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Copyright 1999 Federal News Service, Inc.  
Federal News Service



LENGTH: 3323 words



Mr. Chairman, Ranking Member Hall and distinguished members of the subcommittee, my name is David Joos. I am president and chief executive officer of Consumers Energy. My company owns two nuclear power plants that border Lake Michigan. The Palisades unit is 16 miles north of St. Joseph, Michigan. The second, Big Rock Point near Charlevoix, Michigan, was the nation's longest running nuclear power plant until its retirement in 1997.
Today, I am testifying on behalf of the Nuclear Energy Institute and representing the nuclear energy industry's position on H.R. 45, the Nuclear Waste Policy Act of 1999.
I want to express my gratitude to you, Mr. Chairman, Congressmen Hall, Dingell, Upton and Towns and the rest of the subcommittee for your unflagging commitment to resolving the nuclear waste issue. I also would like to thank the 14 subcommittee members who thus far have joined 74 other House members in cosponsoring H.R. 45.1
This broad bipartisan support is a clear signal to the federal government that it must fulfill its statutory obligation to accept used nuclear fuel and must adopt an integrated plan to manage the nation's nuclear byproducts.
Nuclear power plants supply nearly 20 percent of America's electricity and are the nation's largest source of emission-free energy--an important distinction for policymakers who recognize the unmistakable nexus between energy and environmental policy. In Congress, and indeed across the United States, there is growing appreciation for the industry's vast experience with more than 2,000 reactor years of operation and growing awareness that the industry offers a unique opportunity to meet energy production and clean air needs of the 21st century.
Without nuclear energy, the United States will find it impossible to meet increasingly stringent U.S. clean air regulations as well as international carbon dioxide reduction goals. The nation's nuclear power plants provide clean air benefits while producing electricity at a competitive price--with production costs that are a fraction of a cent higher than coal-fired electricity and more cost-effective than natural gas, solar or wind power. A necessary component to ensure nuclear energy's continued benefits is the federal acceptance and disposal of used nuclear fuel.
The number of H.R. 45 co-sponsors was current as of February 9, 1999.
Mr. Chairman, since 1981, the Energy Department has been siting and developing an underground geologic repository for the disposal of used nuclear fuel. In recent years, however, the agency has failed to advance an important aspect of the program--the acceptance of used fuel. A little more than a year ago, the Energy Department was scheduled to start accepting used fuel from nuclear power plants and defense facilities at 78 locations in 35 states. The agency missed its deadline in violation of its clear statutory duty under the Nuclear Waste Policy Act of 1982. The law required disposal at a single, federally monitored location.
Instead of beginning receipt of this fuel, the Energy Department has deflected and attempted to deny its legal responsibilities based on avoidable delays in the development of a repository. This is irresponsible conduct unfitting of the federal government. It breaks the spirit of the law by reinforcing the agency's reluctance to treat nuclear waste disposal as a high priority. And it certainly violates the letter of the law.
In September 1998, a shift in policy seemed imminent. As part of events leading to the U.S. Senate confirmation of Energy Secretary Bill Richardson, President Clinton wrote a letter to Sen. Frank Murkowski, R-Alaska, chairman of the Senate Energy and Natural Resources Committee. The letter stated that Mr. Richardson would have the "portfolio" to represent the Administration in working with Congress to resolve the disposal problem. This marked a reversal in course from Secretary Richardson's predecessors.
Based on the president's clearly stated commitment that Secretary Richardson would actively engage Congress in a dialogue on nuclear waste disposal issues, the prospects for putting this program on a clear path to success seemed promising. In fact, about three months later, the Energy Department released a report ordered by Congress supporting the continued scientific study of Yucca Mountain, Nevada, as the site for a permanent repository for used nuclear fuel. The report, known as the Yucca Mountain viability assessment, "reveals that no showstoppers have been identified to date," Secretary Richardson said on Dec. 18 when he released the compilation of years of scientific and technical assessments of the site.
Unfortunately, however, there has been no real commitment from the White House or the Energy Department to meet this obligation to electricity consumers and all citizens.
In the past, the Energy Department has excused its delays as the inevitable price of bureaucracy. A British economist wrote that while bureaucracies boast the appearance of science, they violate the true principles of business. So it is with the Energy Department, where unmet deadlines and legal liabilities may spell financial disaster-- both for the industry and for the electricity customer.
Today, the consequences of continued delay are severe. They can be measured first by the financial liability posed to the federal government--in essence, taxpayers. Importantly, consumers of nuclear- generated electricity--not taxpayers--have paid for managing used nuclear fuel and will continue to do so during the life of the program. Second, delay will impact economic operations of U.S. nuclear plants, which serve as linchpins in the administration's dean air and carbon abatement strategies. As this committee knows well, the impact of protracted delay in this program will unduly strain nuclear facilities as they adapt to a competitive electricity market.
First, storing used nuclear fuel indefinitely at nuclear power plant sites drives up on-site storage costs that commercial plants and their electricity customers were never intended to bear. Utilities and state attorneys general, finding no other recourse, turned to the courts to hold the Energy Department accountable for its 1998 fuel acceptance obligation. Electricity consumers have committed $15 billion, including interest, to the Nuclear Waste Fund--a federal trust which has never operated in a fashion to fully fund the program.
Customers who count on electricity generated at our Palisades nuclear power plant and other nuclear energy facilities in Michigan have committed $678 million for these government services. In Texas, Mr. Barton, the customer commitment is $323 million; in New Jersey, Mr. Pallone, $543 million; and in Florida, Mr. Stearns, Mr. Deutsch and Mr. Bilirakis, $648 million.
Yet over the years, the federal government has diverted $7.8 billion from the waste fund for deficit reduction.

This continued erosion of resources should be stopped, especially in view of the program's need for increased levels of funding as it enters a construction phase for central storage. Only Congress can stop the federal government's use of funds in this fashion and ensure that this project has the financial means to move forward. Without passage of H.R. 45, Congress will have a difficult time making funds available within the budget caps to meet program needs.
Without use of a temporary central storage facility, consumers of nuclear-generated electricity win be forced to pay for DOE's negligence once more. They could suffer as much as $56 billion in damages for the Energy Department's default on accepting used fuel and other costs associated with indefinite storage at multiple nuclear power plant sites. Ratepayers will continue to pay into the Nuclear Waste Fund for reasonable program costs. But if they pay a second, multi-billion dollar bill solely because of federal government inaction, it would be tantamount to fraud.The second consequence of continued fuel acceptance delays is the uncertainty it creates for companies like Consumers Energy that cannot adequately plan for future plant operation without a date certain for federal used fuel acceptance. Otherwise, the high-level waste program and its associated expenses aggravate our ability to make prudent decisions in a competitive market. At Big Rock Point, for instance, 58 metric tons of nuclear fuel awaits federal management. The longer fuel sits at the retired plant, the greater the delay for decommissioning. Without legislative action, the process could take 20 to 30 years. With H.R. 45, however, the plant would be decommissioned in half the time and returned to a natural, greenfield state for other uses.
The Palisades plant faces different challenges. The plant's spent fuel pool has reached capacity, prompting Palisades to store 125 metric tons of used fuel in 13 stainless steel containers at the site. Each time we refuel the reactor, the amount of used fuel grows. In 1998, when the Energy Department should have started fuel acceptance, Palisades' dry storage would have been limited to 120 metric tons. By 2010--the date the Energy Department expects to complete a permanent repository--the amount of used fuel requiring dry storage at Palisades would grow to 600 metric tons.
The disposition of used fuel at the Palisades site poses a serious economic impact on plant operations. The timing, the manner in which additional dry storage would be undertaken and the amount the site would be reimbursed for additional storage resulting from government inaction will dictate whether the plant operates in the future. Any risk to Palisades' continued operation would reverberate among all of Michigan electricity customers who receive their electricity from the nuclear power plant. These uncertainties also threaten the tax base of Covert Township, where Palisades is located, as well as the job security of the plant's 500 employees. Mr. Chairman, you can see that the passage of H.R. 45 is absolutely necessary to provide reliable federal fuel acceptance dates and maintain economic stability for our region and many others that rely on the nation's 103 nuclear power plants.
Some industry critics argue that used nuclear fuel is best left alone, that it should continue to be stored at sites across the country. That would be a mistake. Building more dry fuel storage facilities is not feasible at many locations because of geographic constraints, zoning restrictions or political resistance. For example, the Indian Point units in New York are hampered by siting restrictions. The site's limited size and restricted equipment handling capability render it unfavorable for dry storage.
Mr. Chairman, getting the Energy Department's attention has been incredibly frustrating for me, for my industry and for many states and state agencies who have taken active roles in trying to hold the federal government to its fuel acceptance deadline. Every year, we are confronted with a new delay that pushes nuclear fuel disposal further into the future even though the science indicates promise for fuel storage today.
As I mentioned earlier, the agency's repeated delays have forced 61 state officials, state agencies and municipalities to go to court over this matter, seeking legal decisions that force DOE to take waste and to pay utilities to continue storing used fuel past the 1998 federal collection date.
Federal judges consistently have ruled that the Energy Department must comply with nuclear utility contracts that require federal fuel acceptance in exchange for funds utility customers have been paying for 16 years. In three rulings in 1998, the U.S. Court of Federal Claims ruled that the Energy Department is liable for breaching its contract with utilities and failing to accept used nuclear fuel. That court is now considering the level of damages that should be awarded to Yankee Atomic Power Co., Maine Yankee and Connecticut Yankee for the Energy Department's breach of contract. Yankee Atomic alone is seeking $70 million. Seven other utilities have filed individual suits seeking monetary damages. More are expected.
Mr. Chairman, let me repeat the fact that the industry has been presented no alternative to litigation. We always have believed that the preferred solution is for the Energy Department to meet its obligation to manage used fuel at a central location.
The Energy Department's waiting game has become much too costly for consumers to endure. In the years ahead, it may threaten the economic viability of some plants as the energy landscape shifts to a competitive marketplace. By passing H.R. 45, this committee has an opportunity to end the delays and the drain on consumers. This legislation provides a comprehensive management program that integrates storage, transportation and disposal so that the government can begin fuel acceptance in 2003. Once removed from sites, the fuel would be stored temporarily at a central facility until a permanent repository is completed in 2010.
Mr. Chairman, one thing is clear: used fuel will have to be stored properly. The question is, does it make more sense to store it in dozens of locations across the country--including our two sites on the shores of Lake Michigan-or at one location in the Nevada desert?
Nuclear Regulatory Commission Chairman Shirley Jackson, in testimony before the committee last year, endorsed a single disposal site as a means to more safely and efficiently monitor used nuclear fuel.
H.R. 45 does more than create certainty for fuel acceptance and disposal. The legislation ensures adequate funding through the life of the program. And it establishes a 100-millitem radiation standard that is consistent with U.S. and international scientific organizations. This standard also ensures the same level of public safety as the Nevada state radiation protection standard.
While the Energy Department continues a responsible job of collecting scientific data on Yucca Mountain, we have yet to fully address the complex political dynamics that surround this issue.
It still amazes me that the government could put a man on the moon in 10 years but that it will take it 28 years to build an underground repository for used nuclear fuel.
In light of DOE's repeated delays, I respectfully urge the committee to expedite a used fuel management and disposal program through reform legislation--H.R. 45. At the same time, this committee should revive the dialogue with the administration so that the two can work in partnership to begin waste acceptance.
The Need for Reform Legislation
Mr. Chairman, as the preceding discussion indicates, a significant shift in the Energy Department's program direction must take place in order to achieve used fuel acceptance from the nation's nuclear power plants and defense facilities. Only Congress can take the appropriate measures to chart a sure course for the nearterm receipt and storage and ultimate repository disposal of used nuclear fuel.
The Nuclear Waste Policy Act of 1999, H.R. 45, accomplishes this programmatic shift while protecting public health, safety and the environment. Mr. Chairman, you and the members of this committee are quite familiar with the features of this legislation, which is virtually the same as legislation the House of Representatives approved 307-120 during the 105th Congress. Modifications have been made to the program's funding provision to accommodate congressional budget scoring rules. With that exception, and a date change for operation of a temporary storage facility, the legislation's provisions are similar to that of the 1997 legislation. The essential components of H.R. 45 include:
- Establishing a used nuclear fuel management system, including development of a temporary storage facility within Area 25 of the Nevada Test Site. The site would safely hold used nuclear fuel until the Energy Department completes a permanent repository.

A temporary storage facility is necessary since the Energy Department has stated that the agency will not accept used fuel without a disposal or storage facility;Establishing a date for operating used fuel storage. Temporary storage would begin operation by June 2003. A permanent repository is scheduled for January 2010 operation;
- Limiting the size of a temporary storage facility and permitting the Energy Department to determine the repository's size. A temporary storage facility would be built in two stages--10,000 metric tons of uranium (MTU) in the first phase, expanded up to 40,000 MTU in the second phase;
- Complying fully with the National Environmental Policy Act requirements by establishing clear milestones and schedules for preparation of environmental documents, conduct of licensing reviews and all other steps involved in siting, design, licensing and construction of this central storage facility;
- Establishing a radiation health standard of 100 millirems per year for licensing a repository. The standard is consistent with Nevada state regulations and international scientific recommendations. For example, Nevada's Administrative Code, section 459.335, states, "The total effective dose equivalent to any member of the public from (al licensed and registered operation does not exceed 100 millirems per year;"
- Creating a new funding mechanism consisting of a combination of a user fee and a mandatory fee, with an average fee to electricity consumers of 1 mill per kilowatt-hour until the repository opens. During the averaging period, the fee may not exceed 1.5 mills/kWh in any given year. After the repository opens, the fee is capped at the current rate of 1 mill/kWh;
- Instructing the Energy Department to minimize the use of transportation routes through populated areas;
- Providing for transportation planning, training and technical assistance to states, emergency responders and labor organizations; and
- Providing for land conveyances and benefits for affected communities, including payments equal to taxes. The legislation also builds upon sound technical and scientific assessments that support the siting of a permanent repository for used fuel at Yucca Mountain.
Indeed, the Energy Department's December 1998 report to Congress on the viability Yucca Mountain notes that, "over 15 years, extensive research has validated many of the expectations of the scientists who first suggested that remote, desert regions of the Southwest are well- suited for a geologic repository."
Secretary Richardson, in an update to the president about the viability assessment, said that scientific and technical work at Yucca Mountain should proceed to further the project goal of opening a repository in 2010.
Nearly 20 percent of the nation's electricity consumers rely on nuclear power plants for energy that also preserves our air quality. With no harmful emissions, nuclear energy assists the United States in meeting federal clean air regulations and international goals to reduce carbon dioxide worldwide. No other fuel source helps the nation achieve its air preservation goals while offering reliable, competitive electricity to customers. And by balancing the nation's energy portfolio, nuclear energy provides security from international fuel crises.
For these reasons, and for the security of our state economies, Congress must tackle a significant environmental challenge for the 21st century--securing federal acceptance of used nuclear fuel and providing certainty for its disposal. Without H.R. 45, the federal high-level waste program will wend its way through a bureaucratic labyrinth that offers no solution. With H.R. 45, the industry and the nation can meet all other challenges; energy security, air conservation and competitive electric production.
The visionary leadership of this committee will assure a new level of intensity and commitment for this landmark initiative.

LOAD-DATE: February 11, 1999

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