[Senate Report 112-66]
[From the U.S. Government Publishing Office]


                                                       Calendar No. 146
112th Congress                                                   Report
                                 SENATE
 1st Session                                                     112-66

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



 
                  NUCLEAR ENERGY RESEARCH INITIATIVE 
                            IMPROVEMENT ACT

                                _______
                                

  August 30 (legislative day, August 2), 2011.--Ordered to be printed

   Filed under authority of the order of the Senate of August 2, 2011

                                _______
                                

   Mr. Bingaman, from the Committee on Energy and Natural Resources, 
                        submitted the following

                              R E P O R T

                         [To accompany S. 1067]

    The Committee on Energy and Natural Resources, to which was 
referred the bill (S. 1067) to amend the Energy Policy Act of 
2005 to require the Secretary of Energy to carry out a research 
and development and demonstration program to reduce 
manufacturing and construction costs relating to nuclear 
reactors, and for other purposes, having considered the same, 
reports favorably thereon with an amendment and recommends that 
the bill, as amended, do pass.
    The amendment is as follows:
  Strike out all after the enacting clause and insert in lieu 
thereof the following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Nuclear Energy Research Initiative 
Improvement Act of 2011''.

SEC. 2. NUCLEAR ENERGY RESEARCH INITIATIVE.

  Section 952 of the Energy Policy Act of 2005 (42 U.S.C. 16272) is 
amended by striking subsection (a) and inserting the following:
  ``(a) Nuclear Energy Research Initiative.--
          ``(1) In general.--The Secretary shall conduct research to 
        lower the cost of nuclear reactor systems while increasing the 
        levels of safety and security of the systems, including 
        research regarding--
                  ``(A) modular and small-scale reactors;
                  ``(B) balance-of-plant issues;
                  ``(C) cost-efficient manufacturing and construction;
                  ``(D) licensing issues; and
                  ``(E) enhanced proliferation controls.
          ``(2) Consultation requirement.--In carrying out initiatives 
        under paragraph (1), the Secretary shall consult with--
                  ``(A) the Secretary of Commerce;
                  ``(B) the Secretary of the Treasury;
                  ``(C) the Nuclear Regulatory Commission; and
                  ``(D) any other individual who the Secretary 
                determines to be necessary.
          ``(3) Schedule.--
                  ``(A) In general.--Not later than 180 days after the 
                date of enactment of this paragraph, the Secretary 
                shall develop and publish on the website of the 
                Department of Energy a schedule that contains an 
                outline of a 5-year strategy to lower effectively the 
                costs of nuclear reactors.
                  ``(B) Public workshops.--In developing the schedule 
                under subparagraph (A), the Secretary shall conduct 
                public workshops to provide an opportunity for public 
                comment.
                  ``(C) Review.--Before the date on which the Secretary 
                publishes the schedule under subparagraph (A), the 
                Nuclear Energy Advisory Committee shall conduct a 
                review of the schedule.
                  ``(D) Annual updates.--
                          ``(i) In general.--Not later than 180 days 
                        after the date on which the Secretary publishes 
                        the schedule under subparagraph (A) and 
                        annually thereafter, the Secretary shall update 
                        the schedule.
                          ``(ii) Public workshops.--In updating the 
                        schedule under clause (i), the Secretary shall 
                        conduct public workshops in accordance with 
                        subparagraph (B).
          ``(4) Cost sharing.--Section 988 shall apply to initiatives 
        carried out under this section.''.

                                Purpose

    The purpose of S. 1067 is to require the Secretary of 
Energy to carry out a research and development and 
demonstration program to reduce manufacturing and construction 
costs relating to nuclear reactors while increasing their 
levels of safety and security.

                          Background and Need

    The 104 nuclear power plants currently operating in the 
United States generate roughly 20 percent of the nation's 
electricity, and roughly 70 percent of the nation's carbon-free 
electricity. New nuclear power plants will need to be built in 
the years ahead to replace existing plants as they age and are 
retired, to meet increased energy demand, and to help reduce 
carbon dioxide emissions.
    The greatest challenge to the deployment of new nuclear 
power plants is their large capital cost. A new nuclear power 
plant is estimated to cost between $6 billion and $8 billion. 
Congress has previously sought to address this problem through 
loan guarantees in title XVII of the Energy Policy Act of 2005, 
insurance against regulatory delays in section 638 of the 
Energy Policy Act of 2005, production tax credits in section 
1306 of the Energy Policy Act of 2005, and improvements in the 
licensing process in title XXVIII of the Energy Policy Act of 
1992. In addition, section 952 of the Energy Policy Act of 2005 
established a Nuclear Energy Research Initiative within the 
Department of Energy for research and development on nuclear 
energy systems.
    Additional legislation is needed to make lowering the cost 
of nuclear reactor systems a primary objective of the 
Department of Energy's Nuclear Energy Research Initiative.

                          Legislative History

    S. 1067 was introduced by Senator Mark Udall on May 25, 
2011. Senators Bingaman, Murkowski and Klobuchar are 
cosponsors. The Committee on Energy and Natural Resources held 
a legislative hearing on S. 1067 on June 7, 2011.
    Similar legislation was introduced by Senator Mark Udall in 
the 111th Congress as S. 2052 on October 29, 2009. Senators 
Bingaman, Murkowski, Crapo, Landrieu, Risch, and Klobuchar were 
cosponsors. A companion bill, H.R. 5163, was introduced in the 
House of Representatives on April 28, 2010.
    The Committee on Energy and Natural Resources held a 
legislative hearing on S. 2052 on December 15, 2009. S. Hrg. 
111-375. In addition, the Committee held an oversight hearing 
on nuclear energy development on March 18, 2009. S. Hrg. 111-
21. The Committee ordered S. 2052 favorably reported at its 
business meeting on September 27, 2010.
    The Committee ordered S. 1067 favorably reported, with an 
amendment in the nature of a substitute, at its business 
meeting on July 14, 2011.

                        Committee Recommendation

    The Senate Committee on Energy and Natural Resources, in 
open business session on July 14, 2011, by voice vote of a 
quorum present recommends that the Senate pass S. 1067.
    Senator Sanders asked to be recorded as voting no.

                          Committee Amendments

    During its consideration of S. 1067, the Committee adopted 
an amendment in the nature of a substitute, which makes a 
number of changes to the bill as introduced. The substitute 
amendment replaces the existing general authority for nuclear 
energy research and development under the heading ``Nuclear 
Energy Research Initiative'' in section 952(a) of the Energy 
Policy Act of 2005, and replaces it with the more specific 
authority of S. 1067. The substitute also adds new language to 
section 952(a)(1) that directs the Secretary shall conduct 
research that increases the levels of safety and security, as 
well as lowers the cost, of nuclear reactor systems, and 
strikes the authorization of appropriations.

                      Section-by-Section Analysis

    Section 1 provides a short title.
    Section 2 amends section 952(a) of the Energy Policy Act of 
2005 (42 U.S.C. 16272(a)), ``Nuclear Energy Research 
Initiative,'' by striking that section and replacing it with 
the text of S. 1067, as amended.
    Paragraph (1) of section 952(a), as amended, requires the 
Secretary of Energy to conduct research to lower the cost of 
nuclear reactor systems as part of the Nuclear Energy Research 
Initiative while increasing levels of safety and security, and 
identifies research on modular and small-scale reactors, 
balance-of-plant issues, cost-efficient manufacturing and 
construction, licensing issues, and enhanced proliferation 
controls as types of research included within the initiative.
    Paragraph (2) directs the Secretary of Energy, in carrying 
out research under paragraph (1), to consult with the Secretary 
of Commerce, the Secretary of the Treasury, the Nuclear 
Regulatory Commission, and any other individual who the 
Secretary determines to be necessary.
    Paragraph (3) directs the Secretary of Energy to develop 
and post on the Department of Energy's website a schedule 
outlining a five-year strategy to lower effectively the costs 
of nuclear reactors. Subparagraphs require the Nuclear Energy 
Advisory Committee to review the schedule, and the Secretary to 
update it annually. The Secretary is also required to solicit 
public comment through public workshops when developing and 
updating the schedule.
    Paragraph (4) applies the cost-sharing requirements of 
section 988 of the Energy Policy Act of 2005 to the Nuclear 
Energy Research Initiative.

                   Cost and Budgetary Considerations

    The following estimate of costs of this measure has been 
provided by the Congressional Budget Office.

S. 1067--Nuclear Energy Research Initiative Improvement Act of 2011

    Summary: S. 1067 would authorize the Department of Energy 
(DOE) to conduct research related to nuclear reactor systems. 
Assuming appropriation of the necessary amounts, CB0 estimates 
that implementing S. 1067 would cost $231 million over the 
2012-2016 period. Enacting S. 1067 would not affect direct 
spending or revenues; therefore, pay-as-you-go procedures do 
not apply.
    S. 1067 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act (UMRA) 
and would impose no costs on state, local, or tribal 
governments.
    Estimated cost to the federal government: The estimated 
budgetary impact of S. 1067 is shown in the following table. 
The costs of this legislation fall within budget function 270 
(energy).

----------------------------------------------------------------------------------------------------------------
                                                                By fiscal year, in millions of dollars
                                                    ------------------------------------------------------------
                                                       2012      2013      2014      2015      2016    2012-2016
----------------------------------------------------------------------------------------------------------------
                                  CHANGES IN SPENDING SUBJECT TO APPROPRIATION

Estimated Authorization Level......................        50        51        52        52        53        258
Estimated Outlays..................................        30        45        51        52        53        231
----------------------------------------------------------------------------------------------------------------

    Basis of estimate: S. 1067 would authorize DOE to conduct 
research aimed at reducing the costs of deploying new 
commercial nuclear reactors and increasing levels of safety and 
security of such systems. Under the bill, those efforts would 
be aimed particularly at developing modular and small-scale 
nuclear reactors and technologies to enhance the 
sustainability, cost-effectiveness, and security of nuclear 
reactors.
    Based on information from DOE about the level of effort 
required to make appreciable progress toward those objectives, 
CB0 estimates that fully funding S. 1057 would require 
appropriations totalling $50 million in 2012 and $258 million 
over the 2012-2016 period. Assuming appropriation of those 
amounts, CB0 estimates that resulting spending would total $231 
million over the 2012-2016 period, with additional spending 
occurring in later years. Those estimated outlays are based on 
historical spending patterns for DOE's nuclear programs.
    Pay-as-you-go considerations: None.
    Intergovernmental and private-sector impact: S. 1067 
contains no intergovernmental or private-sector mandates as 
defined in UMRA and would impose no costs on state, local, or 
tribal governments.
    Estimate prepared by: Federal Costs: Megan Carroll; Impact 
on State, Local, and Tribal Governments: Ryan Miller; Impact on 
the Private Sector: Amy Petz.
    Estimate approved by: Theresa Gullo, Deputy Assistant 
Director for Budget Analysis.

                      Regulatory Impact Evaluation

    In compliance with paragraph 11(b) of rule XXVI of the 
Standing Rules of the Senate, the Committee makes the following 
evaluation of the regulatory impact which would be incurred in 
carrying out S. 1067.
    The bill is not a regulatory measure in the sense of 
imposing Government established standards or significant 
economic responsibilities on private individuals and 
businesses.
    No personal information would be collected in administering 
the program. Therefore, there would be no impact on personal 
privacy.
    Little, if any, additional paperwork would result from the 
enactment of S. 1067.

                   Congressionally Directed Spending

    S. 1067, as ordered reported, does not contain any 
congressionally directed spending items, limited tax benefits, 
or limited tariff benefits as defined in rule XLIV of the 
Standing Rules of the Senate.

                        Executive Communications

    The testimony on S. 1067 given by the Deputy Assistant 
Secretary for Reactor Technologies, Office of Nuclear Energy, 
The U.S. Department of Energy at the Committee's June 7, 2011 
hearing as follows:

  Statement of John E. Kelly, Deputy Assistant Secretary for Reactor 
      Technologies, Office of Nuclear Energy, Department of Energy


                              introduction


    Thank you, Chairman Bingaman, Ranking Member Murkowski, and 
Members of the Committee. This is my first testimony before 
Congress and it is a particular pleasure to be discussing small 
modular reactors (SMRs) with you, as they have been an area of 
great interest to me for some time.
    Before joining the Department of Energy, I co-chaired an 
American Nuclear Society special committee that was developing 
solutions to generic licensing issues for small modular 
reactors. Over the course of the last 18 months, this special 
committee, together with the Nuclear Energy Institute, the 
Nuclear Regulatory Commission and the nuclear industry, has 
made great progress in forging the blueprint for the regulatory 
framework for small modular reactors. This progress 
demonstrates an increased interest in the licensing and 
commercialization of SMRs.
    The Administration continues to view nuclear power as an 
important clean energy option. Small modular reactors, 
specifically reactors that have an electrical output of less 
than 300 megawatts, are a promising and innovative technology. 
We see these smaller reactors as giving our utilities 
additional clean energy options and allowing nuclear power to 
penetrate the energy market more broadly. Secretary Chu has 
written that, ``if we can develop this technology in the U.S. 
and build these reactors with American workers, we will have a 
key competitive edge''. SMRs are already inspiring American 
innovation and have the potential to significantly enhance U.S. 
competiveness.
    Since former Assistant Secretary Dr. Pete Miller testified 
to this Committee in 2009 on the two bills we are discussing 
today, several developments have taken place. A little over a 
year ago, we released our fiscal year 2011 budget request, 
which proposed a small modular reactor program with $40 million 
of funding. The proposal was to spend half of that funding on 
R&D efforts and half to initiate a competitive selection 
process to establish public-private partnerships to cost-share 
design certification and licensing efforts with the selected 
winners.
    Earlier this year, the Department released its fiscal year 
2012 budget request, which included an expanded version of the 
small modular reactor program. The request for FY 2012 is $29 
million for R&D and $67 million for design certification and 
licensing activities. The DOE request outlines a multi-year, 
$452 million program that would use cost-shared arrangements 
with industry partners to complete design certification 
activities for up to two light water small modular reactor 
designs. There are several potential SMR vendors pursuing both 
LWR designs and more advanced concepts. Many utilities are 
interested in this technology to replace aging fossil plants.
    The events at the Fukushima nuclear power plants have led 
the Nuclear Regulatory Commission to launch a 90-day review to 
see what lessons can be learned from the Japanese experience 
and applied to U.S. nuclear plants. I want to note that 
designers of light water SMRs have already placed major 
emphasis on the inherent safety of these reactors. Because of 
their lower power level, SMRs have a much lower level of decay 
heat and therefore may require less cooling after reactor 
shutdown. Several designs incorporate passive safety features 
that utilize gravity-driven systems rather than engineered, 
pump-driven systems to supply backup cooling in unusual 
circumstances. Some concepts use natural circulation for normal 
operations, requiring no primary system pumps and providing an 
even more robust safety case. In addition, many SMR designs 
utilize integral designs for which all major primary components 
are located in a single pressure vessel. That feature results 
in a much lower susceptibility to certain potential events, 
such as a loss of coolant accident, because there is no large 
external primary piping. Lastly, most SMRs can be sited 
underground, which should improve their security profile and 
may enhance seismic safety.


                     comments on s. 512 and s. 1067


    Turning to the two bills under consideration by the 
Committee, the Department has a few comments.
    S. 1067 gives broad authority to conduct research into 
small modular reactors, as well as other connected issues.
    S. 512, the Nuclear Power 2021 Act, would require the 
Department of Energy to carry out a program to develop and 
demonstrate two small modular reactor designs. If passed, 
several factors would be important to consider:
     The requirement that at least one of the designs 
be less than 50 MW is too restrictive; simply having an upper 
bound of approximately 300 MWe would be more 
appropriate. Cost-shared design development and licensing 
should be based on competitive procurements and the market 
place should establish the appropriate design parameters.
     The licensing effort should include two different 
designs.
     The program should initially be focused on light 
water reactor technology based on the large amount of 
experience--both design and licensing--with such reactors.


                               conclusion


    That concludes my formal remarks. Thank you for the 
opportunity to testify and I look forward to answering your 
questions and working with the Committee to achieve the 
administration's goals of energy security and reducing the 
nation's carbon emissions.

                        Changes in Existing Law

    In compliance with paragraph 12 of rule XXVI of the 
Standing Rules of the Senate, changes in existing law made by 
the bill S. 1067, as ordered reported, are shown as follows 
(existing law proposed to be omitted is enclosed in black 
brackets, new matter is printed in italic, existing law in 
which no change is proposed is shown in roman):

                       ENERGY POLICY ACT OF 2005


                           Public Law 109-58


   AN ACT To ensure jobs for our future with secure, affordable, and 
reliable energy.

           *       *       *       *       *       *       *


TITLE IX--RESEARCH AND DEVELOPMENT

           *       *       *       *       *       *       *


Subtitle E--Nuclear Energy

           *       *       *       *       *       *       *


SEC. 952. NUCLEAR ENERGY RESEARCH PROGRAMS.

    [(a) Nuclear Energy Research Initiative.--The Secretary 
shall carry out a Nuclear Energy Research Initiative for 
research and development related to nuclear energy.]
    (a) Nuclear Energy Research Initiative.--
          (1) In general.--The Secretary shall conduct research 
        to lower the cost of nuclear reactor systems while 
        increasing the levels of safety and security of the 
        systems, including research regarding--
                  (A) modular and small-scale reactors;
                  (B) balance-of-plant issues;
                  (C) cost-efficient manufacturing and 
                construction;
                  (D) licensing issues; and
                  (E) enhanced proliferation controls.
          (2) Consultation requirement.--In carrying out 
        initiatives under paragraph (1), the Secretary shall 
        consult with--
                  (A) the Secretary of Commerce;
                  (B) the Secretary of the Treasury;
                  (C) the Nuclear Regulatory Commission; and
                  (D) any other individual who the Secretary 
                determines to be necessary.
          (3) Schedule.--
                  (A) In general.--Not later than 180 days 
                after the date of enactment of this paragraph, 
                the Secretary shall develop and publish on the 
                website of the Department of Energy a schedule 
                that contains an outline of a 5-year strategy 
                to lower effectively the costs of nuclear 
                reactors.
                  (B) Public workshops.--In developing the 
                schedule under subparagraph (A), the Secretary 
                shall conduct public workshops to provide an 
                opportunity for public comment.
                  (C) Review.--Before the date on which the 
                Secretary publishes the schedule under 
                subparagraph (A), the Nuclear Energy Advisory 
                Committee shall conduct a review of the 
                schedule.
                  (D) Annual updates.--
                          (i) In general.--Not later than 180 
                        days after the date on which the 
                        Secretary publishes the schedule under 
                        subparagraph (A) and annually 
                        thereafter, the Secretary shall update 
                        the schedule.
                          (ii) Public workshops.--In updating 
                        the schedule under clause (i), the 
                        Secretary shall conduct public 
                        workshops in accordance with 
                        subparagraph (B).
          (4) Cost sharing.--Section 988 shall apply to 
        initiatives carried out under this section.

           *       *       *       *       *       *       *


                                  
