Copyright 1999 Federal News Service, Inc.
Federal News Service
MARCH 12, 1999, FRIDAY
SECTION: IN THE NEWS
LENGTH:
3026 words
HEADLINE: PREPARED STATEMENT OF SECRETARY
BILL RICHARDSON
U.S. DEPARTMENT OF ENERGY
BEFORE THE
HOUSE COMMERCE COMMITTEE
ENERGY AND POWER SUBCOMMITTEE
BODY:
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.
YUCCA MOUNTAIN
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.
ADMINISTRATION VIEWS OF
H.R. 45
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.
PROPOSAL TO TAKE TITLE ON-SITE
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.
PROGRAM FUNDING REQUIREMENTS
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.
CONCLUSION
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.
END
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March 14, 1999 
