[Congressional Record Volume 142, Number 104 (Tuesday, July 16, 1996)]
[Senate]
[Pages S7895-S7897]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. McCAIN (for himself, Mr. Feingold, Mr. Gregg, and Mr. 
        Kerry):
  S. 1958. A bill to terminate the Advanced Light Water Reactor 
Program,

[[Page S7896]]

and for other purposes; to the Committee on Energy and Natural 
Resources.


      the advanced light water reactor program funding act of 1996

 Mr. McCAIN. Mr. President, this legislation would terminate 
funding for the Advanced Light Water Reactor [ALWR] Program which 
provides taxpayer funded subsidies to corporations for the design, 
engineering, testing, and commercialization of nuclear reactor designs.
  I am very pleased that Senators Feingold, Gregg, and Kerry have 
joined me as original cosponsors on this important legislation and I 
urge our colleagues to support us in ending this wasteful Government 
spending and corporate welfare. Organizations such as Public Citizen, 
Citizens Against Government Waste, Competitive Enterprise Institute, 
Taxpayers for Common Sense, and the Heritage Foundation have lent their 
strong support to eliminating ALWR funding. And last year, a bipartisan 
Senate coalition, with the help of the Progressive Policy Institute and 
Cato Institute, included the ALWR Program as one of a dozen high 
priority corporate pork programs to be eliminated.
  Although, the ALWR Program has already received more than $230 
million in Federal support over the past 5 years and is due to be 
completed at the end of fiscal year 1996, the Department of Energy has 
requested $40 million for the ALWR Program in fiscal year 1997. The 
House appropriations subcommittee recently marked up the fiscal 1997 
energy and water appropriations bill and provided $17 million in 
corporate subsidies for commercialization efforts under the ALWR 
Program. The Senate appropriations subcommittee has appropriated $22 
million for the design certification phase of the ALWR Program.
  The ALWR Program was created under the Energy Policy Act [EPACT] of 
1992. EPACT makes clear that design certification support should only 
be provided for ALWR designs that can be certified by the Nuclear 
Regulatory Commission by no later than the end of fiscal year 1996. DOE 
has acknowledged that no ALWR designs will be certified by the end of 
fiscal year 1996. Therefore, under EPACT, no funds should be 
appropriated to support ALWR designs.
  In addition, although EPACT specifies that no entity shall receive 
assistance for commercialization of an advanced light water reactor for 
more than 4 years, DOE's fiscal year 1997 funding request would allow 
for a fifth year of Federal financial assistance to the program's chief 
beneficiaries--well to do corporations which can afford to bear 
commercialization costs on their own. General Electric, Westinghouse, 
and Asea Brown Boveri/Combustion Engineering have already received 4 
years of Federal assistance under the ALWR program since at least 1993. 
Significantly, these three companies had combined 1994 revenues of over 
$70 billion and last year their combined revenues exceeded $100 
billion. These corporations certainly can afford to bring new products 
to the market without taxpayer subsidies.
  Moreover, one of the primary recipients of ALWR Program funds, 
General Electric, recently announced that it is cancelling its 
Simplified Boiling Water Reactor [SBWR] after receiving $50 million 
from DOE because ``extensive evaluations of the market competitiveness 
of a 600 MWe size advanced Light Water Reactor have not established the 
commercial viability of these designs.'' Westinghouse's AP-600, a 
similarly designed reactor scheduled to receive ALWR support, is a 
similar sized design facing similar market forces that led GE to cancel 
the SBWR.
  Mr. President, the ALWR Program exemplified the problems and 
unfairness corporate welfare engenders. If the ALWR designs are 
commercially feasible, large, wealthy corporations like Westinghouse do 
not need taxpayers to subsidize them because the market will reward 
them for their efforts and investment in this research. If the ALWR 
designs are not commercially viable, then the American taxpayer is 
unfairly being forced to pay for a product, in complete defiance of 
market forces, that a company would not pay to produce itself.
  As a matter of fundamental fairness, we cannot ask Americans to 
tighten their belts across-the-board to put our fiscal house in order 
while we provide taxpayer funded subsidies to large corporations. As a 
practical matter, such unnecessary and wasteful Government spending 
must be eliminated if we are to restore fiscal sanity. Simply put, 
corporate welfare of this kind is unfair to the American taxpayer, it 
increases the deficit and we cannot allow it to continue.
  Enough is enough. After 5 years and $230 million, it is time that we 
bring the ALWR Program to an end.
  I ask unanimous consent that copies of letters from Citizens Against 
Government Waste, Public Citizen and Competitive Enterprise Institute 
supporting this legislation be included in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:


                                               Public Citizen,

                                     Washington, DC June 25, 1996.
     Senator John McCain,
     U.S. Senate,
     Washington, DC.
       Dear Senator: We are pleased to support your efforts to 
     terminate further government support for the Advanced Light 
     Water Reactor (ALWR) program at the U.S. Department of 
     Energy. The ALWR program, having received five years of 
     support and more than $230 million of taxpayer money, is a 
     prime candidate for elimination in the coming budget cycle. 
     It represents a textbook example of corporate welfare, 
     provides little value to taxpayers and fails to account for 
     the fact that domestic interest in new nuclear technologies 
     is at an all-time low.
       As of today, not one utility or company participating in 
     the ALWR program has committed to building a new reactor in 
     this country nor are there any signs that domestic orders 
     will be forthcoming in the foreseeable future. Instead of 
     providing reactors for American utilities, the ALWR program 
     has become an export promotion subsidy for General Electric, 
     Westinghouse and Asea Brown Boveri in direct violation of the 
     intent of the Energy Policy Act. These companies, with 
     combined annual revenues of over $70 billion, are hardly in 
     need of such generous financial support.
       Continuing to fund the ALWR program would send a strong 
     message that subsidies to large, profitable corporations are 
     exempt from scrutiny while other programs in the federal 
     budget are cut to reach overall spending targets. The 
     industry receiving this support is mature, developed and 
     profitable and should be fully able to invest its own money 
     in bringing new products to market.
       This legislation is consistent with your long-standing 
     campaign to eliminate wasteful and unnecessary spending in 
     the federal budget. We salute your effort and offer our help 
     in pruning this subsidy from the fiscal year 1997 budget.
           Sincerely,
                                                    Bill Magavern,
     Director, Critical Mass Energy Project.
                                                                    ____



                             Competitive Enterprise Institute,

                                    Washington, DC, June 14, 1996.
     Hon. John McCain,
     U.S. Senate,
     Washington, DC.
       Dear Congressman McCain: I wish to commend you for your 
     efforts to eliminate funding for Advanced Light Water Reactor 
     (ALWR) research. As a longtime opponent of federal subsidies 
     for energy research of this kind, I am glad to see members of 
     Congress representing the interests of the taxpayer on this 
     issue.
       Since 1992, the Department of Energy has spent over $200 
     million on ALWR research, with little to show for it. If such 
     reactors are commercially viable, as supporters claim, then 
     there is no need to waste taxpayer dollars on what amounts to 
     corporate welfare. If the ALWR is not commercially viable, 
     then throwing taxpayer dollars at it is even more wasteful. 
     The fact that no utility plans to build such a reactor in 
     this country any time soon suggests that the latter is more 
     likely. Either way, federal funding for this program should 
     end.
       I full support your efforts to eliminate the ALWR research 
     subsidy and hope that this effort is the first step in the 
     eventual elimination of the Department of Energy as a whole.
           Sincerely,
                                               Fred L. Smith, Jr.,
                                                        President.
                                              Council for Citizens


                                     Against Government Waste,

                                    Washington, DC, June 18, 1996.
     Hon. John McCain,
     U.S. Senate
     Washington, DC.
       Dear Senator McCain: On behalf of the 600,000 members of 
     the Council for Citizens Against Government Waste (CCAGW), I 
     am writing to urge you to introduce legislation to eliminate 
     the Advanced Light Water Reactor (ALWR) program. This program 
     has already surpassed its authorized funding level, and 
     extending its funding will exceed the goals of the Energy 
     Policy Act of 1992 (EPACT).
       In 1992, EPACT authorized $100 million for first-of-a-kind 
     engineering of new reactors. In addition, EPACT specified 
     that the Department of Energy should only support advanced 
     light water reactor designs that could be certified by the 
     Nuclear Regulatory Commission no later than the end of FY 
     1996.
       In a surprise announcement on February 28, 1996, General 
     Electric (GE) terminated

[[Page S7897]]

     one of its taxpayer-subsidized R&D light water reactor 
     programs (the simplified boiling water reactor), stating that 
     the company's recent internal marketing analyses showed that 
     the technology lacked ``commercial viability.'' Westinghouse, 
     which is slated to receive ALWR support between FYs 1997-99 
     for its similar AP-600 program, is not expected to receive 
     design certification until FY 1998 or FY 1999. Taxpayers 
     should not be expected to throw money at projects with little 
     or no domestic commercial value.
       EPACT also stipulates that recipients of any ALWR money 
     must certify to the Secretary of Energy that they intend to 
     construct and operate a reactor in the United States. In 
     1995, the Nuclear Energy Institute's newsletter, Nuclear 
     Energy Insight, reported that ``all three [ALWR] designers 
     see their most immediate opportunities for selling their 
     designs in Pacific Rim countries.'' In fact, GE has sold two 
     reactors developed under this program to Japan, and still the 
     government has not recovered any money.
       As you may recall, CCAGW endorsed your corporate welfare 
     amendment, including the elimination of the ALWR program, to 
     the FY 1996 Budget Reconciliation bill. We are again looking 
     to your leadership to introduce legislation to now eliminate 
     this program. I also testified before the House Energy and 
     Environment Subcommittee on Science on May 1, 1996 calling 
     for the elimination of the ALWR. The mission has been 
     fulfilled, now the program should end.
           Sincerely,
                                                 Thomas A. Schatz,
                                                President.
                                 ______