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Copyright 1999 Federal News Service, Inc.  
Federal News Service

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MARCH 12, 1999, FRIDAY


LENGTH: 3026 words



Thank you, Mr. Chairman, and Members of the Subcommittee, for the opportunity to appear before you today to discuss alternatives for the management of spent nuclear fuel from civilian nuclear power plants until we are able to permanently dispose of it in a geologic repository.
The Administration continues to believe that the overriding goal of the Federal Government's high-level radioactive waste management policy should be the establishment of a permanent, geologic repository. Such a repository is essential not only to dispose of commercial spent fuel, but also to dispose of.' spent fuel and high- level waste from the cleanup of the Department's nuclear weapons complex, unique commercial spent fuel transferred to the Department (such as Three Mile Island and Fort St. Vrain spent fuel), and spent fuel and high-level waste associated with the Navy's nuclear-powered fleet. A permanent repository is also important to our nonproliferation efforts to demonstrate alternatives to reprocessing, important for the disposition of foreign research reactor fuel being returned to the U.S., and an option for disposition of surplus plutonium from nuclear weapons stockpiles.
Before addressing the proposed legislation -- H.R. 45, the Nuclear Waste Policy Act of 1999 -and an alternative approach, I would like to review quickly how this Administration has movedthe Civilian Radioactive Waste Management Program forward in the last several years. In many of the earlier years it appeared that there was little progress towards siting a repository. In 1993, however, the Department broke ground and began drilling the miles of tunnel needed for scientific investigations, completing the five-mile loop in 1997. We also drilled a cross-drift at the horizon of the potential repository area. Reaching these areas, we are now able to verify model predictions that could not be confirmed without being inside the mountain. We are conducting three different thermal tests to evaluate how the heat of the waste could impact the surrounding rock and the repository structure. We are also now able to study water movement through the mountain. The verification of our models with real data from the mountain reduces the uncertainties in our assessment of whether Yucca Mountain will work as a permanent repository.
We are reaching the conclusion of our site characterization effort at Yucca Mountain. In December 1998, I submitted the Viability Assessment of a Repository at Yucca Mountain to the Congress and to the President. This subcommittee received testimony on the Viability Assessment in February when the Acting Director, Lake Barrett, appeared before you.
The Viability Assessment revealed no technical "showstoppers," but it did identify additional scientific and technical work needed before a decision can be made whether to recommend Yucca Mountain as the site for a repository. Consequently, we have asked for close to a $50 million increase in the FY2000 budget for site characterization activities to address these concerns - a 17.4 per cent increase. We will study the presence and movement of water through the repository block, the effects of water movement on the waste package, and the effects of heat from thedecay of radioactive materials inside the waste packages on the site's geologic and hydrologic behavior.
It is important to underscore that the scientific and technical work being carded out at Yucca Mountain represents cutting-edge science on a first-of-a-kind project. The United States is at the forefront in developing a geologic repository, and the decisions we make will have impacts throughout the international community.
We are on target to decide in 2001 whether Yucca Mountain is suitable to be the location of a repository and to submit a license application to the U.S. Nuclear Regulatory Commission in 2002. In short, since 1993, although we were not able to make up for time lost during the early years of the program, we have maintained steady progress and met the key milestones of our Program Plan. CONTRACTUAL OBLIGATIONS FOR SPENT FUEL MANAGEMENT
I want to assure you that I am very conscious of the Department's contractual obligation to take spent fuel from utilities beginning in 1998. Notwithstanding the progress being made at Yucca Mountain, the nuclear utility industry and state utility commissions are understandably concerned about the Department's inability tO accept spent fuel on the schedule anticipated at the time of enactment of the Nuclear Waste Policy Act of 1982. The inventory of spent fuel in the United States continues to grow. Spent fuel from nuclear power reactors is now stored at 72 commercial reactor sites in 33 states. We know some have already reached their capacity and many are reaching their capacity. Each year reactor sites will require additional on- site storage either in pools or with dry cask storage. There are currently 10 utilities with dry storage facilities in 8 states, and many utilities are concerned about the costs and physical and regulatory limitations on their continued storage of spent fuel at their reactor sites.
As you are aware, the Department is in litigation with a number of utilities related to the Department's contractual obligation to take spent fuel from utilities. The U.S. Circuit Court of Appeals for the District of Columbia has found that the Department has a contractual obligation to commence spent fuel disposal no later than January 31, 1998. The Court, however, has twice rejected the request from utilities for an order directing the Department to physically move spent fuel from their sites and found that the contracts the Department has with the utilities provide a potentially adequate mechanism for relief Pursuant to the ruling of the Court of Appeals, the Department announced that it would process claims presented to it under the contract, and we have entered into settlement discussions with several utilities.
In separate litigation, ten utilities have filed claims for damages. In the first three cases the Court found that the Department had breached its contracts, and the Department is now engaged in determining the amount of damages owed to these utilities. The other Court of Claims cases are in very preliminary stages with potentially years of litigation still ahead. As indicated by the Justice Department in its testimony before this Subcommittee on February 10, the damages being sought by the ten utilities before the Court of Claims could total $8.5 billion. This is more than theexisting balance in the Nuclear Waste Fund and is roughly 85 percent of the remaining cost to open the repository in 2010. Potential claims from other utilities could be many times this amount.
The Justice Department also stated that a decision on whether payments for these judgments would come out of the Nuclear Waste Fund is still pending. Should it become necessary to use the Fund to pay these claims, the Department's ability to complete the repository program would be in jeopardy. Ironically, claims against the Fund could also require a significant increase in the fee charged utilities to maintain the program, and could trigger yet another round of litigation and claims.
I also want to point out that several utilities have come and talked to us about their specific problems and proposed potential solutions. Some of these utilities have asked the Department to take title to their spent fuel onsite at their reactors.

The Administration opposes H.R. 45, which would require the Department to begin accepting waste at an interim storage facility in Nevada no later than June 30, 2003. Making a decision now to put interim storage in Nevada is not the right approach. It simply does not make sense to transport spent fuel across country to Yucca Mountain until we have completed the scientific work and know where a final repository will be. Spent fuel is currently being stored safely atreactor sites, under U.S. Nuclear Regulatory Commission oversight, and can continue to be stored safely until a repository is open.
From a budgetary standpoint, enactment of H.R. 45 could also have several negative impacts on the repository program. First, it will add the cost of construction of an interim storage facility to the program budget, and it will advance the costs of transportation much earlier than now planned. Between now and the year 2010, we estimate that H.R. 45 would add approximately $1.5 billion to the total cost of the civilian radioactive waste program because of the additional cost of the interim storage facility. It would also require expending $2-3 billion dollars for transportation prior to knowing whether Yucca Mountain will be the site for a permanent repository.
In addition to these new budgetary burdens, and perhaps more significantly, H.R. 45 would not provide the Department or the Federal Government relief from the billions of dollars of potential damages likely to be awarded through litigation. By imposing new statutorily defined obligations and deadlines, H.R. 45 would also create the potential for new litigation if the Department were unable to meet these requirements or if it had the effect of altering the existing utility contracts.
As I stated in my introductory remarks, it is critical to many national goals that we develop the capability to permanently dispose of high-level radioactive waste and spent fuel. We believe H.R 45 could seriously jeopardize our ability to carry out this effort. For these reasons, and because of the central fact that we have not completed the work necessary to make a decision torecommend Yucca Mountain as a permanent repository site, the Administration remains unequivocally opposed to the enactment of legislation requiring construction and operation of an interim storage facility at Yucca Mountain, and I would recommend a veto of any such legislation.
As the Subcommittee has requested, I would like to discuss the Department taking legal title to utilities' spent fuel at reactor sites until a repository is opened. Let me emphasize first that the Department is only at the beginning of the process of analyzing this approach and discussing it with the utility industry and other interested parties. However, it appears to be a practical option that would provide a near-term solution to utilities' spent fuel storage needs and would be relatively easy to implement. The chairman's invitation letter raised a number of specific questions such as how it would be funded, when it would be implemented, who would own and regulate these sites, and how it would affect the Department's contractual liability. These are all very important questions that the Department is in the process of answering, and many of those answers will depend upon the specific needs of individual utilities.
Let me discuss briefly some of the concepts we believe are appropriate to consider as pan of that discussion.
Conceptually, the Department could offer to take title to spent fuel consistent with our schedule for acceptance provided under its contracts with utilities. By taking title to the spent fuel, theDepartment could either assume financial responsibility for the utility's continued management of the spent fuel or possibly assume possession and responsibility for management of the spent fuel. We assume that utilities may have differing opinions on these alternatives, based upon their individual circumstance. For example, a utility with a permanently shut down reactor and no ongoing nuclear operations may want the Department to assume complete responsibility for the management of the spent fuel and storage facilities, while other utilities with operating reactors may prefer the Department only to take financial responsibility.
As part of an agreement to take title, the Department could agree either to reimburse the utility for the incremental cost of storing that spent fuel or to take a more direct role in the management of the spent fuel and storage facilities. We believe we could implement this proposal by modifying the existing contracts with utilities. We would still have to address a range of issues, including liability, financial and operational responsibilities.
While we want to hear from utilities and other interested parties on how taking title to spent fuel could most efficiently be implemented, our initial thoughts are that a continued reliance on the utilities to manage their spent fuel, rather than the Department, would be most practical and least intrusive on utility operations. Again, the purpose of initiating this dialogue is to better understand what the utilities think and to obtain other relevant perspectives on the issue. Under any approach, the Nuclear Regulatory Commission would continue to provide regulatory oversight of spent fuel storage activities at sites.In return for the Department taking title and financial responsibility for the spent fuel, the Department would expect the utilities to terminate their litigation and claims; something that H.R. 45 does not address. This would end the uncertainty that continuing the litigation brings to all parties and ensure the continuance of a repository program. The potential cost of current litigation damages already places the repository program in jeopardy. If the Department is unable to proceed with a permanent solution, future costs could be even greater. Consequently, the cost to take title appears to be minimal compared to the potential cost of damages, which as I noted above could end up being assessed against the Nuclear Waste Fund.
The cost of taking title onsite would depend on the final arrangements worked out with utilities for spent fuel management. We have not done a detailed cost estimate. Our rough estimate is that it could cost up to $2 to $3 billion between now and 2010. That cost estimate assumes that we would take title of the fuel in accordance with our contract acceptance schedule. There may also be ways in which these costs can be reduced. For example, one of the major costs of continued onsite storage is the cost of dry storage casks. It may be possible to consider federal purchase or lease of these casks. Here again, we need to hear from the industry on their views on how we can best address these issues.
Funding for the DOE to take title on-site could be achieved through a variety of means, ranging from deferral of ongoing spent fuel disposal fee payments, to direct reimbursement for costs incurred, to advance payments for anticipated costs. As with other program costs, payments could come from a mix of Nuclear Waste Fund balances, current payments, or appropriated funds.Again, we need to hear from the industry on their views of payment and funding options.
As we continue to discuss and develop the specifics of a take title alternative to centralized interim storage, we need to take a serious look at how such a proposal would be paid for without imposing undue burdens on either utility ratepayers or the taxpayers. I also want to analyze further proposals that would ensure that the revenues raised by the nuclear waste fee remain available to complete the job of safe management and disposal of nuclear waste.
Both the Administration and the Congress have been aware for some time that the overall constraints of the federal budget process have the potential to limit the availability of funding for the nuclear waste program in the out years. Therefore, I would like to work together with the Congress to assure the repository program continues to be adequately funded. If the Yucca Mountain site is found suitable, it is critical that funding is available after 2001 to meet our obligations as program demands increase and to ensure our ability to meet a date certain for disposal of waste. In exploring any funding alternatives, I want to preserve the two important objectives I mentioned above: (1) that we do not impose undue burdens on either utility ratepayers or the taxpayers; and (2) that the revenues raised by the nuclear waste fee remain available to complete the job.
Mr. Chairman, we are reaching the conclusion of our site characterization effort. We know technical questions about the site remain. We need to finish our scientific and technical work. Ultimately, it is not only the Department of Energy, but also the Nuclear Regulatory Commission (NRC) that will need to pass judgment on whether a repository can be constructed and operated safely. Therefore, in completing the remaining work at the site, we need to ensure that we have an adequate technical basis to support a rigorous NRC licensing process. This will require a continued and sustained effort over the next couple of years. However, the completion of the characterization effort is in sight.
I know that you and many other Members of Congress are frustrated because we have not accepted spent fuel and want to be responsive to utilities and state regulatory commissions that have had to deal with additional spent fuel management responsibilities. I want to reiterate the Administration's view that enactment of interim storage legislation is not the solution. Shipping 10,000 metric tons of spent fuel to Yucca Mountain, as proposed in H.R. 45, is inconsistent with the process and principles established for making a decision on the permanent disposal of our Nation's spent nuclear fuel.
I ask this Subcommittee not to proceed with adoption of interim storage legislation and to work with me to fashion a more practical solution. This legislation would place significant additional financial, programmatic, and legal liabilities on the Department's civilian nuclear waste repositoryprogram. It would prejudge the selection of Yucca Mountain. And it would not resolve the billions of dollars in claims arising out of the delay in accepting utility spent fuel. We need to address the utilities' spent fuel problems, and I believe that we are at a point where there is a genuine opportunity to explore alternatives.

LOAD-DATE: March 14, 1999

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