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Witness Testimony
The Honorable Robert H. Card
A Review of the Department of Energy's Yucca Mountain Project, and Proposed Legislation to Alter the Nuclear Waste Trust Fund (H.R. 3429 and H.R. 3981).
Introduction I appreciate the opportunity to testify about the Department of Energy's program to implement our Nation's radioactive waste management policy, as established by the Nuclear Waste Policy Act of 1982, as amended. The Act requires safe, permanent geologic disposal of spent nuclear fuel and high-level radioactive waste resulting from the Nation's commercial nuclear power and atomic energy defense activities. The disposal of this material in a geologic repository is needed to protect public health and safety and the environment, to maintain our energy options and national security, to allow the cleanup of former weapons production sites, to continue operation of our nuclear-powered naval vessels, and to advance our international nonproliferation goals. The Department's consolidation of spent nuclear fuel and high-level waste from 127 sites at a single secure, remote location in an arid desert, far from cities, schools, and water supplies, is vital to our national interest. As I will discuss at greater length in a moment, the Federal government is contractually required to implement a permanent solution for management of commercial spent nuclear fuel, in return for which utilities and ratepayers have paid fees to cover the costs of disposal. The Administration and the Congress have recognized these important national benefits and supported the Department's geologic repository program. This support was underlined in 2002 when bipartisan majorities in both houses of Congress voted to pass a joint resolution approving the Yucca Mountain site for a repository, and the President signed that resolution into law (Public Law No. 107-200). With the approval of Yucca Mountain as a suitable repository site, the program's focus has shifted from scientific study to the design, licensing and construction of a repository and the development of a transportation system. I am happy to report that the Program is on track to complete the scientific, technical and design work required to submit a license application to the Nuclear Regulatory Commission (NRC) in December 2004 and to begin repository operations at Yucca Mountain in 2010. To accomplish these objectives will require a substantial increase in funding over historical levels. We estimate, for example, that from 2005 to 2010 it will cost about $8 billion to construct the repository and develop the transportation system. That would average more than $1 billion a year, much higher than our previous annual appropriations. If these funding levels are not achieved, we cannot meet the 2010 goal. Today I would like to focus attention on the Administration's legislative proposal that is designed to make it easier for Congress to provide the necessary funding levels. Action on the Administration's proposal is needed as soon as possible to enable the program to stay on track. The Nuclear Waste Funding Problem Enactment of the Administration's legislative proposal would help rectify a long-standing inequity imposed on all of the tens of millions of households who use nuclear-generated electricity. Since 1983 these households have been paying a fee on every kilowatt-hour of nuclear electricity they use, in order to fund the development of a repository for disposal of the used fuel from the nuclear reactors producing that electricity. They are not being treated fairly. By law that money is being collected for one purpose and one purpose only - performance of "nuclear waste disposal activities" through the development of a repository. In actuality, much of the total that has been collected sits unused, but on a year-to-year basis, the fees not appropriated are used to offset other federal programs. The problem is compounded by the fact that the fee is part of a legally binding contractual agreement mandated by Congress in the Nuclear Waste Policy Act that the Department of Energy entered into with the nuclear utilities. In that contract, the Department was required to begin accepting the used fuel for disposal beginning by January 31, 1998, in exchange for utilities' payment of the fee. The fact that this fee is a quid pro quo payment in advance for a contractually required service to be performed by the federal government - a legal obligation affirmed by the federal courts - sets it apart from most other federal user charges and taxes and justifies special consideration in the budget process. The fee was to be placed into a Nuclear Waste Fund and used to pay the full cost of developing and operating the facilities needed to meet the federal government's commitment to conduct nuclear waste disposal activities mandated by the Nuclear Waste Policy Act, and for that purpose alone. This funding mechanism was designed to ensure that the Department of Energy's high-level waste program would have the funds it needed as it needed them in order to get the job done, and that the federal taxpayer did not pay for it. The utilities and their ratepayers have been keeping their part of the bargain since 1983. Unfortunately, the federal appropriations process is increasingly constraining the ability of the federal government to do its share. Because the fee revenues are classified under budget control legislation, as mandatory receipts, they are treated just like general tax revenues and deposited into the federal treasury with no impact at all on the ability of the appropriators to fund the program for which the fees are being paid. As far as the millions of ratepayers are concerned, the fee appears to be just one more federal tax instead of the payment to ensure the delivery of a service that it was intended to be. Over the last 10 years, ratepayers of nuclear utilities have averaged annual payments into the Fund of about $636 million, while appropriations from the Fund averaged $198 million. The total unspent balance in the Fund is nearly $15 billion. Until recently, the waste program's requirements were substantially below the annual fee collections. Beginning with the FY05 budget, however, that situation has changed, with program requirements equaling or exceeding projected income from the fee. To ensure that the waste fee revenues are fully available for their contractually obligated purpose, they need to be reclassified from mandatory to discretionary so they can directly offset the appropriations from the Fund. If the federal government is to honor its solemn legal obligation, it must act now to ensure that the moneys obtained from millions of ratepayers are applied to their intended purpose. The clear objective of the Nuclear Waste Policy Act is not satisfied by letting the money accumulate unspent in the Fund, as is happening now. Instead, it requires that these funds be used at the time and in the amounts needed to deliver on the contractual obligation that justifies their collection in the first place. Need for a Funding Remedy to Avoid Delays and Cost Increases The Department of Energy recognized long ago that it would not be able to open the repository contemplated by the Nuclear Waste Policy Act by 1998. Since 1989, however, it has held to the firm goal of beginning repository operations by 2010. Meeting the 2010 objective will require much greater resources than the program has thus far received. If Congress appropriates less than requested by the Administration, the schedule for repository operation would be jeopardized. This would not be fair to the ratepayers, and it would not be fair to the taxpayers, since they will both pay if there are further delays in meeting the government's contractual obligations. Those taxpayers who are also ratepayers will pay twice. Delay could lead to additional costs in three ways:
In short, everyone loses if we don't fix this funding problem soon. The country will be forced to spend billions of extra dollars, without solving the waste problem. Nuclear waste will remain at sites near communities and water supplies throughout the country, and we will not have finished the job of cleaning up the Cold War legacy at defense sites. The Administration's Proposal We believe a solution to this problem is the Administration's proposal that has been put forward to the Congress and introduced by request as H.R. 3981. The essence of this proposal is to reclassify the revenues from the nuclear utility fees so they can be used in the way that was intended when the Nuclear Waste Policy Act was passed: to develop a repository for disposal of high-level radioactive waste and spent nuclear fuel. Specifically, under the Administration's proposal, the amount of receipts from annual fees would be credited as offsetting collections. The amount credited as offsetting collections would still be subject to approval in an appropriations act, but could be appropriated without reducing the funding that would be available for other federal programs. I should add that the Administration also appreciates the efforts of Congressman Shimkus, Congressman Rush, and the other bipartisan supporters of their bill, H. R. 3429, which seeks the same goal of reclassification of the nuclear waste fee revenues so they can be used to offset appropriations. In light of the issues and concerns just described, we urge you to give careful consideration to the Administration's proposal to correct the constraining way these moneys are now being treated. As you consider the Administration's proposal, let me correct two misconceptions about it-- First, despite misrepresentations by some critics, it does not reduce Congressional control of the program's budget in any way. Congress will still have to appropriate the funds, as required by the Nuclear Waste Policy Act. The effect of the proposal is simply to ensure that Congress can focus its appropriations decisions on ensuring that the funds are used effectively and efficiently to meet the objectives of the Act, without having to worry about the impact on the funding of other programs within the Energy and Water Development appropriation. Why should other programs continue to have to compete with a contractually mandated program that is, or is intended to be, fully self-financing? That competition will only get worse as damage judgments increase the pressure to keep the repository on track. Second, the principle supported by the proposal is specific to the highly unusual contractual arrangement required by the Nuclear Waste Policy Act, and is unlikely to be relevant to many other federal activities. Simply stated, whenever the Federal government, pursuant to an explicit statutory requirement, makes a legally binding contractual commitment specified by that statutory requirement to perform a well-defined service in exchange for payments that cover the costs of that service, it should treat those payments in a way that ensures that they are used for the statutorily-specified contracted purpose. It is hard to see how anyone could disagree with that principle. Likewise, it is hard to see how such distinctive-if not unique-statutory obligations could threaten the ability of Congress to weigh competing demands for appropriations in other, unrelated areas. Let me repeat one key point: The Federal government is contractually obligated to perform the service for which these fees are paid. Over 65 lawsuits have been filed in the U.S. Court of Federal Claims for damages for failure of the government to meet that obligation. The Court of Appeals has already established liability in at least some of the cases, and the first case to proceed to trial to determine the scope of the damages for which the government will be liable recently concluded. Passage of this legislation to help assure adequate funding for the waste program would send a strong signal to the ratepayers, the utilities, and the court that the Federal government is indeed serious about meeting its obligations. Failure to ensure full funding of the waste program could have quite the opposite effect, at a most inopportune time. Importance of Timely Action Some people argue that because of federal budget constraints, now is not the time to increase appropriations for the waste program, much less to make changes in the budgetary treatment of the waste fee. If past decisions are any guide, federal courts are not likely to accept funding limitations as an excuse for failure to meet contractual obligations. In a case from the Depression era involving a federal law, the Economy Act, that stopped payment on government-issued insurance policies, the Supreme Court concluded: "No doubt there was in March, 1933, great need of economy. In the administration of all government business economy had become urgent because of lessened revenues and the heavy obligations to be issued in the hope of relieving widespread distress. Congress was free to reduce gratuities deemed excessive. But Congress was without power to reduce expenditures by abrogating contractual obligations of the United States. To abrogate contracts, in the attempt to lessen government expenditure, would not be the practice of economy, but an act of repudiation."1 The Administration and many in Congress understand the magnitude of the injustice being inflicted on households using nuclear electricity and recognize the need to end it. A number of proposals have been advanced before, to no avail. It is time to stop arguing about which approach would be best, and adopt one that will start to fix the problem. Procrastination will not make it any easier to do the right thing later. We need to take action now to ensure that inappropriate funding constraints do not prevent us from achieving the goal of operation of a repository in 2010. Status of the program Let me talk for a minute about the current activities of the program. By decisively approving the President's recommendation of the Yucca Mountain site, Congress allowed the process of developing a nuclear waste repository to proceed to the next step, recognizing that the independent experts at the Nuclear Regulatory Commission deserve the right to review the 24 years of scientific study of Yucca Mountain and to consider the site for a license. As I stated earlier, the program is on track to complete the work required to submit a license application to the Nuclear Regulatory Commission in December 2004 and to begin repository operations at Yucca Mountain in 2010, providing that action is taken to ensure that the necessary funding is provided throughout that critical period. FY 2005 is a critical year in which important activities must converge if we are to meet the 2010 objective. In FY 2005, the program will be fully engaged in the licensing process. At the same time, it must initiate certain activities in the near term to permit timely construction and ensure readiness for operations. These activities, in the areas of repository readiness and detailed design, transportation system development, and waste acceptance readiness - along with licensing activities - lead to the program's total budget request for FY 2005 of $880 million. While this is a significant increase over historical funding levels, it is an increase that has been carefully planned and understood for many years. We are confident that the program is positioned to commit funds effectively to defend the license application; to accelerate repository surface, subsurface, and waste package design work needed for construction authorization; and to conduct conceptual and preliminary design activities for Nevada transportation. Moreover, a major portion of the increase represents procurements: transportation cask acquisition and important repository site safety infrastructure upgrades. In view of the change in focus of the program since the site recommendation and approval, several steps have been taken to turn the program into a project-oriented organization that can manage capital projects efficiently and cost-effectively and secure a repository license from the NRC. The program is committed to achieving a project management and organization culture founded on the highest standards of safety and quality. The program's "human capital" has been significantly strengthened by installation of a new senior management team with strong skills and extensive experience in the successful management of large capital projects. The Department is putting in place numerous far-reaching management measures, such as a Capital Asset Management Plan and earned-value management system for the program, and undertaking annually a comprehensive, independent external financial, cost, schedule, and technical audit of the program. The program has also undertaken major management initiatives to improve performance in such areas as Quality Assurance, Safety Conscious Work Environment, and Corrective Action, and to better define roles, responsibilities, authority and accountability. These initiatives have better positioned the program to be a successful NRC licensee and to meet mandated requirements for a safe repository, and will help ensure that funds are spent in a way that merits the confidence of Congress and the public. The program plans to submit to the NRC, by December 2004, a high-quality, defensible license application that meets regulatory requirements, merits the NRC's confidence, and supports construction authorization in December 2007. By the end of FY 2004, with the funds appropriated, we will have:
While we are concentrating on the technical issues that the NRC expects us to address for the license application, we are also considering issues raised by the Nuclear Waste Technical Review Board and other independent observers. For example, there has been discussion recently of a report by the Technical Review Board concerning the possibility of corrosion of the waste packages at the temperatures which will be reached in the repository. As we understand it, the Board's concern relates to the appropriate thermal operating conditions for our proposed repository design rather than to the ability to build a safe repository at the Yucca Mountain site at all. We are conducting a detailed evaluation of the Board's report, and plan to discuss the issue with the Board at their meeting in May. We believe that our current design and proposed operating conditions would meet the radiation protection standards established by the Nuclear Regulatory Commission and the Environmental Protection Agency for a Yucca Mountain repository. We also believe that the licensing process will ensure that any issue that has significant potential for affecting safety will receive rigorous scrutiny. A repository will not be constructed, much less operated, unless such issues have been addressed to the Commission's satisfaction. Even after operation begins, the Commission's regulations require us to conduct a long term performance confirmation program to collect and analyze data to verify the bases for the repository license. We must also ensure that the waste can be retrieved from the repository if necessary for at least 50 years after emplacement begins, in the event that the results of performance confirmation indicate that changes are necessary. In fact, we are providing the capability to keep the repository open for at least 100 years, allowing plenty of time to improve our scientific understanding and deploy new technology as appropriate. Before discussing our efforts to ensure that we will have a transportation system in place to move waste to the repository in 2010, I would like to address an issue concerning work at Yucca Mountain that has received considerable attention recently and about which we are taking decisive action. In September 2003, a former Yucca Mountain Project employee expressed concern about overexposure to silica and other potentially harmful substances during tunnel mining operations in the early to mid-1990s. Prior to the beginning of tunnel boring operations in 1994, safety programs were in place. Respiratory protection was made available to Yucca Mountain workers; however, between 1992 and 1996, requirements for its use were not consistently applied. In 1996, the Office of Civilian Radioactive Waste Management issued a stop work order, established a rigorous protection program, and enhanced monitoring of the work environment. Also in 1996, ventilation in the tunnel was improved to better control dust levels. Our records indicate that the requirements for the proper use of respiratory protection have been in effect since 1996 and have been rigorously enforced. We feel confident that the program is in full compliance and will provide safe conditions for its workers into the future. To respond to the concern expressed by the former employee in 2003, in January 2004 we established the Silicosis Screening Program with the University of Cincinnati for current and former workers. This program provides medical screening that will detect any pulmonary changes. This program is free of charge to the workers. We have sent 2400 letters about this program to former and current workers, including a substantial number who did not work in the underground facility. We estimate that some 1200-1500 people have worked in the underground from 1992 to the present. I should note that in 2000, two cases of silicosis were diagnosed through the ongoing medical surveillance program for current workers. Both of these individuals worked at Yucca Mountain during the tunneling operations and also had previous mining experience. In addition to implementing the screening program, we also have taken action to ensure that our current worker protection program is technically sound and fully implemented. Let me turn now to our transportation activities related to Yucca Mountain, which were deferred for many years while the program focused on site characterization and the technical work supporting the license application. The acquisition of rail and truck casks; interactions with state, tribal, and local governments; and construction of a rail line in Nevada are all critical for achieving waste acceptance goals in 2010. We have taken some significant first steps. In November 2003 we published the Strategic Plan for the Safe Transportation of Spent Nuclear Fuel and High-Level Radioactive Waste to Yucca Mountain: A Guide to Stakeholder Interaction. The plan described how we will conduct an open and collaborative planning process involving states, tribes, and other interested parties as we develop and refine the transportation system. We have already begun working with State Regional Groups to identify the topics for future interaction and establish processes for working together. We anticipate a productive dialogue on issues that include the selection of transportation routes and modes, emergency response planning and training, safeguards and security, operational practices, communications and information access, worker protection, training, training standards, and qualifications. Another important action that occurred at the end of last year was the identification of a preferred rail corridor for construction of a rail line in Nevada to connect an existing main line to the repository, should the Department choose mostly rail as the preferred mode of transportation. Five rail corridor options were identified in the Final Environmental Impact Statement (EIS), but none offered a clear environmental advantage. We looked at other factors, including views that had been expressed over the years, to identify our preferred corridor. The Caliente corridor appears to best assure the safe, secure, and timely transport capability, due to its remote location and lower likelihood of land use conflicts. In December, we identified the Caliente corridor as our preference, with the Carlin corridor as a secondary preference. We also initiated the process for withdrawal of federal land for the Nevada rail line within the preferred corridor. In the Final EIS for the repository, the Department stated that mostly rail was the preferred mode of transportation, both nationally and in the State of Nevada. The mostly rail option would limit the number of shipments into Nevada to the repository site each year. A Record of Decision is pending on the mode of transportation and on the corridor for Nevada transportation if the mostly rail mode is selected. Following these actions, we would schedule public scoping hearings in Nevada and award a contract for an EIS for a specific alignment within the rail corridor, and a contract for conceptual design for the rail line. We plan to focus on cask acquisition activities in FY 2005. We must begin the process now because cask design, certification, and fabrication take years to complete. We are also planning to undertake conceptual design for a fleet management facility that will support operations and maintenance of the cask fleet. We believe that we can implement a transportation system that is safe and secure and merits public confidence, and we are committed to doing so. We are still at an early point in the process, but the collaborative approach we have established provides the framework for addressing stakeholder priorities and ensuring coordination with all interested parties. Conclusion In conclusion, in FY 2005 and beyond, the program will need significantly increased funding to pay for the design, construction, and operation of the repository, and the transportation infrastructure. The repository and the transportation projects are on the critical path to the program's goal of initiating waste receipt in 2010. If funds are available as needed, the program is well positioned to achieve the goal of beginning, in less than 7 years, to operate the world's first geologic repository for high level waste and used nuclear fuel.
[1] Lynch v. United States , 292 U.S. 571, 580 (1934) Related Documents |
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