[Congressional Record Volume 145, Number 96 (Thursday, July 1, 1999)]
[Senate]
[Pages S8077-S8078]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                      CBO COST ESTIMATE OF S. 1287

  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. 1287, the 
Nuclear Waste Policy Amendments Act of 1999, 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 the S. 1287 contains intergovernmental mandates as defined in 
that Act. I ask unanimous consent that the opinion of the Congressional 
Budget Office be printed in the Record.
  There being no objection, the opinion was ordered to be printed in 
the Record, as follows:
                                                    U.S. Congress,


                                  Congressional Budget Office,

                                    Washington, DC, June 14, 1999.
     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 the Nuclear Waste 
     Policy Amendments Act of 1999.
       If you wish further details on this estimate, we will be 
     pleased to provide them. The CBO staff contacts are Kim 
     Cawley (for federal costs), who can be reached at 226-2860, 
     and Marjorie Miller (for state and local impact), who can be 
     reached at 225-3220.
           Sincerely,
                                                   Dan L. Crippen.
       Enclosure.
       Summary: This bill would amend the Nuclear Waste Policy Act 
     by directing the Department of Energy (DOE) to make a final 
     decision by December 31, 2001, whether to recommend to the 
     President that the Yucca Mountain site in Nevada be developed 
     as a permanent waste repository. The bill would, under 
     certain conditions, provide for storage of waste at Yucca 
     Mountain before a permanent repository is completed, and 
     would allow DOE to enter into agreements with nuclear 
     utilities to assume responsibility for some waste at a 
     utility's current storage site. In addition, the bill would 
     authorize training programs and grants to states to prepare 
     for transshipment of nuclear waste, and it would authorize 
     the establishment of an Office of Spent Fuel Research in DOE.
       Assuming appropriation of the necessary amounts, CBO 
     estimates that implementing this legislation would cost about 
     $1.9 billion over the 2000-2004 period to continue DOE's 
     efforts to characterize the Yucca Mountain site and submit a 
     license application to the Nuclear Regulatory Commission 
     (NRC). Enacting this bill would not affect direct spending or 
     receipts; therefore, 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 (UMRA). We estimate that the 
     costs incurred by state and local governments would total 
     significantly less than the threshold established in the law 
     ($50 million in 1996, adjusted annually for inflation). This 
     bill contains no new private-sector mandates as defined in 
     UMRA.
       Estimated cost to the Federal Government: The estimated 
     budgetary impact of this bill is shown in the following 
     table. The costs of this legislation fall within budget 
     functions 270 and 050 (energy and defense).

                [By fiscal year, in millions of dollars]
------------------------------------------------------------------------
                                 1999   2000   2001   2002   2003   2004
------------------------------------------------------------------------
                    SPENDING SUBJECT TO APPROPRIATION
Spending on Nuclear Waste
 Disposal Under Current Law:
    Budget Authority \1\......    358      0      0      0      0      0
    Estimated Outlays.........    324     55      0      0      0      0
Proposed Changes:
    Estimated Authorization         0    390    365    340    430    455
     Level....................
    Estimated Outlays.........      0    312    370    345    412    450
Spending on Nuclear Waste
 Disposal Under the Bill:
    Estimated Authorization       358    390    365    340    430    455
     Level \1\................
    Estimated Outlays.........    324    367    370    345    412    450
------------------------------------------------------------------------
\1\ The 1999 level is the amount appropriated for that year.

       Basis of estimate: This estimate is based on DOE's current 
     plan for the nuclear waste program, issued in July 1998. For 
     purposes of this estimate, CBO assumes the bill will be 
     enacted before the end of fiscal year 1999. We assume DOE 
     will apply to the NRC for authorization to build a permanent 
     repository at the Yucca Mountain site by March 31, 2002, so 
     that the NRC may decide whether to authorize construction by 
     December 31, 2006, as directed by section 101 of this bill.
       Yucca Mountain. This legislation would authorize DOE to 
     proceed with its Civilian Radioactive Waste Management 
     Program plan of July 1998. This plan calls for continuing to 
     evaluate the Yucca Mountain site as a permanent repository 
     for nuclear waste and applying for a construction license 
     from the NRC in 2002, if the site appears to be viable for 
     this use. Based on information from DOE, CBO estimates that 
     this effort would require appropriations averaging nearly 
     $400 million annually and totaling about $2 billion over the 
     2000-2004 period. Substantial additional costs would be 
     incurred after 2004 to construct and operate a nuclear waste 
     repository at Yucca Mountain if the NRC issues a license to 
     the department. In its December 1998 report, Analysis of the 
     Total System Life Cycle Cost of the Civilian Radioactive 
     Waste Management Program, DOE estimates the future cost to 
     complete the program is ``approximately $26.6 billion, in 
     constant 1998 dollars from 1999 through closure and 
     decommissioning, assumed to be in 2116.''
       Backup storage. Section 102 would direct DOE to take title 
     to any amounts of nuclear waste that the NRC determines 
     cannot be stored at a utility's site, provided that such a 
     utility would agree to waive any claim for damages against 
     the United States because of DOE's failure to begin disposing 
     of waste in 1998. DOE would be directed to transport this 
     waste to the Yucca Mountain site following NRC authorization 
     to construct a permanent repository there, or to transport it 
     to a privately run facility for nuclear waste storage. DOE 
     could incur additional discretionary costs for building waste 
     storage capacity at the Yucca Mountain site before the 
     facility opened or transporting waste to a private storage 
     facility (if any private facilities are constructed), if any 
     utilities require backup storage.
       This cost estimate does not include any potential costs for 
     backup storage, however, because it is not clear that there 
     will be any demand for backup storage. Thus, there may not be 
     a need for additional DOE spending over 2003-2006 period. In 
     addition, it is uncertain whether or not the NRC will 
     authorize construction of a repository at the Yucca Mountain 
     site in 2006. This authorization would be required before 
     backup storage could be provided since it appears unlikely 
     that any privately owned waste storage facilities will be 
     developed over the next few years. If DOE were required to 
     prepare the Yucca Mountain site for backup storage, 
     additional costs could be substantial. Based on information 
     from DOE, we estimated such costs could approach $1 billion 
     over the 2003-2006 period, subject to the availability of 
     appropriated funds.
       Settlement agreements. Section 105 would allow DOE to enter 
     into settlement agreements with any utilities that were 
     scheduled to have nuclear waste removed from their sites by 
     DOE starting on January 31, 1998. If a utility waives any 
     claim for damages against the United States because of DOE's 
     failure to begin disposing of waste in 1998, then the 
     department may take title to the utility's waste, provide 
     waste storage casks to the utility, operate an existing 
     dry cask storage facility for the utility, or compensate 
     the utility for the cost of providing storage for this 
     waste at the utility's site. The bill would restrict DOE 
     from making expenditures from the Nuclear Waste Fund to 
     pay for any settlement costs that would not otherwise be 
     incurred under the existing contracts for nuclear waste 
     disposal between DOE and nuclear utilities.
       This estimate does not include any additional discretionary 
     costs for settlement agreements that may be entered into 
     between DOE and nuclear utilities as a result of enacting 
     this bill. Under current law, and consistent with the 
     standard contract for nuclear waste disposal between the 
     department and the nuclear utilities, these parties may agree 
     to reduce the annual nuclear waste fee (referred to as ``fee 
     credits'') paid to the government by the utilities in the 
     event of an avoidable delay in the schedule for disposing of 
     waste. CBO has assumed that DOE and those utilities that have 
     experienced an avoidable delay in the disposal of their waste 
     will choose to invoke this provision of their contracts and 
     that the mandatory nuclear waste fee will be reduced by a 
     total of about $400 million over the 2000-2009 period to 
     compensate these utilities for the incremental cost of 
     continued waste storage at their sites of 10,000 metric tons 
     of waste.
       If nuclear utilities choose to enter into settlement 
     agreements with DOE following enactment of this bill, it is 
     possible that DOE would agree to provide compensation greater 
     than or less than the amount CBO has assumed under current 
     law. It is also possible that DOE would choose to use 
     appropriated funds to provide compensation instead of fee 
     credits as we have assumed. In this case, the discretionary 
     costs of this legislation would be higher than we have 
     estimated here, and nuclear waste fee collections would be 
     greater than the amount we have estimated. CBO cannot predict 
     whether or not utilities would choose to enter into 
     settlement agreements under the terms defined in this bill, 
     nor whether DOE would use fee credits or appropriated funds 
     to implement any settlement agreements.
       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 
     estimated 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 ($50 million 
     in 1996, adjusted annually for inflation).
       Although this bill would, by itself, establish no new 
     enforceable duties on state,

[[Page S8078]]

     local, or tribal governments, shipments on nuclear waste for 
     surface storage at the Yucca Mountain site, as authorized 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.
       Additional spending by the state would support a number of 
     activities, including emergency communications, emergency 
     response planning and training, inspections, and escort of 
     waste shipments. 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. This 
     bill would, however, authorize DOE to receive and store waste 
     at Yucca Mountain once the NRC has authorized construction of 
     a repository at that site and would set a deadline of 
     December 31, 2006, for NRC to make that decision. This date 
     is about three years earlier than DOE expects to begin 
     receiving material at the site under current law.
       Other impacts. This bill would authorize planning grants of 
     at least $150,000 for each state and Indian tribe through 
     whose jurisdiction radioactive waste would be transported and 
     annual implementation grants for those states and tribes 
     after they have completed their plans. 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 three years.
       Estimated impact on the private sector: This bill contains 
     no new private-sector mandates as defined in UMRA.
       Previous CBO estimate: On May 4, 1999, CBO prepared a cost 
     estimate for H.R. 45, the Nuclear Waste Policy Act of 1999, 
     as ordered reported by the House Committee on Commerce on 
     April 21, 1999. The provisions of the bill ordered reported 
     by the Senate Committee on Energy and Natural Resources and 
     H.R. 45 are different and the two cost estimates reflect 
     those differences. In particular, H.R. 45 would authorize 
     construction of an interim repository at the Yucca Mountain 
     site, while the Senate bill does not contain any similar 
     provision. In contrast to H.R. 45, the Senate bill contains 
     provisions relating to settlement agreements between DOE and 
     nuclear utilities and to backup storage.
       Estimate prepared by: Federal costs: Kim Cawley (226-2860); 
     Impact on State, local, and tribal governments: Majorie 
     Miller (225-3220).
       Estimate approved by: Paul N. Van de Water, Assistant 
     Director for Budget Analysis.

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