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AN EXAMINATION OF THE SAFETY AND ECONOMICS OF LIGHT WATER SMALL MODULAR REACTORS 

HEARING 

BEFORE A

SUBCOMMITTEE OF THE 

COMMITTEE ON APPROPRIATIONS 

UNITED STATES SENATE 

ONE HUNDRED TWELFTH CONGRESS 

FIRST SESSION 

SPECIAL HEARING 

JULY 14, 2011—WASHINGTON DC 

Printed for the use of the Committee on Appropriations 

( 

Available via the World Wide Web: http://www.gpo.gov/fdsys/browse/ 

committee.action?chamber=senate&committee=appropriations 
(II) 

COMMITTEE ON APPROPRIATIONS 

DANIEL K. INOUYE, Hawaii, Chairman 

PATRICK J. LEAHY, Vermont 

TOM HARKIN, Iowa 

BARBARA A. MIKULSKI, Maryland 

HERB KOHL, Wisconsin 

PATTY MURRAY, Washington 

DIANNE FEINSTEIN, California 

RICHARD J. DURBIN, Illinois 

TIM JOHNSON, South Dakota 

MARY L. LANDRIEU, Louisiana 

JACK REED, Rhode Island 

FRANK R. LAUTENBERG, New Jersey 

BEN NELSON, Nebraska 

MARK PRYOR, Arkansas 

JON TESTER, Montana 

SHERROD BROWN, Ohio 

THAD COCHRAN, Mississippi, Ranking 

MITCH MCCONNELL, Kentucky 

RICHARD C. SHELBY, Alabama 

KAY BAILEY HUTCHISON, Texas 

LAMAR ALEXANDER, Tennessee 

SUSAN COLLINS, Maine 

LISA MURKOWSKI, Alaska 

LINDSEY GRAHAM, South Carolina 

MARK KIRK, Illinois 

DANIEL COATS, Indiana 

ROY BLUNT, Missouri 

JERRY MORAN, Kansas 

JOHN HOEVEN, North Dakota 

RON JOHNSON, Wisconsin 

CHARLES J. HOUY, Staff Director 

BRUCE EVANS, Minority Staff Director 

SUBCOMMITTEE ON ENERGY AND WATER DEVELOPMENT

DIANNE FEINSTEIN, California, Chairman 

PATTY MURRAY, Washington 

TIM JOHNSON, South Dakota 

MARY L. LANDRIEU, Louisiana 

JACK REED, Rhode Island 

FRANK R. LAUTENBERG, New Jersey 

TOM HARKIN, Iowa 

JON TESTER, Montana 

RICHARD J. DURBIN, Illinois 

DANIEL K. INOUYE, Hawaii, (ex officio) 

LAMAR ALEXANDER, Tennessee 

THAD COCHRAN, Mississippi 

MITCH MCCONNELL, Kentucky 

KAY BAILEY HUTCHISON, Texas 

RICHARD C. SHELBY, Alabama 

SUSAN COLLINS, Maine 

LISA MURKOWSKI, Alaska 

LINDSEY GRAHAM, South Carolina 

Professional Staff 

DOUG CLAPP

ROGER COCKRELL

LELAND COGLIANI

CAROLYN E. APOSTOLOU (Minority) 

TYLER OWENS (Minority) 

TOM CRAIG (Minority) 

LASHAWNDA SMITH (Minority) 

Administrative Support 

MOLLY BARACKMAN-EDER
(III) 

C O N T E N T S 

Page 

Opening Statement of Senator Dianne Feinstein ................................................. 1 

Opening Statement of Senator Lamar Alexander ................................................. 4 

Statement of Peter B. Lyons, Assistant Secretary For Nuclear Energy, Department of Energy .............................................................................................. 6 

Prepared Statement of ..................................................................................... 7 

The Case for SMRs .................................................................................................. 8 

Safety Features of SMRs ......................................................................................... 8 

Safety of Multiple Modules ..................................................................................... 8 

Fuel ........................................................................................................................... 9 

Waste Management ................................................................................................. 9 

Siting ........................................................................................................................ 9 

Advanced R&D ......................................................................................................... 9 

Global Competitiveness ........................................................................................... 10 

Statement of William D. Magwood, IV, Commissioner, Nuclear Regulatory 

Commission ........................................................................................................... 10 

Prepared Statement of ..................................................................................... 12 

Federal Subsidy for Nuclear Power ....................................................................... 15 

Safety and Logistics of Clustering Reactors .......................................................... 15 

Need for Federal Appropriation .............................................................................. 16 

Spent-fuel Management .......................................................................................... 16 

Concerns Raised in Light of Japanese Natural Disaster ..................................... 17 

Nuclear Waste Reprocessing ................................................................................... 18 

Nuclear Technology Competition ............................................................................ 19 

H-Canyon .................................................................................................................. 20 

On-site Spent-fuel Storage ...................................................................................... 20 

Cost to Federal Government ................................................................................... 22 

Nuclear Plant Operation Subsidy ........................................................................... 24 

Lessons learned From Fukushima ......................................................................... 24 

Statement of Dr. Edwin Lyman, Senior Scientist, Global Security Union of 

Concerned Scientists ............................................................................................ 25 

Prepared Statement of ..................................................................................... 27 

Statement of E. James Ferland, Jr., President, Americas Westinghouse Electric Company, LLC ............................................................................................... 30 

Prepared Statement of ..................................................................................... 32 

Statement of Christofer M. Mowry, President, Babcock & Wilson Nuclear 

Energy ................................................................................................................... 34 

Prepared Statement of ..................................................................................... 36 

Inherent Safety of SMRs—Robust Defense-in-Depth ........................................... 36 

The Economics of SMRs—Competitive and Financeable ..................................... 40 

Public-private Partnership—Investment in Clean Energy and U.S. Jobs .......... 41 

Statement of Dr. Paul G. Lorenzini, CEO, Nuscale Power, Inc. .......................... 42 

Prepared Statement of ..................................................................................... 44 

Statement of Dr. Ernest J. Moniz, Professor of Physics, Massachusetts Institute of Technology ................................................................................................ 51 

Prepared Statement of ..................................................................................... 53 

Light Water Small Modular Reactors .................................................................... 53 

Economics of Individual SMRs ............................................................................... 58 

Low-carbon Energy Options .................................................................................... 61 

SMR Production Business Models .......................................................................... 61 

Reactor Design in Light of Fukushima .................................................................. 63 

Clean Energy ............................................................................................................ 63 

Energy Storage ........................................................................................................ 64 

Role of Federal Spending in Research and Development ..................................... 65 

Concerns About Nuclear Waste Disposal .............................................................. 65 
Page

IV 

Agreement on Federal Policy .................................................................................. 66 

Prepared Statement of the Nuclear Energy Institute .......................................... 69 

Small Reactor Development Advances Energy, Environmental Benefits in 

New Markets ........................................................................................................ 69 

Small Reactor Safety and Security—Enhanced by Design, Required by Regulation ..................................................................................................................... 70 

Public/Private Partnerships are Essential To Support Small Reactor Development ...................................................................................................................... 70 
(1) 

AN EXAMINATION OF THE SAFETY AND ECONOMICS OF LIGHT WATER SMALL MODULAR REACTORS 

THURSDAY, JULY 14, 2011 

U.S. SENATE, 

SUBCOMMITTEE ON ENERGY AND WATER DEVELOPMENT, 

COMMITTEE ON APPROPRIATIONS, 

Washington, DC. 

The subcommittee met at 10:02 a.m., in room SD–192, Dirksen 

Senate Office Building, Hon. Dianne Feinstein (chairman) presiding. 

Present: Senators Feinstein, Alexander, and Graham. 

OPENING STATEMENT OF SENATOR DIANNE FEINSTEIN

Senator FEINSTEIN. This hearing of the Subcommittee on Energy 

and Water Development will come to order and I want to welcome 

everyone. This is an oversight hearing on the safety and economic 

issues for the proposed light water small modular reactor (LW 

SMR). 

The program proposed by the administration is a major investment of taxpayer funds to help two private companies develop their 

designs and submit them to the Nuclear Regulatory Commission 

(NRC) for certification. 

In today’s hearing, we will look at the safety features and potential economics of LW SMRs. We may not arrive at definitive answers today to the questions that are raised. That will likely require the NRC to take action on the actual application. 

However, it’s important that we try to understand the potential 

benefits and deficits and acknowledge uncertainties to determine 

whether such a large investment by the Federal Government is justified. 

My friend, the distinguished ranking member of this subcommittee, often talks with me about subsidies for wind energy. I 

look at this program and think that it appears to be one heck of 

a proposed subsidy. The administration has proposed a 5-year, $452 million program 

to develop the designs for two LW SMRs. These designs would then 

be presented to the NRC for certification. 

It’s important to note that the program will have a cost share of 

at least 50 percent from industry, but this immediately raises, I 

think, a significant point. 

I’m told that the total cost to take two designs through the proposed process will cost at least $1.5 billion. On a 50–50 cost-share 
2 

basis, that would make the Federal contribution $750 million, not 

$452 million. 

So one thing we must determine is how the administration plans 

to make up this difference. Will it require a higher industry cost 

share, say 70 percent? Will the administration choose only one design rather than two? Or will we blindly move forward hoping $300 

million in additional funding will be approved by the Congress? 

As with any hearing in the nuclear industry, we have to recall 

the recent earthquake, tsunami, and subsequent nuclear disaster 

in Japan. Just this morning the Japanese Prime Minister—in The 

Washington Post, at least—has said that he wants the country get 

out of nuclear power entirely. 

These events have rightly caused an examination of nuclear safety internationally and here in the United States. 

For me, one of the fundamental issues raised by events in 

Fukushima is whether multiple reactors should be collocated. The 

threat of high-level radiation exposure at one plant clearly compromised the ability of workers to adequately respond to events at 

nearby plants in the Daiichi site. 

The premise of the SMR program is that utilities could start with 

a small number of units and then install more as funding allowed 

and demand necessitated. Now, how does that premise stack up 

against possible problems? 

The Fukushima crisis also demonstrated the potential danger of 

storing spent fuel in pools on site, and yet the proposed SMR designs do not appear to make any improvements in this method of 

spent-fuel storage. 

Bluntly, I’m struggling to reconcile the lessons of Fukushima 

with the principal design premise of SMRs, and so I look forward 

to witnesses addressing these issues today. 

This hearing is not about spent fuel, but it’s hard to have a hearing on new nuclear power without considering the issue of what we 

do with the waste. This country has not—and I stress not—done 

a good job dealing with defense or commercial nuclear waste. 

That’s simply a fact. 

Today, we have no national policy to address our commercial 

spent nuclear fuel, and we store it at every nuclear plant in the 

country in pools and dry casks for decades without end. 

Yet, today we’re considering investing $452 million in LW SMRs 

that will result in more spent fuel stored at sites with no permanent storage for waste. 

By law, the Federal Government must take this waste and store 

it permanently but, today, the Federal Government is being sued 

and is making payments for lost cases because it cannot fulfill that 

obligation. 

This is not inexpensive. The Government Accountability Office 

estimates that we face $12.3 billion in liability through 2020 if we 

fail to take the spent fuel from utilities. That’s $12.3 billion of liability. 

Now, that’s a very deep concern and should concern every one of 

us in this Congress. Presumably, building new plants licensed 

under the SMR program would only increase this liability. 
3 

While we discuss the specific safety and economic issues of LW 

SMRs, I continue to view these issues with the absence of a spentfuel policy. 

I visited our two reactors in California and, candidly, I don’t 

know how the NRC can say it’s fine to keep re-racking spent fuels, 

adding more rods, keeping them there in California for 24 years, 

transferring to dry casks, most of which are designed for transportation to permanent storage, and we have no permanent storage. 

We have no repository. We have no regional storage. We have no 

permanent storage, and yet we’re looking at a new start. 

So I’m struggling to understand how these reactors will also be 

economical. The central premise I’ve been given is that for SMRs 

to be economical, they must offset the loss of economies of scale 

with economies of manufacturing. 

If true, we need to determine how many reactors must be constructed to achieve cost effectiveness and competitiveness and how 

many must be sold to maintain a factory production level necessary 

to justify the capital investment. 

The Nuclear Energy Agency, an arm of the Organization for Economic Cooperation and Development, recently released a report 

that said that electric power from SMRs would cost 10 to 40 percent more than large reactors. 

I’ve been told that anywhere between 20 and 1,000 reactors 

would be needed to be produced in order to be economical. How 

many are needed to be cost effective? Clearly, a larger number 

makes the endeavor questionable. 

I understand the University of Chicago is completing a study for 

the Department of Energy (DOE) on the economics of these reactors and perhaps that will provide some clarity. But, in the meantime, my hope is that representatives from the companies that are 

here today will elaborate on this particular issue. 

Whether the companies would be selling these units in the 

United States or overseas, I would like to have a better understanding of what is necessary in terms of production levels to be 

economical and thus be a justified expenditure of Federal resources. 

On our first panel today, we will hear from Pete Lyons, the Assistant Secretary for Nuclear Energy at the DOE. Dr. Lyons also, 

at one time, was a commissioner at the NRC. 

We will also hear from Dr. Bill Magwood, a current commissioner 

on the NRC. Interestingly, he used to hold the position Dr. Lyons 

holds today. 

On our second panel, we will hear from Dr. Ed Lyman from the 

Union of Concerned Scientists and Dr. Ernie Moniz of Massachusetts Institute of Technology. Both of these have spent time considering the merits of SMRs. 

The second panel will also feature Mr. Jim Ferland from Westinghouse, Mr. Christofer Mowry from Babcock & Wilcox and Mr. 

Paul Lorenzini from NuScale. These gentlemen represent three 

companies interested in pursuing the cost-shared program, but I 

understand there may be other companies interested as well. 

So I look forward to everyone’s testimony, and even more so to 

the question-and-answer period and I thank everyone for coming. 
4 

Now, I’d like to turn to our distinguished Ranking Member, Senator Alexander. 

OPENING STATEMENT OF SENATOR LAMAR ALEXANDER

Senator ALEXANDER. Thanks, Madam Chairman, and thank you 

for the way you’re approaching this hearing in your typical style, 

which is straightforward and with a fair presentation and an attempt to get the answers. I appreciate that very, very, very much. As the chairman said, we’re talking about a 5-year, $452 million 

program that will end up with two SMRs operating by 2020. And, 

as she said, we’re talking about LW SMRs. 

We know how to build and operate LW SMRs. The NRC knows 

what they are. All 104 of our big, commercial reactors are LW 

SMRs, and these are smaller versions of those. 

I believe we need to move ahead with this program of research 

and development as quickly as possible if we want to get to the 

2020 timeline. 

The goal should be are these designed to be safe? Can exporting 

our technology that is safe around the world make the world safer, 

keeping nuclear materials out of the hands of people who shouldn’t 

have them? And, third, is this a useful way to promote clean electricity in a country that uses nearly 25 percent of all electricity in 

the world? 

Talking about safety first, it’s a subject we take very seriously. 

I believe we have the best regime of making reactors safe in the 

world. We certainly have the best record. No deaths ever, either at 

our Navy reactors or at our commercial reactors. No one was even 

hurt at Three Mile Island, our big nuclear accident. No one was 

hurt at that. No other form of energy has that record. 

So the NRC’s review of the design and licensing will help us 

know whether they themselves are safe and the places they will be 

located are safe, and I’m very interested in that result. 

There are several questions that I’ll be interested in hearing 

more about. I’m told the passive design of the systems, which 

means they’ll work automatically without using any device that 

could fail in the event of an accident, will make them perhaps 

safer. 

The problems at Fukushima with nuclear power all had to do 

with no water, no electricity to pump the water to cool the reactors. 

We’re not the only country in the world that is interested in 

small nuclear reactors. There are at least five or six other countries 

that are moving ahead with them—Russia, China, France, South 

Korea, Argentina, and Japan. 

If we don’t, arguably, the world will be deprived of our safety regime and our technology, and we’ll be deprived of an industry that 

will make it easier and cheaper for us to create private-sector jobs 

by new ways to have low-cost, reliable, clean electricity. 

It’s important to note there are now 60 countries that are considering introducing nuclear power to their power grids. South Korea 

is helping the United Arab Emirates build reactors. I would argue 

that the world needs our technology and our safety standards as 

much as we do. 

My final point is this: The Energy Information Administration 

estimates that electric consumption in the United States will rise 
5 

by more than 20 percent by 2035. Where will that electricity come 

from? 

We know where it comes from now—nearly one-half coal, 20 percent nuclear power, 20 percent natural gas, and a very small 

amount from renewables. 

Most of us believe we need clean electricity, and we know where 

that comes from—67 percent nuclear power, .10 of 1 percent from 

solar, a little less than 8 percent from wind. So any new way to 

safety and inexpensively create new options for nuclear power, I 

would argue, is something we should treat seriously. 

The Tennessee Valley Authority has recently said it would close 

a number of coal plants, 18 of its coal plants. What will it replace 

them with? It will still have coal—35 percent—but it’ll be going up 

to 40 percent nuclear power. That’s really its only option, other 

than natural gas, and we’ve seen the natural gas prices go up and 

down over the years. 

So because of our safety record, because of the opportunity that 

it presents for an American business, because of the lower cost and 

the possible improved safety standards, even though the reactors 

we now have are safe, I think this is a promising opportunity and 

I welcome the chairman’s decision to hold this hearing to consider 

whether to go ahead. 

I would make these points, if I may, in commenting on what 

Chairman Feinstein said. In terms of used nuclear fuel, I agree 

with her. We badly need a place to put, in the end, used nuclear 

fuel. But all the used nuclear fuel we have today from all of our 

plants would fill one football field 20 feet deep. So it’s not that 

much mass, but we need a place to eventually put it. 

The NRC and Dr. Chu have said it is safe where it is for 100 

years, and the President has appointed distinguished people to figure out how to deal with that. I think we can do it. 

In terms of subsidies, my view on subsidies is we should use subsidies to jump start technologies, like offshore wind, but we 

shouldn’t be spending $26 billion over the next 10 years to support 

subsidies for mature technology, which is existing wind, and the 

104 commercial nuclear reactors today operate without Government subsidy. 

So I would expect to hear from the industry folks whether they 

would expect subsidies once we get past this research and development stage. 

Those are my comments, Madam Chairman. I agree with you. 

The questions and answers will be the most important part of this, 

and I thank you for the balanced cast of witnesses that we have 

and your inquiry into important questions. 

Senator FEINSTEIN. Thank you very much, Senator. I very much 

appreciate your comments and really look forward to working with 

you, as we always have. 

Senator ALEXANDER. Thank you. 

Senator FEINSTEIN. Mr. Secretary, can we begin with you, Secretary Lyons? 
6 

STATEMENT OF PETER B. LYONS, ASSISTANT SECRETARY FOR NUCLEAR ENERGY, DEPARTMENT OF ENERGY 

Dr. LYONS. Thank you, Chairman Feinstein, Ranking Member 

Alexander and Senator Graham. Thank you very much for the opportunity to appear before you today to discuss SMRs and the administration’s request to begin a cost-shared program to accelerate 

the certification and licensing of LW SMRs. 

The Department believes that SMRs have the potential to provide our Nation with clean, cost-effective energy, improved safety 

and an opportunity to compete in the global clean-energy marketplace. 

In my written testimony, I address the role of nuclear power to 

provide the Nation with clean, safe energy and the strong support 

from the administration to increase utilization of nuclear power. 

I also noted that the capital investment in large plants makes it 

very, very difficult for utilities to move ahead with them. SMRs 

offer a chance to change that paradigm by providing power in increments that may better fit utilities’ fiscal constraints. 

In my oral comments today I’ll just focus on a few of the issues 

that are sometimes raised with SMRs. 

In general, enhanced safety is easier to achieve in smaller reactors as many design challenges are simplified when reactor size is 

reduced. 

Current SMR designs offer notable safety advantages, including 

passive safety features that minimize the need for prompt operator 

actions in any upset conditions. In addition, these SMRs utilize socalled integral designs resulting in a much lower susceptibility to 

a loss of coolant accident. 

You’ll hear from some prospective vendors in the second panel 

about a host of innovative approaches that they are including to 

significantly enhance SMR safety and security. 

For example, features like underground siting offer increased resistance against seismic events while also providing for more robust security. SMRs are also designed for long periods of unattended operation under accident conditions. 

Some have suggested that SMRs can only succeed if safety and 

security requirements of the NRC are weakened. Such statements, 

I think, confuse weakened safety or security with the reality that 

the character and risk presented by SMRs may enable identical or 

enhanced safety and security to be addressed with alternative prescriptions, and, in any case, licensing of any SMR would be considered through the normal, rigorous, open, transparent processes of 

the NRC. 

Concerns have also been raised about the potential proximity of 

multiple SMR modules and the potential that any concern with one 

module might affect the safety of other modules. 

These modules are being designed such that their safety systems 

are completely independent, but, again, the NRC will address any 

potential common failure mode as the licensing process progresses. 

And, finally, I’d like to just very briefly address the intertwined 

issues of global competitiveness and global security. Innovative 

technologies certainly contribute to our Nation’s global competitiveness providing good jobs for American workers. 
7 

As Secretary of Energy Steven Chu noted in his Wall Street 

Journal editorial about SMRs: ‘‘If we can develop this technology 

in the United States and build these reactors with American workers, we will have a key competitive edge.’’ 

As part of a robust, nuclear industry supply base in the United 

States, SMRs may also contribute to our national security interests 

by helping to increase the global reach of U.S. nuclear technology. 

The nations that export and build the majority of nuclear power 

plants will strongly influence safety standards for the world. A 

strong U.S. presence in the global marketplace will allow U.S. safety standards to be adopted more broadly around the world while 

also improving the ability of the United States to influence decisions about waste management and nonproliferation. 

PREPARED STATEMENT

In conclusion, while there are significant uncertainties in the future competitiveness of SMRs, the DOE’s proposed LW SMR licensing tech support program would address those uncertainties to enable a demonstration of their market potential. 

The United States is by no means the only country exploring 

these technologies. Some countries are already licensing or building 

SMRs. In my view, SMRs represent our best and perhaps our only 

option for regaining a larger share of the nuclear technology global 

market. 

Thank you and I’ll look forward to your questions. 

[The statement follows:] 

PREPARED STATEMENT OF PETER B. LYONS

Chairman Feinstein, Ranking Member Alexander, and members of the subcommittee, thank you for the opportunity to appear before you today to discuss 

small modular reactors (SMRs) and the administration’s request to begin a costshare program to accelerate the certification, licensing, and deployment of light 

water (LW) SMRs. The Department believes SMRs have the potential to provide our 

Nation with clean, cost-effective energy, improved safety, and an opportunity to 

compete in the global clean-energy marketplace. 

Today in the United States, nuclear power provides about 20 percent of all electricity consumed. It accounts for 70 percent of our carbon-free electricity. And it has 

demonstrated an outstanding safety record. Many attributes of our nuclear power 

operations contribute to this record, starting with independent regulation from the 

Nuclear Regulatory Commission (NRC). In addition, industry groups such as the Institute for Nuclear Power Operations (INPO) help maintain robust operational excellence in the industry. The NRC provides the necessary regulatory enforcement 

and INPO relies on peer evaluation, peer pressure, information sharing among operators, and financial incentives. Our combination of efforts has established the international ‘‘gold standard’’ for nuclear operations. 

President Obama has repeatedly emphasized the importance of clean energy to 

our Nation’s future. During his State of the Union Address earlier this year, he outlined a goal of obtaining 80 percent of our electricity from clean-energy sources by 

2035. It’s an ambitious goal. And as he noted, we’re going to need all clean-energy 

sources—including nuclear energy—to achieve that goal. As the President has said, 

‘‘To meet our growing energy needs and prevent the worst consequences of climate 

change, we’ll need to increase our supply of nuclear power. It’s that simple.’’ 

The reactors being considered by utilities today are in the gigawatt (GWe) class— 

meaning they provide at least 1,000 megawatts of electrical power. These are large 

plants and the size of the investment to build them is correspondingly large. A new, 

GWe class nuclear powerplant requires an investment on the order of $6 billion to 

$10 billion, which poses a challenge even to large nuclear utilities whose market 

capitalizations are around $19 billion. A major rating agency has characterized this 

kind of investment as a ‘‘bet the farm’’ endeavor for most utilities. Certain polices 
8 

can help mitigate some of this risk, but construction of such plants remains a significant financial risk for a utility. 

THE CASE FOR SMRs 

SMRs may provide an alternative to these larger plants that overcomes some of 

these challenges. Because we expect that they would be built in factories in a mass 

production format, SMRs could achieve cost savings through replication, rather than 

relying upon the economies of scale for larger reactors built individually at each construction site. Of particular note is the prospect for driving down costs over time 

through the process of learning-by-doing in a factory setting with an experienced 

workforce. The Department anticipates that SMR powerplants will be able to be 

purchased in smaller sizes that better fit the financial needs of the utilities, and 

generation capability could be expanded to meet demand. 

For this business model to work the economics of factory fabrication will need to 

prove successful and that is still uncertain. Based upon the experience of cost savings in the U.S. Navy submarine program or in the aerospace industry, there is reason for optimism that these learning effects can be substantial, but it is unproven 

for this application. 

Operational efficiencies may also be possible for SMRs, but the NRC will determine if any such possibilities are acceptable without compromising safety or security. For the SMR business model to be viable, an improved economic case must materialize. The proposed DOE light water reactor (LWR) SMR Licensing Technical 

Support program will focus on engineering support related to design certification 

and licensing for two LWR-based SMR designs through cost-shared arrangements 

with industry partners, which is expected to help to reduce some uncertainties and 

increase the potential for reducing costs over time. 

To understand these issues, the Office of Nuclear Energy has supported a study 

on the economics of nuclear energy with a particular emphasis on SMRs. This report 

is currently undergoing review, but one of the anticipated findings is that a mature 

SMR industry will likely be competitive with natural gas generation. The smaller 

upfront capital investment should reduce the financial risk of the projects, but more 

work is still needed to reduce the uncertainties around the construction costs for 

SMRs over time. 

SAFETY FEATURES OF SMRs 

The Department anticipates that enhanced safety can be more readily achieved 

in small reactors. Current SMR designs offer notable potential safety advantages. 

LW SMR designs proposed to date incorporate passive safety features that utilize 

gravity-driven or natural convection systems—rather than engineered, pump-driven 

systems—to supply backup cooling in unusual circumstances. These passive systems 

should also minimize the need for prompt operator actions in any upset condition. 

Some concepts use natural circulation for normal operations, requiring no primary 

system pumps. In addition, many SMR designs utilize integral designs, meaning all 

major primary components are located in a single, high-strength, pressure vessel. 

That feature is expected to result in a much lower susceptibility to certain potential 

events, such as a loss of coolant accident, because there is no large external primary 

piping. In addition, LWR SMRs would have a much lower level of decay heat than 

large plants and therefore require less cooling after reactor shutdown. 

Vendors are proposing an additional host of innovative approaches to significantly 

enhance SMR safety and security. For example, features like underground siting 

can offer increased resistance against seismic events while also providing more robust security. These systems are also designed for long periods of unattended operation under accident conditions and no emergency diesel generators are required for 

several of the designs. Several of the concepts rely only on stored energy in an accident, so that there is no dependence on external power sources. And these are only 

a sampling of the enhanced safety features that could potentially be part of these 

systems. 

The NRC—through their rigorous, open, and transparent process—will determine 

the precise requirements for future SMR deployment and issue any future licenses. 

In that process, the NRC will evaluate whether the smaller size and anticipated improved safety and security envelope enables adequate safety and security with somewhat different operational mandates than those applied to the large plants. 

SAFETY OF MULTIPLE MODULES

Some have raised questions about safety of multiple modules at a site and whether a serious problem in one module might affect the safety other modules. The NRC 

will address any common mode failures and many more questions as the licensing 
9 

process progresses. The onus will be on the SMR vendors to convince NRC that no 

common mode failure, including those due to natural events such as a tsunami or 

earthquake, could lead to a common failure of multiple modules or that a failure 

of one module could prevent the safe shutdown of other modules. The NRC will demand, as they do for any design, that the safety case proposed by SMR vendors be 

subjected to intense study and evaluation, both within the NRC staff review and 

through their standard, extensive, public opportunities for participation in the licensing process. 

FUEL

The SMR concepts of near-term interest are based upon the well-understood LWR 

technology. This is important because our current regulatory knowledge base and 

experience are built on LWR technology. The choice to stay within the proven performance envelope of the existing commercial, low-enriched uranium, nuclear fuel 

cycle has two important benefits. First, it means that the most promising near-term 

SMRs can build upon the well-established LWR fuel industry, avoiding the need to 

establish a parallel fuel manufacturing capability. Second, this fuel cycle minimizes 

the technical risk of the most demanding technology component of any new nuclear 

reactor system, a new fuel design, and reduces the time to license within the NRC 

regulatory system. 

WASTE MANAGEMENT

For the LW SMR designs that would be considered in the Department’s proposed 

program, the amount of electricity produced per kilogram of waste will be about the 

same as for current LWRs since these units utilize very similar, and very well-understood, technologies. But in contrast to the current fleet of plants where used fuel 

pools were not initially designed to hold a lifetime of used fuel, most current LWR 

SMR concepts propose storing the used fuel underground where it may be more easily protected from external hazards or sabotage. Provisions have also been incorporated in the current SMR concepts to provide long-term cooling so that the used 

fuel remains safe under potential upset conditions. 

In the longer term, after the operational lifetime of an SMR, a used-fuel management program will be essential, just as it is for the current fleet. This question of 

used fuel disposition is currently the subject of examination by the Blue Ribbon 

Commission. The Department is eagerly awaiting their recommendations to inform 

the administration as it develops a strategy on used fuel management. Used fuel 

from newly deployed SMRs should not need another storage location during the 

plants’ operational lifetime. 

SITING

Traditional siting of large nuclear power stations has primarily been limited to 

locations that have abundant water for cooling, sufficient demand to justify the size 

of the plant, transportation capabilities suitable to handle the very large components, and other defining attributes that limit the places where large plants are feasible. While these factors will continue to be considered in the siting of SMR plants, 

the draft designs of most LWR SMRs may be able to overcome these limitations 

with reduced cooling water requirements, the ability to tailor the generation capacity to meet the needs of the local market, and more flexible transportation options 

based on transport of much smaller components to any site. Hence, new SMR designs could potentially open up new markets to nuclear, a step that could be useful 

for meeting our clean-energy goals. 

Some have taken these design features to imply that SMRs could be sited without 

due consideration of safety and security. Nothing could be further from the truth. 

The NRC remains the regulatory authority that must license any commercial reactor including an SMR and their review will be no less thorough for SMRs than it 

has been for the existing plants. 

ADVANCED R&D

DOE also proposes to support the development of advanced small reactor concepts 

that depart from the well-known LWR technology base. These advanced SMRs are 

in the very early development stage, but have the potential to greatly increase the 

amount of electricity produced per kilogram of waste. Such systems could increase 

uranium utilization through the use of long-lived cores, for example, which may also 

have nonproliferation benefits. Moving beyond LWR technology would allow for systems that are better suited to serve markets that are not practical for the current 

reactors, such as the use of nuclear energy for process heat or transportable deploy-
10 

ments. The fuel cycles for these advanced reactors could also open the possibilities 

of long-lived cores or could enable transmutation of elements in used fuel. 

The R&D performed today will establish the knowledge base that will be needed 

to inform further development of these designs by industry. 

GLOBAL COMPETITIVENESS

Innovative technologies can effectively contribute to our Nation’s global competitiveness, which can mean good jobs for American workers. As Secretary of Energy 

Steven Chu noted in his editorial in the Wall Street Journal supporting SMRs, ‘‘If 

we can develop this technology in the United States and build these reactors with 

American workers, we will have a key competitive edge.’’ As part of a robust nuclear 

industry supply base in the United States, SMRs may also contribute to our national security interests by helping to increase the global reach of U.S. nuclear technology. 

Today, about 60 new reactors are under construction around the world. The TVA 

Watts Bar 2 unit is completing construction, four Westinghouse AP–1000s are in 

pre-construction in the United States, and four are under construction in China. By 

any measure, the U.S. share of the global market in terms of new reactor builds 

is currently small. About 26 reactors are under construction in China alone, almost 

one-half of the world’s total. China plans substantial expansion of its nuclear power 

capabilities, with estimates reaching about 130–180 GWe by 2030. They intend to 

quickly become self-sufficient in reactor construction, and are clearly poised to take 

over the global lead in nuclear energy capacity in the coming decades. 

This situation is in sharp contrast to the early days of nuclear power. In the 

1960s and 1970s, the United States was the world leader in nuclear technologies; 

we invented most of the technologies and successfully implemented many of them 

in commercial systems. In the 1980s, virtually all U.S. nuclear plant equipment was 

manufactured domestically. Today, that figure is more like 25 percent. The United 

States still has a seat at the table internationally, but domestic deployment of this 

technology could lead to increased domestic manufacturing, which in turn would 

likely create increased export opportunities for the United States. 

The Nations that export and build the majority of nuclear powerplants are expected to strongly influence safety standards for the world. If industry chooses to 

deploy SMR technology, it can provide an opportunity to gain a share of the global 

market, and more importantly, leadership in this new area of nuclear technology. 

A strong U.S. presence in the global marketplace will allow U.S. safety standards 

to be adopted more broadly around the world while also improving the U.S. position 

in decisions about waste management and nonproliferation. 

CONCLUSION

While there are significant uncertainties in the future competitiveness of SMRs, 

the Department of Energy’s proposed LW SMR Licensing Technical Support program will seek to address those uncertainties and provide a concrete demonstration 

of their market potential. But the United States is by no means the only country 

exploring these technologies. The recent report from the Nuclear Energy Agency of 

the Organization for Economic Co-operation and Development listed seven countries 

with strong SMR programs, some of which are already licensed or under construction. 

In addition to meeting part of our own clean-energy needs, I’ve also tried to emphasize that SMRs could help strengthen U.S. competitiveness in the global nuclear 

technology market. This would not only be supportive of good jobs in America, but 

also directly supportive of international nuclear safety and our nonproliferation 

goals. 

Senator FEINSTEIN. Thank you very much, Mr. Secretary. 

Commissioner Magwood, welcome. 

STATEMENT OF WILLIAM D. MAGWOOD, IV, COMMISSIONER, NUCLEAR 

REGULATORY COMMISSION 

Mr. MAGWOOD. Thank you, chairman. Thank you, chairman and 

Ranking Member Alexander and Senator Graham for the opportunity to speak today. 

Senator FEINSTEIN. Could you see your mike is on? 

Mr. MAGWOOD. Yes, it is. I’ll try—— 

Senator FEINSTEIN. Well, bring it a little closer please. Great. 
11 

Mr. MAGWOOD. I’ve provided a written statement for the record 

and so I’ll summarize my remarks very briefly. 

I also want to stress I appear today as an individual member of 

the NRC and will provide my personal views and perspectives and 

will not speak for the agency or the NRC as a whole at this particular hearing. 

The various concepts known as SMRs have garnered a great deal 

of interest both inside the Government and in the public, and I understand this interest for all the reasons that Dr. Lyons has outlined. I won’t try to repeat all those points. 

These are all laudable and important interests. However, I’m 

sure the subcommittee will hear, over the course of the morning, 

that all these possibilities are really just still that, possibilities. 

We’re really only at the very early first steps of this venture and 

there’s much work to be done. 

I wanted to highlight in my remarks today that SMRs are really 

not a new idea. We’ve been talking about this subject for quite 

some time. For example, the potential advantages of small reactors 

prompted the Government to provide considerable financial support 

for the development of midsize passively safe reactors in the early 

1990s. 

Unfortunately, these efforts proved unable to overcome the economic realities of building and operating nuclear plants, realities 

that tend to penalize small reactors and reward larger designs. 

Thus, instead of the AP–600 and the 500 megawatt Simplified 

Boiling Water Reactor of the early 1990s, the market pushed vendors to increase the size of their designs. 

Today, vendors offer the Generation III∂ technologies based on 

those small systems, including the 1100 megawatt AP–1000 and 

the 1600 megawatt ESBWR reactor from General Electric. 

So the big question is why is today different from yesterday? 

Well, as Secretary Lyons pointed out, the greatest difference is the 

fact the technology has evolved quite significantly over the years. 

Having learned the lessons from the development of Generation 

III∂ technologies and from the failures of previous small reactors, 

today’s vendors clearly believe they have solved the riddle of small 

reactor economics. 

Today’s SMR technologies apply novel design approaches, such as 

integral pressure vessels that contain reactor systems and are comprised of far fewer parts. These new SMRs are also much smaller 

than the systems of the 1990s. This choice was made to assure they 

could be factory built and shipped by rail for deployment. 

Importantly from a regulatory standpoint, today’s SMRs also 

have features that could lead to very important safety benefits. For 

example, design concepts I’ve seen thus far further the advanced 

use of passive safety systems by applying gravity, natural circulation and large inventories of cooling water to reduce reliance on 

human intervention. 

And those large inventories are also used to make the spent-fuel 

pools safer, which I think is a very important aspect of designs. 

There’s still a great deal of work to be done, and this is really 

much the same place I think we were in the 2000 timeframe when 

the DOE launched the Nuclear Power 2010 program (NP2010) to 
12 

spur the development of the certification of Generation III∂ designs, such as the AP–1000. 

At that time, the level of design completeness was insufficient to 

enable vendors to provide utilities with reliable cost estimates. 

After this cost-shared work was completed, vendors and utilities 

were able to negotiate contracts on realistic bases. 

A decade later, utilities are awaiting final regulatory approval to 

begin constructing new plants based on technologies advanced by 

NP2010. 

At the same time, one often hears the industry is concerned that 

the NRC might make decisions that will render these new systems 

to be uncompetitive. In my opinion, these concerns are not well 

grounded in an understanding of how the NRC develops regulatory 

requirements. 

Using security as a general example, the size of guard forces and 

the nature of security barriers protecting U.S. nuclear powerplants 

is not determined in accordance with a set formula that might 

somehow be applied to SMRs. The security strategies of each individual plant are designed by licensees to defend their facilities 

against threats postulated by NRC. 

These strategies are tested on a periodic basis using force-onforce exercises, and when issues arise as a result of these exercises, 

licensees are obligated to make necessary adjustments. I believe 

this exact same process will work very well with SMRs. 

Whatever else they are SMRs are power reactors. While the size 

of SMRs may eventually prove to have financial or implementation 

benefits the fact that they are small has far less significance from 

a regulatory standpoint than I think many expect. 

That said, SMR vendors have proposed design components that, 

if fully realized, incorporate technologies and approaches that can 

have significant safety benefits and, therefore, must be considered 

as risk-informed regulatory decisions are made. 

PREPARED STATEMENT

At the end of the day, as the many issues SMRs present are discussed and resolved, I do not expect the decisions made by NRC 

will be the critical factor in the success or failure of these technologies. 

More likely, the success or failure of this newest attempt to build 

small reactors will depend on the ability of today’s vendors to avoid 

the pitfalls of the past. 

Thank you very much. I look forward to answering your questions. 

[The statement follows:] 

PREPARED STATEMENT OF WILLIAM D. MAGWOOD, IV 

Chairman Feinstein, Ranking Member Alexander, and members of the subcommittee, I thank you for the opportunity to speak to the subcommittee this morning. I appear today as an individual member of the Nuclear Regulatory Commission 

(NRC) and will provide my personal views and perspectives. I am not here today 

to represent the NRC as a whole or to speak for the agency. 

The various technology concepts that have become known collectively as small 

modular reactors (SMRs) have generated a great deal of attention and interest in 

recent years. The prospects for SMRs have garnered considerable press coverage, 

significant interest in industry circles, and support from Members of Congress and 

the administration. 
13 

I understand this interest. For utilities, SMRs present the possibility of a new financial model for nuclear powerplant deployment—one which allows generating assets to be built and installed on a more certain and predictable basis. Utilities are 

also attracted by the idea that reactors could be deployed in a modular fashion, 

avoiding the large, upfront costs inherent to today’s nuclear plants. 

For vendors, SMRs are technologies that could be manufactured in U.S. facilities 

at lower and more predicable cost than is typical of conventional nuclear reactors. 

They envision large numbers of SMRs being built to meet a range of energy requirements, including the possible replacement of outdated, small coal-fired powerplants 

across the country. 

For many Government officials, SMRs provide a means to support the revitalization of the Nation’s heavy manufacturing base, providing thousands of well-paid, 

skilled jobs, and reducing U.S. reliance on overseas suppliers for vital energy technologies. 

These are all laudable and important interests. However, as I’m sure the subcommittee will hear over the course of this morning, all of these possibilities are 

still just that—possibilities. We are only at the first early steps of this venture and 

there is much work still to do. 

That is not to say that SMRs are a new idea. The conceptual benefits of small 

reactors have been the subject of discussion and analysis for decades, and all the 

potential benefits I’ve mentioned have been considered in the past. The potential advantages of smaller reactors prompted the Government to provide considerable financial support for the development of the mid-size, passive-safety reactors in the 

1990s and to encourage the pursuit of the pebble-bed modular reactor in the early 

years of this century. Both efforts proved unable to overcome the economic realities 

of building and operating nuclear powerplants—realities that tend to penalize small 

reactors and reward larger designs. Thus, instead of the AP–600 and 500 megawatt 

Simplified Boiling Water Reactor of the early 1990s, the market pushed vendors to 

increase the size of their designs; today, vendors offer Generation III∂ technologies 

based on those smaller systems—the 1,100 megawatt AP–1000 and the 1,600 megawatt Economic Simplified Boiling Water Reactor. 

Around the turn of the century, both DOE and industry became interested in the 

Pebble Bed Modular Reactor, or PBMR. This was a small, high-temperature, gascooled reactor with a generating capacity of about 165 megawatts. This technology 

captured considerable media attention after United States companies became involved in an effort to build a commercial pilot in South Africa. However, as the high 

costs of the project became apparent, commercial participants began to peel away 

and eventually the South African project was abandoned. 

All small reactor technologies of the past failed to find a way to overcome the fact 

that the infrastructure required to safely operate a nuclear power reactor of any size 

is considerable. Tons of steel and concrete are needed to construct containment 

buildings. Control rod drives, steam generators, and other key systems are hugely 

expensive to design and build. A larger plant with greater electric generating capacity simply has an inherently superior opportunity to recover these large upfront 

costs over a reasonable period. 

So why is today different from yesterday? The greatest difference is the fact that 

the technology has evolved significantly over the years. Having learned lessons from 

the development of Generation III∂ technologies and from the failure of previous 

small reactors, today’s SMR vendors clearly believe they have solved the riddle of 

small reactor economics. They are presenting novel design approaches that could 

lead to significant improvements in nuclear safety. For example, design concepts 

that I have seen thus far further advance the use of passive safety systems, applying gravity, natural circulation, and very large inventories of cooling water to reduce 

reliance on human intervention during an emergency. SMR designs also apply novel 

technologies such as integral pressure vessels that contain all major system components and use fewer and smaller pipes and pumps, thereby reducing the potential 

for a serious loss-of-coolant accident. 

Very importantly, these new SMRs are much smaller than the systems designed 

in the 1990s; this choice was made to assure that they could be factory-built and 

shipped largely intact by rail for deployment. The ability to ‘‘manufacture’’ a reactor 

rather than ‘‘constructing’’ it onsite could prove to be a major advantage in terms 

of cost, schedule reliability, and even quality control. 

But will innovations like these allow this new breed of SMRs to be successful? 

Maybe. 

Many years of work remain for SMR vendors to refine their designs and allow 

for the development of realistic and reliable cost estimates. This is much the same 

state of affairs that existed in the 2002 timeframe when DOE launched the Nuclear 

Power 2010 program (NP2010) to spur the development and certification of Genera-
14 

tion III∂ designs such as the AP–1000. At that time, the level of design completeness was insufficient to enable vendors to provide utilities with reliable cost and 

schedule estimates. After the cost-shared effort to complete more design and engineering work, vendors and utilities were able to negotiate contracts on a realistic 

basis. A decade later, utilities are awaiting final regulatory approval to begin constructing new plants based on technologies advanced by the Nuclear Power 2010 initiative. I understand that DOE has proposed a similar approach that is generally 

modeled after the success of NP2010 in order to further the development and licensing of SMRs. 

At the same time, one often hears that the industry is concerned that the NRC 

might make decisions that will render these new systems uncompetitive. Industry 

representatives have voiced concern over regulatory issues such as the number of 

operators needed to run these reactors, the size of the security forces needed to protect them, and the requirements for emergency planning. According to these concerns, if NRC holds SMRs to the same requirements as currently operating plants, 

the operating costs will be too high and utilities will turn away from the potential 

benefits of small reactors. 

In my opinion, these concerns are not well-grounded in an understanding of how 

the NRC develops regulatory requirements. Using security as a general example, I 

note that it is certainly true that NRC requires licensees to maintain significant security capabilities to protect existing nuclear powerplants from a range of potential 

threats. U.S. nuclear plants are protected by highly trained security professionals, 

many of whom have military or law enforcement backgrounds. With these people 

on the job, U.S. nuclear plants are the most secure, best-protected, privately owned 

commercial facilities on the planet. Given the threats that exist in the world today, 

it is essential that U.S. nuclear plants be secured in this manner. 

But the size of guard forces and the nature of security barriers protecting U.S. 

nuclear powerplants are not determined by NRC in accordance with a set formula 

that might somehow be applied to SMRs. The security strategies of each individual 

plant are designed to defend these facilities against postulated threats. These strategies are tested on a periodic basis using Force-on-Force exercises and when issues 

arise as a result of these exercises, licensees are obligated to make the necessary 

adjustments. If, for example, the layout of a particular plant creates a blind spot 

that could be exploited by a potential adversary, then the security strategy must be 

modified to eliminate this vulnerability. 

In my opinion, it would be perfectly reasonable to apply the same basic approach 

to SMRs. Future operators of SMRs should be required to deal with the same potential security threats as today’s plants. The size and configuration of the security 

forces required for a given SMR should depend on what is needed to assure the protection of the facility. As issues are found, SMR operators should have the same responsibility as current licensees to close any security concerns. 

From the early discussions I’ve had with SMR vendors, I understand that they 

are designing facilities that are to be largely subsurface facilities with security requirements anticipated in the choices made with regard to their configuration. I 

would expect to see the regulatory process credit the security benefits of design, configuration, and plant lay-out—just as it does in the case of today’s plants. I therefore 

believe the current regulatory approach provides a reasonable framework for industry to pursue the development and deployment of small reactors. 

Hopefully, this simple example illustrates what I believe is a vital point. Whatever else they are, SMRs are power reactors. While the size of SMRs may eventually 

prove to have financial or implementation benefits, the fact that they are ‘‘small’’ 

has far less significance from a regulatory standpoint than I think many expect. 

SMR concepts may have unique characteristics that prompt issues such as the size 

of security forces and control room operations, but the basic concepts related to the 

licensing of reactors should not fundamentally change as a result of the size of the 

reactors. That said, SMR vendors have proposed design concepts that, if fully realized, incorporate technologies and approaches that can have significant safety benefits. The application of passive safety design strategies, very large water inventories, 

and subsurface configurations all must be considered as risk-informed regulatory decisions are made. 

The safety and security of the American people require a clear, strong, and consistent regulatory approach if the construction and operation of SMRs is to be permitted. At the same time, it is only rational to apply this regulatory approach in 

a graded manner that takes account of the safety and security risks presented by 

each design. I have been informed that the NRC staff is already working on these 

issues and considering how best to apply this framework to SMR designs. 

While I have attempted to draw a clear line today to identify fundamental issues, 

there remain numerous complex regulatory decisions to be made. I still have many 
15 

questions that will need to be answered. For example, what are the safety and security implications of installing single SMRs in remote locations? In the case of multimodule facilities, what measures might be necessary to assure the safety of adjacent 

modules should a problem occur with one reactor? 

It is important to highlight the fact that industry has not yet submitted SMR applications for regulatory review. Once this is done, I’m certain that for each SMR 

design, there will be a public, transparent discussion about these and no doubt 

many other issues. In anticipation of applications that could be forthcoming in 2012 

and 2013, the NRC staff recently issued a general schedule anticipating that SMRrelevant analysis, stakeholder interaction, and publication of guidance documents 

regarding issues such as emergency planning requirements and control room staffing will continue into next year. 

At the end of the day, as these issues are discussed and resolved, I do not expect 

that the outcomes of decisions made by NRC are likely to be the critical factor in 

the success or failure of SMRs. More likely, the success or failure of this newest attempt to build small reactors will depend on the ability of today’s SMR vendors to 

avoid the pitfalls of the past. 

Thank you for your attention. 

FEDERAL SUBSIDY FOR NUCLEAR POWER

Senator FEINSTEIN. Thank you very much. 

I have a question. In 2005, the Congress enacted legislation creating a 2-cent-per-kilowatt-hour subsidy for the first eight newly 

built nuclear reactors in our country. So there’s an existing tax 

subsidy for nuclear power, and it’s the same subsidy that wind 

power gets in value, as I understand it. 

The new plant being built in Georgia will claim this subsidy, but 

seven more plants will take it into the future. If those plants are 

SMRs, then they will get a subsidy. Is that correct, Secretary 

Lyons? 

Dr. LYONS. Senator Feinstein, I believe that is correct. I would 

need to reread exactly the wording as to whether there was an expiration date on the production tax credit, but the 1.8-cents-per-kilowatt-hour that you described, yes, that is correct. It is limited per 

plant. 

SAFETY AND LOGISTICS OF CLUSTERING REACTORS

Senator FEINSTEIN. It is my understanding that these plants on 

their own are not cost effective and that the eventual plan is to 

cluster them, so that you cluster 6, 7, maybe 10, maybe 15 of them 

together, again, without permanent waste disposal, with waste remaining on the site. As you look at that, do you find that to be in 

the best interests of this country? 

Dr. LYONS. As I noted in my written and oral comments, Senator, 

the plants are designed to be completely independent, from a safety 

standpoint, between modules. That has to be verified by the NRC. 

The vendors will need to convince the NRC that that is the case. 

In addition, the underground siting, which can be well hardened, 

the large quantities of water, as Commissioner Magwood mentioned, and the substantially enhanced safety features of these 

smaller units, yes, I think we can end up with a very effective safety case. But it remains to be verified or not verified by the NRC. 

Senator FEINSTEIN. Are you saying then that lining up 5 or 10 

or more SMRs is safer than one 1,100, 1,200 megawatt plant? 

Dr. LYONS. I’m saying that the NRC will evaluate however many 

modules are at a site from a safety perspective just as they would 

evaluate the safety of a single unit. And to the extent that the ven-
16 

dor can demonstrate to the NRC’s acceptance that that is achieved, 

then, yes, they can proceed. 

NEED FOR FEDERAL APPROPRIATION

Senator FEINSTEIN. Okay. Your Department is proposing this $452 million program to pay one-half the cost of licensing, yet the 

firms before us today seeking this help are extremely financially 

capable. B&W, for instance, had revenues exceeding $2.6 billion in 

2010. 

In other parts of our economy, we don’t invest Federal dollars to 

pay for private industry to obtain a safety license. We don’t help 

Ford comply with the crash test, nor do we pay Boeing to obtain 

FAA certification. 

I don’t understand why it’s necessary for the taxpayers to pay 

one-half of the cost of licensing. I just said it is likely that they will 

get a subsidy. Now, in addition to that, we’re going to pay one-half 

the cost of licensing? 

Dr. LYONS. The NP2010 program was a 50–50 cost share and I 

think highly successful. As part of the competitive solicitation that 

we will put out for these plants, we will give preference to situations where a vendor comes in with greater than a 50–50 cost 

share. So I don’t know what the cost share will actually end up 

being until we have gone through the procurement process. 

But I am quite confident that, looking at the number of countries 

that are moving ahead rapidly with SMRs, that if we want to see 

this country competing at the table for those opportunities that we 

do need to provide Government encouragement to take some of the 

first-mover costs of exploring whether this model—and there is uncertainty in this model—but whether this model of relying on manufacture in factory settings, can result in sufficient economies-ofscale to gain a competitive system. 

Senator FEINSTEIN. Would you agree that taking two SMR de- signs through design certification will cost at least $1.5 billion? 

That means the Federal cost share at 50–50 would need to be $750 

million, not $452 million. Do you agree with that? If not, why not? 

Dr. LYONS. Until we have gone through the procurement process, 

I don’t know what those numbers will be. 

If you look at NP2010, for the two designs, you would end up 

with numbers right in the range that you are describing. Those 

were for different systems. They’re much larger systems, and exactly how the overall costs for the gigawatt class can be compared 

to the smaller units, I don’t know until we go through the procurement process. 

And, in any case, I indicated that we will give preference to companies that can depart from the 50–50 cost share. 

SPENT-FUEL MANAGEMENT

Senator FEINSTEIN. My final question: Why should the Government fund a new reactor design instead of investing in additional 

R&D to help find solutions to the waste issue? 

Dr. LYONS. Our research portfolio, I believe, has a balanced approach based on the resources that your subcommittee and others 

are providing to us. We certainly have strong programs looking at 

a range of different approaches to management of used fuel. 
17 

We also are awaiting—and we won’t be waiting much longer— 

for the interim report of the Blue Ribbon Commission (BRC), which 

I’m hoping will provide useful guidance to the administration, and 

to the Congress to help to move toward what you indicated the 

country so needs, which is a comprehensive policy on used-fuel 

management. 

CONCERNS RAISED IN LIGHT OF JAPANESE NATURAL DISASTER

Senator FEINSTEIN. I would like to make a comment and then I’d 

like to turn it over to the ranking member. I have a hard time with 

a new start before we have any permanent method of fuel storage. 

It just seems that it is not the right thing to do for safety reasons. 

I was profoundly impacted by Fukushima and the Daiichi issues 

that have come up, and I think we haven’t seen the end of reaction 

yet. You know, this was at the time the grouping of large reactors 

together. Now, with no permanent fuel safety, we’re proposing, 

well, maybe we won’t do large ones. Let’s do small ones and let’s 

group them together. But the bottom line is we still have no permanent spent-fuel site. 

To me, that is putting the cart before the horse. I think we have 

to assure people that the waste can be taken care of. We have a 

permanent site. We have regional sites. The Government is monitoring it. It is safe. We can’t say that to people, and we’ve got $13 

billion in liability for not doing it. 

Dr. LYONS. You just said that was a comment. Do you want me 

to respond or—— 

Senator FEINSTEIN. Sure. Spice it up a little. 

Dr. LYONS. No, I will agree with many of your comments, but we 

are waiting for the BRC. Many of the suggestions you have made 

are incorporated within at least the subcommittee recommendations of the BRC. It remains to be seen what the full committee report will be, and it remains to be seen how the administration and 

the Congress will respond to that report. 

But I think a very key point with the SMRs is that the spentfuel pools for the SMRs are in hardened underground enclosures 

with very, very large quantities of water. These are extremely robust systems designed to hold fuel for many decades. 

When the fuel eventually emerges from underground, it certainly 

could go in dry casks, but we’re also looking at a time probably at 

least 2050, 2060, something like that. I would sincerely hope that 

the actions of the BRC, the actions of the administration and the 

Congress will have us well on the path to used-fuel solutions well 

before then. 

Senator FEINSTEIN. I hope so, too. Thank you, Mr. Secretary, 

Senator. 

Senator ALEXANDER. I’ll defer to Senator Graham since he didn’t 

have an opening statement. 

Senator GRAHAM. Well, I want to thank the chairman and the 

ranking member for having this hearing. This is a great debate, 

long overdue. 

Mr. Lyons, I’ve had the pleasure of meeting with you several 

times. Do you agree with the general statement that the world is 

passing us by as Americans when it comes to nuclear technology 

development? 
18 

Dr. LYONS. I’m afraid, Senator Graham, that you would reach 

that conclusion from any number of indicators. 

Senator GRAHAM. As a matter of fact, in the last 30 years, we 

haven’t built a reactor and we’re trying to build the first one in 30 

years. Is that correct? 

Dr. LYONS. It’s more than 30 years since the last one was licensed. 

Senator GRAHAM. I stand corrected. 

So to my really good friend from California who is very smart 

and has asked a lot of good questions. 

Senator FEINSTEIN. Uh-oh, something’s coming. 

Senator GRAHAM. Something’s coming. That’s right. 

NUCLEAR WASTE REPROCESSING

The point of not having a storage plan is that we don’t have a 

plan at all for nuclear power. If you shut down Yucca Mountain 

after you’ve spent $12 billion and say you can’t have central storage, you’ve got nobody to blame but yourself. The French have been 

reprocessing for decades. So have other countries, and we have no 

reprocessing plan. 

Now, here’s where I want to applaud the administration. The 

small nuclear reactor—modular reactor is the future. Either we’re 

going to embrace it or get left behind and all the jobs that are 

going to be created from the nuclear power industry are going to 

come overseas or they’re going to come here in America. We’ve got 

a chance to lead, finally. 

I embrace the administration’s effort to try to lead. Why should 

you subsidize this? Because if I’m in business, I would be very reluctant to spend a bunch of money in a country where nobody’s 

been able to build a reactor for 30 years, we’ve been building airplanes all the time. 

So, if I’m in the private sector, I’d be willing to pony up some 

money, but this is a very iffy deal because the Congress seems to 

be very schizophrenic. We complain about the lack of a storage 

plan, but we won’t allow storage at Yucca Mountain and we can’t 

reprocess. So the only alternative available to you is on-site storage. That’s the problem we’ve created. We’ve got nobody to blame 

but ourselves. 

Now, the administration has put together a blue ribbon panel. 

Are you familiar with that, Dr. Lyons? 

Dr. LYONS. Yes, Sir. 

Senator GRAHAM. All right. Here’s what I’m proposing to the 

ranking member: Secretary Chu is, I think, one of the best Secretaries of Energy I’ve dealt with since I’ve been here since 1995. 

He’s convinced me rather than spending billions of dollars on trying to duplicate the French PUREX system, let’s spend a decade or 

so looking at ways to come up with a reprocessing system that’s a 

generation or two advanced. 

That makes sense to me, and I’m here to offer to the country HCanyon at Savannah River Site as an experimental program to see 

how you could come up with advanced reprocessing technologies. 

So to the ranking member, our choices are not new starts, current system. We’ve got to do both. We’re going to have to lead or 

we’re going to follow. 
19 

So I’ll support the administration’s efforts to come up with a new 

generation of reprocessing. That’s going to cost money. At the same 

time you’re spending money in developing the new reactors of the 

future, you have to do both. If you don’t do both, you’re going to 

get left behind on all fronts. 

So, Mr. Lyons, when it comes to SMRs, the United States Navy 

has been doing this for a long time, haven’t they? 

Dr. LYONS. Yes, Sir. 

Senator GRAHAM. I think an aircraft carrier is about 5,000 people? 

Dr. LYONS. At least, yes. 

Senator GRAHAM. Yes, or more. So the concept works. Now, 

whether or not we can get it for a city of 100,000, that’s what 

you’re trying to do. So on the nuclear waste storage front, I think 

it was a mistake to shut down Yucca Mountain, but I don’t see that 

changing any time soon. 

So what I would like to do is urge this subcommittee to be forward thinking, embrace the administration’s suggestion to develop 

a waste-disposal system beyond what the French have today and 

encourage this subcommittee to embrace the competition to build 

a SMR in America. 

NUCLEAR TECHNOLOGY COMPETITION

Mr. Lyons, do you believe more competition, generally speaking, 

is better than less? 

Dr. LYONS. Yes, Sir. 

Senator GRAHAM. So rather than having two sites that could develop this technology, I would urge you to think outside the box 

and there are a bunch of companies out there who are dying to get 

into this business. There are a bunch of sites, like Savannah River 

Site, Tennessee Valley Authority (TVA) and other places, Oak 

Ridge that would love to be able to show the country we can do this 

safely. So would you consider more competition rather than less if 

the Congress gives you the go-ahead? 

Dr. LYONS. Certainly, we will be following the direction of the 

Congress, Sir. 

Senator GRAHAM. Okay. Now, my time is about up. Do you agree 

that we have to do two things at once? We have to come up with 

a way to reprocess beyond the French. And, at the same time, we 

have to invest in new starts, because, if we don’t, America is going 

to lose a golden opportunity to create jobs and lead the world when 

it comes to clean energy. 

Dr. LYONS. Senator, I’ll agree if you’ll let me rephrase it ever so 

slightly. 

Senator GRAHAM. You certainly can. 

Dr. LYONS. I very much agree we need to continue with new 

starts on power reactors. I would hope that instead of mandating 

that we move ahead with reprocessing that we could mandate that 

we move toward a comprehensive fuel management program for 

the country which may well include reprocessing, and that, to me, 

should be the subject of the research programs of the BRC output. 

There are—— 
20 

Senator GRAHAM. But we have to do both at the same time. But 

we have to deal with the waste-stream situation as well as new 

starts. You can’t pick one over the other? 

Dr. LYONS. That is the intent of the research program in my office and that is what we will continue to do assuming it is funded 

by—— 

H-CANYON

Senator GRAHAM. Final question. Do you see H-Canyon as a national asset when it comes to being able to figure out what kind 

of waste disposal systems to adopt in the future? 

Dr. LYONS. H-Canyon is very much a national asset, and, as you 

know, Senator, we’re in the process of evaluating ways in which HCanyon can contribute to research in used-fuel management. 

Senator GRAHAM. Well, I applaud your efforts. 

And, Mr. Magwood, I’m sure you’ve enjoyed these conversations. 

Do you believe as an individual member of the board that the country should lead when it comes to SMR because it is indeed the future of nuclear power? 

Mr. MAGWOOD. Well, certainly, from an NRC standpoint, I don’t 

think we’re in a position to encourage one way or the other whether we lead in those technologies or not. 

What I can say is that we’re going to be prepared to deal with 

whatever applications come before us, and I can assure you that 

the staff is very eager to take on the new challenge that these technologies present. 

Senator ALEXANDER. Thank you, Senator Graham. 

Senator Feinstein had to take a call. I hope she would hear the 

answers to some of these questions, but we can go back over them 

in a little time. 

ON-SITE SPENT-FUEL STORAGE

Mr. Magwood, has the NRC made a decision about whether it’s 

safe to store spent fuel on site? 

Mr. MAGWOOD. Yes, the NRC has issued a waste-confidence determination—in fact, we did it just late last year—indicating that 

spent fuel can be stored safely on site for up to 60 years past the 

licensed life of a reactor. 

Senator ALEXANDER. Up to 60 years. And that’s a determination 

by the NRC. 

Mr. MAGWOOD. Yes. 

Senator ALEXANDER. The chairman of the NRC has testified that 

spent-fuel rods can be safely stored on site for—— 

Senator FEINSTEIN. 100 hundred years. 

Senator ALEXANDER [continuing]. 100 hundred years. And Dr. 

Chu has said the same. 

Mr. Magwood or Mr. Lyons, do either of you have—my understanding of the President’s BRC to study used nuclear fuel is that 

while we safely store this material on site, which—I mean, it’s the 

job of the NRC to decide whether we can or not, and they have repeatedly said we can. And the amount of mass we’re talking about 

is about one football field worth of material 20 feet deep. 

Do you think it’s likely that within the next 10 to 20 years that 

we’ll come up with new and better ways to recycle used nuclear 
21 

fuel in a way that doesn’t isolate plutonium and that reduces the 

mass even further? Either of you want to comment on that? 

Dr. LYONS. Well, certainly, Senator, the research programs within our fuel cycle R&D program are focused on exploring more advanced approaches than PUREX toward used-fuel management. 

At the same time, we’re definitely not ruling out variations on 

the—cycle that we have now. And, again, the BRC will provide advice very soon now—July 29 being the deadline—on their views for 

how to move ahead with an effective used-fuel management program for the Nation. 

Senator ALEXANDER. So where we really are is that the people 

who are in charge of looking at the safety of nuclear power and 

have so far presided over a system where there’s never been a 

death in a commercial reactor and where no one was hurt at Three 

Mile Island and they have been so effective in looking at safety 

that we haven’t been able to build any for 30 years, they’ve said 

that we can store it safely on site for 60 years. 

And the President has said—he’s appointed a distinguished commission to say let’s look carefully at the very best ways to recycle 

used nuclear fuel as a way of reducing any proliferation risk and 

reducing the mass. 

I want to go to a couple of points that the chairman raised, which 

I think are appropriate points, first. Madam Chairman, I agree 

with you that a good use of our research and development money 

would be to take the recommendations of the President’s BRC on 

used nuclear fuel and do an extensive—In fact, I’ve described it as 

a mini Manhattan Project to find out the very best way to do it. 

And I think that’s an appropriate use. 

I’ve come to the conclusion that R&D is a proper use of Federal 

money and that jump starting new technologies may be and that 

long-term subsidies probably are not, which leads me to the subsidy point that we’ve gone back and forth about a little bit. 

I support, for example, jump starting electric cars. The President 

has supported that. There’s a bill in the Congress to do that, but 

not over the long term. 

I support jump starting better batteries. I would like to see us 

have several of these hubs, as we’ve discussed, which I call mini 

Manhattan Projects, in recycled nuclear fuel, in batteries, in making solar cost $1 a watt to give us a jump start, but then leave it 

to the private sector. 

And so that’s the line I would draw is to say that R&D for batteries, for solar, for the first small modular nuclear reactors is appropriate. Long-term subsidies are not. 

I would support subsidies for offshore wind, which we don’t know 

how to do yet, but I don’t support them anymore for the mature 

technology. 

Mr. Lyons, for the 104 commercial reactors that are operating 

today, what is the Government subsidy in terms of operating cost 

to those 104 reactors? 

Dr. LYONS. There is none. 

Senator ALEXANDER. There is none. There’s none at all. And we 

have $26 billion of subsidies going to wind power over the next 10 

years. It’s already committed to. 
22 

As far as the production tax credit for nuclear power, it probably 

won’t be available to the small reactors because that production tax 

credit is limited to the first 6,000 megawatts. No one’s getting it 

yet because there have been no new plants and there probably 

won’t be small reactors in time to take advantage of it. 

Mr. Magwood, I wonder if you or Mr. Lyons would have any comment on this quote by Dr. Moniz who will testify later this morning. In referring to the SMR, he said the program proposed by the 

administration is modest, but sensible. 

Obviously, the Federal budget deficit makes it difficult to start 

any new programs, but a hiatus in creating new clean-energy options, be it nuclear SMRs or renewables or advanced batteries, will 

have us looking back in 10 years lamenting the lack of a technology 

portfolio needed to meet our energy and environmental needs economically or to compete in the global market. Let’s get on with it. 

Do either of you have a comment on that? 

Dr. LYONS. I am very happy to endorse Professor Moniz’s comments and I have also learned over the years that one had better 

be very careful before one argues with Professor Moniz on an issue. 

Senator ALEXANDER. Mr. Magwood. 

Mr. MAGWOOD. I’ve trained myself not to answer questions like 

that since moving into the NRC. I’ll let Dr. Lyons take that. 

Senator ALEXANDER. I understand that, and, Madam Chairman, 

I thank you for the time. 

Senator FEINSTEIN. Oh, thank you very much. 

COST TO FEDERAL GOVERNMENT

I have another question and I don’t know whether the commissioner can explain this or Dr. Lyons can explain it, but why does 

it cost $1.5 billion to take this small reactor design through the 

NRC design process? Could even be more even with a 50–50 costshare basis. 

Mr. MAGWOOD. Well, I can start that and Dr. Lyons can certainly 

add to it. 

I think that when—I’m not familiar with the specific number 

you’re quoting, so I don’t know what entirely is contained in that 

$1.5 billion, but when I reflect on NP2010, which was going on 

while I was at DOE, the money that was spent was not simply for 

licensing costs at the NRC. 

A lot of the money was also spent for design and engineering 

work. And it was work that was necessary to make not just to answer questions from the NRC. It was work that was done to establish sufficient design detail to make negotiations with utilities viable, because before that point there wasn’t enough information for 

utilities to make a decision. 

So I think that the money that gets spent on these programs 

isn’t just for the licensing. It’s also to develop the engineering work 

in the background to be able to have those commercial discussions. 

Dr. LYONS. The only thing I’d add to that is certainly some of the 

NRC questions can be very detailed and should be very detailed 

and do require significant engineering design for the companies to 

provide effective answers to the NRC, and that also—that certainly 

ties in with the commissioner’s response. 
23 

Senator FEINSTEIN. Yes. I understand that, but these are very 

profitable companies. We’ve already established they’re going to be 

subsidized. Now, something that I learned today is that the engineering phase is essentially going to get paid for by the Federal 

Government, and I have a problem with that. 

You know, I’m watching everything get cut back. We’re in one 

fierce argument over the debt limit. There isn’t going to be money. 

We’ve had two continuing resolutions during the year that have cut 

back money, and the one thing that is going ahead without any 

problem so far is the nuclear stuff. Everything else is getting cut 

back. 

It seems to me that we’re in a brave new world and these are 

big companies. They make profits. This is going to be very profitable. It’s estimated it’s going to raise everybody’s utility rates. To 

me, it’s just not the best thing since sliced bread. 

Dr. LYONS. Senator, if I may. 

Senator FEINSTEIN. Go ahead, please. 

Dr. LYONS. Whether these units will be profitable remains to be 

seen. There are significant first-mover costs that they are going to 

have to take on in order to prove whether this model can be effective. 

So, certainly, I’m sure the companies that you’ll talk to in a second panel are hoping to be profitable, but I think they would agree 

that there is substantial uncertainty in the models at this point as 

to exactly what will be the outcome of this. 

The other point I would make is you’ve highlighted the large 

companies several times, and you’ve also suggested concern over 

the 50–50 or whether it should be more cost share. 

I’ve been in several discussions with different folks on whether 

the number should be changed from 50–50. To me, it is far better 

to say as we are doing—that we will give preference to someone 

going above 50–50, but we won’t put that in the demand. 

If you do demand a very large industry share, you will, I think, 

be guaranteeing that only the large companies can compete, and 

some of the companies who will be sitting here in a few minutes 

I don’t think would fit into the category of large companies. Some 

would. Some wouldn’t. 

I don’t know if that response helps. 

Senator FEINSTEIN. Well, it does help. It gives me something else 

to think about as to whether this is appropriate for the Government to do in a day when we just don’t have money. 

I mean, we face terrible things happening right now on August 

3 and yet here’s a whole, huge, new-start program that I’m trying 

to grasp what the public costs are. Does this add to our liability 

of having no permanent waste? We’ll get sued; I’m sure, somewhere 

and have to pay for the fact that we’re keeping this hot stuff in 

pools and in casks on site. 

You know, I’m trying to, I guess, grasp the whole picture of what 

it means. Does it increase rates 10 to 30 percent as I’m told? Do 

they have to be clustered together to be cost efficient? 

I think all of this goes into the decision as to whether the Government should subsidize which we’re already doing, and then provide these additional funds as well, so that the Government is 
24 

bearing, really, a substantial part of the cost, well more than 50 

percent with the subsidy. 

Anyway, those are just my humble thoughts. Do you have any 

comments you want to make? 

NUCLEAR PLANT OPERATION SUBSIDY

Senator ALEXANDER. The only one, Madam Chairman, I think it’s 

important that we establish as a matter of fact I asked Dr.—Mr. 

Lyons, is there any Government subsidy to the operation of the 104 

commercial nuclear plants we have today and his answer was, 

‘‘No.′′ 

Senator FEINSTEIN. That’s because the subsidy was passed in 

2005. 

Senator ALEXANDER. That’s correct. There’s a production tax 

credit—— 

Senator FEINSTEIN. Two cents per kilowatt—— 

Senator ALEXANDER. Two cents per kilowatt hour for new nuclear 

plants of which there haven’t been any. 

Senator FEINSTEIN. Correct. 

Senator ALEXANDER. Now, it’s unlikely—and we can ask the others here when they come—that the new SMRs would benefit from 

that because under the terms of the law they’d have to be under 

construction by 2014 and in operation by January 1, 2021, and 

there’d be a limit of $175 million for that and the estimate is there 

might be two by then. 

So there’s no subsidy today for the operation of a nuclear powerplant. There is for new ones up to 6,000 megawatts. It’s limited 

and it’s unlikely, I believe, that these small reactors would benefit. 

At the same time, if you’ll excuse me for mentioning it again, the 

production tax credit for wind, a mature technology, continues 

through this year and next year at the rate of a couple of billion 

or $3 billion a year. 

So we could take some of that money and use it for this promising new technology. I’d like to make a difference between jump 

starting new technologies and subsidizing mature technologies. 

Senator FEINSTEIN. I very much appreciate that. I think that’s a 

lot of food for thought. I think, before we get into it, we really need 

to think it out what it actually means, and, hopefully, the next 

panel will be able to add some additional clarity. 

Secretary Lyons, Mr. Magwood, thank you very much for coming. 

Did you have a comment you wanted to make? 

LESSONS LEARNED FROM FUKUSHIMA

Mr. MAGWOOD. I just want to make one comment, something you 

said earlier in your opening remarks—which I think covered a lot 

of important issues. There was one item I wanted to highlight. 

You mentioned the example of the Fukushima event, and, as you 

know, the NRC is working very hard to deal with the lessons 

learned at Fukushima. 

And for me personally, and I think you had the same reaction, 

watching the four reactors lined up and realizing that the loss of 

one of those reactors could lead to a very unfortunate set of cascading events certainly gives one pause when you think about the 

idea of having multiple reactors in one place. 
25 

One thing I’d like to say about that is that, first, I myself have 

a lot of questions about how these multi-module reactors will work 

and what the safety parameters will be and how we’ll make sure 

that if there’s a problem in one module that we’ll be able to protect 

the rest of them and make sure that there’s not a cascading event. 

So that’s something we’re looking forward to interacting with the 

vendors about when they make their applications. 

But as we work to learn the lessons of Fukushima, whatever conclusions we reach, those conclusions and those lessons learned will 

be applied to every technology that ever comes before the NRC. It’ll 

apply to the existing reactors. It’ll apply to Generation III∂ reactors like the AP–1000. And if they’re ever approved, it’ll apply to 

the SMRs as well. So we will apply those lessons learned well into 

the future. We’ll not stop with what we’re doing today. 

Senator FEINSTEIN. Well, I very much appreciate that, and you 

certainly have my full support to do that. I mean, it’s clear that the 

NRC has a big, big task in front of it. 

So I thank you for being here and for representing your personal 

views. And I thank you, Secretary Lyons. 

And we’ll move on to the next panel. 

Welcome, gentlemen. I wish I could say ladies and gentlemen, 

but this is a field that we clearly need to level in terms of female 

gender. 

In any event, what I’d like to do is just begin with Dr. Lyman 

and go right down the line, and we have a very distinguished wrapup person in Dr. Moniz. 

So, Dr. Lyman, why don’t you begin? 

STATEMENT OF DR. EDWIN LYMAN, SENIOR SCIENTIST, GLOBAL SECURITY UNION OF CONCERNED SCIENTISTS 

Dr. LYMAN. Good morning. On behalf of the Union of Concerned 

Scientists (USC) I would like to thank you, Chairman Feinstein, 

Ranking Member Alexander, for the opportunity to provide our 

views on the safety and economics of LW SMR. 

UCS is neither pro- nor anti-nuclear power, but we have served 

as a nuclear power safety and security watchdog for more than 40 

years. 

The Fukushima Daiichi crisis has revealed significant 

vulnerabilities in nuclear safety and has shaken public confidence 

in nuclear power around the world. 

If we want to reduce the risk of another Fukushima in the future, new nuclear plants will have to be significantly safer than the 

current generation. And to this end we do believe that it is appropriate for some level of support for the DOE to work with the nuclear industry to develop safer nuclear plant designs. 

But we do think that that money should be directed to spend taxpayer money only on supportive technologies that have clear potential to significantly increase levels of safety and security compared 

to currently operating reactors. 

Also, in light of Fukushima, we do believe it is appropriate for 

the Department to devote resources to addressing safety and security issues with the current fleet that have been revealed by the 

Fukushima crisis. 
26 

Proponents of SMRs claim that their designs have inherent safety features compared to larger reactors and some even argue their 

reactors would have been able to withstand an event as severe as 

Fukushima. 

We find these claims to be unpersuasive. For any plan, whether 

it’s large or small, the key factor is the most severe event that it’s 

designed to withstand, the so-called maximum design-basis event. 

But unless nuclear safety standards for new reactors are strengthened, one cannot expect that either small or large reactors will be 

able to survive the beyond-design-basis event like Fukushima. 

Although some LW SMR concepts may have desirable safety 

characteristics, unless they are carefully designed, licensed, deployed, and inspected they could pose comparable or even greater 

risks than large reactors. 

Some SMR vendors argue their reactors will be safer because 

they can be built underground. While underground siting could 

clearly enhance protection against certain events, it could also have 

disadvantages. 

For instance, at Fukushima, emergency diesel generators and 

electrical switched gear were actually installed below grade to reduce their vulnerability to seismic events, but this increased their 

vulnerability to flooding. In the event of a serious accident, emergency crews could have difficulty accessing underground reactors if 

intervention was necessary. 

Some SMR vendors emphasize their designs are passively safe, 

but no credible reactor design is completely passive and can shut 

itself down in every circumstance without need for intervention. 

Small reactors may have an advantage because the lower the 

power of a reactor, the easier it may be to cool through passive 

means, but accidents involving multiple small units may cause 

complications that could outweigh the advantages of having lower 

heat removal requirements for each unit. 

Moreover, passively safe reactors do require some equipment, 

such as valves that are designed to operate automatically, but are 

not 100 percent reliable. 

All passive systems will have to be equipped or should be 

equipped with highly reliable active backup systems in order to 

compensate for these uncertainties, but more backups mean generally higher costs and this poses a particular problem for SMRs, 

which begin with a large economic disadvantage compared to large 

reactors. 

Given there is no apparent capital cost benefit for SMRs, we are 

concerned that the industry is trying to cut the potential operating 

maintenance costs by asking the NRC for regulatory relief for a 

number of requirements. 

These do include reduced operator staffing for each unit and potentially reducing the number of operators that you need to monitor the safety of each individual unit. They also are interested in 

reducing emergency planning zone sizes and also adjusting security 

requirements that may end up with a reduced number of security 

officers. 

We think one of the early lessons of Fukushima is that you need 

to prevent serious accidents with significant margins of safety, so 
27 

now is not the time to start reducing regulatory requirements for 

small reactors. 

Emergency planning zone should be maintained. Security certainly should be maintained, especially in light of potential increased threats following the potential for retaliation of the death 

of Osama bin Laden, and we believe that the multiple reactor 

issues will require additional enhancements to regulations for collocated units to make sure that you do not have interactions that can 

affect the safety of each site because of an accident its neighbors. 

So all these suggest that we need to increase nuclear safety 

standards, not reduce them, and to the extent that that may further impact the economics of SMRs, it could be an issue for their 

economic viability. 

Just one last point, with regard to export, we believe that SMRs 

should only be exported to areas where there’s an established infrastructure to cope with emergencies and you can provide sufficient 

numbers of trained operator and security staff. 

PREPARED STATEMENT

We do agree that U.S. safety standards are worth exporting, but 

that’s exactly why we need to maintain and strengthen them rather than weaken them. 

And I refer to my written remarks for more details. Thank you. 

[The statement follows:] 

PREPARED STATEMENT OF DR. EDWIN LYMAN

Good morning. On behalf of the Union of Concerned Scientists (UCS), I would like 

to thank Chairman Feinstein, Ranking Member Alexander, and the other distinguished members of the subcommittee for the opportunity to provide our views on 

the safety and economics of light water small modular nuclear reactors. 

UCS is neither pro- nor anti-nuclear power, but has served as a nuclear power 

safety and security watchdog for more than 40 years. UCS is also deeply concerned 

about global climate change and has not ruled out an expansion of nuclear power 

as an option to help reduce greenhouse gas emissions—provided that it is affordable 

relative to other low-carbon options and that it meets very high standards of safety 

and security. However, the Fukushima Daiichi crisis has revealed significant 

vulnerabilities in nuclear safety and has shaken public confidence in nuclear power. 

If we want to reduce the risk of another Fukushima in the future, new nuclear 

plants will have to be substantially safer than the current generation. To this end, 

we believe that the nuclear industry and the Energy Department should work together to focus on developing safer nuclear plant designs, and that the Congress 

should direct the Energy Department to spend taxpayer money only on support of 

technologies that have the potential to provide significantly greater levels of safety 

and security than currently operating reactors. The nuclear industry will have to 

work hard to regain the public trust. 

Proponents of small modular reactors (SMRs) claim that their designs have inherent safety features compared to large reactors, and some even argue that their reactors would have been able to withstand an event as severe as Fukushima. We find 

these claims to be unpersuasive. For any plant—large or small—the key factor is 

the most severe event that the plant is designed to withstand—the so-called maximum ‘‘design-basis’’ event. Unless nuclear safety requirements for new reactors are 

significantly strengthened, one cannot expect that either small or large reactors will 

be able to survive a beyond-design-basis event like Fukushima. Although some lightwater SMR concepts may have desirable safety characteristics, unless they are carefully designed, licensed, deployed and inspected, SMRs could pose comparable or 

even greater safety, security and proliferation risks than large reactors. 

Some SMR vendors argue that their reactors will be safer because they can be 

built underground. While underground siting could enhance protection against certain events, such as aircraft attacks and earthquakes, it could also have disadvantages as well. For instance, emergency diesel generators and electrical switchgear 

at Fukushima Daiichi were installed below grade to reduce their vulnerability to 
28 

1M.D. Carelli et al., ‘‘Economic Comparison of Different Size Nuclear Reactors’’, 2007 LAS/ 

ANS Symposium, Cancun, Mexico, 1–5 July 2007. Available at http://www.las-ans.org.br/ 

Papers%202007/pdfs/Paper062.pdf. 

seismic events, but this increased their susceptibility to flooding. And in the event 

of a serious accident, emergency crews could have greater difficulty accessing underground reactors. 

Some SMR vendors emphasize that their designs are ‘‘passively safe’’. However, 

no credible reactor design is completely passive and can shut itself down and cool 

itself in every circumstance without need for intervention. Some reactor designs— 

large or small—have certain passive safety features that allow the reactor to depend 

less on operator action for a limited period of time following design-basis accidents. 

Small reactors may have an advantage because the lower the power of a reactor, 

the easier it is to cool through passive means such as natural convection cooling 

with water or even with air. However, accidents affecting multiple small units may 

cause complications that could outweigh the advantages of having lower heat removal requirements per unit. Moreover, passively safe reactors generally require 

some equipment, such as valves, that are designed to operate automatically, but are 

not 100 percent reliable. 

Operators will always be needed to monitor systems to ensure they are functioning as designed, and to intervene if they fail to do so. Both passive systems and 

operator actions would require functioning instrumentation and control systems, 

which were unreliable during the severe accidents at Three Mile Island and 

Fukushima. Passive systems may not work as intended in the event of beyond-design-basis accidents, and as result passive designs should also be equipped with 

highly reliable active backup systems and associated instrumentation and control 

systems. 

But more backup systems generally mean higher costs. This poses a particular 

problem for SMRs, which begin with a large economic disadvantage compared to 

large reactors. 

According to the standard formula for economies-of-scale, the overnight capital 

cost per kilowatt of a 125 megawatt reactor would be roughly 2.5 times greater than 

that of a 1,250 megawatt unit, all other factors being equal. Advocates argue that 

SMRs offer advantages that can offset this economic penalty, such as a better match 

of supply and demand, reduced upfront financing costs, reduced construction times, 

and an accelerated benefit from learning from the construction of multiple units. 

However, a 2007 paper by Westinghouse scientists and their collaborators that 

quantified the cost savings associated with some of these factors found that they 

could not overcome the size penalty: the paper found that at best, the capital cost 

of four 335 megawatt reactors was slightly greater than that of one 1,340 megawatt 

reactor.1

Given that there is no apparent capital cost benefit for SMRs, it is not surprising 

that the SMR industry is seeking to reduce operating and maintenance (O&M) costs 

by pressuring the Nuclear Regulatory Commission (NRC) to weaken certain regulatory requirements for SMRs. Deputy Assistant Energy Secretary John Kelly told 

the NRC in March that the NRC’s regulatory requirements for SMRs will ‘‘directly 

influence the operating cost, which will be a large determinant into the economic 

feasibility of these plants.’’ 

For example, the industry argues that regulatory requirements for SMRs in areas 

such as emergency planning, control room staffing, and security staffing can be 

weakened because SMRs contain smaller quantities of radioactive substances than 

large reactors and therefore pose lower risks to the public. The NRC is currently 

considering the technical merits of these arguments. 

However, small reactors will not necessarily be safer than large reactors on a permegawatt basis. Simply put, the risk to the public posed by one 1,200-megawatt reactor will be comparable to that posed by six 200-megawatt reactors (assuming that 

all units are independent), unless the likelihood of a serious accident is significantly 

lower for each small reactor. But such an outcome will not be assured under the 

current regulatory regime. The NRC has a long-standing policy that new nuclear 

reactors—large or small—are not required to be safer than operating reactors. One 

consequence of this policy is that new reactor designs that have inherent safety features not present in current reactors may not actually end up being safer in the 

final analysis if designers compensate by narrowing safety margins in other areas, 

such as by reducing containment strength or the diversity and redundancy of safety 

systems. Any safety advantages will be eroded further if the NRC allows SMR owners to reduce emergency planning zones and the numbers of required operators and 

security officers. 
29 

One of the early lessons from Fukushima is that prevention of serious nuclear accidents requires significant margins of safety to protect against extreme events. Earlier this week, UCS and the NRC’s Fukushima Near-Term Task Force each issued 

recommendations for strengthening nuclear safety requirements. Consider the following examples: 

—Emergency planning zones around U.S. nuclear plants extend to a radius of 10 

miles. Yet significant radiological contamination from the Fukushima accident 

has been detected well beyond a distance of 10 miles from the plant. In fact, 

radiation levels high enough to trigger resettlement if they occurred in the 

United States have been detected more than 30 miles away from the 

Fukushima site. The discussion we should be having today is whether current 

emergency planning zones need to be increased, not whether we can shrink 

them for SMRs. 

—As we have seen at Fukushima, nuclear plants with multiple reactors that experience severe accidents present extreme challenges. In its June 2011 report 

to the International Atomic Energy Agency, the Nuclear and Industrial Safety 

Agency of Japan (NISA) stated that: 

‘‘The accident occurred at more than one reactor at the same time, and the 

resources needed for accident response had to be dispersed. Moreover, as two 

reactors shared the facilities, the physical distance between the reactors was 

small... The development of an accident occurring at one reactor affected the 

emergency responses at nearby reactors. 

‘‘Reflecting on the above issues, Japan will take measures to ensure that 

emergency operations at a reactor where an accident occurs can be conducted 

independently from operation at other reactors if one power station has more 

than one reactor. Also, Japan will assure the engineering independence of each 

reactor to prevent an accident at one reactor from affecting nearby reactors. In 

addition, Japan will promote the development of a structure that enables each 

unit to carry out accident responses independently, by choosing a responsible 

person for ensuring the nuclear safety of each unit.’’ 

The NRC will need to consider these issues in developing its licensing approach for small modular reactor sites, which may host two to four times the 

number of units present at the largest U.S. nuclear plant site today. The NRC 

has acknowledged that some of its current regulations and procedures do not 

account for events affecting multiple units on a site. For instance, according to 

the NRC, emergency planning regulations focus on single-unit events with regard to requirements for emergency operations staffing, facilities, and dose projection capability. Also, the NRC’s guidance for probabilistic risk assessment, an 

analysis tool which is used in many regulatory applications, does not require 

the consideration of multiple-unit events. The NRC Fukushima Near-Term Task 

Force is recommending that emergency preparedness requirements be revised 

to address multi-unit events, which could have a significant impact on SMR licensing. 

—Fukushima also demonstrated how rapidly a nuclear reactor accident can 

progress to a core meltdown if multiple safety systems are disabled. A wellplanned and executed terrorist attack could cause damage comparable to or 

worse than the earthquake and tsunami that initiated the Fukushima crisis, potentially in even less time. And although Osama bin Laden is gone, the terrorist 

threat to domestic infrastructure may actually increase over time if al Qaeda 

seeks to retaliate. This is the wrong time to consider reducing security requirements for nuclear powerplants, regardless of their size. However, SMR vendors 

have emphasized that reducing security staffing is critical for the economic viability of their projects. Christofer Mowry of B&W told the NRC in March that 

‘‘whether SMRs get deployed in large numbers or not is going to come down to 

operations and maintenance (O&M). And the biggest variable that we can attack directly . . . is the security issue.’’ A Nuclear Energy Institute representative said in a presentation in June that ‘‘optimal security staffing levels (for 

SMRs) may appreciably differ from current levels.’’ 

UCS is also concerned that reducing safety and security requirements for SMRs 

could facilitate their sale to utilities or other entities in the United States and 

abroad that do not have prior experience with nuclear power. Some SMR vendors 

argue that their technology is so safe that it can be deployed to remote areas, military bases, and countries in the developing world that have relatively low electric 

demand and no nuclear experience or emergency planning infrastructure. However, 

SMRs deployed in this manner could raise additional safety and security concerns 

compared to their deployment by established and experienced nuclear utilities. 
30 

The distributed deployment of small reactors would also put great strains on existing licensing and inspection resources. Nuclear reactors are qualitatively different 

from other types of generating facilities, not least because they require a much more 

extensive safety and security inspection regime. Similarly, deployment of individual 

small reactors at widely distributed and remote sites around the world would strain 

the resources of the International Atomic Energy Agency (IAEA) and its ability to 

adequately safeguard reactors to guard against proliferation, since IAEA inspectors 

would need to visit many more locations per installed megawatt around the world. 

Maintaining robust oversight over vast networks of SMRs around the world would 

be difficult, if feasible at all. 

UCS believes that SMRs are only suitable for deployment where there is an established infrastructure to cope with emergencies, and if sufficient numbers of trained 

operator and security staff can be provided. It is unrealistic to assume the near-term 

availability of SMRs that are so safe they can be shipped around the world without 

the need to ensure the highest levels of competence and integrity of local regulatory 

authorities, plant operators, emergency planning organizations, and security forces. 

Fukushima has demonstrated the importance of timely offsite response in the event 

of a severe accident, so the accessibility of reactors in remote locations also must 

be a prime consideration. Even within the United States, small utilities with little 

or no experience in operating nuclear plants need to fully appreciate the unique 

challenges and responsibilities associated with nuclear power and should not expect 

that small modular reactors will provide any relief in this regard. 

UCS acknowledges the concerns of Members of Congress who fear that the United 

States is lagging in creation of a robust SMR export market and may lose out to 

a country like China if it takes too long to develop and license SMRs. However, we 

believe that the best way for the United States to maintain a competitive edge is 

to establish American brands with the highest safety standards. If, as some say, 

NRC design certification is seen as a ‘‘gold standard’’ worldwide, it makes sense to 

preserve that standard rather than erode it by weakening SMR safety requirements. 

To this end, the Congress should prohibit DOE from selecting SMR proposals for 

its cost-sharing program if their business case depends on a weakening of NRC safety and security regulations or marketing reactors to countries with inadequate safety rules and regulatory oversight mechanisms. 

Thank you for your attention. I would be pleased to answer your questions. 

Senator FEINSTEIN. Thank you, Dr. Lyman. 

Mr. Ferland is representing Westinghouse. 

STATEMENT OF E. JAMES FERLAND, JR., PRESIDENT, AMERICAS WESTINGHOUSE ELECTRIC COMPANY, LLC 

Mr. FERLAND. Thank you. I’m very happy to be here this morning, Madam Chairman—— 

Senator FEINSTEIN. Could you press your microphone button? 

Mr. FERLAND. Chairman Feinstein and Ranking Member Alexander, thank you very much for the opportunity to speak to you 

this morning. 

I am here representing Westinghouse where I serve as the president and oversee our operations in the United States. And what I’d 

like to do in my few minutes of introduction is see if I can address 

some of the items that you highlighted this morning in your introductory comments. 

So let me start with the success of NP2010. NP2010 was a collaboration cost-sharing program meant to kick start Generation III 

technologies. 

Westinghouse was a participant in that program, and the end result for us was an AP–1000 that’s in the final stages of design certification today. 

And, as you know, four units in the United States are under 

preconstruction right now, two in Georgia and two in South Carolina, as a direct result of the success of that program, generating 

in excess of 1,000 jobs to those sites, and that number will multiply 
31 

once we receive the design certification and the combined operating 

license and we move into nuclear construction. 

The theory behind NP2010 was as you stated. It was to kick 

start the design certification on these new passive-safety plants. 

And to give you a ballpark feel from a numbers perspective, the 

cost share received from Westinghouse as a result of NP2010 was 

about $300 million, which was matched by Westinghouse upfront, 

and then the cost share stopped, and Westinghouse, on its own, 

given that we’d proven the viability of that design, spent—and is 

still spending—several hundred million dollars more on our own 

with no Government money to take that plant to completion where 

we have a set of design drawings that are ready to go to the field. 

So that program worked very well. Our view is that if we could 

extend the successes of NP2010 into a SMR program where, again, 

we used the concept to kick it off and get it going, prove the economic viability, get through the upfront design certification, we can 

move to a new generation of technology centered in the United 

States generating thousands of U.S. jobs and putting us in the middle of new nuclear development going forward. So we see an awful 

lot of benefit in the concept of an SMR collaboration cost-sharing 

program. 

A couple of comments on the Westinghouse SMR from a safety 

perspective, again, a passive plant, so we’re taking advantage of 

what we learned in NP2010 with the AP–1000s that we’re working 

on today in extending those passive features—smaller plant, single 

containment with everything inside it. 

So that reduces the amount of piping, significantly enhances the 

safety profile of those units, and, again, we can rely even more on 

passive technology—gravity, natural circulation—in the event of an 

incident. 

So, for example, on the Westinghouse SMR, in the event of a significant incident—for example, a loss of offsite power, as happened 

in Fukushima—the Westinghouse SMR would look at 7 days, no 

operator action, no outside power required, where those units taking advantage of the passive features of the plant would be safe 

and give us plenty of time to go ahead and respond, so a significant 

step in safety in that design. 

Stand-alone units, I think very good questions. Commissioner 

Magwood, Assistant Secretary Lyons addressed some of the concerns about multiple units next to one another. 

The concept behind the Westinghouse SMR is that each unit is 

stand-alone, has stand-alone people, and has stand-alone equipment, no common systems. So each unit is able to fend for itself 

in that matter. 

I recognize that we have the detailed design yet to finish to make 

sure we can stand up to that, and we will receive extensive questioning and scrutiny from the NRC as we go through the design 

certification process, and from the public, to be able to prove that, 

but it’s my belief that you can safely put stand-alone units next to 

each other, SMRs, and not magnify a potential problem. So that’s 

our responsibility to prove that to the NRC, but I believe that will 

be the outcome of this. 

From an economic competitive standpoint, the key is to take advantage of modular construction, factory construction, shipping to 
32 

1 AP–1000 is a trademark and registered trademark in the United States of Westinghouse 

Electric Company LLC, its subsidiaries and/or its affiliates. This mark may also be used and/ 

or registered in other countries throughout the world. All rights reserved. Unauthorized use is 

strictly prohibited. Other names may be trademarks of their respective owners. 

site, and we do need some scale to make that happen, as you mentioned. 

Our numbers upfront show at about 10 units we come down the 

learning curve to the extent where we believe these are now competitive at or below the price of current units today. 

PREPARED STATEMENT

Last comment, on safety, safety is always our number one priority. That’s the case at Westinghouse and in this industry as a 

whole, and we would not ever put forth a design that lowered safety standards, and we would never expect the NRC to lower safety 

standards. So we expect to live up to the standards that are in 

place today or will be in the future when we incorporate the lessons learned from Fukushima. 

Thank you. 

[The statement follows:] 

PREPARED STATEMENT OF E. JAMES FERLAND, JR. 

Chairman Feinstein, Ranking Member Alexander, and members of the subcommittee. Thank you for the opportunity to provide Westinghouse’s views on the 

importance of proceeding with the Department of Energy’s (DOE) program to develop and license light water small modular reactors (LW SMRs). The advancement 

of this technology is certain to benefit the American energy landscape by offering 

new investment options for emissions-free, baseload electricity that operates as an 

increasingly safe and secure generating resource. Westinghouse has appreciated the 

opportunity to provide input to DOE on the development of the SMR program and 

will continue to offer our finest scientists, engineers, and analysts in this productive 

partnership. 

Westinghouse has been at the forefront of applying advanced nuclear energy technology since 1953 and approximately one-half of the operating plants in the world 

today are based on Westinghouse reactor technology. We are currently working with 

the NRC, and utilities in Georgia and South Carolina, to build four Westinghouse 

AP–1000® reactors.1 NRC licensing of these projects is anticipated to be completed 

around the end of this year and will benefit the nuclear fleet by demonstrating passive safety design. 

These projects have already created thousands of jobs across the United States 

to support engineering, manufacturing, and construction preparation. Thousands 

more American jobs will be created when safety-related construction begins next 

year. Moreover, these communities will benefit from the economic multipliers of career employment for thousands of professional and specialized labor personnel who 

will operate the plants over their lifetime. 

As I’m sure you know, the Georgia and South Carolina projects were made possible by the DOE’s Nuclear Power 2010 program. We thank the Department, this 

subcommittee, and the entire Congress for their support of this technology development partnership. We believe that the SMR initiative represents an even more valuable investment because we will be incorporating the improved safety and power 

performance levels developed with the DOE NP2010 program into the SMR design. 

Leveraging these technology breakthroughs, and combining them with the customer 

choice for lower capital cost, significantly smaller footprint, and incremental buildout, will open new markets for emissions-free nuclear energy in the United States. 

The DOE’s investment in the NP2010 program was an unprecedentedly successful 

model for collaboration between government and industry that we believe should be 

reproduced. This public/private partnership provides value to the public, the DOE, 

utility customers and their rate payers, the NRC, and commercial vendors. The 

model produces multiple benefits: it allows the DOE to focus on research and technology development that ensures U.S. leadership in safe nuclear technology; it involves the NRC early to result in the highest safety possible in licensable designs; 
33 

it invests in job creation; and it reduces investment and market risk to encourage 

large private sector investment. 

Around the globe, the hunger for emissions-free, baseload electricity supply has 

invigorated a vibrant export market for Westinghouse technology bearing the stamp 

of stringent U.S. Federal Government review. Sales of Westinghouse technology and 

expertise has created thousands more jobs for Americans who are managing the construction, installation, fuel supply, and supply chain for AP–1000 plant projects in 

China. 

The essential technology advancement of the SMR designs being considered for 

the DOE program is the passive safety system, pioneered and licensed by Westinghouse for its AP–1000 plant design. Passive design means that—in the event of a 

significant, abnormal event—cooling to the nuclear reactor is produced by the physics of nature using gravity, evaporation, and natural circulation. In contrast, all of 

the nuclear plants operating in the world today have active safety equipment which 

relies on pumps and mechanical means requiring uninterrupted sources of electricity to respond to emergencies. Rigorous evaluation proves that passive systems 

perform as expected with full confidence, without requiring human intervention or 

back-up electrical sources, and can be sustained for days instead of hours without 

outside intervention. 

The SMR reactor power output is about one-fifth that of our AP–1000 reactor design and uses a dramatically smaller containment vessel to enclose the reactor. The 

reactor coolant system comprises a single, tall vessel with no need for loop system 

piping. This simplification and reduction of components cuts costs while it improves 

safety by eliminating accident scenarios associated with pipe breakage. Moreover, 

the small, robust containment can be buried underground, adding protection against 

outside events. 

In light of recent events, it’s important to note that the Westinghouse SMR design 

will not require any human operator action for 7 days after a shutdown or accident. 

And because the Westinghouse SMRs are stand-alone units that will not share 

equipment, structures, or operating personnel, concerns about response to simultaneous accidents at multiple units on the same site will be avoided. Onsite, used fuel 

storage will benefit from the same passive safety technology that works much like 

the reactor safety system. 

After safety, the most important factor in our ability to develop a viable SMR 

market is that it be economically competitive. The Westinghouse design achieves 

major efficiencies by dramatically increasing the use of factory fabrication for modules that can be used to build the plant. 

Almost all of the nuclear plants currently operating in the world today were designed to be unique, assembling every system and structure, one stick at a time. 

In contrast, the Westinghouse SMR uses a process that fabricates standardized systems and structures into modules in an assembly line, factory environment for installation onsite. Modular design allows tremendous advantages in productivity and 

schedule controls. Likewise, fabrication, transportation, and construction costs have 

greater certainty. And because of the compact size, it will allow us to fabricate 

major components, such as the reactor vessel and steam generator, here in the 

United States for shipping overseas, creating thousands more high-paying jobs here 

at home. 

The laws of economy-of-scale would say that—all things being equal—a 225 MWe 

nuclear plant would be much more expensive than an 1,117 MWe nuclear plant, on 

a per-unit-of-power basis. But our evaluations indicate that making extensive use 

of inherent SMR features trumps the economy-of-scale penalty. 

In the interest of time, I will close my comments by addressing two specific issues 

that we believe are at the heart of the subcommittee’s final approval to move forward with the DOE SMR program. 

First, in regard to price and economic competitiveness of SMRs, I can assure you 

that Westinghouse does not casually guess or estimate the market potential for any 

of the products or services in any of our business lines. As we designed our SMR, 

our team focused design on the least-cost engineering solutions and developed new 

and improved configurations. Our customers want the safest technology with the 

most efficient design. Both retail and wholesale utilities tell us there will be a substantial market for SMRs if the per-megawatt cost is close to that of large nuclear 

plants. 

In testimony to the this subcommittee on June 7 of this year, Dr. Edwin Lyman 

of the Union of Concerned Scientists referenced a 2007 paper by Westinghouse employees, which estimated that factors such as passive safety technology and modular 

fabrication could produce costs for a particular SMR as being only slightly above the 

cost of a large nuclear plant, when compared on a per MWe basis. Four years later, 
34 

Westinghouse believes our passive technology and increased modularity can enable 

SMR delivery at or below the current costs per MWe for today’s plants. 

Many utilities in the United States and overseas simply cannot afford to invest 

several billion dollars all at once for a large plant, but they could invest in small 

portions for one or more SMRs. In an increasingly carbon-regulated world, utilities 

are looking at nuclear as a preferred, emissions-free, baseload investment. And in 

many cases, the SMRs are the best business strategy for long-term asset investment 

and fuel portfolio strategy. 

On the second issue, we disagree with, and object to statements made by nuclear 

power critics that NRC safety standards and regulation will be weakened to accommodate SMRs in order to help them achieve economic competitiveness. Westinghouse, and the entire nuclear industry, has a vested interest in insuring that nuclear energy is supplied in a safe and reliable manner. As such, Westinghouse and 

others in the nuclear industry support thorough and transparent regulation and 

oversight conducted by the NRC. We have never asked the NRC to lower its standards or alter a regulation merely to increase the economic competitiveness of SMRs; 

and we would never make such a request at the expense of safety. 

A safety focus is ingrained in our company culture as it is in our customers’ culture. There are few business sectors that depend more on maintaining and improving upon safety than the nuclear industry. 

As a final note on safety, I want to say that as a leader in the nuclear industry, 

Westinghouse understands how the events at Fukushima have undermined public 

confidence in nuclear energy, and the expertise of the nuclear industry. The unique 

situation in Japan has caused a legitimate review of our own United States nuclear 

regulatory standards and we are participating fully in those reviews. 

At Westinghouse, we believe that a partnership between industry and the DOE 

is the most effective path for making progress on the policy, regulatory, economic, 

and infrastructure issues related to deployment of SMRs. We can launch the SMR 

program and produce the same level of success as we’ve enjoyed working as investment partners on the NP2010 program. We stand ready to work with DOE on the 

exciting potential for small nuclear technology. 

On behalf of the 15,000 Westinghouse employees, we thank the subcommittee for 

seriously considering our views. I would be pleased to answer any questions. 

Senator FEINSTEIN. Thank you very much. 

Mr. Mowry, president of Babcock & Wilcox. Welcome. 

STATEMENT OF CHRISTOFER M. MOWRY, PRESIDENT, BABCOCK & 

WILSON NUCLEAR ENERGY 

Mr. MOWRY. Chairman Feinstein and Ranking Member Alexander, I do appreciate this opportunity to present testimony today 

on the promise of SMRs and would ask that my entire written 

statement be entered into the subcommittee record. 

Senator FEINSTEIN. So ordered. All of them will be. Thank you. 

Mr. MOWRY. B&W has an ongoing comprehensive effort to evaluate our mPower SMR design in the context of the lessons from the 

Fukushima event, an effort which is confirming that mPower’s 

safety performance is already extremely robust. 

Our SMR design offers significant safety enhancements to current NRC safety goals through the use of inherently safer nuclear 

plant architecture and significant defense-in-depth systems. 

These design features can be summarized in five points. First, an 

integral nuclear steam supply system with no large penetrations in 

the primary cooling circuit, a design which eliminates the possibility of typical worst-case-loss-of-coolant accidents. 

Second, a small core with low-power density and large water inventory, a design that provides a large buffer against short-term 

challenges to core cooling. 

Third, a containment and reactor building fully imbedded underground, a design that effectively isolates the reactor module and all 

emergency cooling water and safety systems from natural disasters 

like what happened in Japan. 
35 

Fourth, no requirements for AC power, emergency diesel generators or pumps for any of the safety systems; a design that instead 

utilizes natural circulation to remove decay heat, and fifth, a fully 

protected spent-fuel pool with its very large cooling-water volume 

located deep underground, a design which provides protection for 

spent fuel similar to that which is provided for the reactor core 

itself. 

Taken together these SMR design features result in a reactor 

planned to be two to three orders of magnitude safer than current 

NRC requirements. 

The design creates a 14-day safe haven before any outside intervention is required to maintain reactor core cooling and more than 

30 days of inherent protection before the spent-fuel pool could experience any exposure of spent fuel. 

Furthermore, our SMR design requires zero operator action for 

the first 72 hours after an emergency shutdown and allows the operators to focus on long-term accident mitigation. 

Concerns that multi-module sites are less safe ignore these inherent differences between SMRs and the Fukushima plant. The 

imbedding of the entire B&W mPower reactor underground, including all necessary cooling and safety systems effectively isolates the 

reactor from such events. Each module is encased in its own individual containment together with its own independent dedicated 

safety systems. 

Concerns that our industry is pushing the NRC to weaken safety 

requirements are a complete mischaracterization. 

While the way in which an SMR design meets NRC regulations 

may be different from that of large reactors, the underlying safety 

requirements are exactly the same. We have no need to change or 

weaken any underlying NRC safety requirements. 

With regard to economics, B&W would not be investing our own 

company’s resources in such an effort if we did not believe we could 

produce a competitive product and create a viable stand-alone business model in the long term. 

Some people are concerned that due to the economies-of-scale 

paradigm small reactors can’t compete with large reactors. This is 

no longer true. Competitive costs are achievable through factory assembly of integral reactors, but, more importantly, through the 

simplicity of their design. 

Nevertheless, based on our long experience manufacturing reactors for both the Navy and the commercial customer base, we believe we can achieve our cost efficiencies after less than 10 modules. 

Recent studies of the economies of SMRs failed to consider that 

every utility does not have the capital, transmission grid or water 

resources necessary to build a large reactor, nor does every utility 

need large- generation capacity additions. In such cases, small, 

more affordable SMRs offer a better solution. 

New EPA regulations are likely to drive near-term retirements 

of up to 50 gigawatts of coal-fired, base-load generation. 

But the industry alone will not be able to develop and deploy carbon-free, base-load replacements for these old coal plants by 2020 

without an effective public-private partnership. Such a roadmap to 
36 

2020 is also essential to maintain America’s competitive edge in 

the global marketplace. 

Our international competitors are largely state-subsidized companies who have already started investing in their SMRs. Failing 

to move forward with this new DOE cost-share program will not 

prevent the deployment of SMRs in the United States, but will only 

ensure that foreign SMRs receive the substantial job and export 

benefits of selling their reactors to our domestic customers. 

Innovative LW SMRs has the near-term potential to raise nuclear safety to the next level while offering America a competitive 

source of domestically produced clean energy. 

In order to meet President Obama’s vision of being 80 percent 

carbon free by 2050, the American energy industry needs a practical nuclear option. Turning this SMR innovation into reality will 

depend on leadership from industry and government. 

PREPARED STATEMENT

We, therefore, ask this subcommittee to support the proposed 

DOE SMR cost-share program and help maintain our Nation’s 

leadership role in clean-energy technology. 

Thank you for the privilege of testifying today, I’m happy to answer any of your questions. 

[The statement follows:] 

PREPARED STATEMENT OF CHRISTOFER M. MOWRY

Chairman Feinstein, Ranking Member Alexander, and members of the subcommittee: My name is Chris Mowry and I am the president of Babcock & Wilcox 

Nuclear Energy, a business unit of The Babcock & Wilcox Company (B&W), and 

chairman of Generation mPower, LLC, which is a majority-owned subsidiary of 

B&W. I would ask that my entire statement and supplemental information be entered into the subcommittee record. My prepared remarks will be a summary of this 

statement. 

I appreciate this opportunity to present testimony today on the promise of small 

modular reactors (SMRs) and describe our innovative technology—the B&W 

mPowerTM reactor. I will focus my testimony on the technical, safety, and economic 

attributes of SMRs and I am happy to respond to any questions. 

B&W has more than 50 years of continuous nuclear engineering and manufacturing experience. Today we provide customers with nuclear manufacturing and nuclear-related services from more than 17 facilities across North America. These locations are engaged in activities from manufacturing major components for government and commercial nuclear powerplants, to operating the Nation’s nuclear energy 

laboratories, to fabricating fuel for the High Flux Isotope Reactor at Oak Ridge National Laboratory and the University of Missouri’s research reactor, both of which 

provide critical research and material testing services. 

B&W operates significant nuclear manufacturing facilities in Indiana, Ohio, Virginia and Tennessee, as well as Ontario, Canada. We are the only American manufacturer accredited and capable of producing large N-stamped components for commercial nuclear powerplants. We have delivered more than 1,100 Nuclear Steam 

Supply System (NSSS) components and pressure vessels, including approximately 

300 nuclear steam generators worldwide. And, we employ (both directly and through 

joint venture companies) approximately 12,000 U.S. nuclear professionals. As such, 

we have significant experience and expertise to validate the technical, safety, and 

economic value of SMRs. 

INHERENT SAFETY OF SMRs—ROBUST DEFENSE-IN-DEPTH

Current and next-generation U.S. large reactor designs operate at a remarkable 

level of safety, making the United States the global leader in nuclear safety and security. While the current fleet is considered safe, in the wake of the devastating 

earthquake and tsunami in Japan, and the resultant emergency at the 

Fukushima—Daiichi nuclear plant, the nuclear community—including the Congress, 

the Nuclear Regulatory Commission (NRC), the industry and the general public— 
37 

is evaluating what additional layers of safety are appropriate to mitigate these 

types of challenges. Our efforts to work together to learn from Japan’s experiences 

will help make the current U.S. fleet and new nuclear technologies even safer than 

they are today. 

The B&W mPower SMR offers significant safety enhancements to NRC safety 

goals through the use of an inherently safer plant architecture and significant defense-in-depth safety systems. This enhanced safety performance is achieved 

through the following design features: 

—An integral nuclear steam supply system with no large reactor penetrations in 

the primary cooling circuit; 

—a small core, low-power density and large water inventory that provide a large 

buffer against short-term challenges to core cooling; 

—deeply embedded underground containment, which effectively isolates all emergency cooling water sources and safety systems from natural disasters and external threats; 

—safety systems powered by gravity and natural circulation with no dependence 

on external AC power; and 

—underground spent-fuel storage with large cooling water volume, located within 

the auxiliary containment structure created by the underground reactor service 

building. 

These innovations transcend the design of the reactor at Fukushima-Daiichi. This 

design results in a reactor planned to be 2–3 orders of magnitude safer than the 

current NRC requirement or EPRI Utility Requirements Document (URD) safety 

benchmark, based on core damage frequency (up to 10¥8 vs. 10¥5 NRC requirement 

or 10¥6 EPRI URD goal). In the unlikely occurrence of an event, the B&W mPower 

reactor design also creates an extended period of time before outside assistance is 

required to maintain safe shutdown of the plant. Specifically, our B&W mPower reactor design creates a 14-day ‘‘safe haven’’ before any intervention is required to 

maintain reactor core cooling through the ultimate reactor cooling water source (ultimate heat sink), and provides more than 30 days of inherent protection before the 

spent-fuel pool could experience any exposure of spent fuel due to loss of cooling 

water volume through boiling. Furthermore, our design requires zero emergency operator action for the first 72 hours after an emergency reactor shutdown, which is 

best in class for all advanced LW SMR designs—large or small. This allows the operators to focus on long-term mitigation of events rather than immediate emergency 

actions. 

The SMR industry is in a unique position to efficiently incorporate both design 

and regulatory lessons learned from Fukushima into our designs. We have an ongoing, extensive effort to evaluate the B&W mPower SMR design in the context of 

what we are learning about the events at Fukushima. B&W’s evaluation is confirming that the safety performance of our SMR design is extremely robust when 

confronted by a Fukushima-type event. 

Integral Design and Robust Safety Margins 

The B&W mPower reactor’s integral design means that the entire reactor and 

steam supply system are incorporated into one vessel, rather than multiple vessels 

connected by large piping. This integral design, with no penetrations in the primary 

cooling circuit of the reactor vessel below the core, eliminates the possibility of the 

worst-case design basis accident occurring, an accident in which a loss of cooling 

water to the reactor is caused by a break in the reactor system piping. In addition, 

the B&W mPower reactor’s small core combined with low density of power and large 

inventory of reactor coolant, results in operating and safety margins significantly 

more robust than those required by the NRC. 

Deeply Embedded Underground Containment and Reactor Building 

The integral B&W mPower reactor module is isolated from external events in a 

steel containment structure, which is itself enclosed within a massive reinforced 

concrete reactor building that is fully embedded underground. This water-tight underground reactor building contains all emergency cooling water sources (including 

the refueling water storage tank and ultimate heat sink), isolates all safety equipment from natural disasters, and creates an auxiliary containment for the protected 

underground spent-fuel pool. In a Fukushima-type event, this means that all systems and cooling water needed to protect the reactor core for an extended period 

of time are well isolated from the effects of natural disasters. This underground configuration also offers inherent protection against external manmade threats such as 

aircraft and projectiles. 
38 

Inherent Safety Systems 

The B&W mPower reactor incorporates the most advanced inherent safety system 

architecture. This means that no AC power, either onsite or offsite, is required to 

power any safety systems. No pumps are required to inject cooling water to the core. 

Instead, the emergency core cooling system is powered by gravity—natural circulation removes decay heat and a gravity-drained storage tank supplies make-up water 

to cool the reactor core. This ultimate heat sink provides up to 14 days of cooling 

without the need for external intervention. Unlike at Fukushima, no diesel generators are required to provide power for any of these safety systems to perform their 

intended functions. However, in keeping with our defense-in-depth philosophy, two 

back-up diesel generators are provided anyway, in seismically qualified structures, 

for further protection. In addition, a 3-day battery supports all plant monitoring and 

control for 72 hours without reliance on AC power. After 72 hours, which is the 

NRC’s current regulatory requirement for passive safety designs, auxiliary power 

units inside the underground reactor building recharge the battery system, again 

without reliance on external power sources. Finally, passive hydrogen recombiners 

prevent the build-up of hydrogen, from either the reactor core or the spent-fuel pool, 

in the containment and reactor building. Most importantly, all of the inherent safety 

systems, including the ultimate reactor cooling water source (ultimate heat sink), 

batteries, battery recharging system, and hydrogen recombiners are housed inside 

the protected underground reactor building, isolated from natural disasters. 

Robustly Protected Spent-fuel Pool 

Our design includes a fully protected spent-fuel pool located within the auxiliary 

containment structure created by the underground reactor service building, at the 

lowest point of the structure. Consistent with the design philosophy of an advanced, 

inherently safe reactor, the B&W mPower SMR provides protection for spent fuel 

similar to that which is provided for the fuel in the reactor core itself. As shown 

at Fukushima, protection of spent fuel is most critical in the first few years after 

it is removed from the reactor core. Therefore, the spent-fuel pool’s auxiliary containment structure, inside the underground reactor building, has a similar level of 

robustness as that protecting the reactor vessel. This ensures an enhanced level of 

protection for spent fuel recently removed from the core. In addition, it is designed 

with a large heat sink to ensure more than 30 days of fuel cooling without the need 

for external intervention, before the loss of water inventory sufficient to uncover fuel 

could occur—which may have been experienced at Fukushima within 1 week of the 

accident. 

These design safety features are summarized in Figure 1. The underground reactor building is illustrated in Figure 2. 

FIGURE 1. 
39 

FIGURE 2. 

Some groups, including the Union of Concerned Scientists (UCS), have raised concerns related to the safety of SMRs. I agree that we have an obligation to re-examine nuclear safety based on the events at Fukushima. However, the UCS statements 

regarding SMR safety are unfounded and inaccurate. In particular, I would like to 

address concerns the UCS has raised related to an alleged ‘‘weakening’’ of NRC regulation to support SMRs, and locating multiple reactors on one site. 

No ‘‘Weakening’’ of NRC Regulation 

In testimony provided to the Senate Energy and Natural Resources Committee 

earlier this year, the UCS made several statements implying that SMRs require 

softer regulatory standards to be viable, stating that we as the SMR industry are 

‘‘pressuring the Nuclear Regulatory Commission to weaken certain regulatory requirements for SMRs.’’ This is a mischaracterization. The B&W mPower reactor design, will meet or exceed all of the NRC’s current safety and security requirements. 

While the way in which an SMR design intends to meet or implement an NRC requirement may differ from large reactor designs, the underlying safety regulations 

are exactly the same. The B&W mPower SMR will be able to meet regulatory requirements through the robust features of its underground nuclear island architecture, which is being designed to exceed the current NRC safety goal by 2–3 orders 

of magnitude. In addition, there is no intention or need to weaken NRC regulatory 

requirements in order to reduce operational and maintenance costs, as the UCS implied. On the contrary, we plan to meet or exceed NRC requirements while simultaneously maintaining competitive costs, by designing the plant itself to be more operationally efficient. For example, we believe the inherently safe and secure design of 

the B&W mPower nuclear island will require fewer personnel to meet the NRC requirements to safeguard the plant against security threats. Therefore, we have no 
40 

plans and no need to change or weaken underlying regulatory requirements in order 

to license the B&W mPower SMR. 

Co-location of Multiple Modules at One Site 

The UCS also stated: 

‘‘As we have seen in Fukushima, nuclear plants with multiple reactors that experience severe conditions present extreme challenges. At Fukushima, the need to 

manage multiple simultaneous crises resulted in what sometimes appeared to be a 

game of ‘whack-a-mole’ as the plant operator was forced to shift limited resources 

from one unit to another as new problems cropped up. These considerations make 

multiple-reactor sites less attractive from a safety perspective.’’ 

The events at Fukushima were more than anything else the result of plant and 

site configuration. This statement ignores the inherent differences between SMRs 

and the Fukushima plant. As explained earlier, the embedding of the entire reactor 

building, including all necessary core cooling and safety systems, in an underground 

containment, significantly isolates the reactor from the threats of external events. 

In addition, each module is embedded in its own individual containment with independent, dedicated safety systems. There is no sharing of safety systems. Finally, 

due to the reactor’s inherently safer design, including small size, low-power density, 

large water inventory and inherent safety systems, reactor safety after a shutdown 

is not dependent upon immediate assistance from operators or outside help. As stated earlier, for the B&W mPower design, no emergency operator action is required 

for the first 72 hours to mitigate accidents, allowing operators to focus on managing 

long-term effects. 

Extensive Test Program 

We are currently engaged in an extensive test program to provide the NRC indepth analytical and physical data to evaluate the safety of the B&W mPower reactor. This includes an Integrated Systems Test facility in Bedford, Virginia, with an 

unfueled, scaled prototype reactor system to demonstrate the thermo-hydraulic characteristics of the reactor. We expect this testing, which represents a significant investment, to demonstrate to the NRC that the B&W mPower reactor will far exceed 

current safety requirements. We are working with the NRC to ensure that our design meets or exceeds regulatory requirements, and we will continue to do so as we 

learn more from the events at Fukushima. 

THE ECONOMICS OF SMRs—COMPETITIVE AND FINANCEABLE

Market analysis has concluded that the addressable market for SMRs, both in the 

United States and globally, ranges from 100–125 GWe through 2030, and that, in 

addition to benefiting from the factors contributing to the resurgence of nuclear 

power in general, SMRs directly address the key challenges such as financing risk, 

cost and time certainty, production bottlenecks and expensive grid upgrades associated with the construction of large-scale, traditional nuclear plants. We would not 

be investing our company’s resources in this effort if we did not believe we could 

produce a competitive product on both a Levelized-Cost-of-Electricity and per-kilowatt (per-kW) basis to serve this meaningful market. 

In addition, we have a Consortium of 15 U.S. utilities and an Industry Advisory 

Council of 26 utilities, both U.S. and international, which demonstrates broad industry interest. In addition to the investment B&W has made, utilities in our Consortium have also invested resources in the B&W mPower development process. We are 

working closely with our Consortium, Industry Advisory Council, and our Engineering, Procurement and Construction (EPC) partner to validate the economic value of 

our reactor and incorporate their valuable input on life-cycle costs. 

There has been much discussion surrounding the economics of SMRs, particularly 

concerns that due to the principle of economies-of-scale, smaller reactors cannot 

compete with large reactors. This is untrue. The design, size and inherently safe 

features that ensure that SMRs will raise safety to the next level also enable SMRs 

to offer the carbon-free advantages of nuclear power in a cost-competitive, more 

financeable form. This is achievable through a paradigm shift from ‘‘economies of 

scale’’ to factory assembly of simplified, integral reactors in a manufacturing setting—the next step beyond onsite modular construction. In fact, based on the Navy’s 

successful experience with modular submarine construction, we have engaged a submarine industry leader to provide lessons learned from this effort as part of our 

B&W mPower design team. Through this paradigm shift, we believe we will be able 

to offer SMRs to our customers without any cost premium—that we can compete 

with any new-generation large reactor. In addition, based on our experience manufacturing reactors for both government and commercial customers, we believe we 
41 

will achieve nth-of-a-kind costs in less than 10 modules, rather than thousands as 

some SMR opponents have implied. Our utility customers require that SMRs be 

competitive on a per-kW basis with large reactors. This is achievable through: 

—modular, integral design and factory assembly for a fully manufactured product; 

—the ability to maintain a skilled workforce in a manufacturing setting; 

—improved quality, efficiency, and process standardization in factory settings; and 

—simplified construction onsite. 

In addition, a significant economic advantage of SMRs is the ability to incrementally add individual modules to a site to support load growth and minimize financing risk. Improved financing reduces costs, while individual modules provide utilities the flexibility to replace old fossil plants with carbon-free nuclear power while 

using existing grid and site assets, further reducing costs. While SMRs require more 

staff than a similarly sized fossil plant, the replacement of such plants with SMRs 

simply trades the higher cost of fossil fuels and impact of emissions, as compared 

to nuclear fuel, for more highly skilled, better paying nuclear jobs. 

External Economic Studies—The Value of a Smaller Option 

There are several studies available on the economics of SMRs, some with widely 

varying views of the cost-competitiveness of SMRs. Unfortunately, many of these 

reach erroneous conclusions. For example, a recent study by the OECD Nuclear Energy Assembly, which is currently receiving attention, concluded that ‘‘the investment component of the Levelized Unit Electricity Cost (LUEC) for a SMR would be 

at least 10–40 percent higher than in the case of a Nuclear Powerplant (NPP) with 

a large reactor’’. We disagree with this viewpoint. This study was completed without 

direct input by B&W, and is not consistent with our internal estimates. Any studies 

that compare estimated SMR costs to large reactor costs are simply comparing estimates to estimates. We have not yet built a new generation large reactor in this 

country, and therefore it is impossible to compare SMR costs to large reactor costs 

without making several significant assumptions about the next class of large reactors. 

More importantly, this type of comparison assumes that every utility has the 

same needs, that require the same solution. Not every utility has the capital, grid 

and water resources to build a large reactor, nor does every utility need capacity 

of that size. In these cases, which represent numerous utilities across the country, 

small, more affordable SMRs offer a better solution. In fact, despite the OECD 

study’s inflated comparative cost estimates, it goes on to conclude that SMRs have 

significant potential for several market segments, including replacing old fossil 

plants, grid-limited sites, water-limited sites, and those utilities for whom lower upfront capital investment, lower cost of financing and flexibility are important. It also 

concludes that ‘‘SMRs could be competitive with many non-nuclear technologies.’’ In 

short, it validates our value proposition, which is that SMRs offer utilities a more 

flexible, financeable, competitive carbon-free option. 

PUBLIC-PRIVATE PARTNERSHIP—INVESTMENT IN CLEAN ENERGY AND U.S. JOBS

I will conclude with a discussion of the critical need for the DOE’s proposed SMR 

cost-share program. This program, which would share the costs and risks associated 

with developing and licensing any new nuclear technology, is critical to the market 

development and viability of SMRs. Due to the regulatory and policy environment, 

there is significant risk associated with developing and deploying any first-of-a-kind 

nuclear technology. A public-private partnership to develop SMRs is necessary to 

share these risks and make the long-term, significant investment justifiable to 

shareholders and investors, by showing the Government’s commitment to the future 

of nuclear power and SMRs. This will provide a level of certainty critical to market 

development, competition, and long-term associated investment. In addition, broad 

market adoption of SMR technology is dependent on a successful first-of-a-kind 

project. Such projects include significant nonrecurring costs, which represent a barrier to deployment of SMRs without a mechanism for public-private partnership. 

The DOE has established a goal to reduce emissions from DOE facilities by 28 

percent by 2020. In addition, new Environmental Protection Agency (EPA) regulations are likely to drive the retirement of 25–50 GW of coal-fired baseload generation near-term, based on recent industry projections. Most U.S. SMR vendors, while 

proactively pursuing development of SMRs, are unable to independently invest at 

the pace needed to deploy the first SMRs by 2020, or potentially at a pace necessary 

to ensure a viable business case. Without SMR technology available to provide inkind baseload power sized to replace these old coal plants, utilities will face grid 

stability and reliability issues. It is critical that utilities have viable carbon-free options to replace old, baseload coal plants by 2020. To reach this goal of deployment 
42 

by 2020—a goal driven by government policy and regulation—a public-private partnership to share costs and risks is critical. 

This timeline is also critical to maintain the U.S.’s competitive edge in the international nuclear power market. Our international competitors are largely stateowned or subsidized companies making large investments in nuclear technology, including SMRs. There are currently several SMRs being developed internationally, 

in China, Russia, India, Argentina, South Korea, and elsewhere. 

Failing to move forward with this program will not stall the deployment of SMRs 

in the United States or worldwide, but will simply stymie the U.S. industry’s current early mover advantage in SMR technology and manufacturing leadership. Failure to fund an SMR cost-share program will ensure that foreign SMRs (like the 

South Korean SMART reactor) receive the manufacturing jobs and exporting benefits by selling to U.S. utility customers. At a time when we need to ensure that public policy promotes U.S. competitiveness in technology innovation and leadership, 

the SMR cost-share program is the conduit to maintain U.S. leadership and create 

the manufacturing base here instead of overseas. Conversely, the sharing of risks 

and costs through public-private partnership will ultimately result in a return on 

investment to Government by supporting nuclear technology, which can compete in 

the market without government support or subsidy, while creating U.S. design, supply chain, construction, and operations jobs. 

As Ernie Moniz, the Director of MIT’s Energy Initiative and Laboratory for Energy and the Environment, testified before this subcommittee, on March 30, 2011, 

2 weeks after the events at Fukushima: 

‘‘A 2020 SMR option will be available only if we start now, and even then it will 

be tight. Prior to Fukushima, the Obama administration submitted to the Congress 

a proposed 2012 budget that would greatly enhance the level of activity in bringing 

SMRs to market... The program is modest, but sensible. Obviously the Federal 

budget deficit makes it difficult to start any new programs, but a hiatus in creating 

new clean-energy options—be it nuclear SMRs or renewables or advanced batteries—will have us looking back in 10 years lamenting the lack of a technology 

portfolio needed to meet our energy and environmental needs economically or to 

compete in the global market.’’ 

CLOSING COMMENTS

Innovative SMRs, like the B&W mPower reactor, have the potential to raise nuclear safety to the next level, while offering America a competitive source of nearterm, domestically produced, clean energy. In order to meet President Obama’s vision of being 80 percent carbon-free by 2050, industry needs a practical nuclear option. The President has explicitly acknowledged and endorsed that nuclear should 

and must be part of the generation portfolio. B&W has heard repeatedly from industry that a near-term light water SMR option is essential to a practical nuclear generation solution. Turning this innovation into reality will depend on leadership and 

foresight from both the nuclear industry and government through a true public-private partnership. We therefore ask that this subcommittee support the DOE costshare program and help maintain our Nation’s leadership role in nuclear power and 

clean-energy technology. 

Thank you for the privilege of testifying today. I am happy to answer any questions the subcommittee may have. 

Senator FEINSTEIN. And we thank you for being here. We thank 

all of you. I know you’ve come a distance, and it’s very much appreciated. So thank you. 

Next is Dr. Paul G. Lorenzini, CEO of NuScale Power, Inc. Welcome, doctor. 

STATEMENT OF DR. PAUL G. LORENZINI, CEO, NUSCALE POWER, INC. 

Dr. LORENZINI. Thank you, Madam Chair and ranking member. 

I am the CEO of NuScale Power, Inc., a startup company that is 

making no profits and is facing a very sizeable investment challenge as a barrier to ultimately commercializing an SMR. 

Let me confine my oral remarks to four areas—economics, safety, 

spent fuel and the importance of an SMR program. 

With regard to the economics, we’ve all known that there are 

economies-of-scale that would suggest that small reactors cannot be 
43 

competitive. We challenged that with simplicity and with offsite 

manufacturing, but we also knew we would need to overcome our 

skeptics. 

So we worked with our engineering and manufacturing partners 

to develop a credible cost estimate, investing more than 16,000 

man-hours over 2 years to develop an estimate in which we had 

confidence. That estimate showed that our unit costs were not just 

competitive with large plants, they were actually lower. 

We were then challenged, and so we retained an independent 

firm to review the analysis. They confirmed our estimates to within 

10 percent. 

We, too, hear all the challenges to the economics of small reactors, but we’ve done the estimating on an actual design starting 

from the ground up. The results establish quite clearly that we 

have a plant that will completely change the economic story for nuclear power, and that, by the way, was for a first plant. And our 

numbers would agree with the others you’ve heard, that we reach 

economies-of-scale for manufacture with about the 8th to the 10th 

module. 

Next, let me address the safety question. When the NuScale concept was first funded by the DOE in 2001, the principal designer, 

a professor at Oregon State University, Dr. Jose Reyes, set out to 

design what he hoped would be the safest LW SMR ever built. 

He’d spent 10 years in the NRC and he’d been involved in the 

analysis of Three Mile Island and he understood the importance of 

making plants inherently safe. The result is the plant we’re commercializing at NuScale Power. 

First, he revolutionized the containment design. It is factory built 

and can withstand much higher internal pressures. It’s also immersed in a pool of water underground. This pool holds 4 million 

gallons of water and is sufficient to remove all the decay without 

ever adding more water to the system. 

In our system, the operator doesn’t have to do anything. After 30 

days, after 7 days there’s enough water, followed by air cooling to 

completely keep these reactors cool. The pool is below ground and 

the building that holds it is seismically very robust. 

Second, he took advantage of simplicity. He designed the reactor 

to be entirely cooled by natural circulation eliminating pumps and 

pipes and valves and all the potential failure modes and costs that 

go with them. He also eliminated by doing this the large break loss 

of coolant accident. 

Finally, he sought out expert advice. Very early in our program 

he convened two expert review panels, one chaired by Dr. Graham 

Wallace, a former chair of the Advisory Committee on Reactor 

Safeguards, and a second chaired by Dr. Michael Corradini, a 

member of the National Academy of Engineering and a member of 

the ACRS. 

These independent reviews not only validated our belief in the 

safety of the plant, they also made helpful recommendations to enhance the safety even further. 

Now, the question has come up about multi-module configurations, many modules in one building. If you could imagine for yourself taking one Fukushima plant, breaking it up into 12 small 

pieces, each now a smaller unit, each now with a smaller potential 
44 

for an accident, separately containing each unit, making it simpler 

and safer, and then putting it in a pool of water, so you now have 

an ultimate heat sink, putting it in a common building where you 

now have a single control room that can watch all 12 at the same 

time. We believe categorically that we’ve made that configuration 

safer by doing that. 

Prior to submitting our application for design certification, we 

will have a complete simulation of the control room and we will 

test the operators. We will challenge them with every multi-module 

configuration that we can think of. The NRC will as well. We won’t 

be able to license our plant the way we have it configured unless 

we can demonstrate that we’ve made that plant safe and made it 

safer by doing it the way we’ve done it. 

Let me speak to the question of spent fuel and make three brief 

points. 

First, spent fuel in the NuScale plant is housed in an underground, protected structure. 

Second, it has approximately four times the water volume of a 

conventional spent-fuel pool per megawatt of thermal power. 

And, finally, it uses what are called low-density fuel racks that 

make it much easier to remove the heat from these spent-fuel assemblies. 

Madam Chair and ranking member, an SMR program serves the 

national interest by bringing to market a nuclear option, a noncarbon source of base-load energy that overcomes financial barriers 

and reaches markets not accessible to larger reactors. 

Second, it strengthens the domestic manufacturing base creating 

jobs and exports. 

Third, it enhances the safety of nuclear plants and assures that 

the NRC will participate in establishing the global regulatory 

framework for SMRs. 

PREPARED STATEMENT

There will be SMRs and they will be marketed throughout the 

world. The question is whether we are going to be in the game. 

Madam Chair and ranking member, I urge your support for this 

program. 

Thank you very much. 

[The statement follows:] 

PREPARED STATEMENT OF DR. PAUL G. LORENZINI

Madam Chair, members of the subcommittee, thank you for this opportunity to 

appear before you today. My name is Paul G. Lorenzini. I am the chief executive 

officer of NuScale Power, Inc., located in Corvallis, Oregon. 

NuScale Power was incorporated in 2007 and has been funded entirely from private sector capital. To date just under $40 million has been invested in our company. 

The genesis of our 45 MWe ‘‘integrated pressurized’’ small-scale power module 

began more than 10 years ago with a Department of Energy (DOE) grant through 

the Idaho National Lab and Oregon State University. This grant came at a time 

when this very same subcommittee set as a goal to ‘‘spin off’’ more private sector 

investments from the national lab community and leverage private capital in new 

companies. 

This program included the construction of a one-third scale, electrically heated 

test facility to validate the safety features of the plant. In other words, our plant 

design rests on a solid foundation, which involves more than paper studies. 
45 

Since our founding in 2007, we have been encouraged by the growing recognition 

of the value of SMRs in developing a balanced energy policy. 

First, we have seen the response of customers. They like several unique aspects 

of the NuScale SMR—the lowered financial barriers, the elimination of so-called single shaft risks—if a single 45 MWe unit goes down, the rest of the plant continues 

to operate eliminating the need to find replacement power for the grid; and they 

especially like the ability to incrementally add new generation to match load 

growth. All of these features provide significant benefits to their customers. We currently have more than 10 major utilities participating on our customer advisory 

board. 

Second, the NRC’s policy guidance issued in March 2010 for potential SMR applicants was a very positive step forward. This key guidance from our safety regulator 

has given us the preliminary roadmap we needed to submit a high-quality application. 

Finally, the inclusion of Federal cost sharing for the development of commercial 

SMR’s in President Obama’s budget last February has been critical to our ability 

to attract the investors who are obviously necessary for our success. 

As we now consider the future of that program, let me focus my remarks in four areas: —First, the economics of small modular reactors (SMRs); 

—Second, the ways in which they enhance the safety of nuclear power, a critical 

question in a post-Fukushima world; 

—Third, a few brief comments on spent fuel; and 

—Last, the key question—does an SMR cost-sharing program serve the national 

interest? 

Let me speak first to the economic question. 

Small nuclear plants have been around for a long time and in recent years they 

attracted interest because they could serve remote locations and electrical systems 

with smaller grids. 

It was always known that the investment required to build a small nuclear plant 

would be less. But it was also believed—indeed, it has become almost an article of 

faith—that the economies-of-scale would make them uneconomic compared with 

larger plants. 

When we first started NuScale in 2007, we knew this is what people believed. Yet 

we believed those old chestnuts might be wrong. 

We saw the economic advantages of the simplicity of our design. 

We saw the economic value of taking virtually the entire nuclear system, including its containment, to a factory where they could be manufactured under more controlled conditions. 

But we also knew no one—either inside or outside the industry—would believe 

our assessment of the economics without some kind of proof. 

In 2008, working with our engineering and manufacturing partners, we developed 

a detailed, bottoms-up cost estimate. When we got the results, we saw where we 

could make improvements in design and construction, so we spent an additional 

16,000 man-hours in 2009 to take a second run at it. 

We came up with unit costs—meaning $/kw—that surprised even us—they not 

only compared very well with large plant numbers—they were actually lower. When 

we showed these numbers to utility executives, they challenged us to independently 

validate them. We used a firm that has done independent cost estimating on many 

large nuclear plants, and they confirmed our estimates within 10 percent. 

We too hear all the challenges to the economics of small reactors based on scaling 

and old rhetoric—but we’ve done the estimating—on an actual design, starting from 

the ground up. That’s the only real way to answer the question. and the results establish quite clearly that we have a plant that will completely change the economic 

story for nuclear power, by not only lowering the financial barriers, but by doing 

so with a unit cost that is actually lower than competitive larger nuclear plants. 

Next let me speak to the safety question. 

When the NuScale concept was first funded by DOE in 2001, the principal designer, a professor at Oregon State University, Dr. Jose Reyes, set out to design 

what he hoped would be the safest light water reactor ever built. He had spent 10 

years in the Nuclear Regulatory Commission (NRC) , he had been involved in the 

analysis of Three Mile Island, and he knew not only of the importance of safety, 

but the importance of validating safety through both large- and small-scale tests 

and experiments. 

With the benefit of having designed the test facilities that demonstrated the passive safety features of the Westinghouse AP–1000—a very important advance in the 

safety of nuclear power and one that, by itself, would have prevented the accident 

at Fukushima—he asked what more could be done. 
46 

The result is the plant we are now seeking to commercialize at NuScale Power. 

First, he developed a revolutionary concept for the containment—one that can be 

factory built, one that can withstand much higher internal pressures, and one that 

can be totally immersed in a pool of water underground. 

The significance of this latter feature is very important. It means we have a very 

resilient and effective passive system for removing decay heat. About getting rid of 

the decay heat. This pool holds 4 million gallons of water and is sufficient to remove 

all the decay heat without ever having to add more water to the system. 

This pool of water is housed in a stainless steel lined concrete building that, because it is mostly underground, is seismically very strong. The effect of this pool 

and the building is not only to provide security for removing decay heat, it also 

makes it much more difficult for any radioactive release to occur because there are 

now additional barriers outside the containment structure. 

Second, he took advantage of simplicity. Drawing on the natural circulation learning from the AP–1000 tests, he designed the reactor to be entirely cooled by natural 

circulation—which eliminates pumps, pipes and valves and all the potential failure 

modes (and costs) associated with that equipment. In so doing, he eliminated the 

so-called large break loss of coolant accident that largely dominates the safety analysis of large plants. 

Finally, he sought outside expert advice. Very early in our program, he convened 

two expert review panels, one chaired by Dr. Graham Wallace, a former chair of the 

Advisory Committee on Reactor Safeguards (ACRS), and a second chaired by Dr. 

Michael Corradini, a member of the National Academy of Engineering and a member of the ACRS. These independent reviews not only validated our belief in the 

safety of this plant, they also made helpful recommendations to enhance the safety 

even further. 

We have since completed an initial probabilistic safety analysis, which shows that 

the probability of any event leading to fuel damage in this plant is once every 50 

million years. This exceeds the requirements of the NRC by a factor of 5,000. 

Because I know it is important to members of this subcommittee, let me speak 

also briefly to the question of spent fuel. 

I will make three quick points: 

—First, spent fuel in the NuScale plant is housed in an underground protected 

structure. 

—Second, it has approximately four times the water volume of conventional spentfuel pools per MW of thermal power. 

—Finally, it uses what are called low-density fuel racks that make it much easier 

to remove heat from these spent-fuel assemblies. 

Madam Chair and members of the subcommittee an SMR program serves the national interest in several ways: 

—It serves the national goal of bringing to market a noncarbon source of baseload 

energy—that is, energy available all day, every day. Nuclear power achieves 

that goal and SMRs further it by overcoming financial barriers, and by reaching 

markets not accessible to larger reactor designs. 

—Second, it builds the domestic manufacturing base, and thus creates jobs and 

the potential for exports. 

—Third, and perhaps most important, it takes the safety of nuclear power to a 

new level, something that will be demanded in a post-Fukushima world. 

—Finally, and most importantly this program assures that our own NRC will be 

engaged in the safety analysis and licensing of this next generation of reactors 

and will preserve what is known around the world as the ‘‘gold standard‘‘ of 

safety reviews. 

Madam Chair and members of this subcommittee, it takes a substantial investment to bring these technologies to market. It may not happen without some kind 

of assistance. we have an opportunity to move this program forward and capture 

the unique advantages of this next advance in the use of nuclear energy—both on 

an economic and a safety front. I urge your support for this program. 

Thank you for giving me this opportunity and I would be happy to answer questions. 
47 
48 
49 
50 
51 

Senator FEINSTEIN. Thank you very much. 

Before we proceed to Dr. Moniz, I just want to thank the three 

heads of the companies for your straightforward presentations. It’s 

very much appreciated, and I know there’s a fiduciary issue here, 

but it’s really appreciated, and I look forward to the Q and A. 

Dr. Moniz, welcome back. It’s good to see you again, Sir. 

STATEMENT OF DR. ERNEST J. MONIZ, PROFESSOR OF PHYSICS, MASSACHUSETTS INSTITUTE OF TECHNOLOGY 

Dr. MONIZ. Thank you, Madam Chair, Ranking Member Alexander. It’s a pleasure to be back in front of you. 

Let me start by declaring very clearly what my reference frame 

is, I think, for the key question before the subcommittee and that 

is that the core argument for Government support to accelerate 

new nuclear powerplant construction in the United States is, in my 

view, the provision of a zero-carbon option for base-load power generation to mitigate climate risks in a timely way. 

Obviously, there are issues around what we will or will not do 

on carbon policy, but let me say that I certainly feel a sense of 

great urgency and believe that Mother Nature will be giving us increasingly clear signals. 

But I do hope that, in any event, we would all agree that it is 

prudent to prepare the technology options that we will need for the 

marketplace in the future should we, in fact, have a significant 

price on carbon dioxide emissions. 

In that context, nuclear is one of those many options, and I appreciate the earlier reading of my earlier statement, Senator Alexander, about some of the other technologies as well. 
52 

Now, when it comes to the issue of Government support, I do believe there are a number of barriers to the private sector assuming 

the full risk for the major capital investment needed upfront right 

now for new plants incorporating new technology, and these include the lack of a price signal on carbon, the absence of end-toend testing of streamlined licensing procedures at the NRC, new 

uncertainties about regulatory requirements following in the events 

at Fukushima and the lack of experience at NRC in licensing reactor technologies other than large light water reactors. So I believe 

these are market imperfections that do merit considering some 

public support. 

I think it’s important for, again, the public to help provide options for this future marketplace that could look quite different 

from where we are today. 

Now, a major factor for nuclear plants is obviously the cost of 

capital, and, there, a major issue is the financing structure. Our 

MIT baseline economics evaluation of base-load plants includes a 

risk premium for any nuclear plant, a higher equity-to-debt ratio 

and a higher cost of capital. 

The question is will SMRs—and, by the way, it has a large impact, that financing risk premium. An issue is will SMRs, smaller 

cost et cetera help to work down that premium that, in itself, is a 

very, very large issue as far as the cost of nuclear plants. 

In fact, I would note that even if the so-called overnight unit cost 

of an SMR is larger than that of a large reactor, it does not mean 

the project unit cost is higher if construction times are shorter and 

financing is available at a more attractive rate. 

The 2020 SMR option, in fact, will be available only if we start 

now, and even then it will be very, very tight, and it’s in that context that I do support the administration’s request of $67 million 

to move toward essentially license or engineering certification studies for these technologies. 

In fact, that comes to the safety and security issues. I will not 

repeat all the issues that had been stated about advantages of 

SMRs and safety. 

I will note that these features need to be certified by the NRC, 

and there are questions. For example, I would say the long-term 

integrity and maintenance of steam generators in integral design 

and the integral system transient characteristics need verification. 

Judgments about passive safety should be a system judgment, not 

something around individual technologies. 

In that context, I will just note that an emerging very important 

tool is large-scale simulation, and I would note that, including at 

CASL, at Oak Ridge and the Nuclear Energy Advanced Modeling 

and Simulation program, I think we are moving to do that. 

I would urge that the NRC should remain very close to these developments to be able to suggest ways in which this helps safety 

reviews and positions them for rapid adoption of new tools. 

I will just also observe that earlier it was stated that—the word 

‘‘cascading’’ was used at Fukushima. They should be very careful. 

There was no cascading of events between reactors. They were essentially independent, driven by a common event, obviously, the 

tsunami. 
53 

What it does raise, however, a point that Mr. Lyman made, is 

that when we think about the staffing of multi-modular units, we 

think about staffing in cases where there might be common problems in multiple modules. 

My last point involves policy considerations. While I do support 

moving forward, I want to point out there are, I think, policy risks 

that need to be addressed. 

The first is that we do not want this program to end up with the 

Government choosing the technologies that go forward. We have 

many contenders, not only the three at this table, not only LW 

SMRs, and I believe it’s important that we have a transparent program design from the DOE that leaves open the possibility of others coming in for some assistance. 

Frankly, we don’t want to repeat history and be left with only 

light water options for the long term, only because it’s what we’ve 

always done. 

The last point I will make is that—In fact, I should add that the 

SMRs have this very attractive feature, frankly, in comparison to 

the nuclear business. There has been an unusual amount of innovation. That’s what we want to encourage and not suppress, for example, with policies that channel us to one particular technology. 

My second and last point is that, as with light water reactors— 

I mean, conventional light water reactors—there will inevitably 

arise a request down the road for direct construction support for 

the SMRs, and I believe the case here—I will put an advance 

marker on the table—is far less compelling than it was for the light 

water reactors. 

Nevertheless, I would want to emphasize a principal as we go in 

this direction. For light water reactors, the Congress has approved—as was mentioned earlier, I believe—a substantial loanguarantee program. 

Whereas, in our MIT 2003 report, we emphasized, rather, approaches that reward success and don’t provide insurance against 

failure, which is one way to interpret a loan guarantee. 

PREPARED STATEMENT

So, as we go forward, whether it’s a production tax credit or a 

purchase-of-power agreement, we need to have any subsidies be 

those that reward the production of electricity according to the economics expected with successful construction and operation and not 

ensuring against failure. 

Thank you. 

[The statement follows:] 

PREPARED STATEMENT OF DR. ERNEST J. MONIZ

LIGHT WATER SMALL MODULAR REACTORS

Chairman Feinstein, Senator Alexander, and members of the subcommittee, 

thank you for the opportunity to present and discuss views on the economics and 

safety of Light Water Small Modular Reactors (LW SMRs) and on some policy issues 

regarding possible Government support for accelerating their deployment. I must 

start by emphasizing that this testimony represents my personal views, not those 

of the President’s Council of Advisors on Science and Technology, the Blue Ribbon 

Commission on America’s Nuclear Future, or my home institution, Massachusetts 

Institute of Technology (MIT). 
54 

The core argument for Government support to accelerate new nuclear powerplant 

construction in the United States is, in my view, the provision of a ‘‘zero’’-carbon 

option for baseload power generation to mitigate climate risks in a timely way. Energy security concerns are not a compelling reason, given the substantial coal and 

natural gas resources of the United States, as well as renewables with expanding 

deployments, such as wind and solar. Also, material displacement of oil as a transportation ‘‘fuel’’ is quite some time away. 

There are currently 104 nuclear plants operating in the United States. The urgency of the climate change risk mitigation imperative argues for a move toward 

low-carbon power generation, but there are a number of barriers to the private sector assuming the full risk for the major capital investment needed for a new nuclear 

plant incorporating current technology. These include: 

—The lack of price signals for the climate change risks associated with greenhouse gas emissions from fossil fuel combustion; 

—The absence of end-to-end testing of streamlined licensing procedures for new 

nuclear plants; and 

—New uncertainties about regulatory requirements following the events at 

Fukushima. 

Policies are in place to accelerate introduction of ‘‘conventional’’ large LWRs (GWe 

and bigger) through, for example, loan guarantees. Some projects are moving ahead 

on this basis, but the number is far fewer than were anticipated when the legislation was passed. In this testimony, I will discuss the motivation for advancing SMRs 

toward design certification and, if the economic case can be made, their licensing 

and construction. 

Baseload Electricity Economics 

The costs of nuclear powerplants should be put in the context of baseload alternatives. These are illustrated in the table showing levelized electricity costs for new 

nuclear, coal, and natural gas plant construction. These data are taken from a 2010 

MIT report on the ‘‘Future of the Nuclear Fuel Cycle’’. Today’s natural gas prices 

are in the $4–$5/MBtu range, making natural gas plants much more economical 

with respect to both capital requirements and levelized electricity cost. We have 

however been through many significant excursions in natural gas prices over the 

last decades, and the recent MIT interdisciplinary study on ‘‘The Future of Natural 

Gas’’ finds that natural gas prices slowly rise on average over time, suggesting the 

need for caution about over-reliance on any single fuel source. Furthermore, eventually natural gas itself becomes too carbon-intensive in a few decades if carbon dioxide emissions are severely limited relative to today’s levels. 

These factors emphasize the importance of providing options for a future marketplace that could look quite different (e.g., a substantial price on carbon dioxide emissions). Nuclear is one such option. The generation portfolio decisions are likely to 

be different in different parts of the country depending on the integrated resource 

planning methodology of public utility commissions, the availability of infrastructure, the ability to incorporate costs into a rate base, generation portfolio standards, 

and State/regional carbon dioxide emissions requirements. 

COSTS OF ELECTRIC GENERATION ALTERNATIVES 

[In 2007 dollars] 

Overnight cost 

($/kW) 

Fuel cost 

($/MBtu) 

Levelized cost of electricity (cents/kWh) 

Base case $25/ton-CO2

price 

Same cost of 

capital 

Nuclear ............................................. 4,000 0.67 8.4 8.4 6.6 

Coal .................................................. 2,300 2.60 6.2 8.3 ........................

Gas ................................................... 850 4/7/10 4.2/6.5/8.7 5.1/7.4/9.6 ........................

Coal (without carbon dioxide capture), like natural gas at the low- and mid-range 

fuel prices, has lower capital and levelized electricity costs than our baseline nuclear 

costs. However, coal is the most carbon intensive fossil fuel and even a modest carbon dioxide emissions charge of $25/ton would make nuclear competitive with coal. 

For reference, $60/ton is generally viewed as a somewhat optimistic emissions 

charge to warrant carbon dioxide capture and geological sequestration on economic 

grounds; such a charge would drive the coal levelized electricity cost beyond 11 

cents/kWh. 

A major factor is the cost of capital, which hits nuclear powerplant construction 

particularly hard because of the high capital costs and the longer construction times 
55 

(5 years) that are typically required. Our baseline financing model assigns a risk 

premium for nuclear, meaning both a higher equity/debt ratio and a higher cost of 

capital. The risk premium has a large impact, as seen in the table. Elimination of 

the premium brings the nuclear levelized cost into line with coal and with moderately priced gas even with no carbon dioxide emissions price. Of course, there is 

still the issue for many utilities of the $6–$10 billion project cost for a large LWR. 

An entirely different approach to new nuclear powerplant construction lies with 

SMRs. This has the possibility of addressing the cost/financing issue. SMRs come 

in a variety of proposed forms, some based on the same underlying light water reactor (LWR) technology that is used in almost all nuclear plants today, while others 

are based on gas- or metal-cooled designs. They range in size from 10 to 300 

megawatts. None have been through a licensing procedure at the Nuclear Regulatory Commission (NRC), and this is a time-consuming process for any new nuclear 

technology—especially those that are farther away from the NRC’s established experience and procedures. 

A major advantage of SMRs is that their small size compared with LWRs means that the total capital cost is more in the $1 billion range rather than an order of 

magnitude higher. Capacity can be built up with smaller bites, and this may lead 

to more favorable financing terms—as we have seen, a major consideration for high 

capital cost projects that take years to license and build. Furthermore, the possibility of bringing part of a larger multi-module plant online means that cash flow 

can start earlier. This is obviously good for the plant owner, but it can also be important for regulators who are increasingly being asked to place part of the nuclear 

construction cost into a rate base before electricity is generated. Other benefits lie 

with more flexibility in providing reserve margins for shutdowns, with grid integration, and with replacement options for fossil plants (which typically are sized well 

below a 1,000 MWe). 

Still, the SMR must come in with a capital cost that is also competitive with 

LWRs on a unit basis; however, it is quite possible that a higher unit overnight cost 

can still yield a lower unit project cost because of improved financing terms and a 

shorter construction time. The LWRs have been driven to larger and larger size in 

order to realize economies of scale. The SMRs may be able to overcome this trend 

by having factory construction of the SMR or at least of its major components, presumably with economies of manufacturing, the ability to train and retain a skilled 

workforce at manufacturing locations, quality assurance, continuous improvement, 

and only fairly simple construction onsite. The catch-22 is that the economies of 

manufacture will presumably be realizable only if there is a sufficiently reliable 

stream of orders to keep the manufacturing lines busy, and this in turn is unlikely 

unless the large number of designs is winnowed down fairly early in the game. 

Reaching the n-th plant for a small number of reactor types is likely to require a 

complex interplay between Government support and proponents of the many contending SMR designs. 

A 2020 SMR option will be available only if we start now, and even then it will 

be tight. Prior to Fukushima, the Obama administration submitted to the Congress 

a proposed 2012 budget that would enhance the level of activity in bringing SMRs 

to market. LWR-based technology options would be advanced toward licensing ($67 

million request), and other SMR technologies would be supported ($29 million request) for R&D needed to have them follow in the licensing queue. The program is 

modest, but sensible in light of today’s fiscal realities. Obviously the Federal budget 

deficit makes it difficult to start any new programs, but a hiatus in creating new 

clean-energy options—be it nuclear SMRs or renewables or advanced batteries—will 

have us looking back in 10 years lamenting the lack of a technology portfolio needed 

to meet our energy and environmental needs economically or to compete in the global market. We need to get on with the business of providing low-carbon options for 

a carbon-constrained future, with a principal role of government being to help establish the engineering and economic performance information for credible competitors 

in a future marketplace conditioned by an explicit or implicit carbon dioxide emissions price. Public investment is too low by about a factor of three (PCAST, November 2010). The 2012 proposal offers a start for SMRs. 

Safety and Security 

The U.S. record for nuclear power safety and security has been a good one for the 

last 30 years. Nevertheless, Fukushima has clearly raised the stakes. New LWR designs incorporate a greater reliance on passive safety systems that can help ameliorate some of the problems that developed with loss of power and active cooling at 

Fukushima, but SMRs have mostly been designed to enhance safety further. The 

designs generally emphasize natural convection cooling such that cooling can be sustained for a considerable time without external power. The small size of the reactors 
56 

facilitates decay heat removal by natural means. Integral designs, wherein various 

primary system components such as steam generators are brought inside the pressure vessel, tend to eliminate large loss of coolant accidents. Below-grade construction for both the reactor and spent-fuel storage pools and enhanced seismic protection are also common features of SMRs. 

Nevertheless, there is some way to go before these design features are certified 

by the NRC (this would be supported partially by the DOE program proposed for 

2012). This is especially so for non-LW SMRs, since the NRC experience and licensing procedures are almost exclusively based on LWRs. It is very important that an 

investment be made in diversifying and deepening the NRC technical strength for 

dealing with multiple nuclear technologies—such as gas reactors, fast reactors, molten salt reactors. Otherwise we will block out or seriously delay innovative technologies for lack of a regulatory basis. 

There will be questions for LW SMRs as well. For example, the long-term integrity and maintenance of steam generators in integral designs and the integral system behavior during transients, including startup, needs verification. Judgments 

about passive safety will need to be made in the context of an integrated appraisal 

of system design. 

An important emerging tool for advancing design and design certification is leading-edge, large-scale computer modeling and simulation. The 2003 MIT report on 

the ‘‘Future of Nuclear Power’’ placed the highest priority for DOE nuclear R&D on 

development of such capabilities, with a perspective that the nuclear industry 

lagged far behind many others in this regard. The latter observation, in my view, 

remains true, but the DOE now has a focus on rectifying this both through the Nuclear Energy Advanced Modeling and Simulation program and the specific innovation hub Consortium for Advanced Simulation of Light Water Reactors (CASL). The 

latter is headed by Oak Ridge National Laboratory and involves several other national laboratories and universities, including MIT (I should note that I serve as 

chair of the CASL advisory board). I believe that these advanced simulation capabilities, when fully developed, will serve as key facilitators of nuclear technology certification and of nuclear science and technology innovation. In particular, such tools 

can be enablers of SMR deployment at the end of this decade. The LW SMR design 

certification could benefit specifically from the tools being developed at CASL, but 

alternative technologies, such as gas and fast neutron spectrum SMRs, should also 

be addressed. The NRC should remain close to these developments so as to be able 

to suggest development paths useful to the regulatory challenge and to position for 

rapid adoption and utilization. 

The SMR configuration may have security advantages as well, such as the benefits of below-grade installation. Nevertheless, the safety and security requirements 

deemed necessary by the NRC remain to be determined and could have a significant 

impact on the economics of SMRs. Post-Fukushima, the NRC will re-examine seismic, flooding, power cutoff, backup, and spent-fuel management requirements. If the 

judgment is that various functions, such as security, do not scale with size of the 

reactor or that operational savings are not realizable for operation of a cluster of 

modular reactors, then the operational costs for SMRs could be challenging. In the 

extreme, if the preferred position of nuclear power in the dispatch order based on 

marginal operating cost is compromised, the value proposition of SMRs would be seriously reduced because of the large sunk capital costs. These issues remain to be 

clarified in the licensing process. 

Nuclear weapons proliferation stemming from misuse of fuel-cycle technologies is 

another security concern. SMRs do not pose a particular problem relative to ‘‘regular’’ LWRs. Indeed there can be some advantages, for example for technologies that 

require less frequent refueling. However, apart from possible technologies that have 

the full reactor module returned to the country of origin or special fuel forms (e.g., 

TRISO particle fuel for gas reactors), the proliferation issue is not an especially 

strong differentiator among LW reactor technologies. 

Spent-fuel management is also a concern, especially in the absence of a licensed 

geological repository or suitable consolidated storage sites. The SMRs are generally 

designed to accommodate a lifetime of spent-fuel storage in below-ground pools. 

However, especially for a multi-module plant, these design features can equally be 

incorporated into the design of new large LWRs. 

Policy Considerations 

While I do believe that SMRs represent a sufficiently novel and promising approach to nuclear power to merit public risk-sharing for first movers, much remains 

to be thought through on the specific implementation plan. There are some major 

policy risks. 
57 

The first, and more important, is that Federal assistance at this stage for two LW 

SMRs, among the many serious candidate technologies in the U.S., could lock-in 

these technologies. This is especially so for SMRs (versus large LWRs) since serial 

production of a significant number of units with an identical design in a manufacturing environment is crucial for the value proposition. This is a challenging issue 

since, as noted earlier, practical pursuit of serial production will require narrowing 

down the options—but the Government must be very careful about being the arbiter 

of technology choice. This tension needs to be addressed transparently. Indeed the 

smaller scale of SMRs relative to traditional LWRs has encouraged an unusual 

amount of innovation in the nuclear technology space, and it is important to nurture 

such innovation, not suppress it. This applies both to LW SMRs and to the other 

SMR technology pathways that are not part of the initial design certification costsharing program. The DOE needs to propose from the beginning a program structure that, subject to congressional appropriations, will leave open the possibility of 

risk-sharing with promising non-LW technologies that have successfully emerged 

from the R&D phase. If not we will repeat history and be left with LW options because that is what we have always done. The Quadrennial Energy Review recommended by PCAST, and the first installment Quadrennial Technology Review 

being carried out by DOE, offers the proper venue for carrying out the underlying 

analysis, but DOE presently lacks sufficient capacity to carry out the needed level 

of quantitative analysis for the QER/QTR; rectifying this is central to the Department’s future effectiveness in formulating energy technology policy. With regard to 

SMRs, the marketplace should be left to decide the appropriate time for down-selecting to one or two designs that can be manufactured in serial fashion to very highquality standards, using the information gained from the Government cost-shared 

program. 

This raises the issue of the degree to which the public benefits from the experience of first movers that are beneficiaries of public support. This issue is not specific 

to SMRs, but nevertheless deserves emphasis. When all is said and done, the 

public’s investment in the first mover plants should provide information for equipment vendors, users, policymakers, investors, and others. The Government’s interest 

is in stimulating further innovation and competition. This is not to say that specific 

IP is shared, but to date the pendulum has swung too far toward the cost-sharing 

company having proprietary rights to control data and information. This needs to 

be addressed to assure taxpayers that their funds are not being used to cement market control by individual companies. 

Second, as with LWRs, there will inevitably arise a request for direct construction 

support for the first SMRs. The case is less compelling here, given the relatively 

smaller capital exposure. For large LWRs, the Congress put in place a substantial 

loan guarantee program. The 2003 MIT report supported a production tax credit 

(PTC), at least for tax-paying entities, on the basis that such a credit rewards success in the project. In contrast, a loan guarantee can be interpreted as insuring 

against failure. Clearly, the opportunity to reduce the cost of capital on such a major 

capital commitment is understandable for the companies involved. For the reduced 

commitment needed for an SMR, we do not see the need for a major extended SMR 

construction subsidy beyond the legitimate areas of design certification review and 

R&D. However, if they are implemented, the principle should be to implement first 

mover subsidies designed to reward project success for different performers (versus 

failure insurance); this will help sort out the contenders for Federal support. 

Conclusions 

SMRs represent technology innovation that could change the trajectory of nuclear 

power deployment in a relatively short period. However, much remains to be understood before they are licensed for material deployment, and the DOE should continue and grow support for key enabling analytical tools. The arguments for public 

‘‘first’’ mover risk-sharing are reasonable, and should be pursued to a degree, but 

the public’s interest in gaining and disseminating experience from demonstrations/ 

first movers should be promoted more strongly. 

Thank you, and I look forward to addressing your comments and questions. 

NOTE.—The MIT reports ‘‘Future of Nuclear Power’’ ‘‘Future of the Nuclear Fuel 

Cycle’’, and ‘‘Future of Natural Gas’’ can be found at web.mit.edu/mitei/. 

Senator FEINSTEIN. Thank you very much, all of you. There is 

much to think about. 
58 

ECONOMICS OF INDIVIDUAL SMRs 

Dr. Moniz you’re an academic. You’re an expert in this area. Are 

these things commercially viable on their own? 

Dr. MONIZ. I think that’s exactly what we need to find out. We 

have two questions. We need to certify the safety characteristics 

through a system evaluation, and I believe that’s what this program will help accomplish, and then we have to find out—excuse 

me—if the dog hunts in terms of economic viability. 

I do believe that, for this decade, in my context of moving toward 

lower carbon, natural gas will be a major bridge, but it’s only a 

bridge to what I believe will be a required deployment of zero-carbon options, and we have to see what nuclear’s role is in there. 

I do believe the SMRs do have a lot of these attractive features 

that provide them much more flexibility in meeting market demands. 

Senator FEINSTEIN. Okay. Let me put this out on the table. My 

big concern is that they’re not cost effective on their own, that they 

have to be clustered, and, therefore, how many do you cluster? 

Where do you stop, that kind of thing. 

The second point is whether, in fact, they will raise the cost to 

the consumer of power. That’s the 10 to 30 percent. 

So let me ask each of the three CEOs if they would care to comment on that question, and then Dr. Lyman, if you would, why 

don’t we begin with you, Mr. Ferland. 

Mr. FERLAND. Sure, I’m happy to comment on that. 

You know, our view of this is that what you have in the past is 

economy of scale has been driven by large plant, spread out your 

costs over a large number of megawatts that are produced. 

On the AP–1000, which we’re constructing today, we are shifting 

to more of a module-type design where we manufacture pieces of 

those units somewhere else and we bring them on site and assemble them. So it’s a step in the right direction, but we still rely on— 

honestly—on the relatively large size of that unit. 

And then the big jump on SMRs is true modular construction 

where we can really gain an assembly line like efficiency, and we 

think, as I said before, we can do that in the ballpark of about 10 

units, ship the units to site and finish them and put them into operation. 

Senator FEINSTEIN. Let me see if I understand you. So to be cost 

effective, you have to manufacture 10 units, but that doesn’t mean 

you have to cluster them all together, right? 

Mr. FERLAND. That’s—— 

Senator FEINSTEIN. So it’s just the manufacture of 10, and then 

is one separately operating cost efficient over time? 

Mr. FERLAND. Yes, Madam Chairwoman. You’re exactly correct 

in that we think we need to have 10. They do not necessarily have 

to be clustered together. 

And from that point forward, our goal is to have the cost of these 

units be at or below the current cost of nuclear today, so it’s extremely competitive, and my belief is that we’ll get there and exceed those numbers. 

Senator FEINSTEIN. Thank you. 

Mr. Mowry. 
59 

Mr. MOWRY. Thank you, Madam Chairman. With regard to the 

economics, first of all, we would not be investing our own company’s resources, and regardless of the degree of cost sharing that 

would go forward, we’re talking about several multiples of our 

yearly earnings that we would have to invest on our own after this 

program, and this represents a significant business risk and business investment, and, clearly, we would not be pursuing this if we 

didn’t believe that, in the long term, we would have a competitive 

product that we could sell. 

And we believe that we are going to have a competitive solution 

not only because of what Mr. Ferland said with regard to the factory assembly, but there is an inherent simplicity around SMRs because of this idea of an integral reactor design that allows you to 

simplify all of the other costly systems that you need around this 

thing to protect it properly. 

Senator FEINSTEIN. Stop for a second. Are you essentially saying 

the same thing that Mr. Ferland said that if you can manufacture 

10, from a manufacturing point of view, that’s cost effective, but 

that you can operate one in a cost-effective way? 

Mr. MOWRY. Yes, and, in fact, we have a consortium of utilities 

in the United States that are funding development of policies and 

other things that are important for the deployment of SMRs. 

We have 14 utilities that are called GNTs that are small, regional cooperatives that have in their network less than 2,000 

megawatts of generation requirements. They cannot afford and 

they cannot use large reactors. They don’t even need a cluster of 

small ones. 

They’re people who need one or two small reactors and they see 

that the potential economics of an SMR can allow them to basically 

own one or two of these and supplement their transmission infrastructure with carbon-free generation. 

Senator FEINSTEIN. Thank you. 

Dr. Lorenzini. 

Dr. LORENZINI. Thank you. First of all, I would say that the biggest test for cost effectiveness for us is our investors. They grill us 

pretty hard, and they’re not going to make the investment unless 

they’re satisfied that we have a technology that’s going to reach the 

market. And reaching the market means that it has to be competitive economically with other opportunities and customers have to 

validate that. 

So our investors go back and forth between scrutinizing us, talking to customers and going back and forth with that dialogue. 

Those are people with skin in the game. 

Senator FEINSTEIN. So you’re saying the same thing. Is your cost 

of production at 10 to be cost effective and one will stand on its 

own? 

Dr. LORENZINI. Our model does not involve marketing a single 

module necessarily. We can market a single module in some markets. We don’t think it’s cost effective for us to market one module 

because if you do that you wind up with a 45-megawatt module distributed throughout the system and it’s just not practical to do 

that. 

What we think we’ve done actually by creating this modular design that clusters reactors is create a huge flexibility for customers. 
60 

We build a single building and we add modules, each one with its 

own independent system and each one totally contained in its own 

system that allows them to increase their load to match demand. 

The National Association of Utility—has endorsed small reactors, 

because they’re looking at it from the perspective of customers. 

We’ve got as well an 11-member customer advisory board. All of 

them are interested because they see this as a huge opportunity for 

them to serve their customers and lower their cost to customers. 

Senator FEINSTEIN. Thank you. 

Let me go to Dr. Lyman first. Dr. Lyman, do you have a comment? We’ve heard the three companies. 

Dr. LYMAN. Yes, thank you. 

I’m not an economist, but I have to say that I still can’t see how 

they can overcome some of these economies-of-scale hurdles with 

the kind of deployment they’re talking about. 

First of all, in my written testimony, I refer to the one study that 

I’m aware of that tried to quantify the benefits that SMR vendors 

have been arguing can actually overcome the economies-of-scale 

disadvantage, and that study found that, at best, they could get it 

close to the cost of a large reactor, but—you know. So they can’t 

beat the large reactor. 

With regards to the clustering issue, it has to do with the economies of scale of the balance of the plant and the infrastructure at 

the site. 

And so this is why I’m concerned that unless—this is why SMR 

vendors want regulatory relief from certain requirements. 

If you need the same number of security officers on every shift 

for a single 125-megawatt reactor as you need for a 1,000-megawatt reactor that would lead to an excessively high operating maintenance cost. 

So this is why I believe that there is a fundamental tie toward 

improving the economics of SMRs at single sites with some of the 

relaxation of security and safety requirements that I’ve been talking about. 

So I don’t believe unless that kind of weakening of regulatory requirements is granted do they stand a chance of competing with 

larger reactors. 

Senator FEINSTEIN. Thank you very much. Senator? 

Dr. MONIZ. Madam Chair, may I just—— 

Senator FEINSTEIN. Oh, I beg your pardon. Dr. Moniz, I’m sorry. 

Dr. MONIZ. I beg your pardon. May I—I have a couple of comments. 

Thank you, Madam Chair, because I want to say that I do see 

how one can draw a conclusion that one cannot beat a large reactor, because there are many variables, including the potential—I’m 

not predicting this—but the potential for very different financing 

structures, which has an enormous impact in a technology where 

it’s all upfront capital. So I think that remains to be seen. 

Number two, nevertheless, I would say, while I support this early 

support, as I said earlier, when it comes to construction, risk 

should remain with the private sector. Let these guys prove it. And 

if not, well, they and their investors will lose the money. 
61 

LOW-CARBON ENERGY OPTIONS

Third, we should note again in this context of options for the future—in particular low-carbon future—that about one-third of our 

coal fleet is more than 40 years old, less than 300 megawatts and 

inefficient. Those plants are not going to get any kind of major investment for retrofits. I don’t mean only carbon capture. I mean for 

criteria pollutants and mercury, et cetera. 

We are going to need some technologies, which I hope will be 

very low-carbon technologies, whether it’s nuclear or wind and storage, et cetera, but we’re going to need those technologies in a 10- 

to-20-year timeframe in spades. 

That’s why I feel that even though our finances are pretty 

stretched at the moment, and I have sympathy for your job on appropriations, we just need to make some low-carbon options available in 10 years. We do not have very attractive options at this 

stage in terms of cost. 

Senator FEINSTEIN. Can you be more precise on whether coal can 

be a real source for these? 

Dr. MONIZ. Well, I think that will be a decision to be made, of 

course, by the utilities and the plants, but another point about finances, which is why I think we should not make black-and-white 

statements, is that the cost of a—let’s say a green-field plant of any 

type, it’s not just the power source, it’s all the balance of plant— 

hooking up the transmission systems, et cetera, et cetera. 

Well, if you’re replacing an existing 250-megawatt plant and you 

can use—you’re all set up into the grid, et cetera, that’s another 

huge financial implication. 

So all I’m saying is I don’t know the answer, but it sure sounds 

like the kind of option we’d like to have if these guys can produce 

what they’re saying, and if they can’t, I’d say put the risk on them. 

Senator FEINSTEIN. All right. Thank you very much, Senator, 

very interesting. 

Senator ALEXANDER. It is, and I thank all five of the witnesses 

for the diversity of views here. 

SMR PRODUCTION BUSINESS MODELS

Senator Feinstein has honed in on a very important point. Let 

me ask the three of you in the middle, Mr. Ferland, does your business model—I’m not asking you to say whether you would turn 

down Federal money if Senator Feinstein offered it to you. I’m just 

saying does your business model for SMRs include a Government 

subsidy after the first 10? 

Mr. FERLAND. No, it does not. The assumption is that we use it 

to kick start the program upfront. It lets us accelerate the R&D 

spending and the engineering work faster than we normally would, 

and then we rely, as my colleagues have said, on the fundamental 

business case—— 

Senator ALEXANDER. So it’d be the marketplace. So you 

wouldn’t—well, I’m not asking you to say you’d reject it, but you’re 

not moving ahead with the idea that after the first 10 are made 

that you need Government support to succeed in the marketplace. 

Mr. FERLAND. That’s correct. We just need the upfront help. 

Senator ALEXANDER. Mr. Mowry, what about you? 
62 

Mr. MOWRY. Our business model does not include subsidies. 

If I could just amplify for a moment here, there was a comment 

made earlier with regard to a cost premium, and I can say, in discussions with our potential customers, they’re not looking necessarily for a relative cost reduction. They would like to have the 

ability to invest in incremental power generation without a cost 

premium. 

In other words, if you’re going to sell me a reactor that’s 10 percent of the size, I would like to invest 10 percent of the money. 

And this whole discussion about subsidies, a lot of the challenges 

that we have today are related not to the relative cost of nuclear, 

but to the—as Dr. Moniz said—to the large magnitude of the investment that’s required that, frankly, it’s betting the farm for a 

lot of utilities. 

You can cut that investment down by a factor of 10, all of a sudden a lot of the drivers for things like loan guarantees go away and 

this becomes a more standard economic decision for a utility. 

And so we don’t see the need for subsidies in the long term. Our 

goal is to create a carbon-free, base-load option that is competitive 

in the marketplace without long-term subsidies. 

What we are looking for is risk sharing as we try to get a firstof-a-kind option out there by 2020. 

Senator ALEXANDER. Mr. Mowry, without—even though Senator 

Feinstein is chairman of the Intelligence Committee, I don’t want 

to get you in any trouble with classified information, but you already know something about making small reactors, right? 

Mr. MOWRY. Yes, we do. 

Senator ALEXANDER. Would you say the United States is the 

world’s leader in the production of small reactors today? 

Mr. MOWRY. At this point, yes. 

Senator ALEXANDER. Yes. And does your company make money? 

Mr. MOWRY. Some. Yes. 

Senator ALEXANDER. Well, I mean, is it a profitable business? 

Mr. MOWRY. Yes, it is profitable. 

Senator ALEXANDER. Yes. So you’re already in a very profitable— 

you’re already in a profitable business making small reactors for 

the United States Government. 

Mr. MOWRY. Yes, we are. 

Senator ALEXANDER. Is that right? 

And they’re used in 103 nuclear Navy vessels. Is that correct? Or 

a number—— 

Mr. MOWRY. They are used in the Navy, yes. 

Senator ALEXANDER. Whatever the number might be. 

Senator FEINSTEIN. Yes. 

Senator ALEXANDER. Mr. Lorenzini, does your business model include subsidies, say, after the first 10 from the Government? 

Dr. LORENZINI. No, Sir. Our business model says it requires a 

substantial front-end investment to develop the design and to get 

the design licensed and certified before the NRC. Once that’s been 

done, we go to market. We don’t need any further subsidies. 

Senator ALEXANDER. So Dr. Lyman thinks you may not make 

money, but that’s really your problem, right? I mean, unless the 

Government decides it wants to create some sort of permanent sub-
63 

sidy for what you’re doing, which I think is very unlikely and 

which I would not be inclined to support. 

REACTOR DESIGN IN LIGHT OF FUKUSHIMA

Dr. Moniz, I believe Mr. Mowry said that the design of his SMR 

would make it such that—well, let me ask this way: What happened at Fukushima was that there was no water to cover the 

spent-fuel rods, basically, right? 

Dr. MONIZ. That was one of many problems. 

Senator ALEXANDER. Well, let’s say if there had been water to 

cover the spent-fuel rods from the instant of the natural occurrences, there wouldn’t have been a problem. Is that right? 

Dr. MONIZ. Both for the spent fuel and for the reactor cores as 

well if they had remained—— 

Senator ALEXANDER. So, now, he said that there wouldn’t be— 

with his passive system that nothing would happen for 7 days. 

Does that sound plausible to you? 

Dr. MONIZ. Sounds plausible, but, again, I would rely upon a 

hard review by the NRC. 

Senator ALEXANDER. Now, as I understand your testimony, 

you’re saying that this is not something that we should barge forward with 100 miles an hour today to start building small reactors. 

You’re saying that we should move ahead with the R&D phase 

as quickly as we can to see whether we should license the safety 

of these and the sites upon which they should go. 

Dr. MONIZ. Well, I would term it not so much R&D as it is kind 

of design and engineering certification and an evaluation to get a 

license. 

Senator ALEXANDER. And some of those dollars are spent so that 

the Government can do its job properly in terms of supervision of 

such reactors. Is that not correct? 

Dr. MONIZ. I agree with that, yes. 

Senator ALEXANDER. Now, as I also understand—— 

Dr. MONIZ. If I may just add, and, again, I think we need to 

also—and it’s not only for LW SMRs. I think we need more investment in the NRC to develop the capability on a broader range of 

technologies to move promptly into a licensing—— 

Senator ALEXANDER. I have two other questions, if I may, 

Madam Chairman. 

Senator FEINSTEIN. Yes. 

CLEAN ENERGY

Senator ALEXANDER. One is you began with the climate-change 

point, which is that we’re going to need as many good options of 

clean electricity as we can have. And by clean, that means without 

sulfur, nitrogen, mercury, carbon, and you mentioned natural gas. 

Today, coal is 46 percent of our electricity. Natural gas is 22— 

going up fast, because that’s what utilities are buying, but natural 

gas has considerable carbon in it. Does it not? 

Dr. MONIZ. Well, it’s carbon light and—— 

Senator ALEXANDER. Forty or 50 percent as much as the cleanest 

coal plant? 

Dr. MONIZ. Well, if you factor in efficiencies of the plants, I 

would call it about 45 percent of the carbon intensity of coal. 
64 

Senator ALEXANDER. Yes. 

Dr. MONIZ. And if we look—we do have at MIT a recent report 

on the future of natural gas and fundamentally the analysis comes 

out confirming the idea of gas as a bridge for a while. If it substitutes for coal, it’s a key part of carbon reduction, but, eventually, 

it itself is too carbon intense and needs zero carbon. 

Senator ALEXANDER. And am I correct in saying that nuclear 

power today is nearly 70 percent of our carbon-free electricity? 

Dr. MONIZ. Yes, I would say roughly, yes. 

Senator ALEXANDER. And you mentioned the closing of the coal 

plant, Senator Feinstein, on the TVA region. They’ve decided to 

close 18 coal plants, which mean they’re too dirty to operate, and 

they’re too expensive to put on the pollution-control equipment. 

And that means they’re going to go from 50 percent to 35 percent 

coal. 

So the question is then what do we do, because we don’t want 

expensive power. Otherwise, our companies go overseas, and the 

decision we’ve made in the TVA area is that we’re opening new nuclear plants, which is the—so nuclear power is going from 30 percent to 40 percent. 

As you envision a future for the United States, Dr. Moniz, do you 

see a situation where we could do what we need to do to have carbon-free electricity at a reasonable cost as a reliable source without 

nuclear power? 

Dr. MONIZ. Well, my view is we have a limited number of arrows 

in the quiver. We have nuclear. We have renewable, especially 

wind and solar, in terms of a possible more ubiquitous deployment, 

and we have carbon capture and sequestration. 

Today, I think that nuclear and wind, obviously are poised to 

make major contributions, and are. Solar has a ways to come, although I’m very optimistic in the long term for solar, but we have 

to solve storage problems. 

CCS, frankly, of those I must say I would call at the moment the 

most challenged in terms of the economics. 

Senator ALEXANDER. I agree. I think the Holy Grail of—the scientist who figures out how to capture carbon from a coal plant—— 

Dr. MONIZ. More cheaply. 

Senator ALEXANDER [continuing]. Will win many prizes. 

ENERGY STORAGE

Madam Chairman, this gets to a discussion we’ve had before and 

we’re likely to have again. 

Dr. Moniz mentioned storage. Batteries we’ve had a little discussion about, but wind or solar or any intermittent power is not going 

to be very useful to us unless we have much better batteries, correct? 

Dr. MONIZ. Well, storage, in general. Batteries, but also—— 

Senator ALEXANDER. Batteries are the leading opportunity—— 

Dr. MONIZ [continuing]. Or other opportunities, but storage is absolutely critical for intermittent renewable. 

Senator ALEXANDER. And here’s my last question. Dr. Chu is organizing his Department around objectives which I find very interesting. 
65 

For example, R&D to try to get the cost of driving an electric car 

down to 1 cent a mile for fuel, getting the cost of solar down to $1 

per kilowatt, finding new ways to recycle used nuclear waste. 

ROLE OF FEDERAL SPENDING IN RESEARCH AND DEVELOPMENT

Does that sound like—and batteries, trying to find ways generally to improve that. Does that sound like an appropriate way to 

spend Federal dollars as opposed to permanent subsidies to energy 

companies that might be operating mature technologies? 

Dr. MONIZ. I am strongly in favor with your statement that extended subsidies for any technology are just an indication of a 

failed policy and a failed technology. 

So I think there is a role, as you have emphasized, for limitedtime subsidies when they offer the real prospect of having the technology become marketplace competitive at the end of that period of 

support. I think that’s the criterion. 

I just might add, by the way, earlier you did scare me a little 

bit when you said jump-start batteries. It reminded me of February 

in Boston, but anyway, that’s—but I think—I totally agree with 

that philosophy, certainly. 

Senator ALEXANDER. Thank you, Madam Chairman. 

Senator FEINSTEIN. Thank you very much, Senator. 

I want to thank everybody. I think this has been a very good 

hearing. It’s been a very interesting hearing for me. 

CONCERNS ABOUT NUCLEAR WASTE DISPOSAL

I think it’s fair to say that my colleague, who I have great respect for, has been an enthusiastic supporter, and I think it’s fair 

to say that I am very reticent about this. 

I’m reticent about it because if we let this go without a policy for 

spent fuel, if we close the plant or the repository in Nevada after 

spending $14 billion on it, we have $13 billion in liabilities because 

we can’t dispose of the waste as we’re supposed to. Adding to these 

problems doesn’t seem to me to make good sense. 

So I think the question comes—and something that I really want 

to tackle, and, Lamar, that I hope you’ll work with me on is how 

do we develop a spent-fuel policy for the Nation. Is it a regional 

system? Is it one repository? 

I think the last report I was reading said it should be voluntary 

on the part of the State. I agree with that, and I gather there is 

at least one State that’s willing to step up. 

I think we have to deal with these issues. Otherwise, I feel from 

my vote that I just compound the problem down line. 

I’ve also come to believe that nobody knows what Mother Nature 

is capable of in terms of earthquake or hurricane or tornado. I 

never thought I’d see a nuclear plant encircled by water, but we 

saw it in Nebraska. I never thought I’d see a tsunami the height 

of this tsunami, but we saw it. I never thought that the Ring of 

Fire would be setting off earthquakes of the size that are now happening around the Pacific. 

So my own view is that we need to solve that waste issue, and 

I would certainly welcome any suggestions for anyone that’s listening to this or particularly the people at this table. 
66 

Candidly, I’m much more—how can I put it? I’m much more persuaded to your point of view by hearing your presentations. And 

yet I have a certain amount of doubt. You know, are they just saying what we want to hear or do they really mean they won’t take 

a subsidy or what is it really going to do to the cost of electricity 

for the average Joe and Susie Smith? 

And yet what Dr. Moniz—who I have respect for—points out is 

we have all these coal plants, aging and dirty. What do you replace 

them with? Maybe this is the logical answer. 

So there’s a lot to think about, and I’d like to work with you on 

it. 

Senator ALEXANDER. Well, I thank you for the hearing. This has 

been very helpful. This is the kind of hearing that we welcome here 

to have such diverse and well-informed views. 

AGREEMENT ON FEDERAL POLICY

I think we’ve identified some things we can work together on, the 

kind of—you know, what’s the appropriate role for limited Federal 

dollars in terms of energy? I mean, where do we draw the line in 

terms of what is R&D, what is joint cost sharing, what is a subsidy 

and what is a permanent—we should tackle that one. 

Second, what are we going to do with used nuclear fuel? 

And the President’s BRC is coming out. I commend President 

Obama on his approach to this. He appointed a distinguished panel 

and good NRC board members and I think we can work—— 

Third, I’ll be glad to go with you and talk to Harry Reid about 

reopening Yucca Mountain if you want to, but I don’t think we’re 

going to have any success. 

And, finally, I think back when I was Governor. The previous 

Governor hadn’t been able to locate a prison because he wanted to 

put it somewhere. 

So I was not having any success either. So I announced that we 

only had one and we’d have to have a competition for it. And we 

actually had four counties compete to get it and we located it and 

then we located another one. 

So I think the idea of having Federal incentives to persuade communities or States either to have a single repository or more than 

one is the obvious way to go, but I think we wait until we hear 

from the President’s BRC. 

In the meantime, though, as you could tell from my comments, 

I think we should go ahead and make sure we have this option. I 

mean, all we’re talking about is doing the preliminary work to see 

if industry can make it—in such a way so that they can make 

money and so that the Federal Government can do it in such a way 

so they can regulate it safely, and then we get to the point where 

then we go forward. 

That’s probably—I mean, the talk is about one or two or three 

small reactors by 2020. So just having the arrow in our quiver, as 

Dr. Moniz said, I think is what we’re talking about, and obviously 

we’ve got a lot more talking to do. 

But this—I thank the chairman for her open mindedness and 

willingness to hear points of view that might not agree with hers. 

That’s—— 

Senator FEINSTEIN. How many at TVA? 
67 

Senator ALEXANDER. Small reactors? 

Senator FEINSTEIN. Yes. 

Senator ALEXANDER. TVA is thinking of one, which would be— 

they have a partner with the Oak Ridge National Laboratory, and 

the Oak Ridge Laboratory—Dr. Chu would like to do that as part 

of his carbon-free quota for his Department. 

And Oak Ridge would like to do it. They estimate that a single 

reactor of about 125 megawatts would power the entire complex 

there—the super computers, the nuclear weapons operation and 

the citizens in the community. 

I think they’re working with B&W on that. Is that right or are 

they working with anybody in particular? 

Mr. MOWRY. Yes, they’re hoping to, yes. 

Senator ALEXANDER. But TVA and the Oak Ridge Laboratory 

have an agreement to explore it, but it would all depend upon this 

several years of work by the NRC and the companies whether it 

would come to reality or not. 

CONCLUSION OF HEARING

Senator FEINSTEIN. Well, thank you very, very much. We appreciate the testimony. There’s much food for thought, and the hearing 

is concluded. 

[Whereupon, at 12:06 p.m., Thursday, July 14, the hearing was 

concluded, and the subcommittee was recessed, to reconvene subject to the call of the Chair.] 

(69) 

1The Nuclear Energy Institute (NEI) is responsible for establishing unified nuclear industry 

policy on matters affecting the nuclear energy industry, including regulatory, financial, technical, and legislative issues. NEI members include all companies licensed to operate commercial 

nuclear powerplants in the United States, nuclear plant designers, major architect/engineering 

firms, fuel fabrication facilities, materials licensees, and other organizations and individuals involved in the nuclear energy industry. 

MATERIAL SUBMITTED SUBSEQUENT TO THE 

HEARING 

[CLERK’S NOTE.—The following testimony was received by the 

Subcommittee on Energy and Water Development for inclusion in 

the record.] 

PREPARED STATEMENT OF THE NUCLEAR ENERGY INSTITUTE

In testimony provided to this subcommittee on April 7, 2011, the Nuclear Energy 

Institute (NEI) 1 supported the administration’s request for fiscal year 2012 funding of $67 million for the Department of Energy’s (DOE) Small Modular Reactor Licensing Technical Support program. This cost-shared, public-private partnership built on 

a similar request by President Obama for fiscal year 2011, which the nuclear industry also supported. In its April testimony, NEI noted that this cost-shared development program is the nuclear energy industry’s highest priority in the fiscal year 

2012 budget request. I urge you to approve DOE’s request to begin this program 

during this fiscal year. 

NEI also provided testimony for the record in support of small reactor development to the Senate Energy and Natural Resources Committee on June 7, 2011. 

NEI’s testimony focused on S. 512, the Nuclear Power 2021 Act, which we support 

broadly. The Nuclear Power 2021 Act also contemplates a cost-shared, public-private 

partnership to accelerate the development and deployment of small modular reactors (SMRs). 

SMALL REACTOR DEVELOPMENT ADVANCES ENERGY, ENVIRONMENTAL BENEFITS IN NEW

MARKETS

Analyses by the Environmental Protection Agency and the Energy Information 

Administration, and global studies by the UN’s Intergovernmental Panel on Climate 

Change and the International Energy Agency, conclude that a significant expansion 

of nuclear energy and other carbon-free generation sources is needed to meet the 

world’s growing electricity requirements and reduce the electric power sector’s emissions of carbon and other air pollutants. 

Small-scale reactors can complement large nuclear plant projects by expanding 

potential markets in the United States and abroad for carbon-free energy production. Smaller reactors provide energy companies and other users with additional options to achieve strategic energy and environmental objectives. 

Their small size—less than 300 megawatts—and innovative features like dry cooling expand the range of sites suitable for deployment, such as remote and arid regions. These and other attributes make them well-suited to replace older coal-fired 

generating capacity. (Various analyses show that 30,000–50,000 megawatts of older 

coal-fired generating capacity may be shut down before 2020 as a result of tighter 

air quality requirements.) 

Modular construction will allow these new small reactors to be manufactured in 

a controlled factory setting, transported to the site by rail, truck or barge, and installed module by module. This manufacturing approach is more efficient than onsite field construction, and should reduce cost and construction time. Modern shipbuilding uses modular construction extensively, and it has been adopted for the construction of large advanced nuclear powerplants, such as the four Westinghouse AP– 

1000 plants under construction in China and the four reactors in pre-construction 

today in Georgia and South Carolina. Because they can be manufactured in North 
70 

2The Commercial Outlook for U.S. Small Modular Nuclear Reactors, U.S. Department of Commerce, February 2011. 

America to meet growing domestic and export demand, SMR deployment will create 

high-tech U.S. jobs and improve our global competitiveness. 

According to a February 2011 Commerce Department study 2 on small reactors, 

a ‘‘robust program of building SMRs could make use of existing domestic capacity 

that is already capable of completely constructing most proposed SMR designs. This 

ability could mean tremendous new commercial opportunities for U.S. firms and 

workers. A substantial SMR deployment program in the United States could result 

in the creation of many new jobs in manufacturing, engineering, transportation, construction (for site preparation and installation) and craft labor, professional services, 

and ongoing plant operations.’’ 

In addition, small reactors manufactured in America will help the United States 

re-establish its leadership position in nuclear energy technology around the world. 

By developing the innovative, clean-energy technologies the world demands, the 

United States can transfer its safety, security, and nonproliferation culture with the 

technology. 

SMALL REACTOR SAFETY AND SECURITY—ENHANCED BY DESIGN, REQUIRED BY

REGULATION

SMRs being developed today benefit from decades of advancements in materials, 

design, instrumentation, controls, and operational experience. 

SMRs are being designed with separate, independent underground containments 

for each module, as well as separate, independent safety systems protected within 

those underground containments. These same features provide the capability to 

withstand aircraft impacts and, coupled with their small footprint and limited access points, provide improved defense against any terrorist threat. 

SMRs rely less on engineered safety features (so-called ‘‘active’’ safety systems 

like pumps and motors), and rely instead on natural safety features (so-called ‘‘passive’’ safety systems like gravity feed of cooling water in the event of loss of electrical power, and natural convection to carry away heat). This design approach provides significant safety advantages. 

In addition, each of the lead light-water SMR designs uses an integral approach 

where the steam generators, pressurizer, control rod drive mechanisms, and coolant 

pumps (if used) are contained within the reactor vessel. There are no penetrations 

into the reactor vessel below the top of the core, which eliminates the possibility 

of large-break loss of coolant accidents. 

Because of their small size, integral design, and reliance on natural convection 

and gravity-based cooling systems, these small reactors can remain safe, even without onsite or offsite AC power, for 7 days or longer. 

PUBLIC/PRIVATE PARTNERSHIPS ARE ESSENTIAL TO SUPPORT SMALL REACTOR

DEVELOPMENT

A number of analyses have documented the potential economic, energy security, 

and environmental benefits of SMRs. There are challenges to realizing those potential benefits, however, including design and first-of-a-kind engineering costs, Nuclear Regulatory Commission (NRC) licensing costs, and fabrication/construction 

costs. These challenges inevitably influence the economics of small reactors. 

In order to determine the business case for small reactors, NRC design and operational requirements must be finalized. Small reactors must meet or exceed all of 

the NRC’s safety and security goals and requirements. Today’s regulations are designed to ensure that large, light water-cooled reactors achieve these requirements. 

Tomorrow’s small reactors may need new or modified regulations to ensure that 

they also meet or exceed these safety and security goals and requirements. 

The nuclear industry and other stakeholders are working with NRC to define the 

regulatory requirements for SMRs. This work is at a relatively early stage. The 

NRC and the industry have identified a number of generic regulatory issues—including license fees, decommissioning funding assurance, emergency planning requirements, security, control room staffing, loss of large areas of the plant due to 

terrorist activity and a number of others—that should be considered when developing the licensing framework for SMRs. 

The industry is developing position papers on many of these issues, and discussing them with NRC staff. These interactions between NRC and the industry are 

conducted in public meetings open to all. 

Based on these discussions and its own analysis, NRC will develop the licensing 

and regulatory requirements for SMRs that, in its view, would protect public health 
71 

and safety. These requirements will be subject to review by (among others) NRC 

senior management, the NRC’s Advisory Committee on Reactor Safeguards, and the 

NRC commissioners before they are finalized. Since these regulatory requirements 

will be promulgated as rules, they will also be subject to public review and comment 

before being finalized. 

Once finalized, these requirements must be factored into the design, licensing, 

construction and operation of a standardized small reactor. Only at this point will 

the initial economics be known for the first-of-a-kind or lead plant. Further work 

will be needed to optimize the factory fabrication and reduce the cost of future 

SMRs in much the same way our shipbuilding and aerospace industries have done. 

The cost-shared, Government-industry SMR program proposed by the President is 

designed to address these issues and reduce the risk and uncertainty of moving forward. Traditional partnerships among technology vendors, component manufacturers and end users are necessary—but not sufficient in themselves. Industry is prepared to absorb its share of these initial development costs, but revenues from the 

sale and operation of the first SMRs are some years away, and some level of Government investment in this promising technology is both necessary and appropriate. 

Absent additional business risk mitigation through Government investment, the potential benefits of these SMR concepts may go unrealized, or may be realized later 

than desirable. 

Leveraging private sector resources through public partnerships with the Department of Energy and other Government entities will help move these new reactor 

technologies to market, capturing their many benefits while maintaining U.S. nuclear energy technology leadership. 

CONCLUSIONS AND RECOMMENDATIONS

The potential benefits of small, modular, nuclear powerplants are substantial. 

These technologies should be pursued and supported. These designs expand the 

strategic role of nuclear energy in meeting national environmental, energy security 

and economic development goals. 

While the United States has the lead today in developing these small reactors, 

other countries are already developing them. Reducing the time to market is key 

to ensuring that U.S. companies gain a share of the global market and influence 

the international safety and security culture. The proposed DOE cost-shared small 

reactor program will help achieve this goal. 

Æ