[Congressional Record Volume 143, Number 39 (Monday, April 7, 1997)]
[Senate]
[Pages S2797-S2799]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




          CONGRESSIONAL BUDGET OFFICE COST ESTIMATE OF S. 104

 Mr. MURKOWSKI. Mr. President, in compliance with paragraph 
11(a) of rule XXVI of the Standing Rules of the Senate, the Committee 
on Energy and Natural Resources has obtained a letter from the 
Congressional Budget Office containing an estimate of the costs of S. 
104, the Energy Policy and Conservation Amendment Act, as reported from 
the committee. In addition, pursuant to Public Law 104-4, the letter 
contains the opinion of the Congressional Budget Office regarding 
whether S. 104 contains intergovernmental mandates as defined in that 
act. I respectfully request that the opinion of the Congressional 
Budget Office be printed in the Record.
  The opinion follows:

                                                    U.S. Congress,


                                  Congressional Budget Office,

                                   Washington, DC, March 21, 1997.
     Hon. Frank H. Murkowski,
     Chairman, Committee on Energy and Natural Resources, U.S. 
         Senate, Washington, DC.
       Dear Mr. Chairman: The Congressional Budget Office has 
     prepared the enclosed cost estimate for S. 104, the Nuclear 
     Waste Policy Act of 1997.
       If you wish further details on this estimate, we will be 
     pleased to provide them. The CBO staff contact is Kim Cawley.
           Sincerely,
                                                  June E. O'Neill,
                                                         Director.
       Enclosure.


               congressional budget office cost estimate

     S. 104--Nuclear Waste Policy Act of 1997
       Summary: S. 104 would amend the Nuclear Waste Policy Act by 
     directing the Department of Energy (DOE) to begin storing 
     spent nuclear fuel and high-level nuclear waste at an interim 
     facility in Nevada no later than November 30, 1999. The bill 
     would direct DOE to continue site characterization activities 
     at the proposed permanent repository site at Yucca Mountain, 
     also in Nevada. Title IV would modify how the nuclear waste 
     program is funded after 2002.
       Assuming appropriation of the necessary amounts, CBO 
     estimates that implementing S. 104 would cost about $4 
     billion over the 1997-2002 period. (The increase in 1997 
     spending only would be about $15 million.) In addition, 
     enacting the bill would affect direct spending--but not until 
     2002. Because S. 104 would not affect direct spending or 
     receipts in either 1997 or 1998, pay-as-you-go procedures 
     would not apply.
       The state of Nevada and localities in the state would incur 
     some additional costs as a result of this bill, but CBO is 
     unsure whether the provisions causing those costs would be 
     considered intergovernmental mandates, as defined in the 
     Unfunded Mandates Reform Act of 1995 (UMRA). We estimate that 
     the costs incurred by state and local governments would total 
     significantly less than the threshold established in the law. 
     (UMRA set a threshold of $50 million for 1996, adjusted 
     annually for inflation).
       CBO estimates that S. 104 contains private-sector mandates 
     that exceed the $100 million threshold identified in UMRA.
       Estimated cost to the Federal Government: The estimated 
     budgetary impact of S. 104 over the next five years is shown 
     in the table below. CBO estimates that building and operating 
     an interim storage facility and continuing the study of the 
     Yucca Mountain site as authorized by the bill would require 
     appropriations of about $4 billion over the 1998-2002 period, 
     resulting in outlays of about $3.8 billion over that period. 
     In addition, section 401 would result in an increase in 
     offsetting receipts in 2002 because it would require certain 
     utilities to make a one-time payment of nuclear waste fees to 
     the government of about $2.7 billion before the end of fiscal 
     year 2002. Under current law, this payment is not expected to 
     be made until 2010 or later.
       S. 104 also would affect direct spending in later years by 
     ending the current mandatory nuclear waste fee. Lost receipts 
     would total about $630 million annually beginning in 2004.

----------------------------------------------------------------------------------------------------------------
                                                                     By fiscal years, in millions of dollars
                                                               -------------------------------------------------
                                                                 1997    1998    1999    2000    2001     2002
----------------------------------------------------------------------------------------------------------------
                                        SPENDING SUBJECT TO APPROPRIATION
 
Spending Under Current Law:
  Budget authority \1\........................................     382       0       0       0       0         0
  Estimated outlays...........................................     375      38       0       0       0         0
Proposed Changes:
  Authorization level.........................................       0     555   1,000     940     855       640
  Estimated outlays...........................................      15     490     782     894     917       751
Spending Under S. 104:
  Authorization Level \1\.....................................     382     555   1,000     940     855       640
  Estimated Outlays...........................................     390     528     782     894     917       751
 
                                           CHANGES IN DIRECT SPENDING
 
Estimated budget authority....................................       0       0       0       0       0    -2,700
Estimated outlays.............................................       0       0       0       0       0    -2,700
----------------------------------------------------------------------------------------------------------------
\1\ The 1997 level is the amount appropriated for that year.

       The costs of this legislation fall within budget functions 
     050 (defense) and 270 (energy).
       Basis of estimate: This estimate is based on DOE's program 
     plan issued on May 6, 1996, and on information from the 
     department concerning the costs of an interim storage 
     facility. For purposes of the estimate, CBO assumes that S. 
     104 will be enacted by July 1, 1997, and that the department 
     will proceed to develop an interim storage facility in Nevada 
     to accept waste beginning in fiscal year 2000, as authorized 
     by the bill. We assume that following the assessment of the 
     viability of the Yucca Mountain site as a permanent waste 
     repository, DOE would apply for a license from the Nuclear 
     Regulatory Commission (NRC) to construct a permanent nuclear 
     waste repository there in 2002, as detailed in the May 6, 
     1996, nuclear waste program plan.
     Spending subject to appropriation
       Yucca Mountain. S. 104 would direct DOE to proceed with its 
     Civilian Radioactive Waste Management Program Plan of May 
     1996. This plan calls for continuing with the evaluation of 
     the Yucca Mountain, Nevada site as a permanent repository for 
     nuclear waste, and applying for a license from the NRC to 
     construct a repository in 2002, if the site appears to be 
     viable for this use. Based on information from DOE, we 
     estimate this effort would cost about $330 million annually 
     over the 1998-2002 period.
       Interim Storage Facility. The bill would require DOE to 
     design and develop an interim nuclear waste storage facility 
     at the Nevada test site. Based on information from DOE, we 
     estimate the total costs of building, operating, and 
     transporting nuclear waste to the Nevada facility would be 
     about $2.3 billion over the 1997-2002 period, including $85 
     million appropriated in 1996. Spending from the existing $85 
     million appropriation was made contingent upon enactment of 
     an authorization of an interim nuclear waste repository, such 
     as S. 104.
       The facility would be built in two phases and designed to 
     accept 55,000 metric tons of uranium (MTU). Initially, the 
     facility would be designed to accept nuclear waste in special 
     storage canisters; later it would accept fuel without 
     canisters. If DOE does not apply for a license to construct a 
     permanent repository in 2002, or if DOE does not begin to 
     operate a permanent repository in 2010, the capacity could be 
     increased to 75,000 MTU. Based on information from DOE, CBO 
     estimates that the interim storage facility would initially 
     cost about $940 million to design, construct, and operate 
     over the 1997-2002 period. This amount includes annual 
     payments to Lincoln County, Nevada, of $2.5 million before 
     the first shipment of waste,

[[Page S2798]]

     and $5 million after waste shipments begin, as authorized by 
     section 201.
       The federal government would be responsible for all 
     transportation costs for shipping nuclear waste from nuclear 
     reactors to the interim storage facility by rail and heavy-
     haul trucks. Procurement of special shipping casts and waste 
     storage canisters would account for most of the initial 
     transportation costs. Based on information from DOE, we 
     estimate that waste transportation costs would total $1.4 
     billion over the 1997-2002 period. This amount includes $10 
     million annually over the 1997-1999 period for grants to 
     state, local, and tribal governments for emergency 
     transportation planning and training of public safety 
     personnel along routes used to ship waste to the Nevada 
     facility.
       Other Authorizations. Section 506 would direct the NRC to 
     establish regulatory guidance for the training and 
     qualifications of nuclear powerplant personnel. This 
     authorization could result in an increase in the NRC 
     workload, but would not result in a net cost to the 
     government because the NRC recovers all costs of regulating 
     the nuclear industry through user fees.
       Section 508 would authorize DOE to compensate the Dairyland 
     Power Cooperative for any cost related to the storage of 
     nuclear waste at the cooperative's La Crosse reactor site, 
     until this waste is removed for temporary storage or 
     disposal. Based on information from DOE, CBO estimates that 
     these storage costs would be $1 million to $2 million 
     annually over the 1998-2002 period.
       Section 509 would authorize such sums as are necessary to 
     establish a decommissioning pilot program to decommission and 
     decontaminate a sodium-cooled fast breeder experimental test-
     site reactor acquired by the University of Arkansas in 1976. 
     Based on information from the university, this activity could 
     cost $20 million and take about four years to complete, 
     assuming that all fuel has already been removed from the 
     facility.
       Section 602 would authorize continuation of the oversight 
     activities of the Nuclear Waste Technical Review Board. Based 
     on the board's ongoing work, CBO estimates this agency would 
     spend about $3 million annually over the 1998-2002 period, 
     assuming appropriation of the necessary amounts.
     Direct Spending
       Section 401(a)(3) would result in an earlier payment by 
     utilities to the government of about $2.7 billion in one-time 
     nuclear waste disposal fees. The bill would require these 
     fees to be paid no later than the end of fiscal year 2002. 
     Utilities that fail to make these payments in 2002 would have 
     their nuclear operating permits suspended by the Nuclear 
     Regulatory Commission. Under current law, these one-time fee 
     payments, along with accrued interest, are due prior to 
     the delivery of nuclear waste to a government storage or 
     disposal facility. Currently, DOE does not expect such a 
     facility to be available until 2010 or later. Thus, the 
     bill would accelerate the payment of these one-time fees 
     by at least 8 years. While this change would result in 
     budgetary savings in 2002, the government would derive no 
     significant benefit over the long run because it would 
     otherwise receive the same amount later, with interest.
       Starting in fiscal year 2004, section 401(a)(2) would limit 
     the aggregate fees the government charges each year to 
     electric utilities for disposal of nuclear waste to no more 
     than the amount appropriated from the nuclear waste fund that 
     year. CBO estimates that, under current law, income from 
     these fees would total $630 million annually over the 2004-
     2007 period and would decline in subsequent years as nuclear 
     power plants are decommissioned. Because S. 104 would make 
     annual fees dependent on future appropriations action after 
     2003, CBO cannot assume their collection for the purpose of 
     estimating the budgetary impact of the bill. Therefore, we 
     estimate that the bill would cause a loss of offsetting 
     receipts (that is, an increase in direct spending) of $630 
     million a year from 2004 to 2007 and of smaller amount in 
     subsequent years.
       In sum, CBO estimates that enacting the bill would decrease 
     direct spending by $2.7 billion in 2002, but would increase 
     direct spending by $2.5 billion over the following five 
     years.
       Pay-as-you-go considerations: None.
       Estimated impact on state, local, and tribal governments: 
     Mandates. CBO is unsure whether the bill contains 
     intergovernmental mandates, as defined in UMRA, but we 
     estimate that costs incurred by state, local, and tribal 
     governments as a result of the bill would total significantly 
     less than the threshold established in the law. (UMRA 
     established a threshold of $50 million for 1996, adjusted 
     annually for inflation.)
       While S. 104 would, by itself, establish no new enforceable 
     duties on state, local, or tribal governments, constructing 
     and operating an interim storage facility, as required by the 
     bill, probably would increase the cost to the state of Nevada 
     of complying with existing federal requirements. CBO cannot 
     determine whether these costs would be considered the 
     direct costs of a mandate as defined by UMRA.
       Based on information provided by state officials, CBO 
     expects that state spending would increase by as much as $30 
     million per year until shipments to the facility begin 
     (assuming that they begin in fiscal year 2000) and $5 million 
     per year between that time and the time that the permanent 
     facility at Yucca Mountain begins operations. This additional 
     spending would support a number of activities, including 
     emergency response planning and training, escort of waste 
     shipment, and environmental monitoring. In addition, spending 
     by Nevada counties for similar activities would probably 
     increase, but by much smaller amounts. Not all of this 
     spending would be for the purpose of complying with federal 
     requirements.
       These costs are similar to those that the state would 
     eventually incur under current law as a result of the 
     permanent repository planned for Yucca Mountain. DOE 
     currently does not expect to begin receiving material at a 
     permanent repository until at least 2010, while S. 104 would 
     require that it begin to receive material at an interim 
     facility in fiscal year 2000. As a result, the state would 
     have to respond to the shipment and storage of waste at least 
     ten years sooner than under current law. Further, the state's 
     costs would increase because it would have to plan for two 
     facilities.
     Other impacts
       Federal Payments to State and Local Governments. S. 104 
     would authorize payments to Lincoln County, Nevada, of $2.5 
     million in each year before waste is shipped to the interim 
     facility and $5 million annual after shipments begin. In 
     addition, the bill identifies several parcels of land that 
     would be conveyed to Lincoln County and Nye County, Nevada by 
     the federal government.
       The state of Nevada might lose payments from the federal 
     government if S. 104 is enacted, while Indian tribes might 
     receive payments. The bill would amend section 116 of the 
     Nuclear Waste Policy Act, which authorizes payments to the 
     state of Nevada and to local governments within the state. 
     Section 116 currently authorizes DOE to make grants to these 
     governments to enable them to participate in evaluating and 
     developing a site for a permanent repository and to offset 
     any negative impacts of such a site. S. 104 would authorize 
     such payments only to affected local governments and Indian 
     tribes, not to the state.
       In recent years, Congress has appropriated amounts ranging 
     from $12 million to $15 million per year under this section 
     for Nevada and for local governments in the state. For the 
     current fiscal year, however, the Energy and Water 
     Development Appropriations Act, 1997 (Public Law 104-206) 
     prohibits DOE from making any such payments to the state 
     or to local governments.
       Transportaton. S. 104 would also amend the provision in 
     current law that directs DOE to provide technical assistance 
     and funds for training of public safety officials to state 
     and local governments and Indian tribes through whose 
     jurisdictions radioactive material would be transported. This 
     bill would specifically authorize planning grants of $150,000 
     for each such state and Indian tribe as well as annual 
     implementation grants. CBO estimates that these grants would 
     total about $10 million per year over the 1997-1999 period. 
     Further, the bill would prohibit shipments through the 
     jurisdiction of any state or tribe that has not received 
     technical assistance and funds for at least two years.
       The state of Nevada could incur substantial additional 
     costs relating to road construction and maintenance as a 
     result of the shipment of waste by heavy-haul truck from the 
     transfer facility in Caliente to the interim storage 
     facility. Based on information provided by DOE, however, CBO 
     expects that the federal government would pay most of these 
     costs.
       Estimated impact on the private sector: CBO has identified 
     private-sector mandates in the bill that would accelerate the 
     payment of certain fees by private nuclear utilities and 
     impose new training standards and requirements on workers. 
     CBO estimates that the direct costs of these private-sector 
     mandates would exceed the statutory threshold established in 
     UMRA ($100 million in 1996, adjusted annually for inflation) 
     in 2002. Because the bill would direct the federal government 
     to begin storing nuclear waste at an earlier date than is now 
     anticipated, the direct costs of these new mandates could be 
     at least partially offset by savings to private nuclear 
     utilities that would no longer have to pay for this storage.
       Fourteen nuclear utilities have chosen the option, 
     available to them under current law, to delay payment of 
     certain one-time disposal fees and to pay the federal 
     government the required additional interest. S. 104 would 
     require nuclear utilities to accelerate payment of those fees 
     to the government. CBO assumes that nuclear utilities would 
     make the required payment of about $2.7 billion to the 
     government in 2002, which would be considered the direct cost 
     of a private-sector mandate, as defined in UMRA. Under 
     current law, such payments would be paid in 2010 or later, 
     when DOE opens a permanent storage facility to accept nuclear 
     waste.
       Acceleration of these payments would likely result in a 
     real economic loss to the utilities over the long run because 
     interest on the payments is accruing at the rate paid on 
     Treasury bills, which is lower than the market rate of 
     interest. The industry does, however, expect to experience 
     significant savings under S. 104 if interim storage 
     facilities begin to accept nuclear waste in fiscal year 2000. 
     Currently, spent nuclear fuel is stored at nuclear reactor 
     sites around the country. Thus, nuclear utilities would save 
     storage costs upon transfer of the nuclear waste to a federal 
     facility.
       S. 104 would also impose a mandate by requiring that the 
     Secretary of Transportation

[[Page S2799]]

     establish training standards applicable to workers directly 
     involved in the removal, transportation, interim storage, and 
     permanent disposal of spent nuclear fuel and high-level 
     radioactive waste. These workers, under current law, are 
     already required to undertake extensive training. Based on 
     information provided by industry experts, CBO estimates that 
     the added costs of this mandate would be minimal. In 
     addition, these costs could be partially offset by 
     appropriated funds designated to cover training costs. 
     Section 203(c) would direct the Secretary of Energy to 
     provide technical assistance and funds for training directly 
     to nonprofit employee organizations and joint labor-
     management organizations that implement safety and training 
     requirements under this bill.
       Estimate prepared by: Federal Cost: Kim Cawley. Impact on 
     State, Local, and Tribal Governments: Marjorie Miller. Impact 
     on the Private Sector: Lesley Frymier.
       Estimate approved by: Robert A. Sunshine, Deputy Assistant 
     Director for Budget Analysis.

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