Copyright 1999 Federal News Service, Inc.
Federal News Service
FEBRUARY 10, 1999, WEDNESDAY
SECTION: IN THE NEWS
HEADLINE: PREPARED STATEMENT OF
PRESIDENT AND CHIEF EXECUTIVE OFFICER
BEFORE THE HOUSE COMMITTEE ON COMMERCE
SUBCOMMITTEE ON ENERGY AND POWER
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
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.
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
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.
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
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.
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
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.
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.
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.
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
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.
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
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?
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
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
- 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
- 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
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.
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
LOAD-DATE: February 11, 1999