Copyright 1999 Federal News Service, Inc.
Federal News Service
MARCH 24, 1999, WEDNESDAY
SECTION: IN THE NEWS
LENGTH:
4257 words
HEADLINE: PREPARED STATEMENT OF
ERLE NYE
CHAIRMAN AND CHIEF EXECUTIVE
TEXAS UTILITIES COMPANY
ON BEHALF OF
THE NUCLEAR ENERGY INSTITUTE
BEFORE THE SENATE ENERGY AND
NATURAL RESOURCES COMMITTEE
BODY:
Mr. Chairman, Ranking Member Bingaman and distinguished members of the
subcommittee, my name is Erle Nye. I am chairman and chief executive of Texas
Utilities Company. My company owns and operates two nuclear units at the
Comanche Peak nuclear power plant in Somervell County, Texas. Unit 1 went into
operation in 1990 and Unit 2 went into operation in 1993. Together, the Comanche
Peak units and the South Texas Project nuclear units operated by STP Nuclear
Operating Company in Matagorda County provide more than 4,800 megawatts of
electricity to Texas, the fourth-largest nuclear-power electricity generation
portfolio of any state.
I am also chairman of the Nuclear Energy Institute,
and today I am representing the nuclear energy industry's position on S. 608,
the Nuclear Waste Policy Act of 1999.
I want to express my gratitude to you,
Mr. Chairman, as well as to Senators Craig, Grams and Crapo for introducing this
important legislation in the Senate earlier this month. I also want to
compliment this committee for its continuing commitment to resolving the nuclear
waste issue. Broad bipartisan support for similar legislation to S. 608 during
the last two Congresses is a clear signal that the Administration must fulfill
its statutory obligation to accept used nuclear fuel and that the Administration
must adopt an integrated plan, such as S. 608, to manage the nation's nuclear
energy byproducts.
Nuclear power plants supply about 20 percent of America's
electricity, the secondlargest source of electricity for the nation. More than
100 nuclear generating units from Maine to California also are the nation's
largest source of emission-freeenergy--an important distinction recognized by
policymakers who appreciate the unmistakable connection between energy and
environmental policy. In Congress, and indeed across the United States, there is
growing appreciation for the industry's vast experience of more than 2,000
reactor years of safe and reliable operation. There also is a 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 and to significantly reduce carbon dioxide emissions. 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. However, an essential component to ensure nuclear energy's continued
benefits is the federal acceptance and disposal of used nuclear fuel.
Summary
Mr. Chairman, for almost two decades, the Energy Department has
been siting and developing an underground geologic repository for the disposal
of used nuclear fuel and defense-related waste. In recent years, however, the
agency has failed to fulfill an important objective of the program--the
acceptance of used fuel. A little more than a year ago, the Energy Department
was scheduled to start consolidating used fuel and nuclear waste now located in
40 states at more than 100 commercial nuclear power plants, federal research
facilities and defense-related sites. The agency missed its deadline in
violation of its clear statutory duty under the Nuclear Waste Policy Act of
1982. The law requires disposal at a single, federally monitored location. The
failure to take fuel has resulted in more than 61 state agencies, various state
officials and utilities suing the federal government, thereby subjectingit to
billions of dollars in potential liabilities. Many more lawsuits are likely to
follow.
Instead of beginning receipt of this fuel, the Energy Department has
not met its legal responsibilities. DOE has claimed delays in the repository
project and the lack of authority in citing a temporary storage facility for its
failure to act. This conduct is inappropriate 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 possible. As part of
events leading to the U.S. Senate confirmation of Energy Secretary Bill
Richardson, President Clinton wrote a letter to the chairman of this committee
stating that Mr. Richardson would have the "portfolio" to represent the
Administration in working with Congress to resolve the used nuclear fuel
disposal problem.
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 reached a major milestone with the release the long-awaited viability
assessment to Congress that supports continued scientific study of Yucca
Mountain, Nevada, as the site for a permanent repository for used
nuclear fuel. The report, which chronicles more than $3 billion worth of leading
scientific and technical research, said:
"Based on the viability assessment,
DOE believes that Yucca Mountain remains a promising site for a
geologic repository and that work should proceed to support a decision in 2001
on whether to recommend the site to the President for development of a
repository. Over 15 years, extensive research has validatedmany of the
expectations of the scientists who first suggested that remote, desert regions
of the southwest are well-suited for a geologic repository. Engineered barriers
can be designed to contain waste for thousands of years, and the natural
barriers can delay and dilute any radioactive material that migrates from the
waste packages. Current models indicate that the possible radiation exposure to
future populations living nearby could be comparable to present-day exposure
levels from natural background radiation."
When DOE released this
compilation of years of scientific and technical assessments of the site last
December, Secretary Richardson said the Yucca Mountain
viability assessment "reveals that no showstoppers have been identified to
date." Despite this finding, we feel there has been no real attempt from the
White House or the Energy Department to meet their obligation to move fuel from
reactor sites and defense facilities. There also has been no demonstrative shift
in Administration policy toward reforming the program in a manner that would
lead to movement of used nuclear fuel to a centralized federal storage or
disposal facility in the near term.
Today, the consequences of continued
delay are severe. They can be measured first by the federal government's
financial liability that, in actuality, is a liability of taxpayers. Second, the
consumers of nuclear-generated electricity have paid for managing used nuclear
fuel and will continue to do so during the life of the program. Third, delay
will impact economic operations of U.S. nuclear plants, which serve as linchpins
in the nation's electricity supply system and the administration's clean air and
carbon abatement strategies. As this committee knows well, the impact of
protracted delay in this program will unduly constrain nuclear facilities as
they adapt to a competitive electricity market.
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. Due to continued Energy Department inaction on its fuel acceptance
commitment, my company has taken measures to expand the capacity of used fuel
storage pools at our two-unit Comanche Peak site at an expected cost in excess
of $10 million. Without these modifications, Comanche Peak would exhaust
existing fuel storage capacity next year.
Utilities, state attorneys general
and public utility commissions, finding no other recourse, turned to the courts
to hold the Energy Department accountable for its failure to meet its 1998 fuel
acceptance obligation. Electricity consumers have committed more than $15
billion, including interest, to the Nuclear Waste Fund.
Our customers who
count on electricity generated at our Comanche Peak nuclear power plant as well
as the South Texas Project in Texas have committed $323 million for these
government services. It may interest other members of this committee that the
citizens of Illinois have committed $1.9 billion to the Nuclear Waste Fund;
Arkansas, $250 million; Florida, $648 million; Louisiana, $226 million; Oregon,
$237 million; and Washington, $107 million.
Over the years, the federal
government has diverted approximately $8 billion from the Nuclear Waste Fund for
deficit reduction. This continued erosion of resources must be stopped,
especially in view of the program's need for increased levels of funding as it
enters a construction phase for temporary storage and the repository. 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 S. 608, Congress cannot make the necessary funds available within the
budget caps to meet program needs.Without use of a temporary storage facility,
taxpayers could pay 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 nuclear power plant sites. These damages would be assessed
in addition to money that electricity consumers will continue to pay into the
Nuclear Waste Fund for reasonable program costs.
The second consequence of
continued fuel acceptance delays is the uncertainty it creates for many
companies that cannot adequately plan for future nuclear power plant operation
without a date certain for federal used fuel acceptance. Otherwise, the
high-level waste program and its associated expenses impede our ability to make
prudent decisions in a competitive market.
The consequences of delay are far
more acute at those plants that have ceased operation and used fuel awaits
federal government action. The longer fuel sits at these retired plants, the
longer final decommissioning will be delayed. Without legislative action,
cleanup at these sites could not be fully completed for another 20 to 30 years.
With S. 608, however, these plants could be decommissioned in half the time and
returned to a natural, green-field state for other uses.
Nearly 30 operating
nuclear units across the country face a different challenge-used fuel storage
pools that have reached capacity, forcing many utilities to store used fuel rods
in above-ground containers at the site. Had the Energy Department started fuel
acceptance in 1998 according to its contracts with electric utilities that
operate nuclear power plants, additional dry storage needs at these plants would
have been greatly reduced. However, assuming the Energy Department completes
work on a permanent repository at Yucca Mountain in
2015--nearly 80 percent of U.S. nuclear plants will have to add dry fuel storage
capacity at the cost of nearly $5 billion to consumers--a cost that continues to
grow even if DOE begins accepting fuel at Yucca Mountain on
that date.The disposition of used fuel at many sites poses an 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 could dictate whether some plants operate in
the future. Any risk to continued operation would reverberate among all
electricity customers in states that receive their electricity from nuclear
power plants. These uncertainties also threaten local and state tax bases where
plants are located, as well as the job security of tens of thousands of their
employees.
Mr. Chairman, you can see that the passage of S. 608 is essential
to provide reliable used fuel acceptance dates and maintain economic stability
for our region and many others that rely on the nation's 103 nuclear generating
units.
Some parties 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 siting 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. Meanwhile, Northern States
Power and Wisconsin Electric Power Co. are hampered by state legislation and
public utility commission concerns, respectively.
During testimony before
Congress, Secretary Richardson said that DOE is considering meeting its fuel
acceptance obligation by taking title to fuel and leaving it at existing sites
in exchange for utilities dropping their lawsuits against the federal
government. Secretary Richardson said the agency would pay for this program from
the Nuclear Waste Fund.
As portrayed by Secretary Richardson, the proposal
envisions the Energy Department beginning to move used nuclear fuel from utility
sites when thepermanent repository begins operation in 2010, as currently
planned by DOE. Based upon the substantial difference between historical funding
for the repository program and increased future funding needs as described in
DOE's viability assessment, the diversion of funding to create federal storage
facilities at nuclear power plant sites would further delay the repository
program and result in fuel remaining at sites even longer.
Mr. Chairman, the
industry appreciates Secretary Richardson's intent. However, the Energy
Department's take title proposal does not work as a stand alone concept.
Fundamentally, the proposal does not result in the movement of fuel from reactor
sites. It also could result in indefinite delays in a repository program--if not
cancel it altogether--because of inadequate funding.
Although Secretary
Richardson acknowledged "the costs and physical limitations of continued storage
of spent fuel" at nuclear power plants, he has not offered Congress or the
industry any details on how this take title proposal would be implemented and no
definitive plan on how the Energy Department would meet its obligation to move
fuel from plant sites.
Secretary Richardson's testimony before this
committee was significant in two ways, however. He reaffirmed that the agency
has an obligation to take used fuel from utilities, and emphasized the need for
an ongoing dialogue among the Administration, Congress and stakeholders. I
believe that dialogue is more appropriately focused on S. 608, a sensible
approach to fulfilling the federal government's commitment to electricity
consumers. We appreciate the Secretary's intention and look forward to a
dialogue focused on immediate receipt and central storage of used nuclear fuel.
As I mentioned earlier, the agency's repeated delays have forced many
utilities and 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 date. Further,
nearly 100 state public utility commissioners from 32 states wrote Secretary
Richardson demanding that the Energy Department limit electricity consumer
payments into the Nuclear Waste Fund until the agency provides the used fuel
disposal services the fees already have paid for.
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.
Combined, these claims total $4 billion in damages and more lawsuits are
expected. That figure does not include other legal claims that are expected to
be filed in the future, which the Administration has testified could reach $8
billion to $35 billion.
The industry has been presented no viable
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. Worse, the inability to move forward with
used fuel acceptance shifts the responsibility to future generations. This is
not the sort of environmental legacy we want to leave them. Today, delays in
used fuel acceptance aggravate our ability to make prudent decisions in a
competitive market. Let me use Consumers Energy as an example. At its Big Rock
Point plant in Michigan, for instance, 58metric tons of nuclear fuel await
federal management. The longer fuel sits at the retired plant, the greater the
delay for decommissioning. With S. 608, the plant would be decommissioned and
returned to a natural, green-field state for other uses in a reasonable time.
Consumer Energy's Palisades plant, also in Michigan, 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 the reactor is refueled, the amount of used fuel stored
at the site 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 now expects to complete a permanent
repository--the amount of used fuel requiring dry storage at Palisades would
grow to 600 metric tons.
In the years ahead, continued delays could worsen
the economic outlook as the energy landscape shifts to a competitive
marketplace. By passing S. 608, this committee has an opportunity to end the
delays and the financial drain on electricity consumers. This legislation
provides a comprehensive management program that integrates temporary storage at
one federal site, permanent disposal at Yucca Mountain, and a
safe transportation network to transfer fuel 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.
Mr. Chairman, one thing is clear: used fuel must be stored properly. The
question is, does it make more sense to store it in more than 100 locations
across the country 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.S. 608 does more than create certainty for fuel
acceptance and disposal. The legislation ensures adequate funding through the
life of the federal used fuel management program. And it establishes a
risk-based radiation standard whereby radioactive releases would not exceed a
level of risk equivalent to 30 millirems per year. The Nuclear Regulatory
Commission would establish the radiation standard in consultation with the
Environmental Protection Agency. This approach to protecting public health and
safety, and the environment, is consistent with U.S. and international
scientific organizations' recommendations. By comparison, the Nevada state
radiation protection standard is 100 millirems.
Although the Energy
Department and hundreds of scientists and engineers continue a responsible job
of collecting scientific data on Yucca Mountain, we have yet to
address fully the complex political dynamics that surround this issue. In light
of DOE's delays, I respectfully urge the committee to expedite a used fuel
management and disposal program through reform legislation--S. 608. 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 disposal, of
used nuclear fuel.
The Nuclear Waste Policy Act of 1999, S. 608,
accomplishes this programmatic shift while protecting public health, safety and
the environment and ensuring adequate near-term and long-term funding for the
program. Mr. Chairman, you and themembers of this committee are quite familiar
with the features of this legislation, which are virtually the same as
legislation approved by the U.S. Senate 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 S. 608 include:
Establishing a management system for defense waste and used nuclear fuel,
including development of a licensed temporary storage facility within Area 25 of
the Nevada Test Site. The site would safely hold used nuclear fuel until all the
fuel is moved to a permanent repository. A temporary storage facility is
necessary since the Energy Department has stated that the agency could not
accept used fuel without a facility authorized under to the Nuclear Waste Policy
Act. S. 608 permits such a facility; Establishing a date for operating used fuel
storage. Temporary storage would begin operation in 2003.
Requiring DOE to
apply to the Nuclear Regulatory Commission for construction authorization of a
permanent repository by Oct. 31,2001 and ensures full funding for that project;
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 a)! other steps involved in siting,
design, licensing and construction of this central storage facility;Establishing
a risk- based radiation health standard for licensing a repository whereby
releases of radioactivity would not exceed a level of risk equivalent to 30
millirems per year. The standard is more stringent than Nevada state regulations
and is consistent with 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 (a) licensed and registered
operation does not exceed 100 millirems per year;"
Creating a new funding
mechanism consisting of a combination of a user fee beginning in fiscal year
2001 and a mandatory fee, with an average fee to electricity consumers of I mill
per kilowatt-hour until the repository opens. During the averaging period, the
fee may not exceed 1.5 mills/kWh in any year. After the repository opens, the
fee is capped at the current rate of 1 mill/kWh;
Providing for fuel
transportation planning that integrates the states and tribal governments in the
process; for inspection and emergency response plans along preferred shipping
routes or state-designated routes that are consistent with the Waste Isolation
Pilot Project's transportation agreement's principles and practices.
Transportation planning, training and technical assistance is provided to
states, emergency responders and labor organizations; and
Providing for land
conveyances and benefits for affected communities, including payments equal to
taxes.
Conclusion
Nearly 20 percent of the nation's electricity
consumers rely on nuclear power plants for energy that helps preserve air
quality. With no harmful emissions, nuclear energy helps meet federal clean air
regulations and will certainly play an integral role in international clean air
goals. No other fuel source helps the nation achieve its air preservation goals
while offering reliable, competitive electricity that can easily expand to meet
future energy demand. And by balancing the nation's energy portfolio, nuclear
energy provides security from international fuel crises.
For these reasons,
and for our nation's energy security, Congress must tackle a significant
environmental responsibility for the 21st century--securing federal acceptance
of used nuclear fuel and defense waste, and providing certainty for safe
disposal. Federal fuel acceptance also is the only prudent course to avoid tens
of billions of dollars in potential liabilities and legal damages.
With S.
608, the industry and the nation can meet many other challenges; energy
security, air quality and competitive electric production. The visionary
leadership of this committee will assure a new level of intensity and commitment
for this landmark initiative.
END
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March 26, 1999