement.
    The Pilgrim Nuclear Power Station in Plymouth, 
Massachusetts, was recently placed in NRC's least safe 
operating reactor category because of repeated unplanned 
shutdowns and other safety problems. There are only three 
reactors in that category, and every single one of them is run 
by Entergy. In fact, of the 10 reactors Entergy operates, only 
4 are currently rated as being in NRC's safest categories.
    Moreover, financial analysts are openly saying that it 
isn't economical for Entergy to continue to operate Pilgrim and 
other reactors.
    Do any of you disagree that if NRC staff wants to renew 
their request to you so that they can receive detailed 
financial information from Entergy in order to determine 
whether Entergy has the money needed to safely operate its 
reactors, that they should not be allowed to do so? Mr. 
Chairman.
    Mr. Burns. There may be an appropriate circumstance in 
which we would do that. I would say on a day-to-day basis I 
want our inspectors in the plant looking at how activities are 
being carried out at the plant. I think that, for us, is the 
primary way to do it.
    I am not particularly familiar with the letter you and 
Senator Sanders sent, but, again, if there is an appropriate 
basis for us to do so, certainly we could do so.
    Senator Markey. I think this is a very suspicious 
situation, Mr. Chairman, when Entergy has three reactors in the 
same category and every single one of them is an Entergy plant, 
in this lowest category, and that analysts are wondering 
whether or not Entergy has the financial capacity to run the 
Pilgrim plant, that we give to the NRC staff the ability to be 
able to make that determination as to whether or not the 
financing capacity is there. Would you agree that that makes 
some sense?
    Mr. Burns. Again, I think there are circumstances in which 
it may be appropriate to do that. Whether that is here or not, 
I won't say.
    Senator Markey. OK. Commissioner Baran.
    Mr. Burns. But I want our inspectors on the ground.
    Senator Markey. OK. Commissioner Baran.
    Mr. Baran. Well, if the NRC staff thinks there is a nexus 
between underinvestment at a plant and safety problems at that 
plant, I think they should get the information they need to 
address that issue.
    Senator Markey. I agree with you.
    Do any of the other commissioners disagree with that?
    Mr. Ostendorff. Senator, just a comment. I had a chance, in 
June of this year, to visit Pilgrim, and I appreciate that one 
of your staff from Massachusetts attended that visit with me, 
and we spent a lot of time with the licensee looking at their 
operating performance. Subsequent to that visit, 2 months 
later, our staff made the recommendation to place them in 
column 4, as you noted in your comments. I would just observe 
that having spent quite a bit of time, along with other 
commissioners and senior staff, looking at this particular 
issue at Pilgrim, we have not assessed that there is a nexus 
between plant investment and operating performance.
    Senator Markey. Commissioner Baran, every time a reactor 
gets placed in a lower safety category by NRC, it gets 
subjected to more inspections and requirements, and those cost 
the industry money. There is currently a proposal in front of 
the Commission that would basically allow reactors to 
experience more safety problems before they fail into NRC's 
second worst safety category for operating reactors. Is that 
your read of the new proposal?
    Mr. Baran. The Commission is currently deliberating on 
whether to increase the number of white findings, or low to 
moderate significance findings, in the same cornerstone 
necessary to put a plant in column 3, so the proposal is to 
increase that from two findings to three findings, which would 
raise the bar for column 3.
    Senator Markey. My experience with nuclear power plants is 
that they age, and what has happened here is that each one of 
these plants keeps requesting an extension so that they can 
continue to operate longer and longer. But the older the plants 
get, the more problems they have; and the industry historically 
has tried to avoid having to make the additional investment in 
safety, because that is cost for them that they don't want to 
have to have factored in, the lifetime cost of keeping these 
plants safe.
    So, from my perspective, I just think that the NRC should 
listen to their staff, they should allow them to do the 
financial analysis of whether or not the actual overall 
financial well being of Entergy is in any way inhibiting their 
investment in the safety procedures that are needed, given the 
fact that Entergy has such a high percentage of the plants in 
America that are considered to be the least safe operating 
reactors in America.
    So that is my request to the Commission. I think you should 
give them permission, and I think we will get the answer we 
need. This linkage between financial viability of a corporation 
and the investment they make in safety. It is pretty clear here 
it is an issue that has to be answered, and soon.
    Senator Inhofe. Thank you, Senator Markey.
    Senator Barrasso.
    Senator Barrasso. Thank you very much, Mr. Chairman.
    Chairman Burns, the EPA has proposed a rule to set forth 
groundwater protection standards for uranium recovery 
facilities. I believe the EPA proposal ignores the successful 
40-year history of in situ recovery projects. It imposes 
numerous overly stringent standards that would jeopardize the 
future of the uranium recovery industry in the United States. I 
believe the EPA is once again asserting power over another area 
of the economy, even though they are not the primary agency 
that Congress created to manage and oversee uranium production. 
That role belongs to the NRC.
    So while I recognize EPA has some standard setting 
authority under the Uranium Mill Tailings Radiation Control 
Act, it is my understanding the NRC is charged with determining 
how to implement these standards, and the question is has the 
NRC adequately looked at this issue.
    Mr. Burns. Thank you, Senator. I think we have looked at 
the issue with respect to the proposed changes to the EPA 
regulations, I think in 40 CFR part 192, and our general 
counsel has submitted commentary with respect to that.
    Senator Barrasso. Do you feel the NRC was adequately 
consulted on the rulemaking?
    Mr. Burns. I think we had an opportunity to provide input, 
which we did, on it. That is what the general counsel's letter 
does.
    Senator Barrasso. Any other members want to jump in on 
that, whether the NRC was adequately consulted?
    Mr. Ostendorff. I would just add that I think the NRC and 
EPA have a very solid ongoing working relationship. We have, 
however, as an agency, identified concerns with perhaps their 
regulatory footprint going into our jurisdictional issues in 
dictating how certain methods are to be used by our licensees, 
and that causes us concern. But I think we understand the EPA 
will be talking to us about our concerns here in the near 
future.
    Senator Barrasso. Because I know the NRC has indicated in a 
July 28th letter to the EPA that the proposed rule ``may 
encroach upon the NRC's authority.'' So I wonder has the NRC 
met with the EPA specifically to discuss the concerns. You said 
you are going to meet with them in the near future? What is the 
plan on that based on that July 28th letter?
    Mr. Burns. My understanding from our general counsel is 
that we met on preliminary basis, but there is the intention to 
have future meetings on the subject.
    Senator Barrasso. Because a 2009 NRC memo from staff 
entitled Staff Assessment of Groundwater Impacts from 
Previously Licensed In Situ Uranium Recovery Facilities states 
that the staff is unaware of any situation indicating that the 
quality of groundwater at a nearby water supply well has been 
degraded, any situation where the use of a water supply well 
has been discontinued, or any situation where a well has been 
relocated because of impacts attributed to an ISR facility. So 
the question is has there ever been a leak that you know of 
from uranium in situ recovery facility that impacted drinking 
water?
    Mr. Burns. Not that I am aware. I could check with our 
staff.
    Senator Barrasso. OK. That is the recent staff report from 
a couple of years ago.
    So, Chairman Burns, in April I asked you about the length 
of time that it should take to review an application for a new 
uranium recovery facility, and your response you concluded was 
I think this is an area I am willing to look at and see. We are 
trying to do a better job. And I agree with you.
    This is what we found from information that we requested 
from the NRC. By our math, the agency takes an average of 3 
years to review an application for a new facility; one 
application took 5 years. I mean, that is longer that it took 
for the NRC to issue the licenses for the new nuclear plants in 
Georgia and South Carolina.
    So uranium recovery licenses are for 10 years, and there 
has to be a reapplication for a renewable. We found the NRC 
sometimes spends 5 years deciding whether to grant the 10-year 
license extension. So a company spends about half of its time 
paying for license reviews.
    Is a uranium recovery facility as complicated as a nuclear 
power plant? And if not, why should it take a comparable, if 
not longer, amount of time to review a license application than 
it does for a nuclear power plant?
    Mr. Burns. I think, Senator, in some of the circumstances 
the requirements on consultation under the National Historic 
Preservation Act, those requirements, because of the 
consultations, have to be done with local tribes, those have 
been extensive.
    What I understand from talking to our staff, a couple areas 
where I think we have seen some improvement in that area is, 
one, encouraging the license applicant to have dialog with 
local community. Second, we have been focused also on improving 
our processes with request to this consultation process. We 
issued recently a tribal protocol in terms of helping our 
communications. I think that is going to help in that area, but 
it is something I think we can continue to work on.
    Senator Barrasso. So finally, then, would a longer license 
duration, rather than the 10 years, a longer duration, help the 
NRC manage its workload better?
    Mr. Burns. That is a possibility. We would have to take a 
look at that.
    Senator Barrasso. Thank you.
    Thank you, Mr. Chairman.
    Senator Inhofe. Thank you, Senator Barrasso.
    Senator Boxer, I think you want to submit something for the 
record.
    Senator Boxer. Yes. I just wanted to thank you for this 
hearing and thank the Commission and all of our colleagues.
    I ask unanimous consent to place in the record an 
explanation of the rulemaking that Senator Barrasso talked 
about. We want to make sure that the water is safe when you 
have this uranium mining. I think the EPA could go either way; 
they could do a rule under the Uranium Mill Tailing Radiation 
Control Act or under the Safe Drinking Water Act. So I just 
want to put that in the record.
    Senator Inhofe. Thank you. Without objection, it will be in 
the record.
    [The referenced information was not received at time of 
print.]
    Senator Inhofe. Let me just say to the four commissioners, 
first of all, thank you for being here. You are doing a good 
job in some areas, but the big concern that gave birth to this 
hearing is that when you are looking at operating reactors 
dropping down from 105 to 99, licensed action going down from 
1,500 to 900, material licensees 4,500 to 3,200, licensed 
renewals 43 percent down at the same time, there should be cuts 
in the budget commensurate with this lighter workload.
    I know that Project Aim is supposed to be helping us to do 
that, but I don't think anyone on our side over here is 
satisfied with the progress that we have made so far, and I 
want to make sure that you leave with that message and that you 
continue on this and come up in a very short period of time 
with better results that respond to what we refer to as the 
workload and financial concern. And I thank you very much for 
the hearing today. Thank you, Chairman Burns.
    Mr. Burns. Thank you.
    Senator Inhofe. We are adjourned.
    [Whereupon, at 10:58 a.m., the committee was adjourned.]
    [An additional statement submitted for the record follows:]

                  Statement of Hon. Bernard Sanders, 
                 U.S. Senator from the State of Vermont

    Although this hearing will cover a range of important 
issues, the issue that is of the greatest concern to me is the 
Vermont Yankee nuclear power plant in Vernon, Vermont, and the 
process involved in decommissioning the plant.
    Since the plant's operator, Entergy, announced its plan to 
close Vermont Yankee in August 2013, we have turned our 
attention to employing the safest measures for decommissioning 
and to protecting the livelihood of Vermont Yankee's employees 
and the communities in which they live. There has been a strong 
desire on the part of Vermonters to participate in the 
decommissioning process to ensure a complete, full, and safe 
decommissioning.
    I have voiced my very serious concerns regarding the lack 
of input communities in Vermont have in the decommissioning 
process. I have said time and again that these communities 
deserve a seat at the table, and have introduced legislation 
that would allow States and cities to provide meaningful 
feedback during the decommissioning process.
    It is my understanding that most of the conversation 
surrounding Vermont Yankee's decommissioning plan has been 
between Nuclear Regulatory Commission staff and members of the 
Nuclear Energy Institute, which includes Entergy--to the 
exclusion of the State government and local communities that 
house the plant. This is simply unacceptable. I believe that it 
is unconscionable that the NRC would deny Vermonters the 
opportunity to participate in the decommissioning plan--a plan 
that will affect their day to day lives and livelihoods for 
generations.
    Even more unsettling than the lack of communication with 
local stakeholders is that Entergy has been allowed to take 
money out of its decommissioning fund for spent fuel 
management, even though NRC regulations expressly disallow the 
use of decommissioning funds for spent fuel management. \1\ To 
my mind, this is a misuse of funds and could potentially put 
Vermonters on the hook if Vermont Yankee is unable to cover the 
costs remaining for full decommissioning. If the company goes 
bankrupt in the process of decommissioning the plant, then 
Vermonters will be responsible for finishing the job, which 
includes at this point, managing spent nuclear fuel.
    There is little assurance that Entergy itself will still be 
around 60 years from now or that the cost of decommissioning 
won't skyrocket between now and then. Vermont is counting on 
the NRC to play the role it needs to play and look out for our 
communities' interests, not just Vermont Yankee's. I intend to 
hold them accountable.
    The NRC rules allowing for a 60-year decommissioning 
process were adopted many years ago. We now know more about 
nuclear plant safety and degradation issues than we did when 
the regulations were first promulgated. Yet, unfortunately, the 
Commission's regulations have not addressed those issues. I 
look forward to working with the committee to ensure the NRC's 
decommissioning process addresses the full span of the NRC's 
obligation to protect communities across the country.
    I encourage my colleagues to cosponsor and support my bill 
(the Nuclear Plant Decommissioning Act) that would give States 
a seat at the table and to require the NRC to represent the 
interests of the communities that are dealing with 
decommissioning plants like Vermont Yankee.
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    \1\ ``Amounts are based on activities related to the definition of 
`Decommission' in Sec. 50.2 of this part and do not include the cost of 
removal and disposal of spent fuel or of nonradioactive structures and 
materials beyond that necessary to terminate the license.'' 10 CFR 
50.75(h)(1)(iv) n. 1.
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