Nuclear energy policy

Nuclear Energy Policy
Updated March 12, 2002
Resources, Science, and Industry Division Congressional Research Service ˜ The Library of Congress
Overview of Nuclear Power in the United States Nuclear Power Plant Safety and Regulation Domestic Reactor SafetySecurity and Emergency PlanningReactor Safety in the Former Soviet Bloc Licensing and RegulationDecommissioning and Life ExtensionNuclear Accident Liability Federal Funding for Nuclear Energy Programs 03-12-02
extension bill passed by the House November gress include questions about radioactive 27, 2001 (H.R. 2983). An extra $36 million waste management, research and development for nuclear power plant security was provided priorities, power plant safety and regulation, by the FY2002 supplemental appropriations terrorism, the Price-Anderson Act accident bill, included in the FY2002 Defense Appro- liability system, nuclear weapons proliferation, priations Bill (H.R. 3338), passed by Congress and technology for producing nuclear fuel.
been one of the most controversial aspects of reduced by the Clinton Administration, and the nuclear power. The Nuclear Waste Policy Act Bush Administration proposed further cuts.
of 1982 (P.L. 97-425), as amended in 1987, However, in the Energy and Water Develop- ment Appropriations for FY2002 (P.L. 107- characterization of Yucca Mountain in Nevada 66), Congress generally rejected those reduc- as a permanent underground repository for tions. President Bush’s FY2003 budget re- quest includes $38.5 million for a Department recommended approval of the site February of Energy (DOE) effort to encourage deploy- ment of new commercial nuclear power plantsby 2010.
disposal and other congressional action will Several bills have been introduced in the revive the U.S. nuclear power industry’s 107th Congress to encourage the growth of nuclear power. A number of nuclear provi- considerations. Natural gas- and coal-fired sions are included in comprehensive energy powerplants currently are favored over nuclear reactors for new generating capacity. Howev- August 2, 2001. Nuclear energy provisions er, rising energy prices and electricity short- are also included in omnibus energy legislation ages have led some utilities to consider build- introduced by Senator Daschle December 5, 2001 (S. 1766). Similar provisions are in aDaschle amendment (S.Amdt. 2917), which was offered on the floor to another energy bill, tion, of nuclear weapons throughout the world has risen sharply since longtime rivals Indiaand Pakistan conducted competing nuclear The September 11, 2001, terrorist attacks weapons tests in May 1998. Recent height- on the United States raised questions about ened tensions in Southeast Asia have focused nuclear power plant security. The Nuclear attention on the effectiveness of the interna- tional nuclear nonproliferation regime. In addition, the September 11 attacks have raised highest security level and began evaluating new concerns about the potential for terrorists plant security requirements. Reactor security to detonate nuclear explosives or radioactive provisions were included in a Price-Anderson Congressional Research Service ˜ The Library of Congress
President Bush’s FY2003 budget request, submitted to Congress February 4, would provide $38.5 million for a Department of Energy (DOE) effort to encourage deploymentof new commercial nuclear power plants by 2010. The overall budget request for nuclearenergy supply programs is $250.7 million, about $50 million below the FY2002appropriation. A 40% increase is being sought for the DOE nuclear waste disposalprogram, to $527 million. According to DOE, the increase is needed for preparation of alicense application to the Nuclear Regulatory Commission (NRC) for a proposed nationalnuclear waste repository at Yucca Mountain, Nevada. Funding for cleaning upcontaminated DOE nuclear facilities would rise nearly 15%, to $6.7 billion, including an$800 million fund to pay for alternative cleanup strategies approved by environmentalregulators. NRC is requesting a 5% spending increase, to $605.6 million. President Bush recommended to Congress February 15 that a license application be submitted to NRC to build a nuclear waste repository at Yucca Mountain. Nevada GovernorGuinn announced the same day that he would exercise his right under the Nuclear WastePolicy Act to send Congress a notice of disapproval for the Yucca Mountain site. That so-called “state veto” would block further action at the site unless a congressional resolutionto approve the site were enacted into law within 90 days of continuous session after the stateveto had been received. NRC announced February 14 that it would order nuclear power plants and other key nuclear facilities to implement enhanced security measures, in light of continued securitythreats. Some of the new measures were included in security recommendations issued tonuclear plants after the September 11, 2001, terrorist attacks on New York and Washington,D.C. NRC is continuing a “top to bottom” review of nuclear security regulations andprocedures. In floor action on an omnibus energy bill (S. 517), the Senate on March 7 approved an amendment to extend the Price-Anderson Act nuclear liability system 10 years forcommercial reactors and indefinitely for DOE nuclear contractors. The amendment wouldallow nuclear plants consisting of several small modules to be treated as a single reactorunder the Price-Anderson system. The House approved a 15-year extension of the Price-Anderson Act on November 27, 2001 (H.R. 2983). Overview of Nuclear Power in the United States
The U.S. nuclear power industry, while currently generating about 20% of the nation’s electricity, faces an uncertain future. No nuclear plants have been ordered since 1978 andmore than 100 reactors have been canceled, including all ordered after 1973. No units arecurrently under active construction; the Tennessee Valley Authority’s Watts Bar 1 reactor,ordered in 1970 and licensed to operate in 1996, was the most recent U.S. nuclear unit to be completed. The nuclear power industry’s troubles include high nuclear power plantconstruction costs, public concern about nuclear safety and waste disposal, and regulatorycompliance costs.
High construction costs are perhaps the most serious obstacle to nuclear power expansion. Construction costs for reactors completed since the mid-1980s have ranged from$2-$6 billion, averaging more than $3,000 per kilowatt of electric generating capacity (in1997 dollars). The nuclear industry predicts that new plant designs could be built for abouthalf that amount if many identical plants were built in a series, but such economies of scalehave yet to be demonstrated.
Nevertheless, all is not bleak for the U.S. nuclear power industry, which currently comprises 103 licensed reactors at 65 plant sites in 31 states (excluding one Tennessee ValleyAuthority unit that is indefinitely shut down). Electricity production from U.S. nuclear powerplants is greater than that from oil, natural gas, and hydropower, and behind only coal, whichaccounts for 55% of U.S. electricity generation. Nuclear plants generate more than half theelectricity in six states.
Average operating costs of U.S. nuclear plants dropped substantially during the 1990s, and costly downtime has been steadily reduced. Licensed commercial reactors generatedelectricity at a record-high average of more than 88% of their total capacity in 2001,according to industry statistics.1 The Calvert Cliffs nuclear plant received the first 20-year license extension from the Nuclear Regulatory Commission (NRC) in March 2000; two more extensions have since beengranted, and extensions for 13 additional reactors are under review. Industry consolidationcould also help existing nuclear power plants, as larger nuclear operators purchase plantsfrom utilities that run only one or two reactors. Several such sales have been announced,including the March 2001 sale of the Millstone plant in Connecticut to Dominion Energy fora record $1.28 billion. The merger of two of the nation’s largest nuclear utilities, PECOEnergy and Unicom, completed in October 2000, consolidated the operation of 17 reactorsunder a single corporate entity, Exelon Corporation.
Existing nuclear power plants appear to hold a strong position in the ongoing restructuring of the electricity industry. In most cases, nuclear utilities have receivedfavorable regulatory treatment of past construction costs, and average nuclear operating costsare currently estimated to be lower than those of competing technologies.2 Although eightU.S. nuclear reactors have permanently shut down since 1990, recent reactor sales couldindicate greater industry interest in nuclear plants that previously had been consideredmarginal. Despite the shutdowns, total U.S. nuclear electrical output increased nearly 25%from 1990 to 2000, according to the Energy Information Administration. The increaseresulted primarily from reduced downtime at the remaining plants, the startup of five newunits, and reactor modifications to boost capacity.
1 “U.S. Nuclear Record Sustained as 2001 Output nears 800-Million MWH,” Nucleonics Week,February 14, 2002, p. 1.
2 “Production Costs Made Nuclear Cheapest Fuel in 1999, NEI Says,” Nucleonics Week, January 11,2001, p. 3.
A spike in fossil fuel prices and shortages of electricity during 2000-2001 helped encourage at least two nuclear operating companies to consider building new commercialnuclear reactors. Exelon is participating in an international consortium that may build ademonstration Pebble Bed Modular Reactor in South Africa, a reactor cooled by helium thatis intended to be highly resistant to accidents. Entergy is considering selecting U.S. sites forfuture nuclear units.3 The Department of Energy (DOE) included an initiative in its FY2003budget request to encourage construction of new commercial reactors by 2010.
Global warming that may be caused by fossil fuels — the “greenhouse effect” — is cited by nuclear power supporters as an important reason to develop a new generation of reactors.
But the large obstacles noted above must still be overcome before electric generatingcompanies will risk ordering new nuclear units.
A nuclear energy bill by Senator Domenici, S. 472, is intended to overcome some of the obstacles to new reactors. Among the bill’s provisions are a demonstration of the approvalprocess for new reactor sites, the designation of nuclear power as “an environmentallypreferable product” for government procurement purposes and as an “emission-free electricitysource” under the Clean Air Act, the inclusion of nuclear power in any “greenhouse gas”incentive programs, and changes in nuclear licensing requirements and procedures.
Nuclear Power Research and Development
The Bush Administration’s National Energy Policy, issued in May 2001, calls for “the expansion of nuclear energy in the United States.” DOE’s FY2003 budget request reflectsthat policy with a funding initiative to encourage construction of new commercial reactors by2010 and additional funding for advanced reactor designs. However, total funding for nuclearenergy supply programs would decline by about $50 million from FY2002, to $250.1 million.
DOE’s “Nuclear Power 2010” initiative would receive $38.5 million in FY2003, an increase of $30.5 million over FY2002. According to the DOE budget justification, theprogram builds on efforts begun in FY2001 to “identify the technical, institutional andregulatory barriers to the deployment of new nuclear power plants by 2010.” The programseeks to deploy both a water-cooled reactor (similar to most existing commercial plants) anda gas-cooled reactor (such as the design proposed by Exelon). DOE would pay up to half thecost of site approval, reactor design certification, license applications, detailed design work,and development of improved construction techniques.
DOE is requesting $8.0 million in FY2003 – double the FY2002 level – for advanced reactor technologies that could be ready for deployment after 2010. A variety of conceptsare under consideration, according to the budget justification, including reactors fueled byplutonium recovered through reprocessing of spent nuclear fuel. The Administration’s National Energy Policy report contends that plutonium recovery could reduce the long-term environmental impact of nuclear waste disposal and increase 3 “Entergy Considers Picking Sites for Potential Plant Construction,” Nucleonics Week, May 3, 2001,p. 1.
domestic energy supplies. However, opponents contend that the separation of plutoniumfrom spent fuel poses unacceptable environmental risks and undermines U.S. policy onnuclear weapons proliferation.
DOE is requesting $18 million to study pyroprocessing technology and electrometallurgical treatment of spent fuel from the Experimental Breeder Reactor II inIdaho, a decrease of about $4.5 million from FY2002. No funding is requested for wastetransmutation, which involves bombarding nuclear waste with neutrons from a fast reactoror particle accelerator to convert long-lived radioactive isotopes into radioisotopes withshorter half-lives. Electrometallurgical treatment could be included in the DOE advanced fuelrecycling program authorized by H.R. 4.
A DOE program to support innovative nuclear energy research projects, the “nuclear energy research initiative” (NERI), would receive $25 million under the FY2003 request, a$7 million reduction from FY2002. No funding is requested for “nuclear energy plantoptimization” (NEPO), a research program to improve the economic competitiveness ofexisting nuclear power plants.
Several nuclear research and development provisions are included in comprehensive energy legislation (H.R. 4) approved by the House August 2. A DOE “advanced fuelrecycling technology research and development program” would be authorized at $10 millionin FY2002. The bill would authorize appropriations of $60 million for NERI, $15 million forNEPO, and $20 million for the nuclear energy technologies program for FY2002, with “suchsums as are necessary” for the following two fiscal years.
Senator Domenici’s nuclear energy bill, S. 472, includes an extensive section on development of advanced reactor designs. DOE would be required to give Congress aresearch and development plan that would lead toward the selection in 2004 of one or moreadvanced nuclear energy systems for demonstration through a public and private partnership.
The bill would authorize $50 million for the program in FY2002 and such sums as necessarythrough FY2006.
“Nuclear energy is the only expandable, large-scale electricity source that avoids air emissions and meets the energy demands of a growing, modern economy,” according to theDOE FY2003 budget justification. However, opponents have criticized DOE’s nuclearresearch program as providing wasteful subsidies to an industry that they believe should bephased out as unacceptably hazardous.
Despite the federal cutbacks in developing new reactors, the recently tightening electricity supply situation has led to the first serious consideration of new U.S. reactorconstruction in many years. Substantial attention has focused on Exelon’s participation in aconsortium that is considering construction of an advanced “pebble bed” modular high-temperature gas-cooled reactor (PBMR) in South Africa, which could lead to constructionof similar reactors in the United States. The reactor’s fuel would be encased within tennis-ball-sized spheres that would be designed to withstand maximum accident temperatureswithout damage. The consortium plans to decide whether to proceed with the South Africaproject by autumn of 2002.
Future nuclear plant orders depend primarily on whether the PBMR and other new designs can cut construction costs by more than half from their average of the past twodecades. It is not yet clear whether that cost goal can be achieved.4 (For more about nuclearpower plant costs, see CRS Report RL31064, Nuclear Power: Prospects for NewCommercial Reactors.) Nuclear Power Plant Safety and Regulation
Safety and Security
Controversy over safety has dogged nuclear power throughout its development, particularly following the March 1979 Three Mile Island accident in Pennsylvania and theApril 1986 Chernobyl disaster in the former Soviet Union. In the United States, safety-relatedshortcomings have been identified in the construction quality of some plants, plant operationand maintenance, equipment reliability, emergency planning, and other areas. NRC’s oversightof the nuclear industry is an ongoing issue; nuclear utilities often complain that they aresubject to overly rigorous and inflexible regulation, but nuclear critics charge that NRCfrequently relaxes safety standards when compliance may prove difficult or costly to theindustry. In the wake of the September 11, 2001, terrorist attacks against the United States,concerns about nuclear power plant security have received heightened attention.
Domestic Reactor Safety. In terms of public health consequences, the safety record
of the U.S. nuclear power industry in comparison with other major commercial energytechnologies has been excellent. In more than 2,250 reactor-years of operation in the UnitedStates, the only incident at a commercial power plant that might lead to any deaths or injuriesto the public has been the Three Mile Island accident, in which more than half the reactor coremelted. Public exposure to radioactive materials released during that accident is expected tocause fewer than five deaths (and perhaps none) from cancer over the following 30 years.
The relatively small amounts of radioactivity released by nuclear plants during normal operation are not generally believed to pose significant hazards. Documented public exposureto radioactivity from nuclear power plant waste has also been minimal, although the potentiallong-term hazard of waste disposal remains controversial. There is substantial scientificuncertainty about the level of risk posed by low levels of radiation exposure; as with manycarcinogens and other hazardous substances, health effects can be clearly measured only atrelatively high exposure levels. In the case of radiation, the assumed risk of low-levelexposure has been extrapolated mostly from health effects documented among personsexposed to high levels of radiation, particularly Japanese survivors of nuclear bombing inWorld War II.
The consensus among most safety experts is that a severe nuclear power plant accident in the United States is likely to occur less frequently than once every 10,000 reactor-years ofoperation. These experts believe that most severe accidents would have small public healthimpacts, and that accidents causing as many as 100 deaths would be much rarer than once 4 Weil, Jenny. “Exelon Considering Demo Plant in U.S. to Prove PBMR Concept.” Platts NucleonicsWeek. December 13, 2001. p. 1.
every 10,000 reactor-years. On the other hand, some experts challenge the complexcalculations that go into predicting such accident frequencies, contending that accidents withserious public health consequences may be more frequent.
Security and Emergency Planning. Nuclear power plant security has been an
ongoing issue, but concerns were considerably increased following the terrorist attacks onNew York and Washington, D.C. At NRC’s recommendation, nuclear power plants in theUnited States went to the highest level of security immediately after the attacks. The NRCEmergency Operations Center was activated, as well as regional NRC emergency centers, allof which maintained constant contact with the nation’s nuclear power plants.
NRC ordered all commercial reactors on February 26, 2002, to “implement interim compensatory security measures for the generalized high-level threat environment.” Someof the required security measures had been included in NRC’s previous securityrecommendations. Although most of the detailed security requirements are secret, NRC saidthey generally included: ! increase patrols at nuclear power plants;! augmented security forces and capabilities;! establishment of additional security posts;! installation of additional physical barriers;! vehicle checks at greater distances from vital facilities;! enhanced plant security coordination with law enforcement and military ! more restrictive controls on personnel access to nuclear plant sites.
In light of the unprecedented attacks, NRC Chairman Richard A. Meserve, with the support of the other Commissioners, ordered a staff review of NRC’s security regulations andprocedures. NRC received $36 million in FY2002 supplemental appropriations to pay foranalyzing the “design basis threats” that nuclear plants must be able to prevent, strengthenpersonnel screening procedures for nuclear facilities, and improve emergency preparednessprograms and emergency communication capabilities. The funding was included in theFY2002 Defense Appropriations bill (H.R. 3338), approved by Congress December 20, 2001.
NRC is seeking an additional $29.3 million for FY2003 to continue its research effort onsecurity threats.
NRC regulations require nuclear power plants to be designed and operated to prevent unauthorized intrusion and to withstand external attacks. However, reactor containmentstructures are not specifically designed to withstand the types of deliberate air crashes thatwere carried out September 11, according to an NRC fact sheet. Groups critical of thenuclear industry contend that such a crash could cause a reactor meltdown, but some industryofficials have expressed confidence that no radioactive release would occur. To preventinternal threats, background checks are required for unescorted access and computerizedsecurity doors monitor the movement of personnel throughout each reactor building.
Nuclear plant security forces are tested periodically with mock attacks under NRC’s Operational Safeguards Response Evaluation (OSRE) program. Several power plants arescheduled to test the industry-initiated Safeguards Performance Assessment (SPA) program, a security force self-assessment system that would replace the OSRE program.
Implementation of the SPA program has drawn criticism from both the industry and its critics.
Since the September 11 terrorist attacks, a number of groups have intensified their criticism of NRC’s nuclear plant security requirements as being inadequate againstsophisticated assaults. A bill to extend the Price-Anderson Act nuclear liability system (H.R.
2983), approved by the House November 27, 2001, would require the federal governmentto study a wide variety of security threats to nuclear facilities and to determine which threatswould come from enemies of the United States and therefore be the responsibility of thefederal government and which threats should be guarded against by nuclear power plantowners. NRC would be required to issue new regulations to ensure that nuclear power plantswould be prepared for the threats identified as their responsibility. Other provisions wouldrequire that NRC continue designing, implementing, and evaluating security exercises atnuclear plants, rather than relying on an industry self-assessment program, and require NRCto issue new security regulations for nuclear materials transportation.
NRC would be required to take over the security forces at nuclear power plants under companion bills introduced November 29, 2001, by Representative Markey and Senator Reid(H.R. 3382, S. 1746). Supporters of the measure contend that existing guard forces hired byreactor owners are inadequate, but NRC strongly opposes the provision on the grounds thatdirectly providing reactor security would interfere with its primary mission as an independentsafety regulator.
The legislation also would require NRC to establish stockpiles of potassium iodide (KI) tablets within at least 50 miles of nuclear power plants. A separate bill focused specificallyon the KI issue was introduced by Representative Markey on November 13, 2001 (H.R.
3279). If taken quickly enough, the tablets can prevent radioactive iodine released during anuclear accident from being absorbed in the thyroid gland. On December 20, 2001, NRCoffered to supply potassium iodide tablets to states in which nuclear power plants are locatedor nearby.
(For more information, see CRS Report RS21131, Nuclear Powerplants: Vulnerability to Terrorist Attack, and CRS Terrorism Electronic Briefing Book fact sheet on NuclearPower Plant Emergency Response,http://www.congress.gov/brbk/html/ebter138.html.) Reactor Safety in the Former Soviet Bloc. The Chernobyl accident was by far
the worst nuclear power plant accident to have occurred anywhere in the world. At least 31persons died quickly from acute radiation exposure or other injuries, and thousands ofadditional cancer deaths among the tens of millions of people exposed to radiation from theaccident may occur during the next several decades.
According to a November 1995 report by the Organization for Economic Cooperation and Development (OECD), the primary observable health consequence of the accident hasbeen a dramatic increase in childhood thyroid cancer. About 1,000 cases of childhood thyroidcancer were reported in certain regions surrounding the destroyed reactor — a rate that is asmuch as a hundred times the pre-accident level, according to OECD. The death rate foraccident cleanup workers also rose measurably, the organization reported. The OECD report estimated that about 50,000 square miles of land in Belarus, Ukraine, and Russia weresubstantially contaminated with radioactive cesium.
World concern in recent years has focused on the safety of 13 other Chernobyl-type reactors (called RBMKs) that are still operating in the former Soviet Union (the last operatingChernobyl unit was permanently closed at the end of 2000). Despite safety improvementsmade after the Chernobyl disaster, the RBMKs remain inherently unstable and dangerous,according to many Western experts. Also still operating in the former Soviet bloc are 10early-model Soviet light water reactors (LWRs), which are similar to most Western reactorsbut suffer from major safety deficiencies, such as the lack of Western-style emergency coolingsystems.
The United States is providing direct assistance for upgrading the safety of Soviet- designed reactors, a program being coordinated by DOE, NRC, the Agency for InternationalDevelopment (AID), and the Department of State. DOE is seeking $14.6 million in FY2003for improving the operation and physical condition of Soviet-designed nuclear power plants,a decrease of $6.5 million from FY2002. The General Accounting Office estimates that $1.93billion had been provided through November 1999 by the United States and otherindustrialized nations to improve the safety of Soviet-designed reactors. Of that amount,$753 was contributed by the European Union, $532 by the United States, $43 million by theInternational Atomic Energy Agency, and the remainder from 14 other countries.
Licensing and Regulation
For many years a top priority of the nuclear industry was to modify the process for licensing new nuclear plants. No electric utility would consider ordering a nuclear powerplant, according to the industry, unless licensing became quicker and more predictable, anddesigns were less subject to mid-construction safety-related changes ordered by NRC. TheEnergy Policy Act of 1992 largely implemented the industry’s licensing goals.
Nuclear plant licensing under the Atomic Energy Act of 1954 (P.L. 83-703; U.S.C.
2011-2282) had historically been a two-stage process. NRC first issued a construction permitto build a plant, and then, after construction was finished, an operating permit to run it. Eachstage of the licensing process involved complicated proceedings. Environmental impactstatements also are required under the National Environmental Policy Act.
Over the vehement objections of nuclear opponents, the Energy Policy Act (P.L. 102- 486) provides a clear statutory basis for one-step nuclear licenses, which would combine theconstruction permits and operating licenses and allow completed plants to operate withoutdelay if construction criteria are met. NRC would hold preoperational hearings on theadequacy of plant construction only in specified circumstances. DOE’s Nuclear Power 2010initiative proposes to pay up to half the cost of combined construction and operating licensesfor a water-cooled and a gas-cooled reactor. H.R. 4 would specify that a reactor’s 40-yearoperating period under a combined license would begin when the reactor is ready to operate,rather than when the license is issued prior to construction.
A fundamental concern in the nuclear regulatory debate is the performance of NRC in issuing and enforcing nuclear safety regulations. The nuclear industry and its supporters haveregularly complained that unnecessarily stringent and inflexibly enforced nuclear safety regulations have burdened nuclear utilities and their customers with excessive costs. Butmany environmentalists, nuclear opponents, and other groups charge NRC with being tooclose to the nuclear industry, a situation that they say has resulted in lax oversight of nuclearpower plants and routine exemptions from safety requirements.
Primary responsibility for nuclear safety compliance lies with nuclear plant owners, who are required to find any problems with their plants and report them to NRC. Compliance isalso monitored directly by NRC, which maintains at least two resident inspectors at eachnuclear power plant. The resident inspectors routinely examine plant systems, observe theperformance of reactor personnel, and prepare regular inspection reports. For serious safetyviolations, NRC often dispatches special inspection teams to plant sites.
In response to congressional criticism, NRC has begun reorganizing and overhauling many of its procedures. The Commission is moving toward “risk-informed regulation,” inwhich safety enforcement is guided by the relative risks identified by detailed individual plantstudies. NRC began implementing a new reactor oversight system April 2, 2000, that relieson a series of performance indicators to determine the level of scrutiny that each reactorshould receive. However, the Union of Concerned Scientists has questioned the validity ofthe individual plant studies on which risk-informed regulation is based.
Senator Domenici’s nuclear energy bill, S. 472, would change a number of licensing requirements and procedures, including the elimination of foreign ownership restrictions,authorization of informal licensing hearings in place of adjudicatory proceedings, andelimination of automatic Justice Department antitrust reviews of license applications.
Decommissioning and Life Extension
When nuclear power plants end their useful lives, they must be safely removed from service, a process called decommissioning. NRC requires nuclear utilities to make regularcontributions to special trust funds to ensure that money is available to remove all radioactivematerial from reactors after they are closed. Because no full-sized U.S. commercial reactorhas yet been completely decommissioned, which can take several decades, the cost of theprocess can only be estimated. Decommissioning cost estimates cited by a 1996 DOE report,for one full-sized commercial reactor, ranged from about $150 million to $600 million in 1995dollars. Disposal of large amounts of low-level waste, consisting of contaminated reactorcomponents, concrete, and other materials, is expected to account for much of those costs.
Consolidation of the nuclear industry has raised questions about the tax treatment of decommissioning funds when a commercial reactor is sold. H.R. 4 specifies that dedicatednuclear decommissioning funds can be transferred without incurring additional tax liabilities.
For planning purposes, it is generally assumed that U.S. commercial reactors could be decommissioned at the end of their 40-year operating licenses, although several plants havebeen retired before their licenses expired and others could seek license renewals to operatelonger. NRC rules that took effect June 13, 1992, allow plants to apply for a 20-year licenseextension, for a total operating life of 60 years. Industry officials have predicted that mostcurrently operating reactors will seek NRC license extensions. Assuming a 40-year lifespan,without life extension, more than half of today’s 103 licensed reactors could bedecommissioned by the year 2016.
Nuclear Accident Liability
Liability for damages to the general public from nuclear accidents is addressed by the Price-Anderson Act (primarily Section 170 of the Atomic Energy Act of 1954, 42 U.S.C.
2210). The act is up for reauthorization on August 1, 2002, but existing nuclear plants willcontinue to operate under the current Price-Anderson liability system if no extension isenacted.
Under Price-Anderson, the owners of commercial reactors must assume all liability for accident damages awarded to the public by the court system, and they must waive most oftheir legal defenses following a severe accident (“extraordinary nuclear occurrence”). To payany such damages, each licensed reactor must carry financial protection in the amount of themaximum liability insurance available, currently $200 million. Any damages exceeding thatamount are to be assessed equally against all operating commercial reactors, up to $83.9million per reactor. Those assessments – called “retrospective premiums” – would be paidat an annual rate of no more than $10 million per reactor, to limit the potential financialburden on reactor owners following a major accident. Including three that are not operating,106 commercial reactors are currently covered by the Price-Anderson retrospective premiumrequirement.
For each accident, therefore, the Price-Anderson liability system currently would provide up to $9.09 billion in public compensation. That total includes the $200 million in insurancecoverage carried by the reactor that had the accident, plus the $83.9 million in retrospectivepremiums from each of the 106 currently covered reactors. On top of those payments, a 5%surcharge may also be imposed, raising the total per-reactor retrospective premium to $88.1million and total compensation to $9.5 billion. Under Price-Anderson, the nuclear industry’sliability for an accident is capped at that amount, which varies depending on the number ofcovered reactors, the amount of available insurance, and an inflation adjustment that is madeevery five years. Payment of any damages above that liability limit would requirecongressional approval under special procedures in the act.
The Price-Anderson Act also covers contractors who operate hazardous DOE nuclear facilities. The liability limit for DOE contractors is the same as for commercial reactors,except when the limit for commercial reactors drops because of a decline in the number ofcovered reactors. Since 1998, the number of covered commercial reactors has dropped from110 to 106, so the commercial liability limit has dropped from $9.43 billion to $9.09 billion.
Under the law, however, the limit for DOE contractors does not decline and so remains at$9.43 billion. Price-Anderson authorizes DOE to indemnify its contractors for the entireamount, so that damage payments for accidents at DOE facilities would ultimately come fromthe Treasury. However, the law also allows DOE to fine its contractors for safety violations,and contractor employees and directors can face criminal penalties for “knowingly andwillfully” violating nuclear safety rules.
The House approved a 15-year extension of the Price-Anderson liability system November 27, 2001 (H.R. 2983). The total retrospective premium for each reactor wouldbe raised to $94 million and the limit on per-reactor annual payments raised to $15 million,with both to be adjusted for inflation every five years. For the purposes of those paymentlimits, a nuclear plant consisting of multiple small reactors (100-300 megawatts, up to a totalof 950 megawatts) would be considered a single reactor. Therefore, a power plant with six 120-megawatt pebble-bed modular reactors would be liable for retrospective premiums of upto $94 million, rather than $564 million. The liability limit on DOE contractors would be setat $10 billion per accident, also to be adjusted for inflation.
In the Senate, a provision extending Price-Anderson was included as an amendment to an omnibus energy bill (S. 517) on March 7, 2002. The Senate amendment, approved 78-21,would extend Price-Anderson coverage for new commercial reactors for 10 years andindefinitely for DOE contractors. The liability limit for commercial reactors would remain thesame, with a five-year inflation adjustment, and the limit for DOE contractors would be setat $10 billion with an inflation adjustment. Modular reactors of 100-300 megawatts builttogether in a plant of up to 1,300 megawatts could be considered a single reactor under Price-Anderson.
The House-passed Price-Anderson bill would authorize the federal government to sue DOE contractors to recover at least some of the compensation that the government had paidfor any accident caused by intentional DOE contractor management misconduct. Such costrecovery would be limited to the amount of the contractor’s profit under the contractinvolved, and no recovery would be allowed from nonprofit contractors.
Although DOE is generally authorized to impose civil penalties on its contractors for violations of nuclear safety regulations, Atomic Energy Act §234A specifically exempts sevennon-profit DOE contractors and their subcontractors. Under the same section, DOEautomatically remits any civil penalties imposed on non-profit educational institutions servingas DOE contractors. H.R. 2983 would for future contracts eliminate the civil penaltyexemption for the seven listed non-profit contractors and DOE’s authority to automaticallyremit penalties imposed on all non-profit educational institutions serving as contractors.
However, the bill would limit the civil penalties against a non-profit contractor to the amountof discretionary fees (incentive fees above actual cost reimbursement) awarded by DOE underthat contract. The Senate’s Price-Anderson Amendment to S. 517 includes similar provisions.
In approving an identical measure during the 106th Congress (H.R. 3383, H.Rept. 106- 695, Part 1), the House Commerce Committee contended that elimination of the civil penaltyexemption was necessary to improve nuclear safety enforcement at facilities operated byexempt contractors. However, DOE warned in its March 1999 Report to Congress on thePrice-Anderson Act [http://www.gc.doe.gov] that elimination of the exemption coulddiscourage non-profit institutions from operating DOE nuclear facilities.
The Price-Anderson Act’s limits on liability were crucial in establishing the commercial nuclear power industry in the 1950s. Supporters of the Price-Anderson system contend thatit has worked well since that time in ensuring that nuclear accident victims would have asecure source of compensation, at little cost to the taxpayer. However, opponents contendthat Price-Anderson subsidizes the nuclear power industry by protecting it from some of thefinancial consequences of the most severe conceivable accidents. The 2001 Green ScissorsReport, issued by a coalition of environmental and citizens groups, calls for the Price-Anderson Act to be repealed and for the nuclear industry to purchase all necessary riskinsurance on the private market.
Without an extension of the law, any commercial nuclear reactor licensed after August 1, 2002, could not be covered by the Price-Anderson system, although existing reactors would continue to be covered. Because no new U.S. reactors are currently planned, missingthe deadline for extension would have little short-term effect on the nuclear power industry.
However, if Price-Anderson expired, DOE would have to use alternate indemnificationauthority for hazardous nuclear contracts signed after that time.
Nuclear Waste Management
One of the most controversial aspects of nuclear power is the disposal of radioactive waste, which can remain hazardous for thousands of years. Each nuclear reactor producesan annual average of about 20 tons of highly radioactive spent nuclear fuel and 50-200 cubicmeters of low-level radioactive waste. Upon decommissioning, contaminated reactorcomponents are also disposed of as low-level waste.
The federal government is responsible for permanent disposal of commercial spent fuel (paid for with a fee on nuclear power) and federally generated radioactive waste, while stateshave the authority to develop disposal facilities for commercial low-level waste. Spent fueland other highly radioactive waste is to be isolated in a deep underground repository,consisting of a large network of chambers carved from rock that has remained geologicallyundisturbed for hundreds of thousands of years.
The Nuclear Waste Policy Act of 1982 (NWPA, P.L. 97-425) as amended, names Nevada’s Yucca Mountain as the sole candidate site for a national geologic repository.
Following the recommendation of Energy Secretary Abraham, President Bush on February15, 2002, recommended to Congress that DOE submit an application to NRC to constructthe Yucca Mountain repository. Under NWPA, the State of Nevada has 60 days after thePresident’s recommendation to submit a “notice of disapproval” (or “state veto”) toCongress. Nevada Governor Guinn announced on the day of the President’s recommendationthat he would veto the site. The state veto would block repository construction at YuccaMountain unless a congressional resolution were approved by majority vote within 90 daysand signed into law. (For details about congressional procedures in response to a state veto,see CRS Report RL31135, Nuclear Waste Repository Siting: Expedited Procedures forCongressional Approval.) The Bush Administration is seeking $527 million for the DOE civilian waste disposal program for FY2003, a 40% boost over FY2002. The increased budget is intended to payfor preparation of a Yucca Mountain repository construction permit application, which DOEexpects to submit to NRC in FY2004 – a one-year delay from the previous schedule. Theadditional funds are also needed for detailed repository design work, repository performancestudies, and transportation planning, according to DOE. Despite the delay in submitting aconstruction application, DOE contends that it can still begin receiving waste at the site by2010 as previously scheduled.
(For further details, see CRS Issue Brief IB92059, Civilian Nuclear Waste Disposal.) Nuclear Weapons Proliferation
The United States has been a leader of worldwide efforts to prevent the spread of nuclear weapons. To this end, the international community and many individual states haveagreed to a range of treaties, laws, and agreements, known collectively as the nuclearnonproliferation regime, aimed at keeping nations that do not have nuclear weapons fromacquiring them.
The nonproliferation regime has also been concerned with preventing terrorists from obtaining a nuclear weapon or the materials to craft one. The attacks on New York andWashington on September 11, 2001, added a new level of reality to the threat that terroristsmight acquire a nuclear weapon and explode it in a populated area.
Other nonproliferation concerns include a number of regional crisis points: the India- Pakistan arms race, North Korea, and the Middle East, primarily Iraq, Iran, and Israel. Thereis concern about China’s actions in expanding its nuclear force, and of Chinese and Russianactivities that may encourage proliferation in the other regions.
Disposing of plutonium and highly enriched uranium from dismantled Russian nuclear weapons, while preventing it from falling into the hands of terrorists or other proliferators,is another current focus of nonproliferation activities. In the longer term, the major questionis fulfilling the pledge in the Nuclear Nonproliferation Treaty (NPT) by the nuclear weaponsstates, including the United States, to pursue complete nuclear disarmament, in the face ofskepticism about the possibility, or even the wisdom, of achieving that goal.
Numerous U.S. agencies have programs related to nuclear nonproliferation, but the major activities are carried out by the Departments of State, Defense, and Energy. DOE’sprogram is part of the National Nuclear Security Administration, which is responsible for themanagement of the U.S. nuclear weapons program.
The attacks of September 11 have increased interest in assuring that Russian nuclear materials do not fall into terrorists’ hands, and some increase in funding DOE’s non-proliferation activities in the Former Soviet Union was included in the FY2002 Defense andEmergency Supplemental Appropriations Act (P.L. 107-117). Increased funding fornonproliferation programs in both DOE and the State Department was also included in theAdministration’s FY2003 budget request released in February 2002.
(For detailed discussion of nonproliferation policy, see CRS Issue Brief IB10091, Federal Funding for Nuclear Energy Programs
The following tables summarize current funding for DOE nuclear fission programs and uranium activities, and for the NRC. The sources for the funding figures are Administrationbudget requests and committee reports on the Energy and Water DevelopmentAppropriations Acts, which fund all nuclear programs. President Bush submitted his FY2003funding request to Congress February 4, 2002.
Table 1. Funding for the Nuclear Regulatory Commission
(budget authority* in millions of current dollars) Nuclear Regulatory Commission
TOTAL NRC BUDGET
AUTHORITY
Offsetting fees
Net appropriation
* Additional $36 million for nuclear plant security provided by FY2002 supplemental appropriationsincluded in FY2002 Defense Appropriations Bill (H.R. 3338), approved by Congress December 20,2001. The supplemental security funding is not to be offset by fees. The security funding is includedin the other NRC programs, so it should not be added to the NRC total as a separate fundingcategory.
Table 2. DOE Funding for Nuclear Activities
(budget authority in millions of current dollars) Approp. Request
Nuclear Energy (selected programs)
Program Direction
Uranium Facilities Maintenance and
Remediation
Nuclear Waste Activities
Environmental Management
* Funded under “Defense Nuclear Nonproliferation.”** Funded by a 1-mill-per-kilowatt-hour fee on nuclear power, plus appropriations for defense wastedisposal.
H.R. 4 (Tauzin)
Securing America’s Future Energy Act of 2001. Comprehensive energy bill that includes
several nuclear energy provisions. Introduced July 27, 2001; referred to multiple committees.
Passed House August 2, 2001, by vote of 240-189.
H.R. 2983 (Wilson)
Price-Anderson Reauthorization Act of 2001. Extends Price-Anderson Act nuclear
accident liability system for 15 years and increases liability limits. Allows nuclear powerplants consisting of multiple small units to be counted as a single reactor in assessing accidentliability. Authorizes the federal government to recover at least some of any damages it wasforced to pay on behalf of indemnified Department of Energy (DOE) nuclear contractors foraccidents caused by intentional management misconduct. Requires NRC to issue newsecurity regulations for nuclear power plants and the transportation of nuclear materials.
Introduced October 2, 2001; referred to Committee on Energy and Commerce. Orderedreported by Committee October 31, 2001; approved by House November 27, 2001.
H.R. 3279 (Markey)
Requires NRC to ensure sufficient stockpiles of potassium iodide tablets for use after
a nuclear accident. Introduced November 13, 2001; referred to Committee on Energy andCommerce.
H.R. 3382 (Markey)/S. 1746 (Reid)
Requires NRC to take over operation of nuclear power plant security forces and to
ensure sufficient stockpiles of potassium iodide tablets for use after a nuclear accident.
Introduced November 29, 2001. House bill referred to Committee on Energy and Commerce;Senate bill referred to Committee on Environment and Public Works.
S. 388 (Murkowski)
National Energy Security Act of 2001. Includes provisions to encourage increased
generation by existing nuclear power plants, authorize nuclear research and development, andextend the Price-Anderson nuclear liability system. Introduced February 26, 2001; referredto Energy and Natural Resources Committee.
S. 472 (Domenici)/H.R. 1679 (Graham)
Nuclear Energy Electricity Supply Assurance Act of 2001. Authorizes nuclear energy
research and development programs, provides incentives for increasing capacity at existingnuclear power plants, modifies nuclear licensing requirements, and extends the Price-Anderson Act nuclear liability system. Senate bill introduced March 7, 2001; referred toEnergy and Natural Resources Committee. House bill introduced May 2, 2001; referred toCommittees on Energy and Commerce and Science.
S. 517, Amendment No. 2917 (Daschle)
Energy Policy Act of 2002. S.Amdt. 2917 substitutes language based on the text of S.
1766, including Price-Anderson provisions. Amendment offered on Senate floor February15, 2002.
S. 597 (Bingaman)
Comprehensive and Balanced Energy Policy Act of 2001. Introduced March 22, 2001;
referred to Committee on Energy and Natural Resources. Includes provisions extendingPrice-Anderson liability system for DOE nuclear contractors and authorizing nuclear researchand development. Committee markup began August 2, 2001.
S. 919 (Thurmond)
Requires the Department of Energy to study the feasibility of developing commercial
nuclear power plants at existing DOE nuclear sites. Introduced May 21, 2001; referred toCommittee on Energy and Natural Resources.
S. 1591 (Voinovich)
Nuclear Safety and Promotion Act of 2001. Reauthorizes Price-Anderson Act for 10
years, modifies nuclear power plant licensing requirements, and addresses potential shortagesof skilled nuclear safety personnel at the Nuclear Regulatory Commission. IntroducedOctober 30, 2001; referred to Committee on Environment and Public Works.
S. 1766 (Daschle)
Energy Policy Act of 2002. Omnibus energy bill that includes Price-Anderson
reauthorization and other nuclear energy provisions. Introduced December 6, 2001. Used asbasis for S.Amdt. 2917, offered February 15, 2002, to S. 517.

Source: http://web.sungshin.ac.kr/~youngho/data/security/e-CRSReport(12Mar2002).pdf