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26–151 PDF 2017

S. HRG. 115–52 

HEARING ON S. 512, THE NUCLEAR ENERGY 

INNOVATION AND MODERNIZATION ACT 

HEARING 

BEFORE THE

COMMITTEE ON 

ENVIRONMENT AND PUBLIC WORKS 

UNITED STATES SENATE 

ONE HUNDRED FIFTEENTH CONGRESS 

FIRST SESSION 

MARCH 8, 2017 

Printed for the use of the Committee on Environment and Public Works 

( 

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

(II) 

COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS 

ONE HUNDRED FIFTEENTH CONGRESS 

FIRST SESSION 

JOHN BARRASSO, Wyoming, Chairman 

JAMES M. INHOFE, Oklahoma 

SHELLEY MOORE CAPITO, West Virginia 

JOHN BOOZMAN, Arkansas 

ROGER WICKER, Mississippi 

DEB FISCHER, Nebraska 

JERRY MORAN, Kansas 

MIKE ROUNDS, South Dakota 

JONI ERNST, Iowa 

DAN SULLIVAN, Alaska 

RICHARD SHELBY, Alabama 

THOMAS R. CARPER, Delaware 

BENJAMIN L. CARDIN, Maryland 

BERNARD SANDERS, Vermont 

SHELDON WHITEHOUSE, Rhode Island 

JEFF MERKLEY, Oregon 

KIRSTEN GILLIBRAND, New York 

CORY A. BOOKER, New Jersey 

EDWARD J. MARKEY, Massachusetts 

TAMMY DUCKWORTH, Illinois 

KAMALA HARRIS, California 

RICHARD M. RUSSELL, Majority Staff Director 

GABRIELLE BATKIN, Minority Staff Director 

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C O N T E N T S 

Page 

MARCH 8, 2017 

OPENING STATEMENTS 

Barrasso, Hon. John, U.S. Senator from the State of Wyoming .......................... 1 

Carper, Hon. Thomas R., U.S. Senator from the State of Delaware ................... 2 

Inhofe Hon. James M., U.S. Senator from the State of Oklahoma ..................... 10 

Whitehouse, Hon. Sheldon, U.S. Senator from the State of Rhode Island ......... 11 

Fischer, Hon. Deb, U.S. Senator from the State of Nebraska ............................. 11 

WITNESSES 

Korsnick, Maria, President and CEO, Nuclear Energy Institute ........................ 18 

Prepared statement .......................................................................................... 20 

Finan, Ashley E., Policy Director, Nuclear Innovation Alliance .......................... 28 

Prepared statement .......................................................................................... 30 

Back, Tina, Vice President of Nuclear Technologies and Materials, General 

Atomics .................................................................................................................. 43 

Prepared statement .......................................................................................... 45 

Lyman, Edwin, Senior Scientist, Union of Concerned Scientists Global Security System ........................................................................................................... 58 

Prepared statement .......................................................................................... 60 

Bawden, Allison, Acting Director for Natural Resources and Environment, 

Government Accountability Office ...................................................................... 71 

Prepared statement .......................................................................................... 73 

ADDITIONAL MATERIAL 

Statements: 

William Paul Goranson, Executive Vice President, Energy Fuels Resources (USA) Inc. on Behalf of the Uranium Producers of America ....... 127 

Victor M. McCree, Executive Director for Operations United States Nuclear Regulatory Commission ...................................................................... 135 

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HEARING ON S. 512, THE NUCLEAR ENERGY 

INNOVATION AND MODERNIZATION ACT 

WEDNESDAY, MARCH 8, 2017 

U.S. SENATE, COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS, Washington, DC. 

The committee met, pursuant to notice, at 10:04 a.m. in room 

406, Dirksen Senate Office Building, Hon. John Barrasso (chairman of the committee) presiding. 

Present: Senators Barrasso, Carper, Inhofe, Capito, Boozman, 

Wicker, Fischer, Moran, Rounds, Ernst, Sullivan, Cardin, 

Whitehouse, Merkley, Gillibrand, Booker, Markey, Duckworth, and 

Harris. 

OPENING STATEMENT OF HON. JOHN BARRASSO, 

U.S. SENATOR FROM THE STATE OF WYOMING 

Senator BARRASSO. Good morning. I call this hearing to order. 

I am a strong supporter of American nuclear energy. It is a vital 

component of our all-of-the-above American energy plan. 

My home State of Wyoming plays a key role in the American nuclear energy supply by producing more uranium than any other 

State. 

Nuclear energy is clean, safe, reliable, and affordable. It is also 

a major boost for the economy. American nuclear plants provide 

thousands of jobs and millions of dollars in benefits to local communities. U.S. nuclear power plants have run safely for decades, and 

many will serve our Country for years to come. 

After decades of reliable power from our traditional nuclear 

plants, innovation is taking shape in the nuclear industry. Increased private investment in nuclear energy has led to advancements in safety, security, and cost. These advantages and advancements are exciting. 

The biggest challenges these innovators face, however, are delays 

and costs from regulatory red tape. Many of these delays come 

from trying to navigate a regulatory system that was developed 

around one specific technology, water-cooled reactors. Traditional 

water-cooled reactors have powered our Navy and our electricity 

grid for decades. Today’s innovators are pursuing very different designs that are using high temperature gases, molten salts, and 

other high tech materials to advance the safety, efficiency, and reliability of nuclear energy. 

The nuclear regulatory system needs to be updated to enable 

these innovations. That is why I am joined by my colleagues, Senators Whitehouse, Inhofe, Booker, Crapo, Fischer, Capito, Manchin, 

2 

Casey, and Duckworth to introduce the Nuclear Energy Innovation 

and Modernization Act. This bipartisan bill seeks to modernize the 

Nuclear Regulatory Commission by providing a flexible regulatory 

framework for licensing advanced nuclear reactors. 

The NRC needs a modern regulatory framework that is predictable and efficient. Reactor operators from both traditional and advanced reactors need timely decisionmaking from the NRC. At the 

same time, the Commission needs to maintain the ability to assess 

a variety of technologies and still meet its mission of ensuring safety and security. 

Additionally, our legislation will update the Nuclear Regulatory 

Commission’s fee recovery structure. This measure will bring increased transparency and accountability to the NRC, while improving the Commission’s efficiency and timeliness. 

This bill will also help preserve the uranium producers who are 

essential to powering this technology. The Energy Information Administration reported that uranium production in 2016 was at its 

lowest level since 2005. 

One challenge that uranium producers face is the need for clear, 

predictable regulations. Under current law, the EPA sets standards 

of general application and the NRC implements these standards. 

Yet, there is no definition in the Atomic Energy Act for ‘‘standards 

of general application.’’ 

Paul Goranson, from Energy Fuels Company in Casper, Wyoming, submitted written testimony for today’s hearing in which he 

states, ‘‘Clearly defining standards of general application, without 

reducing any oversight of the industry, would help clarify the roles 

and responsibilities of the EPA and NRC, reduce regulatory conflict, and provide for a more effective regulatory framework.’’ 

I am going to continue to work with other sponsors to address 

this more fully. 

Finally, the bill addresses the Department of Energy’s mismanagement of the public’s stockpile of excess uranium. Since 

2009, the Department has repeatedly violated its own written policy and written law when managing the public’s excess uranium. 

As a result, the Department of Energy has failed to obtain a fair 

return on this uranium for American taxpayers. 

For example, the Government Accountability Office found that 

the Department of Energy’s transfer of excess uranium in 2012 

may have actually cost taxpayers up to $195 million. The Department of Energy’s mismanagement has also contributed to volatility 

in the uranium market and has led to job losses in many States 

like my home State of Wyoming. 

So I want to thank Senator Ed Markey and his staff for helping 

with these specific provisions. This bipartisan legislation will enable the development of innovative reactors with bold new technologies. 

America needs to be a leader of nuclear development. We need 

to create an environment where entrepreneurs can flourish and 

create jobs here at home that will revitalize our nuclear energy sector. The Nuclear Energy Innovation and Modernization Act does 

just this. This broadly bipartisan bill will strengthen American energy independence, foster innovation and job creation. 

3 

With that, I would like to turn to the Ranking Member of the 

Committee, Senator Carper. 

[The prepared statement of Senator Barrasso follows:] 

OPENING STATEMENT OF HON. THOMAS R. CARPER, 

U.S. SENATOR FROM THE STATE OF DELAWARE 

Senator CARPER. Thank you, Mr. Chairman. 

I yield my time to the Senator from Maryland, Ben Cardin. 

Senator CARDIN. I don’t want your time, Mr. Ranking Member. 

Senator CARPER. Five seconds of my time. 

Senator CARDIN. Thank you. Appreciate that. 

As the home State for the NRC’s headquarters, I ask consent to 

put in my statement in regards to work force challenges. 

Senator BARRASSO. Without objection. 

[The referenced information follows:] 

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STATEMENT OF THE HONORABLE BENJAMIN L. CARDIN (D-MD) 

SENATE COMMITTEE ON ENVIRONMENT & PUBLIC WORKS 

HEARING ON ADVANCED NUCLEAR REACTORS AND S. 512, 

THE "NUCLEAR ENERGY INNOVATION & MODERNIZATION ACT" 

March 8, 2017 

Mr. Chairman, Ranking Member Carper, thank you for holding this hearing. 

Nuclear power provides a critical share of the Nation's electricity- about 20 percent of 

the total - and an even larger share - about 60 percent- of our carbon-free electricity. 

It is a crucial supplier of base-load power. 

Nuclear power will be part of the energy mix for the foreseeable future: there are 

nearly 100 reactors currently operating in the U.S., including the two units at Calvert 

Cliffs. 

In 1954, Lewis L. Strauss, who was Chairman of the Atomic Energy Commission 

(AEC), famously said, "It is not too much to expect that our children will enjoy in their 

homes electrical energy too cheap to meter." Chairman Strauss, who was addressing 

the National Association of Science Writers, was making a general prediction that 

science would continue to improve the human condition. But his statement came to be 

misinterpreted as referring to nuclear power specifically. It is, perhaps, an 

understandable mistake, given his affiliation with the AEC, which was charged with 

promoting nuclear energy as well as regulating it. 
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Nuclear energy isn't too cheap to meter, as it turns out, but there are ways to 

reduce its cost while protecting human health and the environment. 

The current fleet of commercial light-water reactors has reached or is reaching its 

original "design basis" of operating for 40 years. While the Nuclear Regulatory 

Commission (NRC) has determined that it is safe to allow these reactors to continue 

operating, scientists and engineers are coming up with new reactor designs that will 

improve upon or replace existing light-water reactor (LWR) technology. 

As existing reactors are retired over the next several years or decades, we have 

the opportunity to replace them with safer, less costly, modular reactors utilizing either 

enhanced LWR technology or advanced non-LWR technology. 

I am confident the nuclear industry can solve the technical problems. Scientists 

and engineers are problem-solvers; it's what they do and what they do well. 

The question is whether the NRC has the resources and regulatory framework to 

review and license the new designs in a fashion that encourages -or at least doesn't 

discourage -the large private capital investments that will be necessary to 

commercialize advanced reactor technology. 

Of course, the NRC will have to continue its oversight of the existing fleet, too. 
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The NRC's job as an independent agency is neither to promote nor hinder the 

nuclear power industry or a particular technology, but rather to regulate it, as effectively 

and efficiently as possible, in a manner that protects human health and the 

environment. 

The NRC's mission is enormously important and technically challenging. For that 

reason, and because the Commission is headquartered in Rockville and much of its 

staff lives in Maryland, I would like to discuss its workforce in the context of this hearing. 

Statistics the Commission provided to my staff indicate that 21 percent of the 

NRC's employees are over the age of 60 and another 33 percent of the employees are 

between the ages of 50 and 59. Conversely, just 26 percent of NRC's employees are 

39 or younger. Twenty-four percent of NRC's employees are eligible to retire this year; 

on a cumulative basis, that number rises to 36 percent by Fiscal Year (FY) 2020. 

The NRC has a highly educated and skilled workforce with a strong esprit de 

corps. The Commission's older workers especially have vast experience and expertise. 

The Commission has embarked on "Project AIM 2020" to "right-size" its 

workforce relative to its workload. As long as safety isn't jeopardized, that's a logical 

step, considering that the "nuclear renaissance" many people predicted with respect to 

conventional light-water reactors a decade ago hasn't occurred - at least not yet. But 

now small modular reactors (SMRs) and advanced reactors are coming down the pike. 
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The number of NRC FTEs- "full-time equivalents"- peaked at 3,960 in Fiscal 

Year (FY) 2010 and was over 3,700 in FY 2014; that number will decline to fewer than 

3,400 under the FY 2017 "re-base-lined" budget request and continue to drop after that. 

I'm hopeful that the Commission can meet its workforce reduction targets through 

voluntary attrition since so many NRC employees are eligible to retire now or in the near 

future. 

But even if the targets are met in the least disruptive fashion possible, the 

Commission must avoid a "brain drain". 

Roughly 1.200 NRC employees will be eligible to retire over the next five years. 

Will retirements over the next several years exceed the planned reduction in the size of 

the workforce? If so, what measures is the Commission taking to attract, train, and 

retain the next generation of our "best and brightest"? How is knowledge being 

transmitted to younger NRC staffers and new hires? 

The current fleet of nuclear power reactors may not be growing as previously 

envisioned, but it is ggjng- that much is certain. An aging fleet presents unique safety 

challenges that will require continued diligence by the NRC to protect human health and 

the environment. And reviewing the designs and license applications of SMRs and 

advanced reactors will present a different set of challenges. 
8 

Senator CARPER. Thanks so much. 

Welcome, everybody. Delighted to see you again. Thank you for 

taking this time with us. 

My colleagues have heard me tell this story before. I want to tell 

it again; I think it is appropriate. 

Both my boys are, I am proud to say, Eagle Scouts and my wife 

and I are very much involved in their troop. I am a retired Navy 

Captain. I used to take our Boy Scout troop to Norfolk Naval Station about every 3 years to spend a weekend and to have a chance 

to climb over the ships, submarines, aircraft carriers, sleep in the 

barracks and even the galley; and it was a great adventure for 

them and, frankly, for all of us. 

One day, one Sunday, we went and visited the Teddy Roosevelt 

nuclear power carrier and we had the opportunity, the captain of 

the ship came out to welcome us. We were up on the bridge and 

he addressed 25 scouts, 5 adults, and here is what he said. To the 

boys, he said, boys, when Teddy Roosevelt goes to sea, it is 1,000 

feet long. The boys went, ooh. He said, boys, when the Teddy Roosevelt goes to sea, it is 35 stories high. And the boys went, ooh. 

And he said, boys, when the Teddy Roosevelt goes to sea, it has 

5,000 sailors onboard. Five thousand. And the boys went, ooh. And 

he said, boys, when the Teddy Roosevelt goes to sea, it has 75 different aircraft onboard. And the boys went, ooh. And then he finally added, and, boys, when the Teddy Roosevelt goes to sea, it 

refuels every 25 years. And the adults went, ooh. 

[Laughter.] 

Senator CARPER. And I think that says almost not everything 

that we need to say, but a whole lot about what we need to say. 

I agree very much with what our Chairman has said. A lot of 

people I served with in the Navy actually were on ships and submarines and aircraft carriers that were nuclear powered, and the 

safety record is good. We have to continue to focus on that not only 

at sea, but on land as well, and we have. 

Today’s hearing is very timely as the nuclear industry faces real 

challenge. The industry is what I describe as a crossroads, and 

which the path the industry decides to take will have ramifications 

on our Country and our citizens, I think, for decades to come. 

Let me begin by noting that it is important to examine the benefits. There are many. The Chairman has mentioned a number of 

those, of nuclear energy. There are some drawbacks, as well, and 

we need to be honest about those and address them. 

First and foremost, the energy from nuclear power plants helps 

curb our Nation’s reliance on dirty fossil fuels and reduces air pollution emissions that threaten our health and our climate. 

Second, nuclear energy can be a major economic driver. Many 

Americans may be unaware that the United States invented nuclear technology. In fact, for many years our Nation led the world 

in nuclear manufacturing, construction, and production. The jobs 

and the economic benefits of this stayed here at home for the most 

part. Unfortunately, that is no longer the case. 

If our Country decides to retake its leadership in nuclear energy, 

I hope we do, and is successful in that endeavor, history has shown 

there will be economic benefits in the form of manufacturing and 

construction jobs and, frankly, operating jobs. 

9 

It turns out there is, as we know, two test cases, examples in 

Georgia and South Carolina, real-life tests where the construction 

of two new reactors in each of those States has provided thousands 

of good paying jobs and spurred economic development in the surrounding communities. 

Despite all the benefits of nuclear power, I should mention also 

some of the potential adverse consequences of nuclear energy. We 

have seen, from serious incidents like places in Fukushima, the 

damage that nuclear power can cause if the proper safety precautions are not in place, not up to date, and, most important, not 

adhered to. 

With nuclear energy, safety has been, and must remain, a top 

priority in the operation of nuclear reactors. I salute everyone, 

whether it is the NRC, the folks in the industry themselves, everybody who has been involved to try to make sure that that safety 

record remains unblemished here in this Country. 

Unfortunately, the costs of safety precautions, along with the 

costs of construction, operation, and maintenance of current nuclear reactors can be expensive, especially when compared to the 

costs of other sources of energy, including natural gas. In fact, 

some of the U.S. reactors are retiring, as we know, sooner than expected due to market forces. 

At the same time, our Country’s nuclear reactors are getting 

older and will need to be replaced in the years to come. Some people believe our Nation’s nuclear success story is ending. They may 

be right, but I believe that success story may just be getting its second wind. I sure hope so. And if we are smart, we will replace our 

aging nuclear reactors with new technology developed in this Country that is safer, that produces less spent fuel, and is cheaper to 

build and to operate. 

If we seize this opportunity, seize the day, the U.S. can be a leader once again in nuclear energy, reaping the economic benefits that 

flow from that leadership. 

I am not the only one who sees the opportunity. U.S. companies 

have already invested in an estimated, I am told, $1.5 billion in 

next generation nuclear technology, and today we will hear directly 

from General Atomics, a company that is investing in a design that 

is much smaller than current reactors, doesn’t need water for cooling, is able to use spent fuel as a fuel, and is passive in design so 

that it will shut down easily if a significant concern rises. 

As we will hear today, if this design works, this type of reactor 

may well be competitive in today’s energy markets. This technology, like the dozens of other types of nuclear energy technology 

that are being actively researched, developed, and invested in today 

still face real material and design challenges before it is ready to 

be commercialized. 

I should hasten to add that as companies like General Atomics 

make advances in the technologies, we need to make sure that our 

regulatory framework can keep pace. The NRC is considered the 

world’s gold standard of nuclear regulatory agencies; however, as 

science and technology evolves, so must the NRC. 

We also need to make sure that the NRC has the resources it 

needs to review these new technologies and ensure our current nuclear reactor fleet remains safe. At the same time, we must be conVerDate Aug 31 2005 09:03 Jul 25, 2017 Jkt 000000 PO 00000 Frm 00013 Fmt 6633 Sfmt 6633 S:\_EPW\DOCS\26151.TXT VERNE
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scious of how change to the NRC fee structure might impact the 

funds required from taxpayers. 

Finally, it is also important to remember that the current Administration wants to cut domestic spending to the bone, while increasing funding for defense and homeland security. If this Administration is successful, we may ultimately face a situation where 

there are insufficient taxpayer dollars for the NRC to work on advanced nuclear energy issues and meet its other responsibilities. 

We need to keep that in mind. I don’t want to see that happen. I 

suspect that none of us in this Committee do either. 

I believe advances in nuclear energy can help us sustain that 

nurturing environment for job creation, cleaner air for our people 

and our planet. We need that. 

I want to again thank our Chairman and the cosponsors of the 

legislation he has mentioned before us for their work, the work of 

their staffs, and for working closely with my own staff. We look forward to building on that working relationship. 

I am just happy to be here for a hearing on something we agree 

on. It is a good thing. We are having a series of hearings on things 

we agree on, and maybe we can get some good work done for this 

Country. 

Thank you, Mr. Chairman. 

Senator INHOFE. That is right. That is right. 

Senator BARRASSO. Thank you very much, Senator Carper. 

Would any of the original cosponsors like to be recognized? Senator Inhofe. 

OPENING STATEMENT OF HON. JAMES M. INHOFE, 

U.S. SENATOR FROM THE STATE OF OKLAHOMA 

Senator INHOFE. Well, you know, it is hard for me to accept the 

fact that it was 20 years ago, 19 years ago that I became chairman 

of the subcommittee of this Committee that deals with nuclear energy, and I remember when I became chairman they had not had 

an oversight hearing before the NRC in 10 years. Now, you can’t 

let a bureaucracy, no matter how wonderful everyone is, go without 

oversight. And, of course, we changed that; we became very active 

at that time. 

I dramatically shortened my opening statement because they 

have already spoken for me. I agree with the comments that were 

made. 

It is important for everyone to understand this is the second time 

around for this, because we introduced this bill last year, and last 

year we had Senators Whitehouse, Booker, Crapo, myself, and others working on essentially the same bill that we have. 

Now, I have to say confession is good for the soul, and Senator 

Whitehouse and I don’t always see eye-to-eye on every issue. That 

is a shocker to a lot of people, but on this issue we do. So it shows 

the broad base of support that we have, and I think this is the time 

that we can get it through. We didn’t get it through last time. It 

always surprised a lot of people, when I chaired this Committee, 

how many times Barbara Boxer and I agreed, and we got a lot of 

things done that we couldn’t have otherwise, if it hadn’t been for 

a close friendship. I could never sell her, though, on this one, so 

she opposed that. This time, I think, that is going to happen. 

11 

It bothers me, when I look at countries like China and Russia, 

to see that they are advancing ahead of us at this time. New technologies are out there. We know we can reach them. And this is 

what we have to pass to make sure that it does happen, so I am 

very enthusiastic about this. And I agree with you, Senator Carper, 

that it is a lot fun when we can work on issues that we agree on, 

so let’s get it done. 

Senator BARRASSO. Thank you very much, Senator Inhofe. 

Senator INHOFE. One other comment I want to make. There are 

several members over here on this side that are also on the Commerce Committee, so we will be going back and forth, so you know 

why we are doing this at the same time. 

Senator BARRASSO. Any other cosponsors like to make a statement? Senator Whitehouse. 

OPENING STATEMENT OF HON. SHELDON WHITEHOUSE, 

U.S. SENATOR FROM THE STATE OF RHODE ISLAND 

Senator WHITEHOUSE. I would be delighted to, Chairman. Let me 

first say that I believe I am now in the position, as Ranking Member on the subcommittee with Senator Capito, and I look forward 

to working with her to move this legislation quickly forward 

through the Committee, and, of course, with our Chairman and 

Ranking Member. 

I want to particularly thank Senator Inhofe and Senator Crapo, 

who are the two opening cosponsors on the Republican side, along 

with myself and Senator Booker. Senator Fischer is here, and I am 

delighted that she has joined us as a cosponsor of this legislation; 

and, of course, Chairman Barrasso is now a cosponsor of this legislation. So I think we have a good opportunity to move forward and 

get it done. 

To me, one of the elements of this that is most attractive is the 

potential down the road for advanced nuclear technology to begin 

to direct its attention to our existing nuclear waste stockpile and 

find a way to turn it from a massive and unbooked liability for this 

Nation into an asset for this Nation. If that scientific achievement 

can be reached, all of our work will not have been in vein and very 

good things will have been done. 

Mr. Chairman, I would just like to close by recognizing Dr. Ashley Finan, who is here from Jamestown, Rhode Island, a particularly beautiful part of our State, and I am very pleased to have her 

here and thank her for her work advising us on this legislation. 

Thank you, Chairman. Thank you to the Ranking Member. 

Senator BARRASSO. Thank you very much, Senator Whitehouse. 

Thank you, Dr. Finan, for being here as well. 

Senator FISCHER. 

OPENING STATEMENT OF HON. DEB FISCHER, 

U.S. SENATOR FROM THE STATE OF NEBRASKA 

Senator FISCHER. Thank you, Mr. Chairman, for convening this 

hearing. I am very pleased to be able to cosponsor this Act. At a 

time when we see it is hard for us to agree on things, it is nice 

to be part of a bipartisan effort. 

I am especially pleased with the addition of the new uranium recovery provisions that strengthen the bill and provide benefits to 

12 

my State. We have a nuclear plant in the southeast corner of Nebraska and we have a uranium mine in our western panhandle. 

So this bill will make regulatory reviews more efficient and costs 

more predictable without compromising safety. It also enables the 

licensing of advanced technologies, which can revitalize our industry and ensure that nuclear energy is a robust energy source for 

decades to come. 

So I am glad to be here today, Mr. Chairman. I thank you again 

for the hearing. I am eager to hear what the Committee will have 

for consideration of the bill. Thank you. 

Senator BARRASSO. Thank you, Senator Fischer. 

Senator WHITEHOUSE. May I ask for unanimous consent? 

Senator BARRASSO. Senator Whitehouse, yes, please. 

Senator WHITEHOUSE. Senator Lamar Alexander is another Senator who is keenly interested in nuclear advancements, and he and 

I wrote together an op-ed at the end of last year, and I would like 

to ask unanimous consent that that editorial piece by the two of 

us be included in the record of this hearing. 

Senator BARRASSO. Without objection. 

[The referenced information follows:] 

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In California, the closing of the San Onofre Nuclear Generating Station in 2012 contributed to a 

24 percent increase in carbon emissions from the electricity sector, according to data from the 

California Environmental Protection Agency Air Resources Board. Carbon emissions from the 

electricity sector in New England rose 5 percent in 2015, the first year-to-year increase since 

2010, largely because of the closing of the Vermont Yankee Nuclear Power Station in December 

2014, according to ISO New England, the region's grid operator. 

In roughly two decades, the United States could lose about half its reactors. That's because, by 

2038, 50 reactors will be at least 60 years old, and will face having to close, representing nearly 

half of the nuclear generating capacity in the United States. Without them, or enough new 

reactors to replace them, it will be much harder to reduce carbon emissions that contribute to 

climate change. 

To encourage clean energy, such as the Clean Energy Incentive Program within President 

Obama's Clean Power Plan, do not explicitly include or incentivize nuclear power. Likewise, 

some states have chosen to adopt policies, such as renewable portfolio standards, that do not 

include or incentivize nuclear power. 

At the same time, our energy markets do not currently account for the value of carbon-free 

power, a failure that puts nuclear power at an unfair and economically inefficient disadvantage to 

fossil fuels like coal and natural gas. 

We come from different political parties, but we agree on the overall goal of leveling the playing 

field for nuclear power, and the need to find a bipartisan solution to achieve it. This matters 

because the investments we make today, in new plants and transmission infrastructure, will be 

around for decades. Every time new fossil energy replaces nuclear, we're locking ourselves in to 

Some states and utilities are working to reduce carbon emissions with the understanding that 

nuclear power can be part of the solution. In the Southeast, there are four new reactors under 

construction that will provide 4,470 megawatts of carbon-free electricity- enough for 3.3 

million homes. New York established a clean-energy standard in August that might help the 

state's reactors stay open, including one that had been announced as closing. Gov. Andrew M. 

Cuomo's office explained that "maintaining zero-emission nuclear power is a critical element to 

achieving New York's ambitious climate goals." And the private sector is pitching in, too: 

According to Energy Secretary Ernest J. Moniz, there are dozens of entrepreneurs focusing on 

ways to improve and expand the nuclear power industry. 

The federal government should support these efforts. 

For one thing, we should extend existing reactor licenses from 60 to 80 years, in cases where the 

Nuclear Regulatory Commission says it is safe to do so. 
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We should also invest more in research to develop advanced nuclear reactors, including small 

modular reactors and accident-tolerant fuels. Advanced reactor designs may substantially reduce 

the threat of a meltdown. Many new, modular designs are much smaller than their predecessors, 

meaning they can be built in factories at lower cost and plugged into the grid as needed. 

Some of these new reactor technologies could actually use waste from traditional reactors as 

fuel, helping to alleviate a major challenge facing the industry. The Nuclear Regulatory 

Commission licensing framework, developed to support the last generation of reactors, should be 

updated to encourage and promote new investment in the next wave of advanced nuclear 

technology. And finally, we need to resolve the stalemate over where to store used nuclear 

reactor fuel. 

If we want to clean the air and reduce carbon emissions to deal with climate change, we need a 

stronger, not weaker, nuclear energy sector. Congress, federal agencies and the Nuclear 

Regulatory Commission must work with utilities to preserve our existing reactors in the safest 

possible way, and to develop the next generation of reactors that will provide cheaper, reliable, 

carbon-free electricity. 

Senator Lamar Alexander, Republican of Tennessee, is the chairman of the Senate 

Appropriations Subcommittee on Energy and Water Development. Senator Sheldon Whitehouse 

is a Democrat from Rhode Island. 

Follow The New York Times Opinion section on Face book and Twitter (@NYTOpinion), and 

sign up for the Opinion Today newsletter. 
16 

Senator BARRASSO. I also ask unanimous consent to submit a 

statement from Senator Crapo, a long-time member of this Committee, into the record. Without objection. 

[The referenced information follows:] 

17 


26151.009

Senator Mike Crapo 

Legislative Hearing on S. 512, the Nuclear Energy Innovation and Modernization 

Act 

U.S. Senate Committee on Environment and Public Works 

March 8, 2017 

Thank you, Chairman Barrasso and Ranking Member Carper, for holding this hearing 

today regarding S. 512, the Nuclear Energy Innovation and Modernization Act (NEIMA). 

It has been my pleasure to be part of the team working to develop and advance this 

important piece of legislation. Thank you, Senator Barrasso, Senator Carper, Senator 

Whitehouse, Senator Booker and Senator lnhofe, for all of your help and partnership 

during the past year of working on this measure. 

NEIMA is a bipartisan bill that would ensure the Nuclear Regulatory Commission (NRC) 

could develop an appropriate regulatory framework for licensing a diverse set of 

advanced reactor technologies. This measure is critically important to ensure the 

private-public partnerships supporting advanced reactor work at the Idaho National Lab 

are able to result in advanced reactor designs that have a chance to make it to the 

market. Such reactors are technologically diverse with different performance features 

and characteristics. The NRC must have a transparent and predictable process for 

licensing technology beyond the light-water reactor. 

NEIMA also makes important transparency and accountability reforms to the NRC's 

budget and fee structure. Such reforms will be important to maintaining trust between 

the industry and the agency should some reactors close prematurely. 

Again, it has been my pleasure to work with so many talented Senate colleagues on this 

measure. I look forward to working with my colleagues in the Senate to enact this 

legislation. Thank you for the opportunity to share a few words, and thank you to the 

witnesses for your contributions to this discussion. All of you have very valuable 

perspectives on this subject, and your assistance with this effort is productive. 
18 

Senator BARRASSO. We will now turn and hear from our witnesses. I would like to start with Maria Korsnick, who is president 

and CEO, Nuclear Energy Institute. 

Thank you so much for joining us. 

STATEMENT OF MARIA KORSNICK, PRESIDENT AND CEO, 

NUCLEAR ENERGY INSTITUTE 

Ms. KORSNICK. Thank you very much, Mr. Chairman. Good 

morning. I am Maria Korsnick, President and CEO of the Nuclear 

Energy Institute. And on behalf of the nuclear energy industry I 

want to thank the Committee for considering the Nuclear Energy 

Innovation and Modernization Act. We are very pleased that this 

bill is being reintroduced and are grateful for the opportunity to 

testify about the important matters that it brings today. 

Our operating nuclear plants are the backbone of the U.S. electric system and a critical part of our Nation’s infrastructure. Nuclear energy is the largest and most efficient source of carbon-free 

electricity in the United States. We currently have 99 reactors in 

30 States that produce 20 percent of our Nation’s electricity and 

approximately 63 percent of our carbon-free electricity. Nuclear 

produces electricity 24/7, regardless of weather, and with all its 

fuel onsite for 18 to 24 months. 

Nuclear energy facilities are essential to the Nation’s economy 

and to the local communities in which they operate. Collectively, 

the nuclear industry contributes about $60 billion every year to the 

U.S. economy, supports over 475,000 jobs, and produces over $12 

billion a year in tax revenue, both Federal and State. 

I am proud to report that since I last testified before this Committee last year, a new reactor has begun to operate in Tennessee. 

And, as you know, an additional four reactors are under construction, two in Georgia and two in South Carolina, and these are expected to come online in 2019 and 2020. The current nuclear fleet 

is a significant contributor to the Nation’s infrastructure. 

The newly constructed plants will likely provide valuable electricity for 80-plus years, and future nuclear innovations in the form 

of a variety of advanced design reactors are being developed to 

meet the needs of our society well into the next century. 

But, for that to happen, the industry must be able to rely on a 

safety-focused, efficient, and technically expert regulator. That requires strong and focused leadership from the Nuclear Regulatory 

Commission. 

Because the Senate is responsible for confirming qualified candidates to serve on Federal agencies, we wish to emphasize the importance of maintaining a five-member NRC board. The work of 

this agency should be conducted as Congress intended, with five 

commissioners. As the Commission currently has two open seats 

and potentially faces the lack of a quorum by the end of June, we 

do urge the Senate to act swiftly on Administration nominations. 

We commend the bill’s sponsors for taking the NRC’s untimely, 

somewhat outdated and unnecessarily costly, regulatory process. 

The need to reform has become more pressing as companies are beginning to submit the NRC applications for certification of small 

modular reactors and development of advanced non-light water reactors are looking for their deployment within the next decade. 

19 

For years, the industry has raised concerns regarding the NRC’s 

fee structure, only to be told by the NRC that its hands are tied 

by the current law. This bill makes several long-overdue changes 

to the NRC’s fee recovery structure. It repeals the 90 percent fee 

recovery requirement and replaces it with a more predictable, 

transparent, and accountable fee recovery process that also ensures 

that the agency continues to be sufficiently funded to carry out its 

important safety mission. The legislation would create greater accountability and transparency by requiring the NRC to expressly 

identify annual expenditures anticipated for licensing and for other 

activities requested by applicants. 

The legislation also would help drive greater efficiency in the 

NRC’s operation. In turn, it would drive down annual fees by limiting the corporate support to 28 percent. The industry supports 

this provision and we believe there is an opportunity to reduce this 

percentage even further. 

Complementing the limit on corporate support, the bill would cap 

annual fees for operating power reactors at the Fiscal Year 2015 

levels. We commend this approach and we strongly believe that the 

cap should apply to all licensees, including uranium recovery and 

other fuel cycle facilities. 

The bill also affirms Congress’s view that this Country can, and 

in fact should, be a leader in advanced reactor technology. The bill 

directs the NRC to think differently about reactor licensing. It requires them to accommodate light water reactors, small modular 

reactors, and advanced non-light water reactors; in short, an all-ofthe-above approach. 

This bill directs the NRC to resolve the central issue standing in 

the way of innovation. In sum, we need to start planning today if 

we are going to meet the enormous demand for U.S. technology at 

home and abroad. 

On behalf of the nuclear energy industry, I would like to thank 

Chairman and Senators Whitehouse, Inhofe, Booker, Crapo, Fischer, Capito, and Manchin for their commitment to innovation and to 

retain clean, reliable, and constant nuclear electricity. We look forward to continuing to work with you and your staff as the legislation progresses through the Congress, and I encourage you to enact 

the legislation expeditiously. Thank you. 

[The prepared statement of Ms. Korsnick follows:] 

20 


26151.010

Testimony for the Record 

Maria G. Korsnick 

President and Chief Executive Officer 

Nuclear Energy Institute 

Before the 

Senate Environment and Public Works Committee 

March 8, 2017 

The Nuclear Energy Institute (NEI) appreciates the opportunity to provide testimony on the 

Nuclear Energy Innovation and Modernization Act, introduced on March 2, 2017. 

I am Maria Korsnick, President and Chief Executive Officer of the Nuclear Energy Institute. 

NEI is responsible for establishing unified industry policy on regulatory, financial, technicaL and 

legislative issues affecting the commercial nuclear energy industry. NEI has more than 

350 members, including all U.S. companies licensed to operate commercial nuclear power 

plants, nuclear plant designers. major architect/engineering firms, fuel cycle facilities, materials 

licensees. labor organizations. universities, and other organizations involved in the nuclear 

energy sector. 

Nuclear energy is the largest and most efficient source of carbon-free electricity in the United 

States. Currently. 99 reactors in 30 states produce nearly 20 percent of our nation's electricity 

and approximately 63 percent of our carbon-free electricity. Nuclear energy facilities 

demonstrate unmatched reliability by operating with an average capacity factor greater than 

90 percent-higher than all other electricity sources. Nuclear produces electricity 24/7, 

regardless of weather and with all its fuel on site for 18-to-24 months. The long horizon for 

nuclear fuel procurements also means nuclear generation is not subject to price spikes 

occasionally experienced by other generation sources in recent years. 

Nuclear energy facilities are essential to the country's economy and the local communities in 

which they operate. The typical operating plant generates $470 million each year in the sale of 

goods and services in the local community, and employs 700 to l 000 workers. Construction of a 

new nuclear plant provides in the range of 3500 jobs at peak periods. Collectively, the nuclear 

industry contributes about $60 billion every year to the U.S. economy, through supporting over 

475,000 jobs and producing over $12 billion annually in federal and state tax revenues. 

l am proud to report that, since l testified before this Committee last year, a new 1150-megawatt 

reactor has begun to operate in Tennessee. As you know. an additional four reactors are now 

under construction-two reactors in Georgia and two in South Carolina. Those reactors are 

expected to begin production in 2019 and 2020. At this point, the detailed design and 

engineering has been completed for the API 000 reactors now being built, and the lessons learned 

from those projects should be applied by future applicants and licensees as well as the Nuclear 

Regulatory Commission (NRC). Certainly the authors of the Energy Policy Act of 1992 

contemplated that applying the more streamlined NRC combined license process to these firstof-a-kind projects would pave the way for even more efficient regulatory reviews, in tum leading 

to lower costs and shorter time to market for subsequent projects. 
21 


26151.011

The current nuclear fleet is an integral cog in and significant contributor to the nation's 

infrastructure given its environmental benefits, local and national economic value, grid support, 

reliability, and price stability. The newly constructed plants will likely provide this valuable 

energy for 80 years. And. future nuclear innovations in the forrn of various advanced design 

reactors are being developed to meet the needs of our society well into the next century and 

beyond. 

Current operating plants, units now under construction. and plants of the future all must be able 

to rely on a safety focused, efficient, and technically expert regulator. It is imminently 

reasonable from the perspective of the industry as well as our nation's energy consumers to 

expect a regulatory process with those attributes. Those regulatory attributes are also a national 

imperative, as they directly affect the ability to maintain the diversity of America's energy 

portfolio. The industry believes that the NRC's untimely, somewhat outdated, and unnecessarily 

costly regulatory regime needs updating. The need for congressional action directing regulatory 

reform has become more urgent as companies are beginning to submit to the NRC applications 

for certification of small modular reactor (SMR) designs, which will be deployed in the mid2020s, and developers of advanced non-light-water reactors are beginning interactions with the 

NRC and are looking to deploy their technologies around 2030. 

The establishment and implementation of sound regulatory processes requires strong and focused 

NRC leadership. As the Senate is responsible for confirming qualified candidates to serve on 

federal agencies, we wish to emphasize the importance of maintaining a five-member Nuclear 

Regulatory Commission. The work of this agency should be conducted as Congress intended 

when it enacted the Atomic Energy Act. with five commissioners who each bring to their 

position knowledge and a commitment to sound agency decision-making. As the Commission 

currently has two open seats, and potentially faces the lack of a quorum by the end of June. we 

urge the Senate to act swiftly on Administration nominations. We also urge the Senate to 

consider adding to its bill a "holdover" provision to avoid the issues that arise when there is a 

delay in nominating or voting on Commission candidates. In doing so, the Commission could 

continue (e.g., under a provision that would permit continuation at least until the next Congress) 

to perform its functions without disruption. 

On behalf of NEI and its members. I would like to thank the bill's sponsors for recognizing the 

need for legislation to reforrn the NRC fee recovery structure for existing nuclear power plants. 

and to set the stage for developing and deploying innovative nuclear reactor technologies. I hope 

you will also consider acting to ensure that all Commission seats are tilled. 

Reform of the NRC's fee recovery structure is necessary and overdue. 

Industry's concerns with the NRC's fee structure date back to the passage of the Omnibus 

Budget Reconciliation Act of 1990 (OBRA-90). Both NRC and industry identified equity issues 

with this fee recovery framework. OBRA-90 requires the NRC to recover approximately 

90 percent of its budget through fees charged to licensees and applicants. 1 Congress provides the 

1 This fee·recovery requirement excludes amounts appropriated for waste incidental to reprocessing, generic 

homeland security activities, and inspector general services for the Defense Nuclear Facilities Safety Board, as well 

as any amounts appropriated from the Nuclear Waste Fund. 
22 


26151.012

remaining I 0 percent of the agency"s budget authority through appropriations, which covers tbe 

costs for some of the NRC's activities that are not attributable to existing NRC licensees (e.g., 

international assistance activities and Agreement State oversight). This arrangement requires the 

industry to pay for •'fees-for-services" at a current rate of $265 per hour. The industry is also 

charged annual fees, which are apportioned among licensee classes to cover the remainder of the 

agency's budget. This means industry is required to pay fees for many activities that provide no 

direct benefit to licensees. 

Congress attempted to address these fairness and equity issues in the FY 200 I Energy and Water 

Development Appropriations Act but, by the late 2000s, significant problems with the NRC's fee 

recovery framework began to surface. Each year since then. in response to the NRC s proposed 

fee rule, NEI has raised concerns related to the level of fees to be collected and the issues caused 

by the fee structure. NEI has consistently emphasized the industry's concerns regarding: 

significant increases in overhead costs, large increases in the NRC's budgets, the failure to 

account for premature plant closures, and additional states becoming Agreement States without 

cotTesponding reductions in the materials program budget. Further, we have identified the need 

for a firewall between fee-recovery and fee-relief activities. 

The NRC has responded to these comments by indicating that its "hands are tied'' by the current 

statutory framework. Fundamental change to the NRC s fee recovery structure is long overdue, 

and the NRC is not on course to accomplish that change absent congressional direction. 

The Nuclear Energy Innovation and Modernization Act would make several necessary changes. 

It would repeal the relevant provisions of OBRA-90 and replace them with a rational fee 

recovery process that will also ensure that the agency continues to be sufficiently funded to 

effectively carry out its mission to protect public health, safety, and security. The fee recovery 

process envisioned by the bill would create greater accountability and transparency by requiring 

the NRC to expressly identify annual expenditures anticipated for licensing and other activities 

requested by applicants (i.e., fees-for-services). The bill further directs that funds allocated to 

those activities can be used only for those purposes, thus avoiding diversion of agency resources 

to other accounts, including corporate support. 

The legislation also would help drive greater efficiency in agency operation and, in turn. drive 

down annual fees by establishing that corporate support costs can be no more than 30 percent of 

the agency's budget authority beginning in FY 2020 and FY 2021. The percentage cap on 

corporate support is to be reduced by I percent every two years until reaching 28 percent in 

FY 2024. The bill thus would help to bring the NRC's spending on corporate support in line 

with other federal agencies. In an April 2015 congressionally-mandated report, Ernst and Young 

found that the NRC spends 37 percent of its budget on mission support costs, whereas the NRC's 

peer agencies spend only 20, 25, and 32 percent of their total budgets on mission support. In 

response to these excessive overhead costs, Congress limited the portion of the NRC's FY 2016 

budget allocated to corporate support (which constitutes the bulk of NRC's mission support 

costs) to roughly one-third (34 percent) of the agency's total budget. The NRC indicated in its 

FY 2017 budget justification that it would remain below this cap in FY 2016, spending about 32 

percent of its budget on corporate support. Notwithstanding this recent effort to limit the NRC's 

longstanding increases in corporate support costs, the NRC's FY 2017 budget proposed 
23 


26151.013

increasing the agency's corporate support costs to more than $319 million-an increase both in 

real dollars (an additional $3.3 million) and as a percent of the agency's total budget (bringing it 

to 33 percent). The bill would preclude this type of backsliding by placing the NRC on a glide 

path to reduce its corporate support to 28 percent gradually by implementing cost reductions 

such as those already identified by the agency's Project Aim efforts. 

Complementing the upper limit on corporate support, the bill would cap annual fees for 

operating power reactors at the FY 2015 level (adjusted to reflect changes in the Consumer Price 

Index). The misalignment between the NRC's budget and its workload has recently resulted in 

an annual fee structure that essentially penalizes reactor licensees that continue to operate for 

another licensee's decision to discontinue operation. The cap on annual fees should mitigate the 

potential for excessive fees. which will be particularly important if the NRC does not adequately 

adjust its budget to reflect the declining workload with fewer operating reactors. 

It is important to ensure that the NRC and the public understand that a cap on annual fees would 

not adversely affect safety. The cap in the bill is set at the 2015 fee rule level-among the 

highest in the NRC's history. This assures that the NRC would have significant resources to 

carry out its safety and security mission. The annual fee cap also does not affect ''fee-forservice" activities, which the NRC recovers separately through 10 C.F.R. Part 170 fees. As a 

result, the NRC will continue to recover fees necessary to support the NRC resident inspector 

program, force-on-force exercises, security plan reviews, and emerging issues that may require 

NRC resources to perform additional safety or security inspections at specific facilities. The cap 

on annual fees would not constrain the NRC's resources in a way that would compromise the 

agency's safety and security mission, and it appropriately provides for a waiver of the cap in the 

case of unforeseen and unlikely circumstances. In short, the bill gives the Commission authority 

to ensure that the cap on annual fees does not impede its mission. 

The bill also would provide relief based on equitable considerations. For example, it 

appropriately prevents the NRC from recovering fees for activities that are not attributable to an 

existing NRC licensee or class of licensees. Additionally, the bill provides for federal funding 

for the development of regulatory infrastructure for advanced reactor licensing. 

While these fee reforms go a long way toward addressing the problems the industry has 

identified, we suggest that the Committee add a few additional provisions. 

1. The cap on annual fees should be applicable to decommissioning reactors, fuel cycle 

facilities. and other materials licensees. This would ensure that a reduction in the number of 

licensees does not increase the fee burden on the remaining licensees, as has been the case 

for these licensees in recent years. For example, the annual fee for a basic in-situ uranium 

recovery facility will increase by nearly 80 percent from FY 2012 ($29,900) to FY 2017 

($53,600). 

2. The Committee should consider whether to further reduce the 28 percent cap on corporate 

support to ensure the NRC's overhead is consistent with its peer agencies. A lower cap 

would limit expenditures on corporate support, thereby encouraging the NRC to sharpen its 

safety focus and become more efficient. The Ernst and Young report found that some of the 
24 


26151.014

NRC's peer agencies operate with levels of corporate support as low as 20 and 25 percent. 

Additional opportunities for corporate support savings by the NRC are not speculative. A 

February 22. 2017. letter from the NRC Chainnan to the Committee identified $8.4 million 

in corporate support savings the Commission has already approved under Project Aim. The 

letter also listed nearly a dozen other cost saving activities the NRC could implement in 

FY 2018 and beyond. 

3. The NRC should be required to expressly identify in its budget request anticipated 

expenditures necessary for each rulcmaking and other generic activities. Offering a clear 

picture of proposed NRC expenditures on each of these activities would significantly 

improve accountability and transparency. 

Congressional action is necessary to accelerate licensing and deployment of advanced 

nuclear reactor technologies. 

NEI supports an "all-of-the-above"' nuclear future that includes additional large light water reactors 

(LWRs). SMRs, and advanced non-light water reactors. Advanced LWR designs are already 

commercially available with four units under construction; SMRs are expected to be available by 

the mid-2020s; and advanced non-LWRs are being developed to complement the suite of nuclear 

generating options available in the future. It is critically important that the U.S. nuclear industry 

maintain a leadership role in nuclear technology development and contribute to worldwide safety 

enhancements by continuing to design and build new nuclear plants. 

Advanced non-L WR designs must be commercially available by the early 2030s to meet global 

energy needs. This is a challenging task but one that is necessary to accomplish if the U.S. is to 

maintain the reliable electricity service Americans now enjoy and meet its clean air commitments. 

Even at less than I percent annual growth in electricity demand. the U.S. Energy Information 

Administration forecasts a need for 285 gigawatts of new electric capacity by 2040 in the U.S. 

Focusing only on the need for additional electricity in the U.S. in the upcoming decades would 

mistakenly overlook the likelihood of a significant increase in electricity demand worldwide. 

Many countries are looking to a rapid expansion of nuclear generation to address their growing 

electricity needs making it imperative that the U.S. industry's technology be available for 

international deployment. Advanced nuclear reactor designs have many potential technological 

advantages making them particularly appropriate for placement in developing economies 

(e.g.. passive cooling even in the absence of an external energy supply: operation at or near 

atmospheric pressure. which reduces the likelihood of a rapid loss of coolant; and extended 

operations between refueling and consumption of nuclear waste as tucl, reducing disposal 

issues). However. without strong federal leadership and direction. the U.S. industry runs the risk 

of falling behind, as other countries have substantial. state-funded advanced reactor technology 

programs. The strategic importance of U.S. nuclear technology development and sales should 

not be underestimated. A nuclear power plant is an enduring asset that forges a special centurylong relationship between the host country and the nation that supplies the reactor and later the 

fuel. major components. operations, maintenance. and security services. 

The Nuclear Energy Innovation and Modernization Act will bring us a step closer to realizing the 
25 


26151.015

enormous potential of advanced reactor technologies. The bill represents Congress· affirmation of 

the need to accelerate the development. licensing, and deployment of these innovations by 

establishing a path the NRC is to follow to develop an efficient and timely licensing framework. 

We commend the bill's sponsors for their leadership on this issue. 

We appreciate Congress· recognition of the challenges facing advanced reactor development. 

Given the lead times necessary to obtain approval for a new reactor design, license a nuclear 

power plant, and fabricate and build new generating capacity, activities needed to license 

advanced reactors must be a high priority. We highlight several of the ways in which the bill can 

advance Congress' and the industry's vision. 

• The bill would require the Commission to establish perfonnance metrics for licensing 

activities and would require that the NRC staff inform the Commission of delays in 

issuance of final safety evaluations. 

• The bill would require the NRC to develop and implement enhanced strategies within 

270 days for establishing stages in the licensing process for design approval. This will 

establish a clear means by which developers of advanced technologies can demonstrate to 

investors and other project participants progress toward eventual licensing of their first-ofa-kind projects. A staged licensing approach enables developers to be coordinate financing 

and capital investments with achievement of each stage. Further, because perceptions 

regarding regulatory risk increasingly have become an impediment to new reactor 

development, successful completion of specific licensing milestones should reduce 

concerns about regulatory uncertainty. While a staged licensing process could provide 

significant benefits for some developers, its use should be optional, not mandatory. 

Similarly, Congress' mandate that the NRC develop and implement strategies to prepare a 

regulatory framework for licensing a research and test reactor will help advanced reactor 

developers that choose to build a research or test reactor before a commercial reactor 

achieve greater regulatory certainty. Successful demonstration via testing provides credible 

proof that a technology or design is sound, can be used for the intended application. and 

can be economically competitive. 

The bill would require the NRC to modernize aspects of its regulatory approach. It directs 

the agency to develop and implement strategies within two years to increase the use of riskinformed, performance-based licensing evaluation techniques and guidance within the 

NRC's existing regulatory framework. This should lead to a more efficient regulatory 

process that will encourage continued private sector investment in advanced reactor 

development. 

• Because advanced reactor technologies will need to be commercially available in the 2030-

2035 timeframe, the bill requires that the NRC complete a rulemaking to establish a 

technology-inclusive licensing framework by the end of 2024. The bill appropriately 

allows applicants the option of choosing the regulatory approach most appropriate to their 

particular designs. 
26 


26151.016

• The bill would establish and authorize appropriations for a U.S. Department of Energy 

(DOE) Advanced Nuclear Energy Cost-Share Grant Program to make grants to applicants 

to fund a portion of the NRC fees for pre-application and application reviews. This 

provision is critically important to support the development of advanced technologies. As 

proposed, however, this program only addresses NRC-fees. We support the establishment 

of a broader cost-share program that would also support development of the license 

applications for advanced technologies. 

Baffle bolt and emergency preparedness 

The industry recommends that the Committee reconsider the need for the baffle bolt and 

emergency preparedness provisions. With regard to the baffle bolt issues that arose in 2016, the 

NRC has independently reviewed the affected units' analyses, inspections. and bolt-replacement 

plans to ensure safety. Ultimately, the NRC determined that the reactors were safe to operate. 

With regard to the emergency preparedness provision. we note that all nuclear power plants have 

comprehensive on-site and off-site emergency response plans and licensees routinely incorporate 

lessons learned from data and events. Further, this area already is closely regulated by NRC and 

the Federal Emergency Management Agency. 

Uranium recovery, transfers, and sales 

The bill directs the NRC to study the safety and feasibility of increasing the length of uranium 

recovery licenses from I 0 to 20 years. This will reduce the costly burden of renewing the license 

every 10 years to continue operation. As uranium recovery is the lowest risk sector of the 

nuclear fuel cycle, consideration should be provided to increase the license length up to 40 years. 

A 40-year license period is consistent with other fuel cycle facilities and operating power 

reactors. 

The bill also directs the NRC to evaluate the duration of licensing actions and areas to improve 

the efficiency and transparency of licensing reviews. This is a necessary step because the 

uranium recovery industry has faced excessive costs and lengthy reviews on issues not related to 

technical concerns but, rather, due to reinterpreted safety standards and increased costs of 

environmental and cultural resource reviews. 

We support the initiation of a pilot program to establish a flat-fee structure for uranium recovery 

licensees. The flat-fee structure is a welcome first step and should be quickly implemented to 

help resolve invoicing and other issues. 

The bill also addresses DOE's excess uranium inventory. The industry supports the timely and 

efficient cleanup of all of the Department's facilities, including the gaseous diffusion plants. We 

have previously recommended that the cleanup efforts be fully funded through congressional 

appropriations rather than a combination of congressional appropriations and bartering of excess 

uranium inventory, and have urged the Department to request sufficient funding for the cleanup 

efforts to proceed on the Department's desired schedule. 
27 


26151.017

Conclusion 

On behalf of NEt and its members, I wish to thank the bill's sponsors for reintroducing this 

important legislation. Passage of the Nuclear Energy Innovation and Modernization Act will 

benefit all Americans by helping to retain the energy diversity and clean air benefits nuclear 

plants provide. The legislation also will ensure that these economic engines can continue to be 

the backbone of the nation's electric infrastructure and, looking forward, will facilitate the 

development and deployment of innovative nuclear reactor technologies. We look forward to 

working with members of Congress to obtain enactment of this bill into law. 
28 

Senator BARRASSO. Well, thank you very much for your thoughtful testimony. 

Dr. FINAN. 

STATEMENT OF DR. ASHLEY E. FINAN, POLICY DIRECTOR, 

NUCLEAR INNOVATION ALLIANCE 

Ms. FINAN. Thank you, Chairman Barrasso, Ranking Member 

Carper, and distinguished members of this Committee. Thank you 

for holding this hearing and for giving me the opportunity to testify. My name is Ashley Finan, and I am Policy Director for the 

Nuclear Innovation Alliance, a nonprofit organization dedicated to 

leading advanced nuclear energy innovation. 

The NIA was established by a cross-cutting group of innovators, 

academics, environmental organizations, industry groups, and 

other experts and stakeholders who believe that advanced nuclear 

energy is needed to ensure a better future. The world will double 

or triple its energy demand in 30 years, driven by the emergence 

of a middle class in the developing world and the need to bring 

electricity to 1.4 billion people who lack it today. At the same time, 

many analyses point to the pressing need to drastically reduce 

global carbon emissions if we are to avoid the worst impacts of climate change, and clean air is essential to human health. 

A more rapid expansion of nuclear power is a vital part of the 

solution. In the United States and elsewhere, dozens of innovative 

startup companies are pioneering advanced nuclear designs that 

offer opportunities for increased safety and affordability, resistance 

to proliferation, and a reduction in nuclear waste. These designs 

can revolutionize the nuclear industry and revitalize U.S. exports 

with products that take advantage of the latest manufacturing and 

competing technology, that are competitive in markets across the 

globe, and that exceed the expectations of customers and the public. But the transition from design to commercialization and deployment, both in the U.S. and globally, has been slow. 

Current NRC regulation confronts the licensing of advanced technologies with two major challenges. First, NRC approval calls for 

enormous front-loaded investment during a protracted development 

and licensing phase, without a staged structure to provide applicants with clear, early feedback on an agreed schedule. Second, 

current regulation primarily evolved to oversee light water reactor 

technologies. It must be adapted to the features and performance 

characteristics of advanced reactors, which rely on substantially 

different fuels, cooling systems, and safety strategies, and use novel 

operating approaches. 

Over the past 3 years, the NIA has been developing strategies to 

facilitate the efficient, cost-effective, and predictable licensing of 

advanced nuclear power plants in the U.S. These strategies are 

based on consultations with nuclear innovators, safety experts, 

former NRC staff and commissioners, members of the financial 

community, and other nuclear industry stakeholders. We compiled 

the results of some of our work into a report called Enabling Nuclear Innovation: Strategies for Advanced Reactor Licensing, which 

was issued in April 2016. The report has been provided to the Committee and is available to the public on the NIA website. It disVerDate Aug 31 2005 09:03 Jul 25, 2017 Jkt 000000 PO 00000 Frm 00032 Fmt 6633 Sfmt 6633 S:\_EPW\DOCS\26151.TXT VERNE
29 

cusses in much greater detail the points that I am touching on 

today. 

To address the LWR-centric nature of the current regulations, a 

more technology-inclusive approach is needed. A risk-informed, performance-based licensing approach will allow the NRC to review a 

diverse set of advanced reactor technologies. This would incorporate both modern methods of risk assessment and traditional deterministic methods to provide an exhaustive safety review. The 

Nuclear Energy Innovation and Modernization Act, or NEIMA, provides for the NRC to do work in this area without impacting the 

costs incurred to the existing plants. 

To address the investment challenge, the NIA recommends that 

the NRC offer a staged approach, one that would be more aligned 

with private sector development of innovative technology using a licensing project plan, topical reports, and other existing mechanisms; and one that would offer clear and early feedback to investors and developers through an optional conceptual design assessment. This approach maintains the rigor and high standards of the 

NRC and facilitates the development of safer nuclear technology 

that produces less waste, or even consumes it. 

This approach can be achieved using existing regulatory tools at 

the NRC, with some adjustments on the development of additional 

guidance. The NRC has already begun doing this work, and has 

made considerable progress in the past year, but they have done 

so with extraordinarily limited resources. NEIMA authorizes the 

NRC to do the crucial work to further develop and implement this 

staged licensing process with dedicated funding. 

When NEIMA was first introduced in this Committee in 2016, 

the bill was subjected to useful critiques and several concerns were 

raised and addressed. It ultimately passed out of Committee with 

strong bipartisan support. The bill under consideration today is 

stronger for that and I hope that the same support will be evident 

in 2017. 

This is an important bill that will enable the NRC to develop the 

rigorous, technology-inclusive regulatory infrastructure to support 

the review of advanced nuclear energy technologies without diluting funds used to regulate operating plants. It also allows for immediate adjustments that will provide a more efficient, predictable, 

and effective process. The Nuclear Energy Innovation and Modernization Act is needed to enable progress in advanced nuclear energy. 

Thank you for this opportunity to testify. I would be pleased to 

respond to any questions you might have today or in the future. 

[The prepared statement of Ms. Finan follows:] 

30 


26151.018

Written Testimony of 

Dr. Ashley E. Finan 

Policy Director 

Nuclear Innovation Alliance 

Before the U.S. Senate Committee on Environment & Public Works 

Enabling Advanced Reactors 

For a Legislative Hearing on the Nuclear Energy Innovation and Modernization Act 

March 8, 2017 

Summary of Testimony 

Chairman Barrasso, Ranking Member Carper, and distinguished members of this 

committee, thank you for holding this hearing and for giving me the opportunity to testify. 

My name is Ashley Finan, and I am Policy Director for the Nuclear Innovation Alliance 

(NIA), a non-profit organization dedicated to leading advanced nuclear energy innovation. 

The NIA was established by a cross-cutting group of innovators, academics, 

environmental organizations, industry groups, and other experts and stakeholders who 

believe that advanced nuclear energy is needed to ensure a better future. The world will 

double or triple its energy demand in 30 years, driven by an emerging middle class in the 

developing world and the need to bring electricity to 1.4 biJiion people who lack it today. 

At the same time, many analyses point to the pressing need to drastically reduce global 

carbon emissions if we are to avoid the worst impacts of climate change, and clean air is 

essential to human health. 

A more rapid expansion of nuclear power is a vital part of the solution. In the United 

States and elsewhere, dozens of innovative start-up companies are pioneering advanced 

nuclear designs that offer opportunities for increased safety and affordability, resistance 

to proliferation, and a reduction in nuclear waste. These designs can revolutionize the 

nuclear industry and revitalize U.S. exports with products that take advantage of the latest 

manufacturing and computing technology, that are competitive in markets across the 

globe, and that exceed the expectations of customers and the public. But the transition 

from design to commercialization and deployment-both in the US and globally-has 

been slow. 

Current NRC regulation confronts the licensing of advanced technologies with two major 

challenges. First, NRC approval calls for enormous front-loaded investment during a 

protracted development and licensing phase-without a staged structure to provide 

applicants with clear, early feedback on an agreed schedule. Second, current regulation 

primarily evolved to oversee light water reactor (L WR) technologies. It must be adapted 

to the features and performance characteristics of advanced reactors, which rely on 

substantially different fuels, cooling systems, and safety strategies, and use novel 

operating approaches. 
31 


26151.019

Over the past three years, the NIA has been developing strategies to facilitate the efficient, 

cost-effective, and predictable licensing of advanced nuclear power plants in the United 

States. These strategies are based on consultations with nuclear innovators, safety experts, 

former NRC staff and commissioners, members of the financial community, and other 

nuclear industry stakeholders. We compiled the results of some of our work into a report 

called "Enabling Nuclear Innovation: Strategies for Advanced Reactor Licensing," which 

was issued in April2016. The report has been provided to the Committee, and is 

available to the public on the NIA website. It discusses in much greater detail the points 

that I am touching on today. 

To address the LWR-centric nature of the current regulations, a more technologyinclusive approach is needed. A risk-informed, performance-based licensing approach 

will allow the NRC to review a diverse set of advanced reactor technologies. This would 

incorporate both modem methods of risk assessment and traditional deterministic 

approaches to provide an exhaustive safety review. The Nuclear Energy Innovation and 

Modernization Act (NEIMA) provides for the NRC to do work in this area without 

impacting the costs incurred to the existing plants. 

To address the investment challenge, the NIA recommends that the NRC offer a staged 

approach- one that would be more aligned with private sector development of innovative 

technology using a licensing project plan, topical reports, and other existing mechanisms; 

and one that would offer clear and early feedback to investors and developers through an 

optional conceptual design assessment. This approach maintains the rigor and high 

standards of the NRC, and facilitates the development of safer nuclear technology that 

produces less waste, or even consumes it. 

This approach can be achieved using existing regulatory tools at the NRC, with some 

adjustments and the development of additional guidance. The NRC has already begun 

doing this work, and has made considerable progress in the past year, but they have done 

so with extraordinarily limited resources. NEIMA authorizes the NRC to do the crucial 

work to further develop and implement this staged licensing process with dedicated 

funding. 

When NEIMA was first introduced in this Committee in 2016, the bill was subjected to 

useful critiques and several concerns were raised and addressed. It ultimately passed out 

of committee with bipartisan support. The bill under consideration today is stronger for 

that and I hope the same support will be evident in 20 17. 

This is an important bill that will enable the NRC to develop the rigorous, technologyinclusive regulatory infrastructure to support the review of advanced nuclear energy 

technologies without diluting funds used to regulate operating plants. It also allows for 

immediate adjustments that will provide a more efficient, predictable, and effective 

process. The Nuclear Energy Innovation and Modernization Act is needed to enable 

progress in advanced nuclear energy. 

Thank you for this opportunity to testify. I would be pleased to respond to any questions 

you might have, today or in the future. 
32 


26151.020

Full Written Testimony 

Chairman Barrasso, Ranking Member Carper, and distinguished members of this 

committee, thank you for holding this hearing and for giving me the opportunity to testify. 

My name is Ashley Finan, and I am Policy Director for the Nuclear Innovation Alliance 

(NIA), a non-profit organization dedicated to leading advanced nuclear energy innovation. 

The NJA was established by a cross-cutting group of innovators, academics, 

environmental organizations, industry groups, and other experts and stakeholders who 

believe that advanced nuclear energy is needed to ensure a better future. 1 The world will 

double or triple its energy demand in 30 years, driven by an emerging middle class in the 

developing world and the need to bring electricity to 1.4 billion people who lack it today. 

At the same time, many analyses point to the pressing need to reduce global carbon 

emissions by 80 percent or more by 2050 if we are to avoid the worst impacts of climate 

change, and clean air is an essential ingredient for human health. 

A more rapid expansion of nuclear power, though a vital part of the solution, faces stiff 

challenges. Accidents raise public fears about safety; large cost overruns and protracted 

schedules deter investors and owners; and concern over spent nuclear fuel disposal and 

weapons proliferation continues to block expansion in some parts of the world. 

Innovation will be necessary if these challenges are to be addressed. In the US and 

elsewhere, dozens of innovative start-up companies and other stakeholders are pioneering 

new designs that promise to lower risk and cost, and reduce deployment barriers. But, 

despite the American talent for developing advanced nuclear reactor technologies, the 

transition from design to commercialization and deployment-both in the US and 

globally-has been slow. Two of the most critical barriers are the lack of a clear and 

efficient pathway for a first demonstration project, and continuing doubt that the Nuclear 

Regulatory Commission (NRC) will be able to issue a license for a non-light water 

reactor in a time frame compatible with private-sector needs. These obstacles must be 

addressed before we can realize the benefits of the next generation of nuclear technology. 

Many other hurdles exist, including technology challenges, supply chain limitations, a 

difficult market environment, inaction on nuclear waste management, and restrictions on 

international cooperation. In addition, clean air policy must be updated to recognize the 

benefits of nuclear power. Progress on all of these fronts is urgently required. 

The analysis here focuses on a key initial obstacle-a nuclear regulatory process badly in 

need of an update. It is important to keep in mind that addressing this challenge is a 

necessary first step; other steps will be required. 

Current NRC regulation confronts the licensing of advanced technologies with two major 

challenges. First, NRC design certification or approval calls for enormous front-loaded 

investment during a protracted development and licensing phase-without a staged 

1 A list ofNIA Policy Committee and Advisory Committee members is included after this written 

statement. 
33 


26151.021

structure to with clear, feedback on an schedule. Second, 

current regulation primarily evolved to oversee light water reactor (LWR) technologies. !t 

must be adapted to the features and performance characteristics of advanced reactors, 

which rely on substantially different fuels, cooling systems, and safety strategies, and 

novel operating strategies. 

1 illustrates the investment challenge showing schematically the risk/investment 

profile of nuclear energy projects relative to the licensing process today, and the large 

monetary and temporal hurdle of obtaining design approvaL 

l: 

approach - one that would update the current 

with sector of innovative a 

plan, topical reports, and other existing mechanisms; and one that would offer 

clear and early feedback to investors and developers through an optional conceptual 

design assessment. This approach maintains the rigor and high standards of the NRC, 

and taeititates the development of safer nuclear technology that produces less waste, or 

even consumes it. 
34 


26151.022

Cumulative 

---;- +---- Jnvestm&flt 

This approach can be achieved using existing regulatory tools at the NRC, with some 

adjustments in the NRC's approach and the development of additional guidance. The 

NRC has already begun doing this work, and has made considerable progress in the past 

year, but they have done so with extraordinarily limited resources. NEIMA authorizes 

the NRC to do the crucial work to further develop and implement this staged licensing 

process with dedicated funding. 

Over the past three years, the NIA has been developing strategies to facilitate the efficient, 

cost-effective, and predictable licensing of advanced nuclear power plants in the United 

States. These strategies are based on consultations with nuclear innovators, safety experts, 

former NRC staff and Commissioners, members of the financial community, and other 

nuclear industry stakeholders. The NIA also examined nuclear reactor licensing systems 

in the United Kingdom and Canada, and scrutinized analogous regulatory systems 

administered in the United States by the Federal Aviation Administration and the Food 

and Drug Administration. We compiled the results of some of our work into a report 

called "Enabling Nuclear Innovation: Strategies for Advanced Reactor Licensing," which 

was issued in April2016. The report has been provided to the Committee, and is 

available to the public on the NlA website. It discusses in much greater detail the 

that I am touching on today. 

Based on this research and analysis, the NIA report offers the following nine regulatory, 

three policy, and four industry recommendations: 

A. Regulatory Recommendations 

(I) To structure a staged review of advanced reactors and support long-range resource 

planning by the agency and the applicant, the NRC and industry should develop and 

employ guidelines for a licensing project plan (LPP). The LPP would be a living 
35 


26151.023

document that serves as a roadmap for the entire process, defining-in as much detail as 

possible-project schedules, testing requirements, deliverables, and NRC review budgets. 

The most effective approach will be for the applicant and the NRC to design a licensing 

project plan that establishes milestones corresponding to meaningful stage-gates along a 

given project's development pathway and that take full advantage of the NRC's readiness 

to review specific aspects of the design. To provide the foundation for open 

communication and effective project management, we recommend that, as soon as a 

potential applicant initiates interaction with the NRC, the agency produce an initial LPP 

establishing guidelines that define the working relationship among the parties. This 

should help to ensure rapid resolution of conflicts and efficient progress. The NRC and 

potential applicants should discuss the appropriate contents of an LPP during this initial 

engagement period, and the LPP should be built up with additional detail as the project 

progresses and it is possible to foresee upcoming interactions. Much of the responsibility 

for designing an effective LPP lies with the applicant; the applicant will need to 

understand a project's design, development, deployment, and investment milestones in 

order to propose corresponding licensing milestones. At the same time, NRC 

expectations for the level of design detail must correspond to the particular milestone, 

and be clearly communicated to potential developers. 

(2) The NRC should promote and applicants should use topical reports and the standard 

design approval as tools to introduce stages into the advanced reactor licensing process, 

while emphasizing the need to achieve a level of finality that supports staged decision 

making. These tools can be employed under current regulations, if the proper staff 

guidance and policies are put in place, and if dedicated funding can be authorized and 

appropriated; the proposed licensing project plan could structure their use. 

(3) The NRC should develop and employ an optional statement of licensing feasibility2 

process with time frames and budgets to be agreed upon in the licensing project plan. 

This would permit it to more easily assess whether an applicant's design intent was 

conceptually aligned and consistent with established regulatory requirements. Doing so 

would offer important benefits: (i) it would standardize a review phase that, because of its 

limited cost and duration, could be used by stakeholders to compare available design 

options; (ii) it would provide early feedback to the applicant, allowing timely alterations 

in approach to better meet regulatory obligations; and (iii) it would provide useful 

structure to pre-application engagement. 

Figure 3 depicts the elements that could be used to support the staged licensing of an 

advanced reactor, structured by an LPP. 

2 The NRC is pursuing a "Conceptual Design Assessment," (CDA) which serves the purpose of the 

suggested "statement of licensing feasibility." The NIA supports the CDA as a substitute. 
36 


26151.024

OPTIONAL STEPS 

(4) The Commission and license applicants should cooperate to adapt the agency's light 

water reactor (LWR)-centric requirements so that they are better suited to advanced 

reactors seeking licenses in the near tenn, while, wherever appropriate, increasing the use 

ofrisk-infonned and performance based techniques. For new technologies, alternative 

approaches to the exemption process should be considered. Advanced reactor designers 

from both traditional industrial organizations and small start-ups are concerned with the 

cost and schedule uncertainty associated with the exemption process (as well as potential 

negative perception that applicants are trying to avoid stringent safety regulation). A 

means should be available earlier in the process for the NRC and the applicant to reach 

agreement nn alternative compliance strategies for specific requirements that are only 

partially applicable or are not applicable at alL The LPP would be a natural place to do this, 

once the NRC and stakeholders have identified promising approaches. This will increase 

3 The NRC is pursuing a "Conceptual Design Assessment," (CDA) which serves the purpose of the 

suggested "statement of licensing feasibility." The NlA supports the CDA as a substitute. 
37 


26151.025

efficiency and effectiveness in the design and regulation of advanced technologies without 

sacrificing safety or security. 

(5) The NRC and DOE should continue to move forward with the DOE/NRC Advanced Reactor 

Licensing Initiative! This will help to establish and clarify acceptable approaches for 

creating the underlying design criteria associated with these concepts, thereby removing a 

portion of the regulatory uncertainty associated with advanced non-L WRs. 

(6) Given the substantial investments that have already been made by industry and DOE in 

pre-application reports and proposals for advanced reactors (including the Next 

Generation Nuclear Plant), and by NRC staff in evaluating them, the NIA recommends 

that (i) the NRC complete its evaluation and the Commission issue its decisions or 

opinions at this stage of the application, and (ii) generic issues raised by DOE and NRC 

be resolved through the issuance of guidance for advanced reactor applicants. 

(7) At the same time that the NRC pursues the above initiatives, the NRC should designate a 

special technical team to develop and implement a technology inclusive licensing and 

regulatory framework for advanced reactors based on risk-informed and performancebased principles. The technical team should propose a roadmap for putting the new 

framework into practice by 2025 (supported by a rulemaking completed in 2023), and 

then be given the administrative flexibility and resources to succeed. Because this 

framework will not be ready immediately, it should remain optional (similar to the Part 

52 licensing processes as an alternative to the Part 50 process)-at least until it is fully 

demonstrated. That way, its development will not delay current projects. The 

authorization and appropriation of dedicated funding will be necessary to enable this 

work. 

(8) To provide a clear and achievable regulatory pathway for developing and deploying 

advanced demonstration reactors, the NRC should: 

(i) In collaboration with stakeholders, clarity terminology and resolve discrepancies 

and gaps in statutes, regulations, and practice; 

(ii) Using terminology revised pursuant to (i) above, clarity responsibility for 

reviewing potential applications; 

(iii) Develop guidelines for advanced reactor demonstrations to support the review 

process; and 

( iv) Provide or develop guidelines for prototype plant regulation (as defined in 1 0 

CFR 50.2 and 10 CFR 52.1) and conversion to commercial operation. 

(9) The NRC should continue development and execution of advanced reactor technology 

knowledge management and training opportunities for NRC staff. Mid- and upper-level 

managers should be included in these programs. Funding will be needed to support this. 

4 This was recently described in the following report: US Department of Energy, Office of Nuclear Energy, 

Guidance for Developing Principal Design Criteria for Advanced (Non-Light Water) Reactors, December, 

2014. http://pbadupws.nrc.gov/docs/ML 1435/ML 14353A246.pdf. 
38 


26151.026

B. Policy 

(1) Congress should revise the NRC's budget structure so that, instead of a 90% fee-based, 

l 0% public funding model, licensees and applicants reimburse the NRC for activities 

related to their regulation, with Congress funding other agency-related activitiesincluding the development of new regulations for advanced technologies, R&D, 

international programs, and other initiatives not related to a specific licensee. The 

nuclear fleet operating today was licensed by an NRC that had been fully funded by 

Congress, before the advent of current fee-recovery rules. Unlike that earlier generation 

of reactors, licensing of the AP l OOOs now under construction has been supported by 

substantial cost-shared funding from DOE. To prepare for the licensing of advanced 

reactors, the NRC faces a greater challenge that will require consistent public funding. 

(2) Congress should authorize and appropriate funds for the NRC to prepare for advanced 

reactor licensing, including but not limited to: 

• Development and implementation of strategies to stage and expedite the 

advanced reactor licensing process; 

• Development and implementation of a risk-informed, performance-based 

licensing framework for advanced non-light water reactors; 

• Efforts to prepare the process oflicensing advanced demonstration reactors; 

and 

• Staff training or the hiring of experts. 

(3) To expand available financial resources for advanced reactor companies, Congress 

should continue to fund DOE to competitively award grants for early efforts to license 

advanced reactor companies, including but not limited to: 

• Pre-application engagement with the NRC; 

• Developing a licensing project plan; and 

• Applying for a statement of licensing feasibility or similar early-stage design 

review. 

The DOE Gateway for Accelerated Innovation in Nuclear (GAIN) initiative's 

small business voucher program is one possible mechanism for this. 

C. Industry Action 

Industry has an important role to play as a constructive participant in all of the above 

recommendations, but also has primary responsibility for several actions: 

(1) Industry stakeholders should cooperate to deliver a coordinated message to the NRC 

regarding technology-inclusive advanced reactor priorities. 

(2) Prospective applicants should proactively address the NRC's need for information about 

future projects by informing the agency as early as possible of their intent to request NRC 

review. By capturing this information in regulatory issue summaries, the NRC will have 

a stronger basis to support research, as well as budgetary estimates and requests. 
39 


26151.027

(3) Industry should take a more active role in communicating with the NRC, DOE, and other 

stakeholders on the challenges and opportunities associated with various advanced 

reactor designs, including R&D priorities. 

(4) Working with appropriate research and standards organizations, industry should pursue 

the development of codes, standards, and conventions for advanced nuclear power. 

Over the past year, the NRC and industry have made significant progress in addressing 

the recommendations above, as well as in other areas. The NIA applauds that progress 

and appreciates the work being done at the NRC. However, the NRC has undertaken this 

work with extraordinarily limited resources that will not be sufficient to complete the 

tasks in the needed timeframe. The Nuclear Energy Innovation and Modernization Act 

will make it possible for the NRC to continue, to accelerate, and to expand the work that 

the agency has begun, in order to support advanced reactor licensing in the U.S. 

Additional Detailed Comments on 8.512: Nuclear Energy Innovation and 

Modernization Act 

Section 103: Advanced Nuclear Reactor Program: 

1. Staged Licensing: The need for staged licensing varies depending on a project's 

level of technology risk, stage of development, and phase of investment. While 

incremental licensing options will be crucial for some projects to move forward 

successfully, there are others for which speed, not risk reduction, is the highest 

priority, and others that are ready to proceed immediately, before the staged 

licensing options are fully developed at the NRC. For these latter categories of 

projects, it is important that a staged approach be optional, and that the existing 

"all in one" process continues to be available. Particularly in the case of 

companies currently pursuing licensing, it is imperative that their process does 

not change midway through their engagement with the NRC. The NIA believes 

it is the intent ofNEIMA to offer the option of staged licensing without removing 

the existing options, but would support language adjustments to ensure that this is 

the effect of the legislation. 

2. Reporting Requirements: Because the NRC currently has very limited resources 

to address advanced reactor licensing, it is worthwhile to ensure that NEIMA 

requests reports only where they are clearly useful. The NIA would support 

efforts to evaluate where reporting requirements might be reduced without 

negatively impacting progress or oversight. In particular, given the progress that 

the NRC has already made and the documents that they have published on this 

topic in the past year, the "report to establish stages in the commercial advanced 

nuclear reactor licensing process" may not be necessary, and the NIA would 

support removing this reporting requirement. 
40 


26151.028

Section 203: Uranium Transfers and Sales: 

This section usefully seeks to address concerns that DOE uranium sales are having a 

negative impact on the private market, and that the government is not capturing 

appropriate value for its fuel. The NIA supports this effort, but is concerned about an 

unintended consequence: the limits on DOE uranium sales could constrain advanced 

nuclear development by restricting the materials needed to produce advanced reactor 

fuels. There is currently no active domestic enrichment capability for low-enriched 

uranium above 5% enrichment, so DOE would not be competing with or displacing 

market participants by providing >5% LEU in the near term. In fact, DOE uranium 

supply will serve an important role as a bridge until a private capability has been 

established. Several companies are interested in providing this supply in the future, but 

all would need to see some successful advanced reactors prior to making the necessary 

investments. A bridge supply of fuel will be needed to support some of the early movers 

in the advanced reactor space before commercial enrichment capacity is developed. We 

believe this issue could be addressed by changing the language so that the restrictions do 

not apply to low enriched uranium sales for fuels with enrichment between 5% and 20%. 

There may also be an opportunity to expand this section to include measures that would 

help to ensure such a bridge supply and supporting transportation methods are established 

for advanced reactors, and the NIA would be pleased to offer detailed suggestions if 

those would be useful to the Committee. 

Conclusion 

The Nuclear Energy Innovation and Modernization Act authorizes the NRC to do the 

crucial work to develop and implement a staged licensing process with dedicated funding. 

This is an important bill that will enable the NRC to develop the rigorous, technologyinclusive regulatory infrastructure to support the review of advanced nuclear energy 

technologies without diluting funds used to regulate operating plants. It also allows for 

immediate adjustments that will provide a more efficient, predictable, and effective 

process. With a few adjustments to avoid unintended consequences, NEIMA will play a 

critical role in bringing promising new technologies to commercial reality. 

Thank you for this opportunity to testify. I would be pleased to respond to any questions 

you might have, today or in the future. 
41 


26151.029

NIA Committee Membership 

Nuclear Innovation Alliance Policy Committee 

Armond Cohen, Clean Air Task Force 

Desmond Chan, Bechtel National 

Ashley Finan, Clean Air Task Force 

Richard Lester, Massachusetts Institute of Technology 

Christofer Mowry, ARC Nuclear 

Ray Rothrock, RedSeal Networks 

Elina Teplinsky, Pillsbury Law 

Nuclear Innovation Alliance Advisory Committee 

Amir Afzali, Southern Nuclear Company 

Todd Allen, Third Way 

Suzanne Baker, Third Way 

Willis Bixby, Gen4 Energy 

David Blee, U.S. Nuclear Infrastructure Council 

Sam Brinton, Bipartisan Policy Center 

Gilbert Brown, UMass Lowell 

Jacopo Buongiorno, Massachusetts Institute of Technology 

Caroline Cochran, Oklo, Inc. 

Christopher Colbert, NuScale Power 

Leslie Dewan, Transatomic Power 

Jacob DeWitte, Oklo, Inc. 

Ashley Finan, Clean Air Task Force 

Michael Ford, Carnegie Mellon University 

Charles Forsberg, Massachusetts Institute ofTechnology 

Josh Freed, Third Way 

Kirsty Gogan, Energy for Humanity 

Jeff Harper, X-Energy 

Jane Hotchkiss, Energy for the Common Good 

Eric Ingersoll, Energy Options Network 

Simon Irish, Terrestrial Energy 

Jacob Jurewicz, Exelon 

Andrew Kadak, Kadak Associates 

Jim Kinsey, Idaho National Laboratory 

Marilyn Kray, Exelon 

Jessica Lovering, The Breakthrough Institute 

Sam Mar, Laura and John Arnold Foundation 

David B. Matthews, NEC. Inc. 

Rachel Pritzker, Pritzker Innovation Fund 

Everett Redmond, Nuclear Energy Institute 

Paul Roege, Creative Erg 

Robert Schleicher, General Atomics 

Sam Shaner, Massachusetts Institute of Technology 

Kirk Sorensen, Flibe Energy 

Elina Teplinsky, Pillsbury Winthrop Shaw Pittman 

Sam Thernstrom, Energy Innovation Reform Project 

Ed Wallace, GNBC Associates 

Kevan Weaver, TerraPower 

Aditi Verma, Massachusetts Institute of Technology 
42 


26151.030

Biography 

Dr. Ashley Finan serves as Policy Director for the Nuclear Innovation Alliance and as a 

Project Director for Clean Air Task Force. Ashley earned her Ph.D. in Nuclear Science 

and Engineering at the Massachusetts Institute of Technology. Her doctoral work focused 

on energy innovation investment and policy optimization, both in nuclear and renewable 

energy technologies. She has played a key role in studies of the use of advanced nuclear 

energy to reduce greenhouse gas emissions in several applications, including hydrogen 

production, coal to liquids processes, and oil production methods. Ashley has worked as a 

strategy and engineering consultant, primarily on nuclear energy applications. She also 

contributed to an analysis of the techno-economic potential of energy efficiency 

improvements in the residential and commercial sectors and several related topics. 

Ashley holds an SB degree in Physics as well as SB and SM degrees in Nuclear Science 

and Engineering from MIT. 
43 

Senator BARRASSO. Thank you very much for your testimony, Dr. 

Finan. 

I am glad you could join us today. I would like to next turn to 

Dr. Tina Back, who is Vice President of Nuclear Technologies and 

Materials at General Atomics. 

Welcome. 

STATEMENT OF DR. TINA BACK, VICE PRESIDENT OF NUCLEAR TECHNOLOGIES AND MATERIALS, GENERAL 

ATOMICS 

Ms. BACK. Chairman Barrasso, Ranking Member Carper, thank 

you very much for the invitation to appear here today. I also thank 

the bipartisan group of Senators for introducing the Nuclear Energy Innovation Modernization Act, NEIMA, and for their interest 

in advanced nuclear reactors. 

General Atomics is a high technology company that has long history of innovation in nuclear energy, which is detailed in my written testimony. Our long-term vision is embodied in GA’s advanced 

reactor concept, the Energy Multiplier Module, or EM2. It has arisen from RD&D, Research, Development, and Demonstration, which 

has informed and shaped our beliefs of what nuclear innovation 

can achieve. 

In the near-term, the vision is brought into sharper focus 

through projects such as Accident Tolerant Fuel, ATF, and Moly 

99. ATF makes existing reactors less subject to a Fukushima-like 

event and more economically viable. The Moly 99 project establishes a domestic source of a medical isotope. Ultimately, both grew 

out of EM2 research and development and, in return, both deepen 

the skills and understanding needed to make EM2 a reality. 

It might be helpful to explain why we believe nuclear power is 

critical for the energy future and the national defense of the U.S. 

Nuclear power is the largest source of baseload clean energy 

available to our Nation. 

At present, there are no U.S.-owned commercial vendors of nuclear reactors. Furthermore, the supply chain of nuclear grade materials and components has either gone offshore or gone out of business. This is in stark contrast to vigorous nuclear industries in 

China, Russia, and Korea. Unless the U.S. is able to stimulate its 

near-dormant nuclear industry, we will be one of their future customers. 

On the bright side, there is a strong, nascent effort in U.S. private industry to innovate nuclear technologies. NEIMA will help us 

do that. There are many concepts that require different materials 

and technologies to advance beyond the light water reactors of 

today, all of which need NRC approval. The NRC is an important 

and necessary agent in ensuring nuclear power remains safe. 

If the U.S. is to proceed, it will require the support of our Government through regulatory support like that proposed in NEIMA 

and also through financial support of R&D. It may also benefit 

from mechanisms like public-private partnerships to foster new 

generations of nuclear scientists and domestically held intellectual 

property. 

For the U.S. to be a leader in nuclear energy, General Atomics 

believes our Country must do what it does best, bring the ingenuity 

44 

of the people to bear on creating new ways to produce nuclear energy safely, cleanly, and at much lower cost. 

So what exactly are nuclear reactors that are advanced? Advanced reactors are those that improve over existing reactors in the 

following four core objectives: they must produce significantly 

cheaper and cleaner electricity; be safer; produce significantly less 

waste; and reduce the risk of proliferation. 

These seven improvements identified in NEIMA are consistent 

with these core objectives. We believe every worthy advanced reactor concept must address these four core objectives jointly. It is not 

sufficient to address one at the expense of the other three. 

My written testimony provides details on how EM2 leverages engineered ceramic materials and leapfrog technologies to meet these 

four core objectives. 

As with any new reactor design, this one will require extensive 

interactions with the NRC. Ideally, interactions would occur early 

enough to inform the initial design and produce a safer reactor design. Then, when applying for a license, this early effort would pay 

off many times over. 

Radically new concepts employing new technologies require upfront investments involving some risk. Some investments may not 

pay off, and even those that are successful could require at least 

10 years to produce any revenue. While General Atomics has already invested more than $40 million in EM2, these commercial realities make it very difficult to justify early costs to engage the 

NRC. 

If the Committee’s objectives are to stimulate development of advanced reactors and technologies, then we suggest it would be relatively inexpensive to involve NRC in the early phase of development for potentially high impact. We suggest the Committee authorize the appropriation of $5 million at first, growing to $15 million over 5 years, to provide the NRC services. To trigger funding, 

a relatively low cost-share of 3 percent could be required. 

Thank you for your interest, and I hope that you can all come 

to San Diego and visit our facilities. There you could see our 

science in action and understand why we at GA are so optimistic 

about the future of advanced nuclear reactors. We are at the cusp 

of some significant scientific discoveries that are within the reach, 

with a bit of Government support. 

I would be pleased to respond to any questions. 

[The prepared statement of Ms. Back follows:] 

45 


26151.031

Testimony of Christina Back, Ph.D. 

V.P., Nuclear Technologies and Materials, General Atomics 

Before the U.S. Senate Committee on Environment and Public Works "Hearing on S.512 

Nuclear Energy Innovation and Modernization Act" 

March 8, 2017 

Chairman Barrasso and Ranking Member Carper, thank you for the invitation to appear before 

you today. My name is Christina Back and I am the Vice President of Nuclear Technologies and 

Materials at General Atomics. General Atomics is a high technology company that has 

successfully brought solutions to the defense, aeronautics, space, and energy industries. More 

specifically, my division has a long history of innovation in nuclear energy, starting with the 

TRIGA reactor in 1956, High Temperature Gas-Cooled Reactors (HTGRs) including the Peach 

Bottom 1 and Ft. St Vrain power plants, conversion of test reactor fuel from high to low enriched 

uranium to meet the Global Threat Initiative goals, and more recently to development of the EM2 

advanced reactor, Accident Tolerant Fuel, and novel production of the medical isotope, 

Molybdenum 99. Today, we remain committed to developing and implementing clean and safe 

nuclear energy technologies. 

A healthy nuclear power industry is essential to the long-term energy security of the United 

States and it is indirectly essential to our national defense. Nuclear power has been identified as 

an essential part of our nation's energy mix and it is the largest source of reliable, clean energy 

available to our nation. Unfortunately, the principal technology employed by the industry, light 

water reactors, has remained stagnant since the 1970's with the consequence that it is no longer 

an economically competitive energy source in this century. Our existing nuclear plants have an 

average age of around 50 years. Nearly all will be shutdown by mid-century and many plants 

operating in unregulated markets either have been retired early or risk early retirement due to 

inability to compete with other advanced energy technologies. 

At present, there is no U .S.-owned commercial vendor of nuclear power reactors and the supply 

chain of nuclear-grade materials and components has either gone off-shore or gone out of 

business. This is in contrast to vigorous nuclear industries in China, Russia, and Korea which 

have large internal markets for their products and have ambitious plans for export. Unless the 

U.S. is able to stimulate its ncar-dormant nuclear industry, the U.S. will be one of their 

customers in the future. 

On the bright side, there is a strong, nascent effort by private industry to innovate new nuclear 

plants that can be more cost-effective, safer, use less energy resources and produce less waste. 

But nuclear development is very expensive. No private industry can justify this investment with 

such a long payback. If the U.S. is to proceed with the development of new advanced nuclear 

technologies, it will require the support of our government. 

The country will benefit by increasing, not decreasing, the fraction of nuclear energy in the mix 

of energy sources powering our industries and homes. Nuclear provides emission-free, base load 

electricity. If we could make nuclear energy cost-competitive it would provide thousands of 

years of safe, clean electricity for our country. Moreover, being the technology leader in nuclear 

energy is critically important to minimize foreign dependence and strengthen national security. 
46 


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Today's nuclear reactors that use existing technology are currently too expensive to be 

competitive. The U.S. nuclear industry is in decline. To reverse this trend, we believe our 

country must do what it does best: bring the ingenuity of its people to bear on creating new ways 

to produce nuclear energy safely, cleanly and at much lower cost. 

This legislation is timely, and critically relevant, because there are many advanced reactor 

concepts that need different materials and require different technologies to advance beyond the 

light water reactors of today, all of which will need approval as they are developed. 

As the Vice President of Nuclear Technologies and Materials at General Atomics, !lead a team 

of scientists working to solve the challenges facing the nuclear energy industry. Specifically, this 

work focuses on "advanced reactors" and the advanced materials necessary to make these reactor 

concepts, and the nuclear industry at large, a cost-competitive reality. 

In order to be helpful to the Committee, I would like to define the term "advanced reactors," as it 

has previously been used interchangeably for a number of reactors. Some classify any non-light 

water reactor, such as a gas-cooled, sodium-cooled, or molten salt-cooled reactor as "advanced." 

Others use the term to refer to a new light water reactor, such as a Small Modular Reactor 

(SMR). 

Ultimately, nuclear energy involves splitting an atom and using the heat energy released, to tum 

a generator to produce electricity. What matters most in our discussion of advanced reactors is 

that electricity is a commodity, and most consumers care about one thing above all else: cost. 

The source of the energy, whether it is made from nuclear fuels or from burning coal or gas, or 

from renewables, is of secondary concern. 

To provide that commodity in today's world, an "advanced reactor" must improve over existing 

reactors in the following 4-core objectives. It must: 

- produce significantly cheaper and clean electricity 

be safer 

- produce significantly less waste and 

reduce proliferation risk 

These four objectives are consistent with the definition of the seven improvements identified for 

an advanced reactor in the Nuclear Energy Innovation Modernization Act. Essentially, three of 

the defined improvements: reliability, thermal efficiency and ability to integrate electric and nonelectric applications, are connected with the first objective, cost-competitive electricity. Fuel 

utilization is intertwined with the third objective, less waste. We believe every worthy advanced 

reactor concept must address these 4-core objectives jointly, it is not sufficient to address one at 

the expense of the other three, especially cost. 

General Atomics is developing a reactor concept, called the Energy Multiplier Module or EM2

, 

that uses engineered materials and leapfrog technologies, ensuring that the reactor is safer, less 

waste producing and more proliferation resistant. We kept a laser focus on the commercial 
47 


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application of the reactor and focused on cost-competitiveness, the most challenging of the four 

core objectives. While the other three objectives are of importance, if we cannot create costcompetitive advanced reactors, the reactor will not make it into the market. 

In EM2

, we take advantage of the unprecedented advances in the understanding of materials over 

the past three decades to engineer and manipulate materials tor our nuclear energy application. 

Our long-term vision for what nuclear innovation can achieve is embodied in EM2 and our 

strategy is to approach that end by delivering nearer-term technologies, such as Accident 

Tolerant Fuel to demonstrate new materials, and Molybdenum 99 development to exercise new 

technologies. Modernization of the regulatory process, the intent of this legislation, will clearly 

he needed to realize the benefits of advanced reactors as well as the nearer-term technology 

innovations. 

Now I will go through each of the objectives to illustrate what is possible with new materials and 

technologies. First is cost. The drive to minimize costs led to the design of a much smaller 

reactor that could produce much higher power output per reactor volume than today's reactors. It 

also led to a push to higher efficiency, i.e., 50% more electric power from the same amount of 

heat. We do this by producing the electricity from higher temperature heat. 

Second is safety. For a radical improvement in safety, EM2 uses engineered ceramic materials, 

as in Accident Tolerant Fuel, that arc capable of working in higher radiation and higher 

temperature environments. The fuel is contained in materials that can survive accident 

temperatures over 2 times higher and would not be subject to failure like those in Fukushima. 

While challenges remain, our results have been promising so far. If they hold up, we will 

revolutionize this industry. 

Third is waste. Minimizing waste products is linked to better fuel utilization. For EM2

, this is 

accomplished by the innovation of long-bum core physics and by higher conversion efficiency. 

Consequently, EM2 will use only 20 percent of the fuel and produce only 20 percent of the waste 

of a current reactor for the same amount of power. 

Finally, fourth is non-proliferation. The innovative design ofEM2 keeps the fuel in the reactor 

for 30 years, without the need to refuel or reposition fuel rods. Less handling of the fuel, and 

tight security allowed by offsite core fabrication significantly reduces proliferation concerns and 

lowers operating costs. 

As a guiding principle, we believe that to bring advanced nuclear power into the market, the cost 

of nuclear must be significantly reduced below the existing levels projected for new light water 

reactors. This reactor, if it performs as designed, would produce power at perhaps 40% lower 

cost than today's existing nuclear reactors, and with a capital investment per EM2 unit in the $1.5 

billion range. It would be produced in a factory, reducing proliferation concerns and potentially 

reducing licensing costs, and shipped to the site and installed within 4 years, again keeping costs 

down. 

As for any new reactor design, this one will require extensive interactions with the NRC. In 

particular, this radically new material requires intensive development and testing. We think 
48 


26151.034

involving the NRC early in this work is imperative. Ideally, interactions would occur early 

enough to inform the design from the beginning and produce a safer reactor design. Then, when 

we applied for licensing based on what the market called for, a few years from now, this early 

effort would pay otimany times over. 

Radically new concepts that employ new technology require upfront investments involving some 

risk. Some of these investments may not pay oti, and even those that are successful could require 

at least I 0 years to produce any revenue. While General Atomics has already invested $40 

million in the EM2 concept, these commercial realities make it very difficult to justify early costs 

to engage the NRC. 

If this Committee's objective is to stimulate the development of new advanced reactor concepts, 

we would suggest that it is in this early phase of development that it would be relatively 

inexpensive to involve the NRC for early consultations with potentially very high impact. Every 

advanced reactor concept that involves significant long lead development would benefit 

enormously from being able to work with the NRC at an early stage. 

We suggest the Committee consider authorizing the appropriation of$5 million at first, growing 

to possibly $15 million over 5 years, to provide NRC services to developers of advanced reactor 

concepts. To trigger funding, a relatively low cost share of perhaps 3%, could be required. In 

addition, the NRC could engage outside advice from the DOE, universities, and other experts, to 

ensure the individual reactor concepts were viable. 

While outside of this Committee's jurisdiction, we also believe that a public-private partnership 

is necessary to achieve the goal of advanced reactors. The advantages of this approach are noted 

in the recent Secretary of Energy Advisory Board Task Force Report on the Future ofNuclear 

Power. Although such an effort would require a significant investment on the part of the federal 

government, it would yield benefits including: a new generation of nuclear scientists, 

domestically held intellectual property, and a cost-effective means for producing pollution-free 

baseload power that increases safety, reduces waste, and is proliferation-resistant. 

Thank you for your interest in this subject, and this opportunity for me to appear before you. The 

excitement of discovery in science and the satisfaction of making a safe and more efficient 

reactor keeps me engaged and eager to continue to push the boundaries of science and harness 

the energy in the nucleus. The NRC is an important and necessary agent in ensuring nuclear 

power remains safe. Therefore, it plays a critical role in nuclear power innovation. I would be 

pleased to respond to any questions you may have. 
49 


26151.035

26151.036

• core 

" Silicon carbide composite structures 

• Advanced fuels 

• High temperature systems 

• Asynchronous., high-speed 

compact generators 

26151.037

Below-ground construction 

negates many physical threats 

and improves security 

• 30-year fuel life- high 

burn up 

• Multi-fuel capable 

• Reduced waste strea

• Cost competitive 

• flexible siting, no nee

w.¢er <:C»ofing 

26151.038

• Reduces vulnerability 

some surface-based threats 

• Fuel not accessible 

- Sealed core 

- Core cannot be 

reconfigured 

• highlY self:-.prote.ctirig 
53 


26151.039
54 


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26151.041

Primary and their 

approximate points: 

26151.042

-600 

4-unit EM2 produces 80% le

waste over the same perio
57 


26151.043

Christina A. Back, Ph.D. 

Vice President, 

Nuclear Technologies ami Materials 

General Atomics 

Dr. Christina Back has 28 years of experience 

leading research in private industry and U.S. 

Department of Energy (DOE) laboratories, 

including the DOE weapons complex. She is an 

internationally recognized expert in both tlssion 

and fusion energy research and regularly serves 

on committees fi:lr the National Academy or 

Sciences, National Nuclear Security 

Administration, and the DOE. She has over one 

hundred peer-reviewed publications, is a Fellow 

of the American Physical Society and is 

frequently invited to provide expertise for U.S. Congressional Committees and White House 

Science and Technology initiatives. 

At General Atomics, Dr. Back is responsible lor nuclear fission programs, which draw on a 

diverse portti.1lio of innovative technologies. Current activities locus on the developmem of 

advanced nuclear reactors for electric power. production of isotopes tor medical uses, and 

ll1brication of Accident Tokrant Fuel rods t(x safer nuclear reactors, among other projects. 

Dr. Back earned her B.S. in physics from Yale University, and her Ph.D. in plasma physics !i·01n 

the University otTlorida. She also spent two years as an experimentalist at the Ecole 

Polytechnique in France. Prior to joining General Atomics, Dr. Back spent 13 years performing 

research using high powered lasers at Lawrence Livermore National Laboratory in the Inertial 

Conlinement Fusion and High Energy Density Science programs. She has devoted more than 

two decades to energy research and holds an active DOE-Q and US Department of Defense 

clearance. 

Dr. Back has rccci\·ed numerous awards tor her many noted contributions to the field, including 

the DOE Technical Excellence Award and Defense Nuclear Sciences Award. In 2013, she was 

named Woman of the Year in Business by the San Diego East County Chamber of Commerce. 
58 

Senator BARRASSO. Well, thank you very much, Dr. Back, for 

your thoughtful testimony. We appreciate you being here. 

I would like to next turn to Dr. Edwin Lyman, who is the Senior 

Scientist for the Union of Concerned Scientists Global Security System. 

Dr. Lyman, thank you for joining us today. 

STATEMENT OF DR. EDWIN LYMAN, SENIOR SCIENTIST, UNION 

OF CONCERNED SCIENTISTS GLOBAL SECURITY SYSTEM 

Mr. LYMAN. Thank you. Good morning. On behalf of the Union 

of Concerned Scientists, I would like to thank Chairman Barrasso, 

Ranking Member Carper, and the other distinguished members of 

this panel for the opportunity to testify today on NEIMA and its 

potential impacts on nuclear safety and security in the future. 

UCS puts rigorous, independent science to work to solve our 

planet’s most pressing problems. We are neither pro-nor anti-nuclear. But we do believe that nuclear power must meet high standards of safety and security if it is to be a reliable option in the future. 

This Saturday marks the sixth anniversary of March 11, 2011, 

the day when a massive earthquake and tsunami in Japan triggered the triple core meltdowns at the Fukushima Daiichi nuclear 

plant. We know when the disaster started, but we cannot predict 

when it will end, because its legacy will affect the Japanese people 

for decades to come. 

Today, the direct economic impact is estimated at almost $200 

billion, approximately 80,000 people remain displaced from their 

homes, contaminated water continues to flow from the site into the 

sea every day, and the interiors of the three damaged reactors are 

so intensively radioactive that even the robots sent in to explore 

are quickly disabled by the radiation. 

The accident had a significant impact on Japan’s use of nuclear 

power. It now only has three operating reactors, and it pays handsomely for imported natural gas to meet its electricity demand. A 

similar accident in the U.S. would almost certainly compromise the 

future of nuclear power in this Country. 

Fukushima serves as a graphic reminder of the consequences of 

complacency. The nuclear industry and its regulators seriously underestimated the risk from natural disasters and did not adopt 

safety measures strong enough to mitigate those risks, so the urgent need to ensure such a nuclear disaster does not happen again 

provides the context for my remarks today. 

UCS testified on an earlier version of this bill last year. The current version of the legislation has some changes that we believe 

have improved it, and, as a result of those changes, we do not oppose the bill. But neither do we support it, because we still find its 

basic approach problematic from a safety and security perspective. 

We also question the need for the legislation. We don’t believe it 

is going to be effective in actually facilitating the deployment of advanced reactors. 

One of our main concerns is the promotion of a ‘‘risk-informed’’ 

licensing strategy. We do not believe that risk-informed licensing is 

appropriate for new and novel designs. The computer models used 

to calculate risk need to be thoroughly validated by comparison of 

59 

results with actual plant operating experience before you can rely 

on them to do licensing, and such experience is not available for 

new reactor concepts. 

To focus licensing on new reactor designs is to introduce an unacceptably high degree of uncertainty in the process. So in this light 

we appreciate that the current version of NEIMA requires that 

NRC develop strategies for implementing risk-informed licensing 

only where appropriate. And this phrase effectively provides the 

NRC with full discretion to confine the use of risk-informed licensing to those areas where it determines it is appropriate, and it is 

our expectation that there will be few, if any, aspects of advanced 

reactor licensing where they will make that determination. 

There is also a question about which designs may clearly fall 

under NEIMA’s definition of ‘‘advanced reactor.’’ I agree with Dr. 

Back that advanced reactors should improve upon the current generation in a whole variety of different ways, and that there should 

not be tradeoffs of one improvement for another. 

But, in our assessment, none of the advanced reactor designs 

that are currently under discussion, at least non-light water reactors, actually will achieve that. Liquid metal-cooled fast reactors, 

high-temperature gas-cooled reactors, and molten salt reactors all 

introduce new and novel safety and/or security issues relative to 

light water reactors that may ultimately outweigh any improvements they provide. And this is also true for small modular light 

water reactors like NuScale. 

For example, deployment of any advanced reactor that requires 

reprocessing and separation of plutonium or other weapon-usable 

materials will increase the risks of nuclear terrorism and nuclear 

proliferation, and that includes any reactor that claims they can 

consume spent fuel for electricity. So I would really recommend the 

Committee look deeper into what it means to actually consume 

spent fuel. 

The Transatomic Power reactor is an example. The company promoted the idea that its molten salt reactor could consume spent 

fuel, and actually they had to backtrack recently when it turns out 

their analysis was wrong. 

This isn’t to say that TAP is necessarily a failure, but it illustrates the development of advanced reactors cannot be rushed and 

that early optimism may well be tempered by later results. 

It takes a long time and a lot of money to develop advanced nuclear reactors, and a number of studies have demonstrated that. 

NRC licensing is not the chokepoint or the bottleneck in that process; it is the need to develop the necessary technical basis to convince the regulator that a reactor design is safe. And you can’t 

short-circuit that process, so that is the main reason why we are 

concerned about the emphasis of this bill in trying to accelerate or 

bypass the critical safety functions of the agency? 

I will conclude there, and I appreciate and welcome your questions. I apologize for exceeding my time. Thank you. 

[The prepared statement of Mr. Lyman follows:] 

60 


26151.044

Testimony of Edwin Lyman, PhD 

Senior Scientist, Union of Concerned Scientists 

On 

The Nuclear Energy Innovation and Modernization Act." 

Before the 

Committee on Environment and Public Works 

U.S. Senate 

March 8, 2017 
61 


26151.045

Good morning. My name is Edwin Lyman. On behalf of the Union of Concerned Scientists, I 

would like to thank Chairman Barrasso, Ranking Member Carper, and the other distinguished 

members of the Senate Environment and Public Works Committee for the opportunity to testify 

today on the Nuclear Energy Innovation and Modernization Act (NEil\I!A), and its potential 

impacts on nuclear safety and security in the future. 

The Union of Concerned Scientists (UCS) puts rigorous, independent science to work 

to solve our planet's most pressing problems. UCS is neither a pro- nor an anti-nuclear 

organization. However, we believe that nuclear power must meet high standards of safety and 

security if it is to be a reliable option in the future. 

This Saturday marks the sixth anniversary of March 11,2011, the day when a massive 

earthquake and tsunami in Japan triggered the triple core meltdowns at the Fukushima Dai-ichi 

nuclear plant. We know exactly when the disaster started but we cannot predict when it will end: 

Its legacy will affect the Japanese people for decades to come. Today, the Japanese government's 

estimate of the direct economic impact of the accident is approaching $200 billion, 

approximately 80,000 people remain displaced from their homes, contaminated water continues 

to flow from the site into the sea every day, and the interiors of the three damaged reactors 

themselves are so intensely radioactive that even robots sent in to explore are quickly disabled. 

The accident had a significant impact on Japan's use of nuclear power-it now has only three 

operating reactors out of a fleet of more than fifty. It pays handsomely for imported natural gas 
62 


26151.046

to help meet its electricity demand. A similar accident in the United States would almost 

certainly compromise the future of nuclear power in this country. 

Fukushima serves as a graphic reminder of the consequences of complacency on the part of the 

nuclear industry and its regulators, who seriously underestimated the risk to nuclear plants from 

natural disasters and consequently did not adopt safety measures strong enough to mitigate those 

risks. The urgent need to ensure that such a nuclear disaster does not happen again provides the 

context for my remarks today. 

UCS first had the opportunity to testify on an earlier version of this bill before the EPW Clean 

Air and Nuclear Safety Subcommittee in April2016. At that time, we expressed several concerns 

with the legislation. I would refer the Committee to our prior testimony for additional details. 

The current version of the legislation includes a few changes that have by and large improved it. 

As a result of these changes, we do not oppose the bill. Neither, however, do we support it, as we 

still find its basic approach problematic from a safety and security perspective. We also question 

the need for the legislation and are skeptical that it will be effective in facilitating the deployment 

of advanced reactors. 

One of our main concerns with the bill is its promotion of a "risk-informed, performance-based" 

licensing strategy for advanced nuclear reactors. As discussed in our previous testimony, we do 

not believe that so-called risk-informed licensing is appropriate for new and novel reactor 

designs, because the quantitative determination of nuclear plant risk is highly complex and has 

large uncertainties. The computer models used to calculate risk need to be thoroughly validated 
63 


26151.047

by comparison of results with actual plant operating experience before their accuracy can be 

confirmed. Such experience is not available for new reactor concepts that have not made it 

beyond the design stage. 

Assessing risk accurately is difficult even for the current generation of nuclear plants, as 

demonstrated by the Fukushima disaster. State-of-the-art methods are still unable to reliably 

quantify critical sources of risk, such as fires, the failure of digital instrumentation and control 

systems, or the massive flooding that was ultimately responsible for the Fukushima accident. 

And one of the most serious dangers-the risk of terrorist sabotage-cannot be qnantified at all. 

To focus the licensing of new reactor designs too strongly on these risk analyses is to introduce 

an unacceptably high degree of uncertainty into the process, which could degrade safety and 

security by requiring regulators to accept the results of paper studies on faith. For new reactor 

designs, the licensing process must remain systematic and thorough. Regulatory decisions should 

be based on high-quality experimental data and conservative assumptions-not on educated 

guesses or preconceived notions about the performance of reactors that have not been 

demonstrated at commercial scale. 

In that light, we appreciate that the current version ofNEIMA requires that the NRC "develop 

and implement ... strategies for the increased use of risk-informed, performance-based licensing 

evaluation techniques and guidance for commercial advanced nuclear reactors within existing 

regulatory frameworks ... " only where appropriate. This phrase effectively provides the NRC 

with full discretion to confine the use of risk-informed licensing to those areas where it 
64 


26151.048

determines it is appropriate, and per NRC procedures should also allow significant public input 

into those decisions. It is our expectation that NRC's technical analyses will reveal that there will 

be few, if any, aspects of advanced reactor licensing where risk-informed approaches will be 

appropriate. 

Our other concern is about "performance-based" licensing. W c do not believe that such a 

concept would be beneficial for new reactor applicants. "Performance-based" regulation requires 

the use of performance tests to demonstrate compliance. For a new reactor licensee, it will not be 

possible to carry out many of those tests until a first-of-a-kind unit is operating. If the new 

reactor fails a performance test, then costly retrofits may be required. In contrast, it would likely 

be more straightforward and predictable for the applicant to meet prescriptive licensing 

requirements (for example, the presence of a leak-tight containment). 

There is also a question about which designs, if any, may clearly fall under NEIMA's definition 

of "advanced reactor:" that is, "a nuclear fission or fusion reactor ... with significant 

improvements compared to commercial nuclear reactors under construction as of the date of 

enactment of this Act." 

In order to determine whether a particular reactor design represents a significant improvement 

over the commercial fleet, it may be necessary for the design to go through the licensing process 

first. Thus the number of candidate technologies that clearly demonstrate significant 

improvements a priori and therefore are covered by the advanced reactor provisions in NEIMA 

may be smaller than the bill's authors had anticipated. 
65 


26151.049

for example, it is not clear that any of the non-light-water reactor "Generation IV" concepts that 

are currently under development offers unequivocal advantages over the operating reactor f1eet 

or the APlOOO light-water reactors currently under construction. Liquid metal-cooled fast 

reactors, high-temperature gas-cooled reactors, and molten salt reactors all introduce new safety 

and or/security issues relative to light-water reactors that may ultimately outweigh any 

improvements they may provide for uranium utilization or waste management. This is also true 

for small modular light-water reactors such as NuScale. For example, deployment of any 

advanced reactor that requires reprocessing and separation of plutonium or other nuclear 

weapon-usable materials as part of its fuel cycle will increase the risks of nuclear terrorism and 

nuclear proliferation. 

There is also a concern that even if a design is clearly safer, if the NRC ultimately allows 

regulatory rollbacks in the name of "risk-informed" licensing such as a smaller emergency 

planning zone or a diminished security force, the end result may be a licensed reactor that is less 

safe than the current f1eet. 

Some may be surprised to hear this conclusion. But the old adage "if it sounds too good to be 

true, it probably is" applies here. A case in point is the molten salt reactor being developed by the 

company Trans atomic Power (TAP). For most of the time since it was founded in 2011, the 

company heavily promoted the idea that its reactor could generate electricity by consuming spent 

nuclear fuel discharged from operating reactors. TAP even used this aspect as a selling point in 

radio advertisements. However, recently all references to nuclear waste as a fuel source for the 
66 


26151.050

TAP reactor were scrubbed from the company's website. As it turns out, the TAP reactor can't 

consume spent fuel after all. According to a February 2017 article in the MIT Technology 

Review, as far back as late 2015, TAP had become aware that the analysis demonstrating the 

feasibility of using spent fuel as feed for the TAP reactor was incorrect. TAP now makes far 

more modest claims about the capabilities of its reactor design. One observer attributed the error 

to "a lack of experience and perhaps an overconfidence in their [TAP's] own ability." 

This is not to say that the TAP project itself is necessarily a failure. But the story illustrates that 

the development of advanced reactors is a painstaking process that cannot be rushed, and that 

early optimism based on preliminary assessments may well be tempered by later results. 

The implication of finding (9) in Section 2 of NEIMA that "the high costs and long durations 

associated with applying the existing nuclear regulatory framework to advanced nuclear 

reactors" are impediments to their commercialization is not supported by existing analysis. A 

September 2016 report by the Secretary of Energy Advisory Board (SEAB) task force estimated 

it would take 25 years and $11.5 billion, on average, to take an advanced reactor concept from 

design to operation of a first-of-a-kind commercial-scale unit. 

The task force did not identify the NRC licensing process as a major contributor to the 

substantial time and resources needed to deploy an advanced reactor. Instead, its estimate was 

largely determined by the time required to carry out the necessary stages of reactor development, 

from detailed design work to construction. The SEAB task force also stated the licensing cost 

could "approach $1 billion," which although not insignificant is still only a fraction of the overall 
67 


26151.051

project cost. The task force also concluded that it "does not believe that significant reductions in 

either time or cost [of licensing] are likely." 

The task force also argued that the NRC's current regulatory framework was flexible enough to 

accommodate many of the modifications needed to facilitate advanced reactor licensing through 

the development of new guidance, and that changes to the regulatory framework should only be 

employed if experience demonstrated that such changes were needed. 

In this light, UCS believes that it is premature for Congress to require that the NRC complete a 

rulemaking by the end of 2024 to establish an optional "technology-inclusive" regulatory 

framework, per Section 103 (a)(4) of NEIMA. Given Presidential Executive Order 13771 and its 

mandate to offset each new regulation by discarding two existing ones, which the NRC may 

follow, Congress should be very cautious in requiring new regulations at this time that do not 

have an important safety or security purpose. 

Rather than point fingers at the NRC licensing process, the Committee should seek to uncover 

the real reasons for the massive delays and cost overruns being experienced at the new nuclear 

construction projects in the Southeast: the four Westinghouse AP!OOO reactors in South Carolina 

and Georgia and the Mixed-Oxide Fuel Fabrication Facility (MFFF) at the Savannah River Site. 

In both of these cases, one of the root causes was the initiation of construction before plant 

designs were finalized: the kind of problem that could be exacerbated if the staged licensing 

approach that NEIMA encourages is improperly applied. In none of these cases were onerous 

regulations and overzealous reviews to blame. 
68 


26151.052

In fact, one could argue that more intensive NRC scrutiny of these projects might have 

uncovered problems sooner so that they could have been corrected at an earlier stage of the 

construction process, when they would have been cheaper to fix. For example, a scathing internal 

DOE review of the MFFF contractor's performance concludes that "the contractor's overall cost, 

schedule and technical performance was unsatisfactory" and that "the contractor lacked the 

fiduciary will to plan and execute work to fully benefit the project and taxpayer ... "

1 The NRC 

authorized construction of this project to proceed in 2005, after four years of review, and 

construction began in 2007. This deterioration in contractor performance did not occur overnight. 

However, the NRC apparently failed to observe and require correction of the contractor's 

management problems, which have a material impact on safety. 

We raise the issue of the impending failure of the MFFF project for another reason: to point ont 

that commercialization of advanced reactors will also require development, licensing and 

deployment of commercial-scale fuel fabrication and, in some cases, reprocessing facilities to 

support the fuel cycles of these reactors. These efforts will be non-trivial, entail additional costs, 

and introduce the potential for significant delays and cost increases. While NEIMA makes 

reference to qualification of advanced reactor fuels, it appears not to address the need for 

facilities that actually make the fuel. In particular, Section 103 only refers to licensing of 

"advanced nuclear reactors" and not associated advanced fuel cycle facilities. This may be a 

major oversight. 

1 Department of Energy, National Nuclear Security Administration, MOX Project Management Office. FY2016 

Award Fee Determination. Available at htW:IIw\\}'i...Sri'''iHflLQll!.iJ.!W!iHls/_2/7/51X/275X4045/foia J 7-00045-

lD_~1.~JJ~1H~Liil!_ill_r_G.0.r!2~~.Ull:'S_ ;l\VilfS:L(~_fub 1Lfi?Jilru-lf. This document was released under the Freedom of 

Information Act to the independent group SRS Watch. 
69 


26151.053

Another aspect of the bill that we find problematic is its continued exemption of advanced 

reactor licensing activities from NRC user fee recovery. In our previous testimony, UCS 

proposed that the exemption be dropped, given that the bill also authorizes the Energy 

Department to provide grants to prospective advanced reactor applicants to support licensing 

activities. Providing funding through DOE would be a better means to ensure that such grants 

would not be issued on a first-come, first-served basis but would be subject to rigorous peer 

review and awarded on the basis of merit. However, the user fee recovery exemption was 

retained in the current version of the bill. This preserves two routes through which taxpayers may 

provide subsidies to private enterprises. We continue to believe that the DOE program alone is 

sufficient. 

I would like to mention two other additional points. First, UCS strongly supports the additional 

provisions included in the bill that would address nuclear safety more generally, Sections 105 

and 106. In particular, Section 106 requires the NRC to submit to Congress a comprehensive 

report on evacuation planning. The Fukushima accident demonstrated that emergency 

evacuations following a large radiation release might be necessary as far as 25 miles from the 

release site, and Japan has increased its nuclear emergency evacuation zones to 18 miles (30 

kilometers). Recent studies from Princeton University indicate that a fire at a spent fuel pool 

could necessitate the long-term relocation of the public hundreds of miles downwind. Yet even 

after Fukushima, the NRC has refused to consider the potential need for evacuation planning and 

potassium iodide distribution beyond 10 miles from nuclear plant sites. Such short-sightedness 
70 


26151.054

puts Americans at undue risk. If the NRC wants to ground its emergency planning rules in sound 

science, both for operating reactors and for advanced reactors, it needs to address this issue. 

Finally, UCS has a concern with regard to the additional provisions in Section 203 that impose 

annual limits on the amount of uranium that the Energy Department may release from its excess 

stockpile. To support nuclear nonproliferation and arms control, UCS encourages both the 

United States and Russia to declare additional quantities of highly enriched uranium (HEU) from 

their defense stockpiles as excess and to down-blend that material to low-enriched uranium 

(LEU) as rapidly as practicable. While we understand that the limits specified in NEIMA arc 

consistent with the Energy Department's current schedule for HEU down-blending, we are 

concerned that these constraints could potentially inhibit an expansion of the down-blending 

program in the future. This issue also could have an impact on advanced reactor development by 

the private sector. Many of the advanced reactor concepts currently under consideration would 

require LEU fuel with enrichments between 10 and just below 20%. The only domestic source of 

such material currently available in the US is down-blended HEU. It would be prudent for the 

Committee to consider whether these limits could affect the availability in the near-term of an 

adequate supply of LEU within this enrichment range for commercial test and demonstration 

reactors. 

This concludes my testimony. Again, I greatly appreciate the opportunity to appear here today 

and would be happy to answer any questions you have. 
71 

Senator BARRASSO. Well, thank you very much for being with us, 

Dr. Lyman. Thank you for your testimony. 

I would like to next turn to Allison Bawden, who is the Acting 

Director for Natural Resources and Environment with the Government Accountability Office. Thank you very much for joining us. 

STATEMENT OF ALLISON BAWDEN, ACTING DIRECTOR FOR 

NATURAL RESOURCES AND ENVIRONMENT, GOVERNMENT 

ACCOUNTABILITY OFFICE 

Ms. BAWDEN. Chairman Barrasso, Ranking Member Carper, and 

members of the Committee, thank you for inviting me to discuss 

GAO’s work on the Department of Energy’s management of excess 

uranium. 

The Department of Energy regularly undertakes sales and transfers of uranium from its excess inventory. This inventory largely 

resulted from years of Government enrichment activities prior to 

1992 and is considered a national asset. 

DOE has a responsibility to effectively manage the excess uranium inventory on behalf of the American people, who paid for it 

in the first place. 

When DOE conducts transactions in uranium, it is legally obligated to ensure these transactions will not result in adverse material impacts to uranium markets and that it receives reasonable 

compensation for its uranium. 

A portion of DOE’s excess uranium inventory is in the form of 

depleted uranium tails, which historically have been considered 

waste. However, under certain market conditions, tails may have 

value. For example, tails can be profitably re-enriched when the 

price of natural uranium is high, because the re-enrichment bypasses the early stages of the nuclear fuel cycle, including mining 

of uranium ore. 

Today I will discuss findings from GAO’s prior work on three aspects of DOE’s management of its excess uranium inventory. I will 

also comment on how provisions of the Nuclear Energy Innovation 

and Modernization Act address legal concerns we have raised. 

First, DOE has contracted with a private firm for market impact 

studies to help it determine whether planned uranium transactions 

will result in adverse material impacts to uranium markets. The 

Secretary of Energy is legally required to make these determinations. 

In 2014, we found the DOE could not be assured of the quality 

and reliability of two market impact studies because, despite requirements to do so, DOE did not take steps to address their technical quality and the studies did not include sufficient methodological information to assess the reasonableness of their conclusions. Both studies, however, concluded that DOE’s transactions 

would not have an adverse material impact on domestic uranium 

markets. 

We recommended that DOE take steps to ensure the quality, 

credibility, and transparency of any future uranium market impact 

studies, but DOE neither agreed nor disagreed with this recommendation. 

Second, even though DOE is legally required to receive reasonable compensation for its material, in May 2014, we found that 

72 

DOE did not have guidance for valuing tails. We also found that 

DOE has inconsistently valued tails when it has sold or transferred 

them. For example, in 2005, DOE charged a price for tails. But in 

2010 DOE transferred tails to a company without charge, despite 

an estimated value for the transferred material of up to $300 million. 

In May 2014, we recommended that DOE develop consistent and 

transparent valuation methods that maximize the value the Government derives and provides predictability for uranium markets. 

DOE disagreed with this recommendation. 

There continues to be commercial interest in purchasing DOE’s tails, which we last valued in June 2014 at about $1 billion. 

Third, since 2006, we have concluded that DOE’s uranium transactions have, in some cases, violated Federal law. Our legal opinion 

is that DOE likely does not have authority to sell or transfer tails 

because of specific prohibitions imposed by amendments to the 

Atomic Energy Act. 

We have suggested that Congress consider clarifying DOE’s legal 

authority to sell or transfer tails. Also, in reporting on certain 

transactions where DOE has paid for services with uranium, we 

concluded that DOE’s legal authority to conduct barters is unclear 

and that DOE violated the miscellaneous receipts statute. This 

statute requires an official or agent of the Government receiving 

money from any source on the Government’s behalf to deposit the 

money into the Treasury. 

We suggested that Congress consider clarifying DOE’s authority 

to conduct barters and to retain the proceeds from such barters. 

Provisions included in the Nuclear Energy Innovation Modernization Act would address the legal concerns GAO has raised. 

The bill clarifies DOE’s authority to transact in depleted uranium 

tails and provides DOE with authority to barter. The bill does not 

authorize DOE to retain the proceeds from barters. 

The bill also addresses concerns we raised about assuring quality 

for market impact studies by requiring them to undergo peer review. 

This concludes my statement, and I look forward to your questions. 

[The prepared statement of Ms. Bawden follows:] 

73 


26151.055

For Release on Delivery 

Expected at 10 a.m. ET 

Wednesday, March 8, 2017 

GA0-17-472T 

United States Government Accountability Office 

Testimony 

Before the Committee on Environment 

and Public Works, U.S. Senate 

DEPARTMENT OF 

ENERGY 

Excess Uranium Transfers 

Statement of Allison Bawden, Acting Director, 

Natural Resources and Environment 
74 


26151.056

GAO 

Highlights 

HighlightS ofGA0~17-472T, a testimony 

before the Committee on Environment and 

Public Works, U.S. Sehate 

Why GAO Did This Study 

DOE ma[nt~ins an Jnvent~ry of 

urani~m,· ind':J~lng·d~pleted uranium 

(<tails~ resultingfrom the uranium 

enricJ:l~e~t Prq<?ess. and perio.dtcally 

s~l!s. ?r .tran.s:fers· exces~r ~ranium from 

its iflv~n~oiy. Uncte'r the Ato.mic Energy 

Act of 1l)54, as amended by the USEC 

PrivatizatiortAct,pOE'~ sales and 

transf~rs of uranium ~re subject to 

c9rtain conditio.ns. For example, DOE 

must determine that sales or'transfers ?f Ura~iUrp will not have ari adverse 

materlallmpact on the domestic 

uranium market, among .other things. 

This testimcmy liighlighls issues (ound 

in nine. GAQ productstrom July 2006 

through September 2015 related to 

oo~·~~transf~~ ~f ext?ess uranium. n focuses on ( 1) steRs DOE has taken to 

assess the technical ~uality of 

contracted market impact s!ydies, (2) 

whether [)OE has developed guidance 

forNaluing its uranium resources, and 

(3) ~ether DOE'~ uraniUm transfers 

have'vi6fated tederallaw. GAO 

re'.(iew~d re~evarit laWs; dp~uments, 

including, trl:!t1S?tction documents and 

contracts;' and interviewed DOE, 

contr~ctot,'Uranluri1 industry 

representatives, and uranium market 

analysts. 

Over nearly a decade, GAO has made 

numerous recommendations to 

imprOve, DOE's transfers of excess 

ui'a~ium,., f?OE hat? neit~er agreed nor 

d~sag~ee~ on som~ recomm~ndations 

and h?s, 'disagreed with others. GAO 

will cooiinue to monitor DOE's 

imPiementatk:m qf these 

recOmm~ndatJOns. 

View GA0-17-472T,' Fonnore infofmatloh, 

contact Allison Bawden at (202) 512-3841 or 

bawdena@gao.gbv. 

DEPARTMENT OF ENERGY 

Excess Uranium Transfers 

What GAO Found 

GAO has raised several issues related to the Department of Energy's (DOE) 

excess uranium transfers in five reports, three testimonies, and a legal opinion 

issued from 2006 to 2015 as follows: 

DOE did not take steps to assess the technical quality of market impact 

studies conducted in Apri12012 and January 2013. In part to ensure that its 

uranium transfers would not have an adverse material impact on the 

domestic uranium industry, DOE contracted for studies on the potential 

market impact of most of its planned uranium transfers. These studies 

concluded that these transfers would not result in adverse market impacts. In 

its May 2014 report, GAO reviewed these studies and found issues with their 

analyses. For example, GAO found that DOE did not take steps outlined in 

its contracts or in departmental quality assurance guidance to assess the 

technical quality of these studies. GAO also found that the studies provided 

only limited detail about their methodology, data sources, and assumptions, 

although DOE's quality assurance guidance states that DOE information 

disseminated to the public should contain such information. DOE officials 

stated that they did not examine the studies' methodology or assess the 

studies' technical quality because they wanted the studies to be independent, 

and they trusted the contractor to provide subject matter expertise that did 

not exist within DOE. GAO recommended that DOE take steps to evaluate 

the technical quality of the market studies for which it contracts. DOE neither 

agreed nor disagreed with this recommendation. 

DOE has not developed guidance for valuing its depleted uranium tailswhich historically have been considered waste and treated as an 

environmental liability; however, under certain conditions, some tails may 

have economic value and therefore be considered an asset In May 2014, 

GAO recommended that DOE develop guidance for consistently determining 

the value of depleted uranium tails when transferring them as an asset DOE 

disagreed with this recommendation and stated that it is not required to 

establish guidance for depleted uranium, and reiterated this position in 

August 2016. However, since that time, DOE has continued to receive 

commercial interest in its tails, underscoring that taJ!s can be viewed as an 

asset. GAO continues to believe that having guidance that provides a 

consistent and transparent method for determining the value of tails is 

necessary to ensure that DOE is reasonably compensated for its materiaL 

• DOE's uranium transfers have, in some cases, violated federal law. In May 

2014, GAO concluded that DOE likely did not have authority to transfer tails 

because of prohibitions imposed by the USEC Privatization Act. That law 

prohibits DOE from selling or transferring "any uranium" to "any person" 

except in a manner consistent with the act DOE disagreed with this 

conclusion, citing its general authority under the Atomic Energy Act to 

distribute source material. GAO suggested that Congress consider clarifying 

DOE's authority to manage depleted uranium and provide explicit direction 

about whether and how DOE may sell or transfer it. Legislation introduced in 

the 114th Congress would have authorized DOE to transfer tails but it was 

not passed. 

-------------United States Government Accountability Office 
75 


26151.057

Chairman Barrasso, Ranking Member Carper, and Members of the 

Committee: 

Thank you for the opportunity to discuss our work on the Department of 

Energy's (DOE) transfers of excess uranium. 1 For more than 50 years, 

the federal government enriched uranium. 2 These decades of federal 

uranium enrichment activities, and other sources, generated an extensive 

uranium inventory that DOE maintains.3 DOE periodically sells or 

transfers excess uranium from its inventory-material that has been 

deemed excess to national security missions-to achieve other DOE 

missions. For example, DOE sells or transfers its excess uranium to fund 

environmental cleanup of a shuttered uranium enrichment plant in 

Portsmouth, Ohio4 This activity is also supported using annual 

appropriations. 

Sales or transfers of uranium by DOE have the potential to adversely 

impact the domestic uranium industry. DOE's sales and transfers of 

uranium are subject to certain conditions under the Atomic Energy Act of 

1954, as amended by the USEC Privatization Act, including a required 

determination by the Secretary of Energy that the transfer will not have an 

adverse material impact on the domestic uranium market. 5 To help inform 

1

We define uranium transfers as the exchange of natural, enriched, or depleted uranium 

"tails," or uranium enrichment services between DOE and another party. 

2Uranium enrichment involves separating uranium-235--the form, or isotope, that 

undergoes fission to release enormous amounts of energy in nuclear reactors and 

weapons-from uranium~238 to increase the concentration of uranium-235. The 

enrichment process results in two principal products: (1} enriched uranium hexafluoride, 

which can be further processed for specific uses, such as nuclear weapons or fuel for 

power plants, and (2) leftover "tails" of uranium hexafluoride, which also are called 

depleted uranium because the material is depleted in uranium~235 compared with natural 

uranium_ 

3DOE's inventory of uranium comes from a variety of sources, including the dismantling of 

some of the nation's nuclear weapons, as wen as material remaining from U.S. 

government enrichment activities before 1993. In 1992, the U.S. government established 

the United States Enrichment Corporation (USEC} as a government corporation to take 

over operations of DOE's enrichment facilities and to provide commercial uranium 

enrichment services for the U.S. government and utilities that operate nuclear power 

plants. In 1998, USEC was privatized under the USEC Privatization Act. Pub. L. No. 104~ 

134, 110 Stat. 1321, 1321-335 (1996) (codified as amended at 42 U.S.C. §§ 2297h2297h-13 (2017)). 

4For this activity, DOE transfers uranium from its inventory as payment for cleanup 

services provided by a contractor at Portsmouth. 

5

See 42 U.S.C. §§ 2073, 2093, § 2297h-10 (2017). 

GA0·17-472T 
76 


26151.058

this determination, DOE has contracted with an external consulting firm to 

assess the market impact of planned uranium transfers. 

A portion of DOE's uranium inventory consists of depleted uranium "tails," 

which have historically been considered waste and treated as an 

environmental liability; however, under certain economic conditions, some 

tails may have economic value and therefore be considered an asset For 

example, tails can be profitably re-enriched and used in lieu of natural 

uranium when the price of natural uranium is high or when the cost of 

enrichment services is low (see fig. 1 for an illustration of the nuclear fuel 

cycle). When DOE transfers tails for re-enrichment, the mining, milling, 

and conversion stages of the nuclear fuel cycle are bypassed. 

GA0-17-472T 
77 


26151.059

Figure 1: Nuclear Fuel Cycle 

Mining Milling _.s_. Uranium ore 

Uranium oxide 

(yellowcake or UJOa) Storage 

Spent fuel 

t Reactors 

Sowces GAO analysts of lnlerna\,O'MIAtomJr. En<'rgy Afiem;y 

GA0·17·472r 

J Enrichment 

In this context, my testimony today highlights our findings from prior work 

on DOE's management of excess uranium. Specifically, I will address 

three aspects of DOE's management of uranium about which we have 

raised issues for nearly a decade: ( 1) DOE did not take steps to assess 

the technical quality of contracted market impact studies; (2) DOE has not 

developed guidance for valuing its uranium resources, particularly tails; 

and (3) DOE's uranium transfers have in some cases violated federal law. 

GA0-17-472T 
78 


26151.060

Background 

My testimony is based on our five reports, three testimonies, and a legal 

opinion issued from July 2006 through September 2015. 6 To conduct our 

prior work, we reviewed relevant laws; documents, including transaction 

documents and contracts; and interviewed DOE, contractor, uranium 

industry representatives, and uranium market analysts. Detailed 

information about the scope and methodology used to conduct this work 

can be found in each of our issued products. We conducted the work on 

which this statement is based in accordance with generally accepted 

government auditing standards. Those standards require that we plan 

and perform the audit to obtain sufficient, appropriate evidence to provide 

a reasonable basis for our findings and conclusions based on our audit 

objectives. We believe that the evidence obtained provides a reasonable 

basis for our findings and conclusions based on our audit objectives. 

The Atomic Energy Act of 1954, as amended, gives DOE general 

authority to transfer uranium related to its nuclear energy functions; to 

distribute natural uranium under certain conditions to qualified entities; 

and to sell, lease, grant, distribute, or otherwise make available enriched 

uranium under certain conditions. In 1996, Congress enacted the USEC 

Privatization Act to amend the Atomic Energy Act. The USEC 

Privatization Act restricted DOE's authority to conduct certain transfers of 

uraniuml In particular, Section 3112 prohibits DOE from transferring or 

selling uranium except as consistent with the act's terms and conditions. 

For example, DOE is authorized to sell natural uranium and low-enriched 

6GAO, Department of Energy: Transactions Involving USEC Inc. Since 1998, GA0-15-730 

(Washington, D.C.: Sept. 10, 2015); GAO, Department of Energy: Management of Excess 

Uranium, GA0-15-475T (Washington, D.C.: Apr. 22, 2015); GAO, Department of Energy: 

Enhanced Transparency Could Clarify Costs, Market Impact, Risk, and Legal Authonty to 

Conduct Future Uranium Transactions, GA0-14-291 {Washington, D.C.: May 9, 2014); 

GAO, 2012 Annual Report: Opportunities to Reduce Duplication, Overlap and 

Fragmentation, Achieve Savings, and Enhance Revenue, GAO~ 12-342SP (Washington, 

D.C.: Feb. 28, 2012); GAO, Excess Uranium Inventories: Clarifying DOE's Disposition 

Options Could Help Avoid Further Legal Violations, GA0-11-846 (Washington, D.C.: Sept. 

26, 2011 ); GAO, Nuclear Material: DOE's Depleted Uranium Tails Could Be a Source of 

Revenue for the Government, GA0-11-752T (Washington, D.C.: June 13, 2011); GAO, 

Nuclear Material: Several Potential Options for Dealing with DOE's Depleted Uranium 

Tails Could Benefit the Government, GA0-08-613T (Washington, D.C.: Apr. 3, 2008); 

GAO, Nuclear Material.' DOE Has Several Potential Options for Dealing with Depleted 

Uranium Tails, Each of Which Could Benefit the Government, GA0-08-606R 

(Washington, D.C.: Mar. 31, 2008); and GAO, Department of Energy: December 2004 

Agreement with the United States Enrichment Corporation, 8-307137 (Washington, D.C .. 

July 12, 2006). 

'See 42 u.s"c. § 2297h-10 (2017). 

GA0-17472T 
79 


26151.061

uranium from its stockpile if (1) the President determines the material is 

not necessary for national security needs; (2) the Secretary of Energy 

determines the sale will not have an adverse material impact on the 

domestic uranium mining, conversion, or enrichment industries; and (3) 

the price paid will not be less than the fair market value of the material. 

DOE has satisfied the second requirement for a secretarial determination 

with individual determinations of market impact signed by the Secretary of 

Energy for each transaction or group of transactions. DOE has issued 

several secretarial determinations over the past few years pertaining to its 

uranium sales and transfers and the impact on the domestic uranium 

mining, conversion, and enrichment industries. 8 For example, DOE 

issued a secretarial determination on May 1, 2015, which covers 

continued transfers of uranium for, among other activities, cleanup 

services at the Portsmouth plant at rates of up to the equivalent of 2,500 

metric tons of natural uranium per year in 2015 and up to the equivalent 

of 2,100 metric tons of uranium (MTU) in each year thereafter• 

To help inform the Secretary's determinations, DOE has contracted with 

Energy Resources International, Inc. (ERI), a nuclear fuel consulting firm, 

to develop studies analyzing the potential impact of planned uranium 

transfers on the market and has previously made these studies available 

on its public website. With respect to the third requirement pertaining to 

fair market value, DOE previously maintained a pricing policy for uranium 

that at various times specified standard prices or a market value standard 

for depleted uranium. 10 Such a pricing policy generally informed DOE 

determinations as to the value of tails until the early 1990s, but DOE has 

not relied on this policy since the mid-1990s. 

e-rhe duration of the secretarial determinations is limited to no more than two calendar 

years subsequent to the determination. Consolidated and Further Continuing 

Appropriations Act, 2015, Pub. L No. 113~235, div. D, tit. Ill,§ 306{a), 128 Stat 2130, 

2324 (2014). 

9Excess Uranium Management: Secretarial Determination of No Adverse Impact on the 

Domestic Uranium Mining, Conversion, and Enrichment Industries, 80 Fed. Reg. 26,366, 

26.366 (May 7. 2015). 

10See for example, DOE Pricing Policy Change for Sale of Uranium Depleted in Isotope U~ 

235, 47 Fed. Reg. 17,110 (Apr. 21, 1982). See also notices from DOE's predecessors in 

operating the enrichment facilities, Atomic Energy Commission, Uranium Hexaflouride: 

Base Charges, Use Charges, Special Charges, Table of Enriching Services; 

Specifications and Packaging, 32 Fed. Reg. 16,289 (Nov. 29, 1967}; Energy Research 

and Development Administration, Uranium Heraflouride (sic): Base Charges, Use 

Charges, Special Charges, Table of Enriching Services; Specifications, and Packaging: 

Revisions, 42 Fed. Reg. 51,635 (Sept. 29. 1977). 
80 


26151.062

GAO's Prior Work 

Has Found Issues 

Related to DOE's 

Uranium Transfers 

In addition, DOE has previously attempted to manage the market impact 

of its uranium tails transfers by adopting guidance to limit the amount of 

transfers. For instance, in 2008, DOE adopted a guideline to generally 

restrict sales and transfers of uranium to no more than 10 percent of the 

annual U.S. requirements for nuclear fuel, which according to DOE at the 

time, generally would ensure that such transfers would not have an 

adverse material impact on the domestic uranium industry. In 2013, DOE 

announced its decision to discontinue using its 10 percent guideline for 

limiting uranium sales and transfers and stated that it could meet its 

statutory and policy objectives without one. In May 2014, we found that 

DOE officials did not consult with industry representatives before deciding 

to discontinue using its 10 percent sales and transfer guideline. 

The global uranium market entered an extended recession following the 

Fukushima Daiichi nuclear reactor accident. On March 11, 2011, a 

magnitude 9.0 earthquake and subsequent tsunami devastated 

northeastern Japan and severely damaged the Fukushima Daiichi nuclear 

power plant. The accident led to a review of civilian nuclear power 

programs worldwide. For example, following the accident, the Japanese 

government directed that all but 2 of Japan's 50 civilian nuclear power 

reactors be shut down pending a complete safety review. 11 In addition, 

Germany accelerated the shutdown of its nuclear power reactors. 

Specifically, on June 30, 2011, after the Fukushima Daiichi accident, the 

German parliament voted to permanently shut down its nuclear power 

plants by the end of 2022. This vote followed the suspension of 

operations of 8 of Germany's 17 nuclear power plants. The shutdown of 

nuclear power reactors has reduced the demand for uranium conversion 

and enrichment services resulting in an oversupply of enriched uranium 

and a lower market price. 

In nine products we issued from 2006 to 2015, we have raised several 

issues related to DOE's excess uranium transfers, including that: (1) DOE 

did not take steps to assess the technical quality of contracted market 

impact studies; (2) DOE has not developed guidance for valuing its 

uranium resources; and (3) DOE's uranium transfers have in some cases 

violated federal law. 

11 GAO, Nuclear Safety: Countries' Regulatory Bodies Have Made Changes in Response 

to the Fukushima Daiichi Accident, GA0-14-109 (Washington, D.C .. Mar. 6, 2014). 

GA0-17 -472T 
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26151.063

DOE Did Not Take Steps 

to Assess the Technical 

Quality of Market Impact 

Studies for Which It 

Contracted 

In May 2014, we found that DOE did not take steps to assess the 

technical quality of two market impact studies ERI conducted for DOE in 

2012 and 2013. 12 These studies concluded that DOE's planned uranium 

transfers would not result in adverse market impacts. DOE used these 

market impact studies, in part, to inform the Secretary's statutorily 

required determinations about whether DOE sales or transfers of uranium 

would have an adverse material impact on the domestic uranium mining, 

conversion, or enrichment industries. However, we found that DOE did 

not take steps outlined in its contracts or in departmental quality 

assurance guidance to assess the technical quality of these studies. For 

example, we found that DOE's contract with ERI included a statement of 

work providing that, at regular intervals, DOE would formally evaluate the 

contractor's performance, and that the evaluation could include the 

technical quality of the contractor's deliverables, among other things. In 

addition, DOE's Information Quality Guidelines set forth quality assurance 

steps and procedures to ensure the technical quality of information that 

DOE makes publicly available. 13 The ERI studies were published on 

DOE's website, but DOE officials told us that they neither conducted an 

assessment of the technical quality of the studies nor requested any 

additional information from ERI about the studies. According to DOE 

officials, they did not examine the studies' methodology or assess the 

studies' technical quality because they wanted ERI's studies to be 

independent and did not want to influence their results. DOE officials told 

us that they contracted with ERI to provide subject matter expertise that 

did not exist within DOE and trusted ERI to provide that expertise. 

However, if DOE did not have the internal subject matter expertise to 

review the studies, another tool available to the department-specifically 

discussed in DOE's Information Quality Guidelines-is peer review, which 

12The April 2012 study projected the potential market effects during calendar years 2012 

through 2033 for three DOE uranium transfers, and the January 2013 study projected the 

market impact during calendar year 2013 for one transaction. See GA0-14-291 for 

additional details. 

13These guidelines-developed by DOE as required by the Information Quality Act and 

under associated guidelines issued by the Office of Management and Budget-set forth 

quality assurance steps and procedures to ensure the quality and objectivity of information 

that DOE makes publicly available. The guidelines state that DOE should seek to ensure 

that information disseminated to the public meets a basic level of quality, which is 

measured by the objectivity of the information and whether the information is accurate, 

clear, complete, and reliable. Consolidated Appropriations Act, 2001, Pub. L. No. 106-554 

Title V § 515 (a), 114 Stat 2763A·153 to 2763A-154 (2000) (commonly referred to as the 

Information Quality Act). 

GA0·17472T 
82 


26151.064

is generally defined as the process of having independent experts assess 

the technical and scientific merit of studies. Nonetheless, ERI's principal 

author told us that the two studies were not peer-reviewed by a third 

party. 

In our May 2014 report, we also found that ERI's studies provided limited 

detail about their methodology, data sources, and assumptions, even 

though DOE's Information Quality Guidelines direct such information to 

be included in publicly disseminated documents. 14 For example, ERI did 

not provide information about the sources of data it used to develop its 

market supply curves, which were fundamental to its market analysis. We 

also identified shortcomings in the studies that raise questions about their 

conclusions, which DOE used to inform the Secretary of Energy's 

statutory determinations that its uranium transfers would not have an 

adverse material impact on the domestic uranium market. For example, 

we identified concerns about ERI's assumption that DOE's planned 

uranium transfers would not have a cumulative effect on the term 

market. 15 Similarly, in September 2011, we also identified concerns with 

the results of two market impact analyses ERI conducted for DOE in 

November 2009 and December 2010 because of issues related to the 

economic model developed by ERI. 16 

To ensure the quality, credibility, and transparency of any future uranium 

market impact studies, in our May 2014 report we recommended that 

DOE (1) conduct assessments of the quality of its future market impact 

studies consistent with DOE's Information Quality Guidelines or have an 

independent third party conduct a peer review and (2) require that the 

studies include information on the methods, data sources, and 

assumptions used consistent with DOE's Information Quality 

Guidelines. 17 DOE neither agreed nor disagreed with the first part of this 

14See GA0~14~291. 

15Speclfical!y, we identified several concerns with the certainty of ER!'s conclusions 

regarding the effect of DOE's uranium transfers on the term and spot markets, including 

(1) the completeness of the data ER! used to develop the market supply curves, vvhich 

were fundamental to its term market analysis; (2) ERI's assumption that DOE's planned 

uranium transfers would not have a cumulative effect on the term market; and (3) ERI's 

model that it developed for its analysis of the spot market, which accounts for some, but 

not a!!, factors that can affect spot market prices. See GA0-14-291 for our analysis of 

ERI's market impact studies and discussion of these concerns. 

16See GA0-11-846 

17See GA0-14-291. 

GA0-17-472T 
83 


26151.065

DOE Does Not Have 

Guidance for Valuing Its 

Uranium Tails 

recommendation and stated that it would continue to consider the 

applicability of its Information Quality Guidelines to independent analyses 

of the potential market impact of the proposed transactions and take 

appropriate steps if applicable. DOE did not comment on the second part 

of our recommendation to include information on the methods, data 

sources, and assumptions in its studies. We continue to believe that DOE 

should require that its future studies contain such information to ensure 

their quality, credibility, and transparency. 18 However, DOE has taken 

some steps that are consistent with the intent of these recommendations. 

For example, in notices published in the Federal Register in December 

2014 and July 2016, in anticipation of new secretarial determinations 

covering future transfers of uranium, DOE solicited public input on the 

potential effects of DOE transfers of excess uranium on the domestic 

uranium mining, conversion, and enrichment industries." 

In our May 2014 report, we found that DOE did not have guidance for 

valuing depleted uranium tails20 Specifically, we found that DOE did not 

have guidance for determining the value of tails when they are treated as 

an asset in a transaction and, as a result, DOE estimated the tails it 

transferred for re-enrichment in a 2012 transfer had a potential value 

ranging from $0 to $300 million. For this 2012 transaction, DOE decided 

that the tails it transferred had no value because tails are typically 

considered to be an environmental liability and, therefore, the transaction 

had no cost to the department. However, because the tails were reenriched and used in lieu of natural uranium, we found that the tails were 

an asset in the context of this transaction and, therefore, should have had 

some value. Moreover, in other cases, DOE has determined that tails do 

have value. For example, in a DOE 2005 transfer of tails, DOE charged a 

181n April 2014, ERI released a report assessing additional proposed DOE transfers. In 

that assessment, ERI does not make any conclusion about whether or not the release of 

DOE inventories into the commercial markets will result in an adverse materia! impact 

Instead, ERI notes that, in accordance with the USEC Privatization Act, any determination 

of adverse material impact is made by the Secretary of Energy. 

19Excess Uranium Management: Effects of DOE Transfers of Excess Uranium on 

Domestic Uranium Mining, Conversion, and Enrichment Industries; Request for 

Information, 79 Fed. Reg. 72,661 (Dec. 8, 2014); Excess Uranium Management: Effects of 

DOE Transfers of Excess Uranium on Domestic Uranium Mining, Conversion, and 

Enrichment Industries; Request for Information, 81 Fed. Reg. 46,917 (July 19, 2016). 

20See GA0~14-291. As will be discussed in more detail below, DOE likely does not have 

authority to sell depleted uranium tails, but if DOE does sell it, DOE policy requires DOE to 

ensure that the department receives reasonable value in return for transferred uranium. 

GA0-17-472T 
84 


26151.066

price for its tails. We concluded that without guidance for how to value its 

tails in the context of transactions that treat them as an asset, DOE 

cannot ensure the government is reasonably compensated for its uranium 

transfers. 

Having guidance that provides a consistent and transparent method for 

determining the value of tails is particularly important because-as we 

reported in March 2008-uranium prices are very volatile, and a sharp 

rise or fall in prices could greatly affect the value of DOE's tails inventory 

depending on when transfers occur. 21 At the time of that report, we 

concluded that the dramatic increases in uranium prices in 2008 had 

presented the U.S. government with an opportunity to gain potentially 

billions of dollars from depleted uranium tails material that was once 

considered a liability. 22 In June 2011, GAO reported that DOE's depleted 

uranium tails inventory had a net value of $4.2 billion. However, since 

2011, the market prices for uranium have decreased, and the composition 

of DOE's tails inventory has changed in part because of transfers, thereby 

lowering the value of DOE's remaining inventory. In 2014, as part of 

technical assistance provided to Congress, GAO calculated the June 

2014 value of DOE's inventory at then-current uranium prices using a 

model developed by uranium experts at a DOE site and found that the 

estimated value of DOE's tails inventory was about $1 billion. 

In May 2014, we recommended that DOE develop guidance for 

consistently determining the value of depleted uranium tails when 

transferring them as an asset. DOE disagreed with this recommendation 

and stated that it was not required to establish guidance or a pricing 

policy for depleted uranium and to do so would hinder DOE's ability to 

maximize the value received by the government in a given transaction. In 

August 2016, DOE reiterated this position and stated that the 

department's response is unchanged and no actions have been taken 

that are specific to this recommendation. Since that time, DOE has 

continued to receive commercial interest in its uranium tails, underscoring 

that the tails can be viewed as an asset. For example, in November 2016, 

DOE announced that it had agreed with GE-Hitachi's Global Laser 

Enrichment (GLE) to sell depleted uranium for re-enrichment over a 40-

"See GA0-08-606R 

22Whi!e we concluded that DOE's authority to sell depleted uranium tails was doubtful, we 

found that DOE generally has authority tore-enrich and then sell the tails. 

GA0-17472T 
85 


26151.067

DOE's Uranium Transfers 

Have, in Some Cases, 

Violated Federal Law 

year period. 23 According to the licensor of the GLE technology, the 

agreement facilitates the sale of approximately 300,000 tons of depleted 

uranium. The tails would be enriched at a proposed facility to be built in 

the early 2020s in Paducah, Kentucky, next to the shuttered Paducah 

uranium enrichment plant. 24 Therefore, we continue to believe that having 

guidance that provides a consistent and transparent method for 

determining the value of tails in the context of a transaction is necessary. 

Since 2006, we have reported on legal concerns with a number of 

transfers or potential transfers of uranium. 25 In May 2014, we identified 

legal concerns with four DOE uranium transactions conducted from 2012 

through 201326 1n a March 2013 transaction, for example, we found that 

DOE transferred ownership of uranium previously obtained for national 

security purposes without obtaining the required presidential 

determination that the uranium material was no longer necessary for 

national security purposes27 For another transaction, in May 2012, we 

found that DOE likely did not have authority to transfer tails because of 

specific prohibitions imposed by the USEC Privatization Act. 28 As we 

explained in our May 2014 report-and had explained in our 2008 report 

when we addressed the same legal issue29-section 3112 of the USEC 

Privatization Act prohibits DOE from selling or transferring "any uranium" 

to "any person" except in a manner consistent with the act. Because the 

act specifies no conditions for the sale or transfer of depleted uranium 

tails, in contrast to the act's conditions for other types of uranium, 

statutory construction rules indicate DOE likely does not have authority to 

23According to DOE officials, as of June 2014, DOE maintained approximately 525,000 

metric tons of uranium in the form of depleted uranium tails. 

24The 2016 announcement fo!!owed a Request for Offers in July 2013 regarding its 

remaining inventories of tails. The Request for Offers specified that natural uranium 

created from the tails coutd not enter the market before 2019 and would have to be limited 

to 2,000 MTU natural uranium equivalent per year. See DOE Portsmouth/Paducah Project 

Office, Request for Offers for the Sale of Depleted and Off-Specification Uranium 

Hexafluoride Inventories, Request for Offers Number: DE-SOL0005845, July 3, 2013. 

"See GA0·14-291, GA0-11-846, GA0·08-606R, and B-307137. 

26See GA0-14·291. 

27See GA0-14-291. 

2842 U.S.C. § 2297h-10 (2017). 

29See GA0-08-B06R. 

GA0-17-472T 
86 


26151.068

sell or transfer depleted uranium. DOE disagreed with this conclusion, 

citing its general authority under the Atomic Energy Act to distribute 

source material. 30 Even if that general authority applied to the transfer of 

depleted uranium, however, we found that DOE did not meet the Atomic 

Energy Act's requirement to charge a price for the tails because it 

transferred them without charging any price at all. 

To ensure the same type of scrutiny that Congress has required for the 

sale or transfer of DOE's other valuable federal uranium assets-such as 

price, protection of the domestic uranium industry, and safeguarding the 

national security-in March 2008 and September 2011, we suggested 

that Congress consider clarifying DOE's authority to manage depleted 

uranium and provide explicit direction about whether and how DOE may 

sell or transfer it. 31 Legislation introduced in the 114th Congress would 

have authorized DOE to sell or transfer depleted uranium tails subject to 

certain conditions but was not passed. 32 

In our May 2014 report, we recommended that for each uranium 

transaction it conducts, DOE should publicly identify the legal authority it 

relies on and explain how the transaction meets the requirements of that 

authority. DOE disagreed with this recommendation and stated that it 

would not publicly report the authorities it relies on because it is not 

legally required to do this and because citing the law would disclose 

information "traditionally ... protected as attorney work product or 

privileged pre-decisional documents." Reporting DOE's final decision on 

which law it has relied on for its transactions would breach no privilege, 

however, and we maintain that reporting this to Congress and the public 

would improve transparency. After we issued our report, Congress took 

action in the Consolidated and Further Continuing Appropriations Act, 

30DOE stated that its position is ~consistent with" section 3112's broad prohibition because 

Congress included no conditions authorizing the sale or transfer of depleted uranium_ This 

only reinforces GAO's interpretation. Congress imposed conditions on DOE's sale of aU 

valuable uranium; because depleted uranium was not valuable in 1996, Congress did not 

need to address its sate or transfer and.instead addressed its disposal in section 3113. 

When depleted uranium later became valuable, its sale or transfer remained prohibited 

unless and until Congress sets conditions to ensure appropriate management of th1s 

federal asset. See GA0··14-291 and GA0-08~606R 

31 See GA0-11-846 and GA0-08-606R. 

32SAVE Act, H.R. 614, 114th Con~.§ 114 (2015); Excess Uranium Transparency and 

Accountability Act, H.R. 2544, 114 11 Cong. (2015); Excess Uranium Transparency and 

Accountability Act, S. 1428, 114" Cong. {2015). 

GA0-17472T 
87 


26151.069

2015, to require what we had recommended: that DOE report to the 

Committees on Appropriations the provisions of law under which it 

conducts uranium transactions not less than 30 days prior to conducting 

the transaction. 33 

In July 200634 and September 2011, 35 we reported on a different legal 

concern, finding that certain DOE uranium transfers were sales 

authorized by the USEC Privatization Act but that DOE violated federal 

fiscal law in how it handled proceeds from these transfers. Specifically, 

the miscellaneous receipts statute requires an official or agent of the 

government receiving money from any source on the government's behalf 

to deposit the money into the Treasury. 36 We found that DOE provided 

uranium to a company for sale to a third party and allowed the company 

to keep the proceeds of the sales as payment for services rendered to 

DOE, but DOE did not deposit the value of the net proceeds from these 

uranium sales into the Treasury. Even with no money changing hands, 

we concluded that an amount equivalent to the value that went to the 

company should have gone to the Treasury. While our 2011 report noted 

that the transactions we analyzed in 2011 differed in some superficial 

respects from the transactions we analyzed in 2006, we found the core 

substance was the same and, as DOE officials told us in 2011, the 

department intentionally structured the disposition of federal assets to 

avoid payment of the proceeds for those assets into the Treasury. Our 

September 2011 report suggested that Congress consider providing DOE 

with explicit authority to barter excess uranium and to retain the proceeds 

from bartering, transferring, and selling uranium. Legislation introduced in 

the 114th Congress would have authorized DOE to barter uranium but it 

was not passed. 37 

33Pub. L. No. 113-235, div. D tit. Ill,§ 306(b) (2014). 

"See 8-307137. 

35See GA0-11-846. 

"Miscellaneous receipts statute, 31 U.S.C. § 3302(b) (2017). 

37Excess Uranium Transparency and Accountability Act, H.R 2544, 1141

r. Cong. (2015); 

Excess Uranium Transparency and Accountability Act, S. 1428, 1141

h Gong. (2015). 

GA0-17-472T 
88 


26151.070

GAO Contact and 

Staff 

Acknowledgments 

(101730) 

Chairman Barrasso, Ranking Member Carper, and Members of the 

Committee, this completes my prepared statement. I would be pleased to 

respond to any questions that you may have at this time. 

If you or your staff members have any questions about this testimony, 

please contact me at (202) 512-3841 or bawdena@gao.gov. Contact 

points for our Offices of Congressional Relations and Public Affairs may 

be found on the last page of this statement. GAO staff who made key 

contributions to this testimony are William Hoehn, Assistant Director; Eric 

Bachhuber, Antoinette Capaccio, Julia Coulter, Amanda K. Kolling, 

Katrina Pekar-Carpenter, and Steven Putansu. 

GA0-17472T 
89 


26151.071

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90 


26151.072

Senate Environment and Public Works Committee 

Hearing entitled, "Legislative hearing on S.512, the Nuclear Energy Innovation and 

Modernization Act" 

March 8, 2017 

Questions for the Record 

Allison Bawden 

Chairman Barrasso: 

On December 2, 2016, Secretary of Energy, Ernest Moniz, signed a Secretarial 

Determination that the National Nuclear Security Administration's barters of low-enriched 

uranium (LEU) for highly enriched uranium (HEU) downblending services are no longer 

subject to section 3112( d)(2) of the USEC Privatization Act. I understand the Department 

of Energy did not provide any notice of the December 2, 2016 Secretarial Determination 

until referencing it in a Notice published in the Federal Register on March 7, 2017- the 

day before this hearing. 

1) Was the Government Accountability Office (GAO) aware of the December 2, 2016 

Secretarial Determination before my staff shared the Secretarial Determination 

with you on March 7, 2017? 

No. Before receiving a copy of the Determination from committee staff on March 7, 2017, 

GAO was previously unaware of the document. 

2) Was the Department required to provide public notice of the December 2, 2016 

Secretarial Determination? 

GAO is unaware of any requirement on the Department to provide public notice of its 

secretarial determinations. 

3) Does GAO see any problems with or have any concerns about the December 2, 

2016 Secretarial Determination? If so, please explain in detail. 

We have several concerns with DOE's December 2016 Secretarial Determination in 

which DOE argues that both down blending highly enriched uranium (HEU) and 

exchanging low-enriched eranium (LEU) for down blending serves a national security 

purpose. If the national security exemption applies to both down blending and payment 

for down blending as DOE suggests, we question whether such transactions should be 

exempt from the conditions that generally apply to transfers and sales of DOE uranium. 

Specifically, the USEC Privatization Act generally applies three conditions to such 

transfers and sales. It requires 1) a presidential determination that the material is not 

necessary for national security needs, 2) a secretarial determination that the sale will not 

have an adverse material impact on the uranium industry, and 3) that the price paid will 

not be less than fair market value. If DOE's proposed downblending transactions do 

constitute a "national security purpose" then they are not subject to these conditions. 

However, we note that allowing a contractor to retain as payment a portion of the derived 

LEU for down blending services would certainly have a market impact. In addition, we 

have concerns about DOE labelling the portion of transactions involving the exchange of 

LEU as serving "a national security purpose," as presumably the value of this LEU to its 

recipient is in its subsequent sale, and the sale could thus be conducted without having 

to obtain a presidential determination that the assets are no longer necessary for 
91 


26151.073

national security needs. GAO has previously reported on an instance where DOE did not 

obtain a required presidential determination for the transfer of LEU to a private 

corporation that DOE had previously obtained for a national security purpose. 

In addition, DOE released a new Secretarial Determination on April26, 2017, in which 

DOE authorized transfers of natural uranium hexafluoride to contractors for cleanup 

services at the Portsmouth Gaseous Diffusion Plant at lower levels than had been 

established in a May 1, 2015 Secretarial Determination. DOE stated that this action was 

taken in response to the Department's interest in maintaining healthy domestic nuclear 

industries. The 2017 Secretarial Determination does not address the December 2016 

Secretarial Determination. 1 However, the analysis accompanying the 2017 determination 

reiterates DOE's conclusion that downblending HEU serves a national security purpose 

and assumes for analysis purposes that DOE will transfer 500 metric tons of LEU from 

2017 through 2019, in addition to the authorized transfers of natural uranium 

hexafluoride and other uranium transfers. We have not assessed the analysis 

accompanying the 2017 Secretarial Determination. 

4) In GAO's view, do the Department's barters of LEU for HEU down blending 

services violate the miscellaneous receipts statute (31 U.S. C. § 3302(b))? If so, 

please explain. 

5) In GAO's view, is an officer or employee who carries out the Department's barters 

of LEU for HEU down blending services in violation of the Anti-Deficiency Act (31 

u.s.c. § 1342)? 

6) In GAO's view, is an officer or employee who carries out the Department's barters 

of LEU for HEU downblending services subject to discipline or removal from 

office under 31 U.S.C. § 1349? 

7) In GAO's view, may an official or agent who carries out the Department's barters 

of LEU for HEU downblending services be removed from office (or required to pay 

to the Treasury the value of the LEU or HEU downblending services) under 31 

u.s.c. § 3302(d)? 

Questions 4 through 7. As we discussed with your staff, GAO will issue a legal opinion 

concerning whether DOE's transfers of LEU were consistent with the miscellaneous 

receipts statute and the Antideficiency Act. We look forward to receiving your letter 

requesting this opinion. 31 U.S.C. § 1349 provides that an officer or employee who 

violates 31 U.S. C.§ 1341(a) of the Antideficiency Act "shall be subject to appropriate 

administrative discipline including, when circumstances warrant, suspension from duty 

without pay or removal from office." Ultimately the agency must determine the 

appropriate administrative action to take against any employees involved in the violation. 

In addition, if an officer or employee violates the Antideficiency Act, the agency "shall 

report immediately to the President and Congress all relevant facts and a statement of 

actions taken." 31 U.S.C. § 1351. Under section 145 of Office of Management and 

Budget Circular A-11, this report should include a "statement of the administrative 

1

Jn response to a comment from the Uranium Producers of America seeking withdrawal of DOE's 2016 Secretarial 

Determination, in the accompanying analysis DOE stated that the 2016 national security determination was outside 

the scope of the 2017 Secretarial Determination, which only considered future transfers of uranium hexafluoride for 

Portsmouth cleanup services. 
92 


26151.074

discipline imposed and any further action(s) taken with respect to the officer(s) or 

employee(s) involved in the violation." 

The miscellaneous receipts statute, 31 U.S.C. § 3302(d), provides that an official or 

agent who does not comply with 31 U.S.C. § 3302(b) may be removed from office and 

may be required to forfeit appropriate amounts. GAO's legal opinion will address 

whether the LEU transfers violated 31 U.S. C.§ 1341(a) and 31 U.S.C. § 3302(b). As 

with violations of the Antideficiency Act, ultimately the agency concerned must determine 

the appropriate administrative action to take against any employees involved in a 

violation of the miscellaneous receipts statute. 

8) In GAO's view, would the Department's barters of LEU for HEU downblending 

services be subject to the annual caps proposed in section 203 of S. 512? If not, 

what changes to section 203 are necessary to ensure that the LEU bartered for 

HEU down blending services is subject to the caps? 

Whether the provision of LEU for HEU downblending services is subject to the annual 

caps proposed in section 203 of S. 512 depends on whether the transactions are for 

"national security purposes." If such transactions are conducted under what is currently 

subsection 3112(d) of the USEC Privatization Act (subsection (f) as it would be 

redesignated by S. 512), they would be subject to the caps. However, the December 2, 

2016 Secretarial Determination asserts that such transactions would be conducted not 

under subsection (d), but under subsection (e) (subsection (g) as it would be 

redesignated by S. 512), for which no caps are proposed. Subsection (e) allows the 

Department to transfer or sell enriched uranium for national security purposes. While we 

do not dispute that downblending HEU constitutes a national security purpose, we 

question whether transferring LEU for downblending services constitutes a national 

security purpose. To the extent that the committee wants to ensure that such 

transactions are subject to the proposed caps, it may want to consider making the 

capping provision its own subsection applicable to both inventory sales and government 

transfers; including caps for subsection (e); or defining what constitutes a "national 

security purpose." Furthermore, as discussed in our response to Question# 3 above, we 

note that transactions conducted under subsection (e) are not subject to any of the other 

conditions applicable to transactions conducted under subsection (d), including: 1) a 

presidential determination that the material is not necessary for national security needs, 

2) a secretarial determination that the sale will not have an adverse material impact on 

the uranium industry, and 3) that the price paid will not be less than fair market value. 

Clearly defining "national security purpose" could also prevent the Department from 

using subsection (e) to avoid the conditions imposed by subsection (d) by taking an 

overly broad view of what may constitute a "national security purpose." 

9) In the hearing, you responded to a question from Sen. Rounds regarding the size 

of the Department's excess uranium transfers/barters by stating: 

"Well, there have been several of those transactions. We looked at the first in a legal 

opinion we issued in 2006 and then there were others that we looked at in a report in 

2011. I don't know the current value of that, but we would be happy to look into that for 

the record." 

Would you please provide information on both size and value of the Department's 

excess uranium transfers/barters for the record? 
93 


26151.075

In two separate GAO reports, we reported on then-values of certain uranium 

transactions conducted between December 2009 and December 2013. 2 GAO's work did 

not cover all of DOE's uranium transactions undertaken during this lime, but rather 

covered two subsets: (1) uranium transactions between December 2009 and June 2011 

where uranium was used to pay for environmental cleanup services; and (2) uranium 

transactions involving USEC Inc.-a private company now known as Centrus Energy 

Corp.-in 2012 and 2013. 

In 2011, we reported on seven separate transactions where DOE used natural uranium 

to pay for cleanup services. Table 1 provides the quantity of uranium DOE provided for 

each transaction, the transaction's value as we reported it in 2011, and the present value 

of each transaction in 2017. The present value represents the inflation adjusted value of 

the transaction, and not a recalculation of the value of the transaction if conducted under 

current market conditions. 

Table 1: Amount and Value of Natural Uranium DOE Used to Pay for Cleanup, December 2009 through June 

2011, in 2011 and 2017 dollars 

Date Recipient Metric tons of Value (in 2011 Present 

uranium dollars) Value (in 

2017 dollars) 

December 2009 USEC 201.90 $22,740,662 $29,006,572 

March 2010 USEC 201.52 $22,020,735 $27,691,536 

May 2010 USEC 226.32 $25,246,385 $30,423,010 

July 2010 USEC 250.82 $27,970,088 $32,647,366 

October 2010 USEC 242.74 $32,256,667 $36,454,545 

March 2011 USEC 349.99 $64' 030' 962 $74,750,516 

June 2011 Flour-B&W 400.20 $61,763,235 $69,794,204 

Portsmouth 

Total 1,873.49 $256,028,734 $300,767,749 

Sources: GA0·11·846 and GAO analysts 

In 2014, we reported on four separate transactions that involved DOE and USEC. Three 

of these transactions involved direct uranium transfers with USEC while the fourth 

transaction involved a uranium transfer with a third party that then transferred the 

uranium to USEC for enrichment Table 2 provides the quantity of uranium transferred 

between DOE and either USEC or the third party (Energy Northwest), the transaction's 

value as we reported it in 2014, and the present value of each transaction in 2017. The 

transactions are as follows. 

2

Excess Uranium Inventories: Clarifying DOE's Disposition Options Could Help Avoid Further Legal Violations, GA0-

11-846 (Washington, D.C.: Sept. 26, 2011) and Department of Energy: Enhanced Transparency Could Clarify Costs, 

Market Impact, Risk, and Legal Authority to Conduct Future Uranium Transactions, GA0-14-291 (Washington, D.C.: 

May 9, 2014). 
94 


26151.076

1. March 13, 2012 separative work units (SWU) procurement. In March 2012, 

DOE exchanged 409 metric tons of uranium (MTU) of Russian-origin natural 

uranium for an equivalent amount (48 metric tons) of already enriched 

unobligated LEU. Unobligated uranium can be used for national security 

purposes, while Russian-origin uranium cannot. DOE compensated USEC for the 

value of the work to enrich the natural uranium-estimated at $44 million-by 

accepting a $44.4 million disposal liability from USEC in the form of depleted 

uranium tails. This transaction was essentially cost neutral. 

2. May 15, 2012 tails transfer. This was a complex, multi-step transaction which 

resulted in benefits to several parties, including DOE. The value of the 

precipitating transaction, in which DOE transferred 9,092 MTU of high-assay 

depleted uranium tails to Energy Northwest, was determined by DOE to range 

anywhere from $0 to $300 million. 

3. June 12,2012 tails acceptance. In June 2012, DOE accepted $87.7 million in 

disposal liability from USEC for up to 39,200 MTU of depleted uranium tails. 

USEC credited this $87.7 million as DOE's first installment payment on its 

financial commitment to the American Centrifuge Research, Development, and 

Demonstration program. DOE did not transfer any uranium in this transaction, but 

rather received it. 

4. March 15, 2013 SWU transfer. In March 2013, DOE and USEC agreed to 

largely reverse their March 13, 2012 transaction. The value of the SWU, which 

DOE and USEC continued to value at $44.4 million, was credited as payment to 

fulfill another part of DOE's financial commitment to the American Centrifuge 

Research, Development, and Demonstration program. 
95 


26151.077

Table 2: Amount and Value of Certain Uranium Transactions Involving the Department of Energy (DOE) and 

USEC Inc.' in 2012 and 2013" 

Steps Description of Amount of Uranium 

Transaction Transacted, and 

Services, As 

Applicable 

1. March 2012 1 USEC transferred tails' to 13,073 metric tons 

separative DOE (MTU)tails 

work units 2 DOE transferred Russian- 409 MTU natural 

(SWU) origin natural uranium to uraniume as uranium 

procurement USEC hexafluoride 

3 USEC transferred domestic 48 MTU of LEU 

low-enriched uranium (equivalent to 409 

(LEU) to DOE MTU natural uranium) 

Enrichment services 

(SWU) 

2. May 2012 DOE transferred high- 9,092 MTU of hightails transfer assay tails to Energy assay tails 

Northwest 

3. June 2012 USEC transferred uranium Up to 39,200 MTU of 

tails tails to DOE depleted uranium 

acceptance hexafluoride 9 

4. March 2013 1 USEC transferred Russian- 409 MTU natural 

SWU transfer origin natural uranium to uranium as uranium 

DOE hexafluoride 

2 DOE transferred LEU to 48MTU LEU 

USEC (equivalent to 409 

MTU natural uranium) 

Enrichment services 

(SWU) 

Source: GA0-14~291 and GAO analySIS 

•1n September 2014, USEC Inc. changed its name to Centrus Energy Corp. 

"This table is a summary of information presented more fully in GA0-14-291. 

Value (in Present 

2011 Value (in 

dollars)' 2017 

dollars) 

This transaction was 

essentially cost neutral, in 

that DOE accepted an 

estimated $44 million in tails 

liability in exchange for $44.4 

million worth of enrichment 

services. These would be 

worth $47.5 million and $48 

million in 2017 dollars, 

respectively. 

$0-300 $0- 318.3 

millionf million 

$87.7 million $92.6 

The exchange of natural 

uranium and LEU conducted 

in the March 2012 

transaction was essentially 

reversed. The value of the 

SWU enrichment services 

transferred from DOE back 

to USEC were worth $44.4 

million, which is $46.9 million 

in 2017 dollars. 

cBecause these transactions involve uranium transfers, uranium sales that are ongoing, and uranium services, we 

cannot total the value of all these transactions. 

'The enrichment process results in two principal products: (1) enriched uranium hexafluoride, which can be further 

processed for specific uses, such as nuclear weapons or fuel for nuclear power plants; and (2) leftover "tails" of 

uranium hexafluoride. These tails are also known as depleted uranium because the material is depleted in uranium235 compared with natural uranium. 

•uranium is categorized by concentration of uranium-235, expressed as a percentage "assay.' Natural uranium has 

an assay of about 0.7 percent uranium-235. For use in a nuclear power reactor or weapon, natural uranium must be 

enriched to increase its assay to a level required for its ultimate use. For example, LEU, which is used in commercial 

nuclear power reactors, typically, has an assay of between 3 and 5 percent uranium-235. 

'DOE did value the collective benefit to the department of this transaction at about $759 million. DOE identified this 

amount in cost savings primarily from avoiding the costs of an alternative to using tails to obtain LEU. 

•conflicting amounts of uranium were reported in the documents supporting the June 2012 tails acceptance 

transaction. 

10) In GAO's view, are the Department's uranium transfers/barters taxable events? If 

so, how should these transfersfbarters be treated under the tax code? 

To the extent that DOE is compensating contractors for services in either cash or uranium or 

other property, that compensation may be taxable income. Under section 61 of the Internal 
96 


26151.078

Revenue Code, 26 U.S.C. § 61, compensation for services is taxable income, and if 

services are paid for in property, the fair market value of the property taken in payment must 

be included in income as compensation. 
97 

Senator BARRASSO. Well, thank you very much. I appreciate all 

of you being here. We are going to proceed with questions at this 

time, and I would like to start with you, Ms. Bawden, if you would. 

First, I wanted to commend you and commend your team for the 

good work that you have done in bringing to light the Department 

of Energy’s mismanagement of the public stockpile of excess uranium. I want to thank you also for the technical help that you and 

your team have provided to me and to Senator Markey as we drafted these provisions. 

In your testimony, you explain that Federal law requires the Department of Energy to assess whether its forthcoming sales and 

transfers of excess uranium would impact the uranium market. 

For years, the Department has relied on a contractor to assess 

whether the Department’s sales and transfers of excess uranium 

would impact the market, but your team has found that the Department has not taken steps to ensure that the contractor performs quality analysis of that market. 

In the process, the Department has ignored the terms of its own 

contract and its own information quality guidelines, and I think 

this is critically important. 

On Monday, the Casper Star Tribune in Casper, Wyoming ran a 

front-page story entitled State Uranium Operators Are Facing a 

Global Glut. The State uranium operators facing a global glut. 

We need to know whether and to what extent the Department’s 

proposed sale or transfer of excess uranium will hurt America’s 

uranium producers. So my question to you is what should the Department do to assess the quality of its contractor’s work? 

Ms. BAWDEN. There are many actions DOE could take to ensure 

that it fully understands the basis for its conclusions included in 

its secretarial determinations that uranium transactions will not 

have an adverse material impact on the market. First and foremost, we have recommended that DOE take steps to technically 

evaluate the studies for which it contracts to ensure the reliability 

of the conclusions of those studies. 

We have also recommended that another way the Department 

could evaluate the quality of those studies is to put them through 

peer review. 

We have also recommended that the studies should include sufficient information on their methodology and their assumptions so 

that others can assess the veracity of those studies’ conclusions. 

Senator BARRASSO. Could I just followup? How would this bill 

improve the quality of the market impact analysis that the Department prepares for itself or contracts others to prepare for it? 

Ms. BAWDEN. The bill includes provisions that require the studies to be subject to peer review, and that is consistent with our recommendation to the Department. 

Senator BARRASSO. Thank you. Thank you very much. 

Ms. Korsnick, in 2018, my home State of Wyoming is going to become an NRC agreement State, which, as you know, allows Wyoming to assume responsibility for regulating uranium recovery. 

When that happens, the total number of uranium facilities that the 

NRC oversees is going to shrink from 11 to 3. So that means that 

there are only going to be 3 facilities left to shoulder all the costs 

of the NRC Uranium Recovery Office. 

98 

You noted in your testimony how the decline in the number of 

NRC licenses increases the fee burden on those licensees who are 

remaining. Do you believe this problem is a result of a faulty fee 

recovery system? 

Ms. KORSNICK. Yes, that is a concern for us. It is very similar 

to when plants decommission, as an example, the same burden is 

raised on the other plants that continue to operate. So that is why, 

in this bill, there is a cap structure that is established, which we 

think directly applies to this concern and would help ameliorate 

that effect. 

Senator BARRASSO. Terrific. The performance in the report and 

reporting provision in our legislation directs the NRC to expressly 

budget for the funding necessary to complete license reviews requested by the applicants and licensees. The bill also directs the 

NRC to establish transparent schedules to complete each requested 

review along the way. 

So would you please describe the benefits of these provisions toward improving the timeliness and the predictability of the reviews? 

Ms. KORSNICK. We think that is very important. Right now, the 

process is much less predictable from a licensee perspective in 

terms of the amount of time that the NRC would need to review 

products, etcetera. So we think that this helps improve that transparency and the predictability from a licensee perspective. It is a 

step in the right direction. 

Senator BARRASSO. Thank you very much for your comments. 

Senator CARPER. Senator CARPER. Mr. Chairman, I notice a number of the guys 

up here on the dais are wearing red ties and some of the folks in 

the audience are wearing red as well, and today is a day where we 

specially recognize the contributions that women continue to make 

in even greater ways. 

I think Senator Inhofe mentioned earlier today that about 20 

years ago he was the chairman of the subcommittee on Clean Air 

and Nuclear Safety, and held the first oversight hearing, I think, 

for NRC that had been done in maybe 10 years. It has been interesting to see the lineup of the witnesses 20 years ago. My guess 

is it looked a little different then. 

We are happy to see all of you, and thank you for your contributions and those who you represent in a very important way. 

I want to start off and ask my first question. There are a lot of 

things in the legislation that we are here talking about that I think 

commend it to all of us, but what might be one thing that each of 

you would change in the bill? What would be maybe one thing you 

would like to see changed in the legislation? 

We will just start right here. Thank you. 

Ms. KORSNICK. One thing that we would like to see changed from 

what is? 

Senator CARPER. Everything I do I know I can do better. I have 

not written the perfect bill yet, and my guess is this one probably 

is not perfect either. Maybe one thing that you would like to see 

changed as we go forward. 

Ms. KORSNICK. I think there are some provisions in the bill relative to baffle bolts and some emergency planning zone issues that 

99 

we feel have been addressed and were not necessarily needed for 

the current bill. That would be one example that we think that 

would be something that could be removed. 

Senator CARPER. All right, thank you. 

Dr. Finan? Do you pronounce your name Finan? 

Ms. FINAN. Finan, yes. 

Senator CARPER. Good. Thanks. 

Ms. FINAN. Thank you. 

Senator CARPER. I never want to get to the end of the hearing 

and find out we have been mispronouncing your name for the last 

2 hours. 

Ms. FINAN. OK. 

I think something could be added to make the bill stronger. One 

thing that would be helpful is if the research and test reactors were 

able to recover more than 50 percent of their operating costs 

through providing services like irradiation and tests and power and 

electricity or heat. That would potentially make the case for private 

funding of demonstration projects stronger and reduce the amount 

of Government matching funds that might be needed there. So I 

would suggest that as a possible addition. 

Senator CARPER. All right, thank you. 

Dr. Back? Not Back. It looks like Back, but is pronounced Back. 

Ms. BACK. Thank you very much. Yes. 

You know, I would like to stress the fact that innovation actually 

brings advantages that you can’t always foresee, but one of them 

in the case of advanced nuclear reactors is to reduce the cost and 

to actually foster innovation. So I would like to see, in this bill, 

maybe a strengthening of the ability to look at cost-share from an 

industry point of view. As I pointed out, it takes 10 years or more, 

potentially, for technologies to give some kind of payoff. That is 

much longer than any private company will take on, and so we are 

not asking for a free ride, but a fair look at the cost-share and the 

contribution, especially early in the phase for the NRC regulations, 

would be a huge help to all of the companies that are working on 

advanced reactors. 

Senator CARPER. All right, thanks, Dr. Back. 

Dr. Lyman, if you have an idea you would like to share with us, 

please do. One improvement you would like to see made in the legislation. 

Mr. LYMAN. Thank you for your question. UCS believes that the 

NRC does need regulatory reform, but it would be in the direction 

of strengthening safety and security, rather than weakening it. In 

particular, the post-Fukushima reforms that the NRC has enacted 

do not go as far as we would like. In particular, the Commission 

rejected a recommendation of its own task force to reform the regulatory structure to increase the defense in depth, that is, extra layers of protection in regulations. So, you know, as part of the larger 

package, we would like to see an enhancement of NRC’s regulatory 

framework to account for defense in depth in its regulatory decisions in a more formal way. 

Senator CARPER. All right. Thanks, Dr. Lyman. 

Allison Bawden. 

Ms. BAWDEN. Thank you. 

100 

Senator CARPER. Let me say we so apricate the work that you 

and your colleagues at GAO do for us and applaud your efforts on 

behalf of our Country. Thank you. But go right ahead. 

Ms. BAWDEN. We appreciate it. Thank you. 

I don’t know that I would characterize this as something GAO 

would like to see changed, but we have suggested that the Committee could consider using a percentage-based cap in the bill for 

the amount of uranium the Department of Energy is authorized to 

transfer, rather than a hard cap. We have suggested that to the 

Committee. It may provide additional flexibility. 

Senator CARPER. All right, thanks. 

One last question for Dr. Back. It has been, I think, about a year 

since the Obama administration announced efforts to assist the research development and deployment of advanced nuclear reactors. 

Could you just give us a quick update on how things are going, 

please? 

Ms. BACK. Sure. I would be happy to do that. 

We have been very appreciative, industry has been very appreciative of opportunities that now are available to get some grant 

funding. Those have not been large, but there have been some that 

we have been able to take advantage of, and that has helped us 

develop some of these critical technologies that are allowing much 

higher temperature resistance, superior neutron irradiation tolerance; and those kinds of efforts have led to beginnings of standards 

that are being developed to treat accident-tolerant fuel, as well as 

future materials that are able to withstand much greater temperatures and much greater conditions, harsh conditions in the reactor. 

So those areas we would like to see more of, but we are very appreciative of what exists. It has helped in the crosscutting, looking 

across all the reactors. But those opportunities are few and far between. 

Senator CARPER. All right, thanks. 

I am going to slips out right now. I will be back. We have another simultaneous hearing going on in Homeland Security, but 

very much appreciate you being here, your thoughtful testimony, 

and your responses. 

Senator INHOFE. [Presiding.] Thank you, Senator Carper. 

Ms. Korsnick, we are in kind of a situation now, and you have 

heard me talk about this before, that the last 10, 15 years we have 

seen the workload or proposed workload in anticipation of growth 

in nuclear energy go up and down and up and down. Now, it was 

Reagan that said there is nothing closer to life eternal on the face 

of this earth than a government agency once formed. Well, the 

same thing is true with the expansion of an agency. When the 

workload of this agency looked like it was going to be going up, we 

prepared for that and then it didn’t happen. And there are a lot 

of political reasons why it didn’t happen. I am thankful that I think 

we have overcome those now. 

In the year 2000, the NRC got its work done with 2,800 people 

and $470 million. Now, with 3,300 people and twice the amount of 

money, $905 million, it oversees six fewer reactors, half as many 

as the materials, licenses and reviews anticipated. The GAO commented on this. They said by 2011, however, it had become clear 

101 

that the projected growth had not materialized. NRC’s budget and 

its regulatory fees, however, have not declined since that time. 

So what is your thought on that? I know a lot of people on this 

side of the table are thinking, well, the stakeholders are going to 

be paying for this more than just Government. But, nonetheless, 

that is a fact that we have anticipated, growth. And, of course, it 

didn’t happen and yet Government just grew. What are your 

thoughts about that? 

Ms. KORSNICK. Well, I agree with your sentiments, Senator. We 

do understand why the NRC staffed-up. They did staff-up significantly, as you suggest, and if you look at the details for the bill, 

the cap is capping it at a 2015 level, which we think is a high watermark, if you will, so more than sufficient for the agency. 

Senator INHOFE. Well, I wasn’t really referring just to this bill. 

I am just saying that this is history now. This has happened. We 

didn’t shrink any when our workload was considerably reduced in 

the past. 

Now, I am concerned about the caps, and that was addressed by 

the Chairman in his questions. And I think it is a good idea to go 

ahead and get on record where we are going to be at that time, 

where we anticipate. Do you think that under 512, that the caps 

are realistic? I want to get on record now and say that we are going 

to be able to do it within those caps? 

Ms. KORSNICK. Absolutely. I think that there is clearly room for 

the agency to be more efficient than it is today. They have done 

some work in their Project Aim. I would say this bill institutionalizes some of the thinking that they are doing under Project Aim, 

and I think the caps within the bill are clearly achievable. 

Senator INHOFE. OK. That is good to hear, and we will get that 

on the record. 

You know, as we watch, I mentioned in my opening statement 

the concern I have over the fact that we are not operating in a vacuum, there are other countries that are maybe even passing us up. 

I would like to have any one of the witnesses respond to where do 

you think we are right now with China and Russia. 

Why don’t we start with you? 

Ms. KORSNICK. I guess I will start with that. I would tell you 

that there are 60 reactors being built around the world today, and 

two-thirds of those reactors are being built by Chinese and Russian 

design, and I think that is a significant concern that we, in the 

United States, need to take a look at the leadership level that we 

want to play in a world conversation relative to nuclear. It is not 

only that we have the technology and the best designs; we have the 

best standards on how to operate these reactors. And when you get 

engaged in the conversation about these reactors being operated in 

other countries, those standards and those nonproliferation requirements go with it, and that is something that is significant, 

should be very significant to us. 

Senator INHOFE. Yes. 

Anyone else want to comment on that, as to where we are with 

our competition? Yes, ma’am. 

Ms. BACK. I would just like to add, also, that in, for instance, 

China, they are pursuing every kind of advanced reactor in R&D 

and hopefully, from their point of view, to a demonstration plant, 

102 

and the challenge with this is that the governments, for instance, 

Japan also, are sponsoring the research that is being done. So it 

is very difficult to compete at a fair level. 

Senator INHOFE. Yes, that is a good comment. 

Any other comments? 

Mr. LYMAN. Yes, I appreciate the opportunity. I do agree with 

Ms. Korsnick that domestic U.S. standards, including NRC regulations, are the gold standard, and that is why we believe it is very 

important to maintain those standards and not engage in a race to 

the bottom. So of Russia and China, you know, Russia is the country that brought us Chernobyl, and my understanding is that China’s own regulatory process, including the process for qualifying 

fuel, is not nearly as rigorous as the United States. So I think we 

need to maintain those standards, and that is the best selling point 

we would have. 

Senator INHOFE. I think that is good. I don’t want to race to the 

bottom, either, but I think it is important for us to talk about the 

fact that there is competition out there and other countries are 

doing things more aggressively than we are. So I think we are all 

in agreement on that. 

Senator Whitehouse. 

Senator WHITEHOUSE. Thank you, Chairman. 

First, can I say I am delighted that we have been joined by Senator Booker, who is my co-lead sponsor on our side. 

Let me ask, first, Ms. Korsnick, is there value to the carbon 

emissions-free nature of nuclear generated power? And, if so, are 

nuclear power plants compensated for that value? 

Ms. KORSNICK. There is absolutely value, and, no, they are not 

compensated for it. 

Senator WHITEHOUSE. I consider that to be kind of a market deformation. How does that market deformation work out in practice 

in the nuclear market? 

Ms. KORSNICK. So the challenge we have today is that the marketplace just values electricity. It values the capacity and it values 

the product, but it doesn’t value whether or not you have a carbonfree nature or if you have any other impact to the environment. 

And as you know, from a clean air energy, as we look at nuclear, 

you know, there are asthmas, issues in terms of health for people 

and there are also impacts on the environment, things like acid 

rain. So nuclear power is very environmentally friendly; doesn’t 

produce any of those. In the marketplace we have today, that is 

just simply not something that is valued. So many of the States are 

using individual solutions and out-of-market solutions right now 

that they are using to value that, and that is becoming a challenge 

for the marketplace, and I know that is something right now that 

we are working with our members to see what it is that we can 

do to, in effect, come up with a more holistic solution. 

Senator WHITEHOUSE. Well, I look forward to working with you. 

I think Chairman Alexander has a similar concern. And if there 

are ways we can find to compensate safely operating nuclear plants 

for the carbon-free nature of their power, that creates, I think, a 

level playing field for nuclear power, which is now disadvantaged 

by the fact that it gets no benefit for that. 

103 

My other question is similarly an accounting question. Very often 

accounting is policy. As I understand it, we don’t have a liability 

on the books of the United States for the out-year cost of dealing 

with our stockpiles of nuclear waste. If we were a company and we 

had that liability, we would have to report it to our shareholders, 

and management would take a look at that liability and say, oh my 

gosh, that is a real drag on earnings, that is a real out-year risk 

for our shareholders. We better pay attention to that; we have to 

figure out what to do. We might even pay somebody to figure out 

how to reduce that liability, because there would be value in reducing the liability. 

When we don’t adequately account for the liability we have of all 

the nuclear waste we have stockpiled, then there is no economic rationale for spending money to try to move to the point we talked 

about earlier, which is is there a technology out there, or is there 

the potential for a technology out there, that could rid us of the liability for our nuclear waste stockpile by actually figuring out, 

through innovation, how to turn it from a liability into an asset, 

and find a way to turn it into a safe nuclear fuel. 

Would you comment on the liability accounting of all of this and 

how that acts out in your world? 

Ms. KORSNICK. Yes. I guess I would just frame it by saying that 

all of the used fuel is being safely stored today. It is not a technology problem; it is a political problem that we need to appreciate 

and make decisions on where we want to ultimately store this fuel. 

And as you heard earlier today, what we consider a challenge 

today, or trash today, or used fuel today, in the future I am sure 

we will look at it as a resource. So what you consider a liability 

today, depending on new technology, can quickly become an asset 

for the future. 

Senator WHITEHOUSE. And last question to Drs. Finan and Back, 

who are technical experts here. Is that a prospect worth pursuing? 

Ms. FINAN. Absolutely. And many of the innovative companies 

today are pursuing that. So I think we need to be supportive of 

them so that they can achieve that goal. 

Senator WHITEHOUSE. Dr. Back. 

Ms. BACK. Yes, I agree. Many people do consider the waste at the 

back end. When we were looking at EM2 and designing the reactor, 

we took that into consideration to be able to use the spent nuclear 

fuel in light water reactors regenerated and reformed into a fuel 

that the EM2 reactor could use. And in doing that you are gaining 

back all of the energy that would usually just put stored in waste 

and just sit there and not be reused, so we are not putting more 

effort into taking new natural resources, but we are actually using 

the waste as fuel. 

Senator WHITEHOUSE. Thank you, Chairman. My time has expired. 

Senator INHOFE. Thank you, Senator Whitehouse. 

Senator ROUNDS. Thank you, Mr. Chairman. 

Ms. Bawden, I would like to followup on what Senator 

Whitehouse was just talking about. In your GAO report you actually identify the fact that there are tailings and so forth that are 

the property of the U.S. Government today, and that there appears 

to be a commercially viable alternative to simply storing them and 

104 

that there has been an interest in purchasing those tailings. Could 

you share a little bit about your report and what you are finding 

actually in today’s marketplace with regard to those tailings? 

Ms. BAWDEN. Thank you for your correct. The last time we valued the Department of Energy’s inventory of tails was in June 

2014, and we put that value at about $1 billion. We have reported 

over the years that sometimes certain types of tails may be able 

to be re-enriched, and when that occurs basically the tails are used 

as the feedstock for enrichment, rather than natural uranium that 

has been converted. That has occurred on several occasions, re-enrichment has occurred, and most recently the Department of Energy issued a press release stating that there is commercial interest in purchasing a significant amount of the Department’s inventory. 

Senator ROUNDS. So there has been a private entity which has 

made an inquiry to our Department requesting the opportunity to 

purchase tailings, correct? 

Ms. BAWDEN. That is correct. 

Senator ROUNDS. And at the same time we don’t have a process 

in place in which we can facilitate the negotiation of the sale of 

that in any type of a regulated manner, is that a fair way to put 

it? 

Ms. BAWDEN. So we have had a legal opinion in the past that 

says we do not believe the Department of Energy has authority to 

transact in tails. The Department has disagreed with that legal 

opinion, and the bill before us today does address that issue. 

Senator ROUNDS. Thank you. Let me ask another question. In 

your May 2014 report you recommended that for each uranium 

transaction that it conducts, that DOE should publicly identify the 

legal authority that it relies on for that transaction. You went on 

to indicate that there were times in which there had been transfers 

of uranium, a product owned by the Federal Government, that had 

been delivered to a third party that we apparently had a contract 

with and we owed money to. And instead of paying the bill with 

cash, we bartered it out by giving them uranium instead, and that 

they were then allowed to sell the uranium and that was our way 

of completing the transaction through DOE. 

Can you talk a little bit about what that does to the accounting 

process and keeping track of where the money goes in an asset of 

the Federal Government that has been converted at this point? 

Ms. BAWDEN. It is confusing. So what we have said in the cases 

of those transactions that we reviewed that we believe there was 

a miscellaneous receipt statute violation, and that the Department 

of Energy should have deposited in the Treasury the net proceeds 

of the sale of that uranium. It did not, and that continues to be a 

legal disagreement between GAO and DOE. 

Senator ROUNDS. Do you have any idea as to the size of that 

transaction in terms, if we converted it to cash like we would normally do if we were going to have a transaction that could be followed, what size was that transaction? 

Ms. BAWDEN. Well, there have been several of those transactions. 

We looked at the first in a legal opinion we issued in 2006 and 

then there were others that we looked at in a report in 2011. I 

105 

don’t know the current value of that, but we would be happy to 

look into that for the record. 

Senator ROUNDS. Would it be fair to say that if a department 

such as DOE wanted additional resources that they could utilize, 

they can sell an asset of the U.S. Government, basically fuel, they 

can sell it to a third party or transact it to a third party, rather 

than paying cash, which would be part of their budget, and they 

then have additional excess cash available to do what they want 

with or to cover other expenses as they see fit? 

Ms. BAWDEN. The Atomic Energy Act and amendments to it does 

authorize DOE to transact in certain types of uranium. But what 

we believe is not allowed is DOE’s authority to retain the proceeds 

from those transactions. And in these cases that is what we believe 

DOE has done, and that is why we included an opinion that said 

there was a miscellaneous receipts statute violation. 

Senator ROUNDS. In other words, what they should have done is 

deposited it back with the United States Treasury. 

Ms. BAWDEN. That is correct. And not having done so, they would 

have supplemented their appropriation. 

Senator ROUNDS. Are you aware of any other department that 

transacts business like this that is currently allowed to keep the 

resources that we could follow? I know in your recommendation you 

suggested actually that rather than simply slapping their hands for 

doing it, you suggested that we amend the laws in place today so 

that they could do that in the future. 

Ms. BAWDEN. We suggested that the lobby clarified one way or 

the other. There are examples across the Government where Federal agencies are allowed to retain proceeds from various things, 

but I personally don’t know of any Federal agencies that transact 

in this way. 

Senator ROUNDS. Thank you. 

Thank you, Mr. Chairman. 

Senator INHOFE. Thank you, Senator. 

Senator MARKEY. 

Senator MARKEY. Thank you, Mr. Chairman. 

Ms. Korsnick, before we discuss next generation reactors, I have 

a question about how we can ensure that the current nuclear fleet 

is secure against terrorism. The 2005 Energy Policy Act includes a 

provision which I authored that mandates that the Nuclear Regulatory Commission conducts security inspections at U.S. nuclear 

power plants. The reason I built that in, obviously, is the terrorist 

attack on 9/11, where two planes were hijacked from Logan Airport 

that flew into the World Trade Center. So my goal was to make nuclear power plants more secure. 

The inspections must include force-on-force exercises where a 

mock adversary terrorist force conducts a simulated attack on a 

power plant to probe potential gaps in the plant’s security. These 

exercises allow the NRC to ensure that nuclear power plants are 

adequately protected against terrorists or other bad actors. 

The alternative, having plant operators run their own exercises, 

would not only violate the law, but it would create a clear conflict 

of interest and undermine public safety. 

In the past, the Nuclear Energy Institute lobbied the Nuclear 

Regulatory Commission to get rid of its force-on-force exercises in 

106 

favor of exercises conducted by the owners of the power plant. In 

effect, this would have nuclear power plant operators inspecting 

themselves. 

In December I wrote to the NRC to explain that implementing 

such a proposal would not only be dangerous, but also illegal. In 

response to my letter, the Nuclear Energy Institute stated publicly 

that it did not support getting rid of the NRC’s force-on-force exercises. 

But at a recent public meeting, the Nuclear Energy Institute appears to have shifted its position yet again and now says that it 

might support getting rid of NRC-run security evaluations in favor, 

instead, of letting the owners of the plant do their own inspections. 

Could you clear this up? Which side of that issue is the Nuclear 

Energy Institute on? 

Ms. KORSNICK. I can share that we are currently conducting 

these force-on-force exercises. I am familiar with those. I know that 

there has been some work with the industry working with the NRC 

to see if we could do these in a more efficient way, rather than the 

way that they had been conducted. 

Senator MARKEY. Do you support that the Government ensure 

that it is done independent of the owner of the plant, or do you 

support letting the plant operator do it? Which position do you 

take? There are two different positions here just in the last couple 

of months. 

Ms. KORSNICK. What I am familiar with is that it is done independently. I will let you know that—— 

Senator MARKEY. Independently of? 

Ms. KORSNICK. That there is an independent force that conducts 

these, that the NRC observes this independent force on this forceon-force exercise. That is how it is done today. I do know that there 

are folks that are looking at our security right now. 

Senator MARKEY. So you support the continuation of NRC-run 

force-on-force exercises, is that correct? 

Ms. KORSNICK. That is correct. That is what we do today. I do 

know that there are people looking—— 

Senator MARKEY. Do you support that position being continued? 

Ms. KORSNICK. I do support that, but there are folks that are 

looking at it. If, in the future, they come up with a recommendation, we will evaluate it, but that is how it is currently being done 

today. 

Senator MARKEY. Well, the reason that we have the goal of having the plant operator not inspect itself is the same reason that you 

don’t have take-home exams in school, that not only do you take 

it at home, but then you give yourself your own grade. There would 

be a disproportionate number of A-plusses that students would give 

to themselves for the work which they were doing. So you need an 

independent way of looking at the safety issues, especially post-9/ 

11, post-Tsarnaev brothers in Boston, as well, on Marathon Monday. 

So I urge you very strongly, Ms. Korsnick, to have the Nuclear 

Energy Institute adopt the position which you did at the end of last 

year, that there should be independent inspections to make sure 

that these plants can withstand a terrorist attack, and it is not just 

done by the plant owners themselves, who will want to have, necVerDate Aug 31 2005 09:03 Jul 25, 2017 Jkt 000000 PO 00000 Frm 00110 Fmt 6633 Sfmt 6633 S:\_EPW\DOCS\26151.TXT VERNE
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essarily, a stake in lowering the cost that they would have for trying to protect these plants. 

So I can’t urge you strongly enough that we learn this lesson in 

Boston, on 9/11, and then with the Tsarnaev brothers. They are 

coming; they have plans. Nuclear is at the top of their list; nuclear 

weapons coming in from overseas, nuclear power plants in the 

United States. If they don’t have the kind of security that protects 

against a successful terrorist attack, then we are going to see them 

try to penetrate the loose standards that some of these power plant 

owners will put in place. 

So I thank you, Mr. Chairman, and I yield back the balance. 

Senator INHOFE. Thank you, Senator Markey. 

Senator FISCHER. 

Senator FISCHER. Thank you, Mr. Chairman. 

Ms. Bawden, I would like to followup a little bit on Senator 

Rounds’ questioning that he had with you. In your testimony, you 

mention the miscellaneous receipts statute. Can you please expand 

on the purpose of the statute and how it protects Congress’s power 

of the purse under the Constitution and why the American public 

should care whether the Department of energy violates that law? 

Ms. BAWDEN. Essentially, the miscellaneous receipts statute requires that any money the Government receives be deposited in the 

Treasury. When that doesn’t happen, an agency has essentially 

augmented its appropriation or used money that Congress didn’t 

give it, and this circumvents Congress’s power of the purse, which, 

as you stated, is its constitutional responsibility. 

In the cases that we have looked at with respect to uranium 

transactions the Department of Energy has carried out, DOE paid 

for certain services in uranium rather than paying for them with 

appropriated funds, and in our legal opinion did so without authority. 

Senator FISCHER. So what are the consequences if the Department has violated that statute? 

Ms. BAWDEN. It is difficult to determine the consequences. Miscellaneous Receipts Act violations can be resolved if Congress were, 

for example, to retroactively approve what the Department did or 

for the Department of Energy to adjust its books to reflect the uranium that it essentially provided as an obligation against its budget authority. It has not done either of those things. So it is possible, 

if the Department of Energy obligated more money than it was appropriated, that it could be viewed as having an Anti-Deficiency 

Act violation, which does carry with it penalties, civil and criminal 

penalties. 

But we believe that Congress could ask DOE for more information about this issue to really try to understand its scope. For example, Congress could ask DOE to provide the total value of the 

uranium it has traded and look at that with respect to its 

obligational authority. There are also appropriations levers that 

could be used. 

Senator FISCHER. So Congress does have some tools to be able to 

address this. 

Ms. BAWDEN. Yes. 

Senator FISCHER. And do you think they are appropriate at this 

time or do we need to look at augmenting them? 

108 

Ms. BAWDEN. I haven’t looked at that issue. 

Senator FISCHER. OK. Thank you. 

Dr. Finan, I understand that there are several advanced reactor 

technologies that need uranium enriched up to 20 percent, and this 

is higher than the standard 5 percent enrichment currently used 

in operating reactors. Can you tell me more about the situation? 

Ms. FINAN. Sure. Thank you for the question, Senator. 

There are many of the advanced reactor companies who will need 

to use enriched uranium that is low enriched, but is between 5 and 

20 percent, and currently we don’t have a domestic supply chain 

for that fuel because there hasn’t been a demand. So that is essentially the situation. It is possible that they could obtain the materials internationally, but that is not the preferred option. 

Senator FISCHER. So it is not available right now in the commercial market? 

Ms. FINAN. It is not. 

Senator FISCHER. And is the Department of Energy’s uranium 

surplus, is that the only source that we have? 

Ms. FINAN. It is the only domestic source currently. 

Senator FISCHER. Domestic. Which is the preferred method that 

we should be looking at, right? 

Ms. FINAN. Right, right. So it would be a very promising way to 

provide a bridge for those early movers to have the fuel that they 

need to do their development work before commercial enrichment 

capacity is established in the U.S. 

Senator FISCHER. Thank you very much. 

Ms. Korsnick, to followup on the line of questioning we just had 

here, how long would it take to establish a commercial fuel supply 

with the enrichment necessary to meet the needs of the advanced 

reactors that we are looking at? 

Ms. KORSNICK. For that higher enrichment, very much what Dr. 

Finan just said, we would look to the down-blending of the highly 

enriched uranium as sort of a stopgap measure, and we would need 

that until enough of a market develops that there would be a commercial opportunity. Once there is investment at a commercial 

level, we are estimating probably in the neighborhood of 7 to 10 

years, but that is after the decision has made to pursue it. So I 

want to be careful there. It is not 7 to 10 years after people start 

needing it; it is after somebody has made a commercial commitment to actually pursue it. And in the meantime we think downblending the HEU is the best approach. 

Senator FISCHER. And it is appropriate that the Department 

would be able to supply that, do you think? 

Ms. KORSNICK. It would. I think we need to look at this current 

bill and some caps that were put in place. We would think that the 

caps would not apply to the down-blending. 

Senator FISCHER. And in the bill before us, S. 512, it directs the 

NRC to examine the feasibility of extending the duration of uranium recovery licenses, and your testimony states that you believe 

40 years would be appropriate. Can you explain why? 

Ms. KORSNICK. Yes. It is very commensurate with other facilities, 

we think, the 40-year timeframe. For example, when you license a 

reactor, that comes in a 40-year license. And the risk associated is 

much less with the facilities that we are talking about. So we think 

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it is very commensurate with the risk that a 40-year license would 

be very appropriate. 

Senator FISCHER. Thank you very much. 

Thank you, Mr. Chairman. 

Senator BARRASSO. [Presiding.] Thank you, Senator Fischer. 

Senator BOOKER. Senator BOOKER. Thank you very much, Mr. Chairman. And let 

me just say, to begin with and echoing the comments of Senator 

Whitehouse, how grateful I am that we have a tremendous bipartisan bill together. It really is a testimony to this Committee and 

our ability to work together, and I just want to thank Senators 

Inhofe, as he walks out, and thank you, sir, always for your leadership, and Barrasso, Capito, Fischer, as well as Senator Duckworth 

and Manchin, who are now all cosponsoring what I think is a very 

strong bill. In fact, I think it is an urgent bill. 

Nuclear energy, right now, is critical, if not vital when you look 

at the larger energy picture in the United States of America. Not 

only is it from the perspective especially from us Democrats here, 

about the challenges, crises we are facing from the bleaching of 

coral reefs to, as was mentioned already, the extraordinary high 

asthma rates in communities like mine. But it is also urgent when 

it comes to the global security perspective and the competition we 

are seeing in nuclear energy, and what is happening with those scientists who are many ways being developed more so in China or 

Russia than here in the United States. 

Right now we all know that nuclear energy provides a very, very 

critical aspect of our non-carbon-producing power. We did the right 

thing in a very important negotiation in 2015, when we extended 

tax credits for wind energy and solar energy and, as a result of 

having 7 years of predictability, we saw a boom in investment in 

this area, literally creating thousands and thousands of more 

American jobs. And it was the right thing to do, especially if you 

look at, as Senator Whitehouse was saying, the impact of carbon 

and the cost of carbon. But we did not include nuclear energy as 

a result. 

Now, the crisis we have is the fact that if you look at wind and 

solar, we still have nuclear power, baseload, critical baseload 

power, which now compromises about 20 percent of the total U.S. 

electricity generation and more than 60 percent of our Nation’s carbon-free electricity. It is a powerful component. And to have these 

plants closing down and having us move, as a Nation, away from 

nuclear energy really threatens our ability to do carbon-free, to reduce our carbon-producing, polluting-producing energy sources. 

So right now in the United States, though, the good news is that 

there are dozens of private sector companies that are moving forward and making billions of dollars in investments in advanced nuclear designs that could lead to the next generation of reactors. I 

confess, when I first read about advanced nuclear, I thought I was 

reading science fiction and not science fact, because these reactors 

are far more safe to not have a lot of the challenges or problems; 

actually eat the spent nuclear fuel of current generation reactors. 

So we really need long-term policies that are going to support the 

existing fleet, but also support the development and upscale of adVerDate Aug 31 2005 09:03 Jul 25, 2017 Jkt 000000 PO 00000 Frm 00113 Fmt 6633 Sfmt 6633 S:\_EPW\DOCS\26151.TXT VERNE
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vanced nuclear technologies. So that is what the urgency is right 

now. 

I think some of the issues that Senator Markey was bringing up 

are critical. We need to always be doing everything safely. But if 

we are going to move forward and embrace a carbon-free future, we 

are not going to get there quick enough relying on solar or wind; 

nuclear has to be a critical part of it. And, again, looking at the 

critical global security issues and competition issues, this is a space 

that we don’t want to give the advantage to other nations. 

So I want to thank everyone who joined together on trying to design a bipartisan bill. It creates a regulatory regime that still focuses on safety, but also focuses on creating a regulatory environment for us to lead. And my hope is, I think what Senator 

Whitehouse was hinting at, is we start looking at valuing the carbon contributions or, I should say, the non-carbon contributions of 

nuclear as well as thinking of ways to create tax policy in the way 

we did with solar and wind in this space. 

But very quickly I would like to just put a question to Dr. Finan 

on a concern I have about the first-of-the-kind technologies, people 

that are moving in this advanced nuclear space that is really, I 

think, critical right now and exciting. There is an issue for the 

first-of-the-kind technologies that there is a significant design review costs in this space, both pre-application and post-application. 

These costs can be higher and less predictable than for subsequent 

projects. So I want to know, Dr. Finan, do you see this as a problem and can you talk about how the DOE matching grant program 

in this bill could really help solve that problem? 

Ms. FINAN. Yes. Thank you for the question. Many of the advanced nuclear companies have cited these review costs as a major 

challenge to their commercialization. I think that the grant program will help to address that, as similar programs have for the 

AP 1000 and for the NuScale project. 

Senator BOOKER. So this is a first step. But looking at the future, 

this really exciting technology in the nuclear space, are there 

things that we can do to expand on the DOE grant program in this 

bill and make it actually more effective, if you were sort of advising 

us? 

Ms. FINAN. I think that there are. The current language authorizes that that grant program can be used to defray NRC fees. You 

could expand that to allow it to be used for applicant costs in preparing and pursuing the applications, as has been done in the SMR 

program; and that might be more effective. 

Senator BOOKER. Thank you very much. And then there are 

clearly these economic reasons, which I have discussed, why we 

want to develop these next generation nuclear technologies, or safety reasons why we want to embrace these next generation nuclear 

reactors here in the United States, but can you talk about some of 

the other reasons why this is so critical and what risks we face if 

we don’t allow these technologies? What is exciting you about it 

and what are the risks for not moving forward? 

Again, I feel like a nerd now when I go around sort of talking 

about the exciting next generation nuclear technologies, so I am 

hoping that you can confirm me so I can clip this part right here 

and my friends don’t think I am weird for talking about it so much. 

111 

[Laughter.] 

Ms. FINAN. Absolutely. Well, the U.S. has been a leader in nuclear energy since the dawn of technology, and we are actually 

starting to cede that leadership, as has come up a couple times 

today. Many would argue we have ceded it to Russia and to China 

and others, but we have an opportunity here with this future before us to seize that role back and to really regain that leadership 

role so that we have influence on non-proliferation discussions and 

on best practices and safety and environmental issues globally. And 

I think that is a key thing that we will lose if we don’t maintain 

leadership here. 

Just one other point is that if we don’t support our domestic 

innovators, some of these technologies might not be developed at 

all, or they could be supplanted by designs developed elsewhere, 

where they don’t necessarily prioritize safety the way that we do 

here. 

Senator BOOKER. And if you could just clarify for me, in terms 

of, again, Senator Whitehouse is one of the leaders on this issue 

of trying to create a carbon-free future in energy. To get there 

quickly, what is the role that nuclear must play if we are going to 

get there in 10, 15, 20 years? 

Ms. FINAN. Nuclear needs to play an enormous role. We have a 

huge increase in energy demand globally that we are going to see, 

and we can’t keep those people from having energy. We need to 

have everyone have energy abundance for human health and economic growth, and nuclear really is available and ready to play a 

role in providing that energy globally, without any carbon emissions or criteria pollutants. 

Senator BOOKER. And so from India, which is still embracing coal 

power plants left and right, China still starting new coal power 

plants left and right, if we get this technology right, if America 

leads on it in this space, we can really be the leaders in proliferating and really helping to stop this continued reliance on dirty 

fuel. 

Ms. FINAN. Right. We can bring great opportunity to developing 

countries so that they can have clean, abundant power, but also 

help our economy here at home with abundant exports of our technology. 

Senator BOOKER. And is the safety of advance nuclear excite you 

as much as me? Does it? 

Ms. FINAN. Absolutely. I think that one of the biggest amazing 

things about advanced nuclear is the prospect of being able to have 

a plant that does not have impacts outside the site boundary in an 

accident. I think that is a critical characteristic for advanced nuclear plants to meet. 

Senator BOOKER. Thank you very much. Please, more caffeine in 

your next hearing so you can be as jazzed as I am about this. 

[Laughter.] 

Senator BOOKER. And, Dr. Back, really quick, I am excited about 

the work that you and your team are doing over at General 

Atomics. In your testimony, you touched on advanced reactors can 

be safer than existing technologies. Could you just elaborate on 

that safety as the last point? Thank you. 

112 

Ms. BACK. Yes. This gets to your excitement about new technologies. I mean, we start with a fiber that is a silicon carbide 

fiber. We make it into a weave and then we solidify that by depositing silicon carbide in between. That makes something that is 

called a silicon carbide composite that is much more resistant to 

the neutron radiation and also can go to more than two times the 

temperature of metal zircaloy, for instance. 

So that fundamentally changes the game for safety because you 

cannot only avoid accidents in areas where you had meltdown in 

Fukushima of the fuel and the fuel rod, but also you reduce the 

generation in hydrogen so you don’t have explosions like at 

Fukushima. Also, that allows you to burn the fuel more efficiently; 

you can go to higher temperature. That allows you to generate 

more electricity from the same amount of heat. So, for instance, for 

EM2, we can generate 60 percent more energy from the same 

amount of heat. 

And there are simple things with technology where you can borrow and build on other technologies, for instance, moving from a 

steam generator to a gas turbine also jumps you enormously from 

light water reactor plant is sort of bounded by 33 percent efficiency. 

When you use gas turbines, you can jump up to 53 percent for our 

particular design. There are other designs that use gas turbines, 

but also make other advantages in technologies that allows you to 

burn fuel more or, in the case of safety, which I shouldn’t forget, 

we started EM2 before Fukushima happened, but it turns out the 

silicon carbide material that we use is exactly used. It is important 

for light water reactors for the same reasons it is for EM2, which 

is that it is more resistant at temperature and you can avoid these 

problems that happen at Three Mile Island and Fukushima. These 

would not have been problems where you would have to walk away 

from the reactors. 

Senator BOOKER. Thank you very much. 

Thank you, Mr. Chairman. 

Senator BARRASSO. Thank you, Senator Booker. 

Senator CAPITO. Senator CAPITO. Thank you, Mr. Chairman. 

And thank all the witnesses. 

I would like to address both my questions, really, to Ms. 

Korsnick. In the GAO report on the NRC’s fee recovery process, one 

industry stakeholder indicated a lack of understanding as to how 

the fees actually relate to the NRC’s budget. You talked a lot about 

this in your written statement. Another noticed a mismatch between the activities in the NRC budget and the activities the staff 

actually performs. 

So are the structural problems with the NRC’s fee recovery a recent development or has the industry had longstanding concerns 

about the fee structures? 

Ms. KORSNICK. We have actually had longstanding concerns, and 

I know we have had conversations that date back, I don’t know, to 

the early 1990’s, I believe, talking about the concerns that we expressed. We do think that this bill is a step in the right direction 

in terms of creating more transparency and making it much more 

clear in terms of where money is being spent. You mentioned a report. There was also an Ernst & Young report that was done in 

113 

terms of the amount of money that the NRC spends on their corporate costs, so through the provisions in this bill I think there is 

more clarity in terms of how much money would actually be spent 

on those corporate costs, which is something that is of much interest to the industry. 

Senator CAPITO. I guess a very simple question, when I was reading some of the background on this issue, in terms of corporate 

costs, is that another name for administrative fees? Do you know 

what those corporate costs are that they are devoting, what is it, 

32, 33 percent of their budget to? 

Ms. KORSNICK. It is a wide range of things; human resources, administrative costs, building fees, for example, where the offices are 

located. There are information systems costs, etcetera. So it is a variety. 

Senator CAPITO. It is a variety. OK. 

So you just mentioned that you think that S. 512 would go a long 

ways toward the transparency. I have the GAO report here, which 

recommends greater transparency. So you are satisfied that this is 

necessary to get that transparency and equity that you think would 

make this fee structure much more fair and transparent? 

Ms. KORSNICK. Absolutely. Step in the right direction. 

Senator CAPITO. Well, thank you. S. 512 also directs the NRC to 

expressly identify the funds necessary to work on reviews requested by licensees and applicants, and I understand that one of 

the issues is, as plants decommission, it then gets the last man 

standing, fees go up. Could you talk about that a little bit? 

Ms. KORSNICK. Yes. And that is why the provision in the bill relative to the cap is important to us, because, as we spoke earlier to 

your point, as plants decommission, it raises the price, if you will, 

on the plants that remain, so the cap structure that is put in in 

this provision in this bill would help ameliorate that effect. 

Senator CAPITO. Could you say affirmatively that this wouldn’t 

compromise any safety or security issues around any of the plants? 

Ms. KORSNICK. Absolutely. And the reason I would give you for 

that, first of all, the level that it is capped at is the 2015 level, 

which is a high watermark in terms of the amount of money; and 

in the same token, if there is some, I will say, unforeseen event 

that for some reason the NRC would feel the need to go higher 

than the cap, there is a provision in the bill for them to make that 

appeal in that case. I would find that, obviously, very remote, but 

there is a provision in the bill should that be necessary. 

Senator CAPITO. Right. Thank you very much. 

Senator BARRASSO. Thank you, Senator Capito. 

Senator HARRIS. 

Senator HARRIS. Thank you. 

To Ms. Bawden, as you know, the San Onofre Nuclear Generating Station in San Diego, California was nationally scrutinized, 

beginning in 2012, for concerns over the radioactive leaks and potential fire concerns, and I can tell you, living close to that community, many families, many children very concerned about the 

health consequences of what happened there. And the Nuclear Regulatory Commission then began its investigation, which ultimately 

led to the decommissioning, as you probably know, in 2013, of the 

station. Still, there are concerns that of the almost 3.6 million 

114 

pounds of radioactive nuclear waste that was left behind, that 

there could be significant risk to the 65,000 residents of the San 

Clemente area and its surrounding communities. 

So from the GAO’s perspective, has the Nuclear Regulatory Commission sufficiently overseen what is going on in that area and in 

particular the work of Southern California Edison and its process 

for handling the nuclear waste? 

Ms. BAWDEN. I appreciate that question. Unfortunately, I am not 

GAO’s expert on NRC regulation. I came today—— 

Senator HARRIS. What have you heard around the office? 

[Laughter.] 

Ms. BAWDEN. That is a great question. No, I would be happy to 

provide the details on GAO’s work for that for the record. 

Senator HARRIS. OK, I would appreciate that. And as soon as 

possible, because, obviously, it is a big issue for the folks who are 

there. 

Ms. BAWDEN. Absolutely. 

Senator HARRIS. In addition, GAO issued four reports between 

2003 and 2011 which cited the Commission’s regulations were ‘‘too 

weak’’ in their ability to ensure safety and security for the nuclear 

power plants, and also the concern about their ability to monitor 

the underground pipe leaks and their ability to enforce fire protections, all issues that apply to many places but, in particular, San 

Onofre, from my perspective. 

Do you think that there are existing regulations that the Commission should strengthen or others that the Commission should 

consider before we start having a discussion about expediting licenses to advanced nuclear energy projects? 

Ms. BAWDEN. Again, I very much appreciate your question and 

I will provide a full response to it for the record. 

Senator HARRIS. OK. And thank you. 

Ms. Back, one of my general concerns about how nuclear waste 

is disposed of is that even if there is some of it that remains, it 

presents a serious challenge and harm to the health of the people 

in that community. Last year, in an interview with the San Diego 

Tribune, you stated that General Atomics’ new Energy Multiple 

Module, which you have mentioned, EM2, could decrease the 

amount of nuclear waste by 97 percent, which is laudable, compared to a traditional nuclear reactor. So although, of course, that 

is encouraging, what will completely eliminate the nuclear waste 

that is produced? 

Ms. BACK. That is a tough challenge, but the way that we reduce 

the amount of waste is we I don’t want to say burn, because you 

are not really making a flame, but you are using up the fuel, you 

are consuming the fuel when you start to generate heat which then 

turns into electricity. If you generate at higher temperatures and 

you generate or you run the fuel for a longer time—in EM2 we use 

the fuel for 30 years—then you can burn up, if you will, the radioactive elements that are having long life radioactive decay, also 

short life. But if you then use that fuel and reconstitute it and then 

take it through the reactor again, then you can burn more. After 

multiple cycles is how you get to a 97 percent decrease. 

Senator HARRIS. So what about that remaining 3 percent? Let’s 

talk about that. 

115 

Ms. BACK. So that remaining 3 percent, there is still some part 

you will have to put into a geological disposal. That will be much, 

much smaller volume. If you look at the amount of volume from reducing it to 97 percent less, it is hardly comparable. 

Senator HARRIS. So what do you imagine the future will look like 

in terms of our ability, based on the research and the science that 

we are engaged in, what could it possibly look like that we would 

be able to completely eliminate that remaining 3 percent? What 

would need to happen? 

Ms. BACK. I think in the end you still have to dispose of it as 

a geological waste. So there will be some small amount that you 

will still have to dispose of. 

Senator HARRIS. Do you foresee that incrementally we will get to 

the point that we will at some point reduce that number to 2 percent and 1 percent, or have you determined that 3 percent is pretty 

much the end? Pardon the pun. 

Ms. BACK. No, I am never going to second-guess science; there 

are too many discoveries that have happened. 

Senator HARRIS. Of course. 

Ms. BACK. And new technologies that maybe are able to do something in the future that we can’t imagine now. But today I would 

say that that 3 percent is going to have to go into a geological 

waste. But I think that should be kept in contrast with the huge 

amount of waste that you see generated for other power sources. 

So this is an extremely efficient use, where you are taking a large 

atom, uranium, it is splitting, you are getting out energy. 

You know, the footprint of a nuclear reactor, for instance, compared to a solar array, which basically we can’t get States that will 

give us a large enough amount of surface area because it is just 

not possible; the technology is not able to compensate. So replacing 

that 20 percent of nuclear energy that is going to be retired, I personally can’t see a way to do that right now. So, to me, nuclear has 

to be a part of the diverse mix of energy sources. I think it is also 

good for the Nation, for national security, and this is, I think, 

something that we, as a Country, have to make a decision to invest 

the money and the technology to really be able to make these hurdles. 

I mean, if you look at the comparison of, I have used this before, 

but it is just too simple to see. If you look at your telephone from 

the 1950’s and you look at your iPhone today, I mean, you could 

never have imagined that it could grow by leaps and bounds there. 

Nuclear technology has not really fundamentally changed since the 

1940’s and 1950’s, when it was developed, so I think probably there 

is not a person in this room that couldn’t imagine that you could 

make improvements and make them safely. I mean, we value the 

NRC. We believe that they should exist and we believe they should 

be regulated, and we think that advanced reactors can fit within 

that envelope easily. We have to be given a chance and it takes 

time to prove these things out, but that doesn’t mean that we 

shouldn’t start now. 

Senator HARRIS. Thank you. 

Senator BARRASSO. Thank you very much, Senator Harris. 

116 

Senator Duckworth, thank you for being a cosponsor. If you 

would like to have some additional time to make an opening statement as well as the questioning, please feel free. 

Senator DUCKWORTH. Thank you, Mr. Chairman. 

Well, I would like to thank the Chair and Ranking Member for 

convening today’s hearing. I also want to commend Chairman 

Barrasso for your leadership in developing this legislation in a 

transparent and bipartisan fashion. I am very proud to cosponsor 

this bill that seeks to modernize how we regulate the nuclear industry. 

My constituents get a significant amount of energy from nuclear 

sources. Illinois’s 11 reactors, the most of any State, generate half 

of the State’s electricity. We also have 3-D activated reactors. 

But that is only half of the story. These facilities are major job 

creators in my State. Illinois’s nuclear energy facilities employ 

nearly 6,000 high skilled workers and, on average, each reactor has 

an annual payroll of $40 million a year, and Illinois facilities pay 

almost $300 million in State and local taxes. These are good jobs, 

and my mission in the Senate is to protect them and the communities that they support. So I thank the Chairman for this bill. 

I would like to begin my questioning by just saying a lesser 

known fact, but one that we take special pride in, is that Illinois 

is home to Argon National Laboratory, one of our Nation’s crown 

jewels of scientific research and a leader in developing nuclear 

technology. In fact, our current nuclear technology is a product of 

the hard work performed by Argon researchers in Illinois. 

The folks there, about 3,300 researchers and scientists, are leading the Nation’s development of fast reactor and fuel recycled technologies, and if Congress fulfills our commitment to fund this program, Argon will fulfill its promise to improve the affordability of 

nuclear power, enhance safety and security, and minimize radioactive waste, as we have been discussing already. 

Dr. Finan, you mentioned in your testimony that startup companies are pioneering nuclear designs that offer safer and more affordable nuclear technology options. In your view, what are the top 

nuclear innovation benefits of our investment in DOE national laboratories, such as those made at Argon, particularly when it comes 

to materials development, advanced chemistries, reduced nuclear 

wastes, and super-computing capabilities? Can you talk about some 

of the things that are exciting that are happening right now that 

really depend on the DOE laboratories? 

Ms. FINAN. Absolutely. The national labs are really invaluable 

and irreplaceable partners to these nuclear innovators. Not only, as 

you said, do they develop many of the technologies that this work 

is based on now, but these innovators are working hand-in-hand 

with experts at the national labs, including Argon and Oak Ridge 

in Idaho, all of those places, to do their materials work and to do 

their super-computing. They are using the experimental facilities 

at those labs that aren’t available elsewhere, and, really, it is enabling them to move forward in a way that the private sector 

couldn’t do alone. So the labs play a critical role in all of those 

areas. 

117 

Senator DUCKWORTH. Is there any particular technology that is 

being developed that you find especially exciting that is a partnership with private organizations? 

Ms. FINAN. I think one of the key technologies being developed 

or worked on and furthered is fast reactor fuels, which are really 

being developed in partnership with the labs and the private companies, and that is an important synergy, where the fuels really 

couldn’t be developed on their own in the private sector. 

Senator DUCKWORTH. Thank you. 

I believe deeply in scientific research and remain committed to 

advance in innovation. I also know that R&D on its own will not 

make the lives of Illinoisans or Americans better by itself. In order 

to fully capitalize on our investments in next generation nuclear 

technology, we have to make sure that those jobs associated with 

them stay at home. So could you speak a little bit as to how you 

think we could ensure that U.S. components manufacturers and 

manufacturing workers, what kind of a role do they plan in the development of manufacturing of SMRs and other advanced nuclear 

technologies, the folks who are the subs and who are making the 

components? 

Ms. FINAN. Sure. You know, I think it is important to note that 

several U.S. companies are already turning to other countries to be 

their main partners in licensing and demonstrating their technologies. And when they do that and go that route, they are much 

more likely to use manufacturing in those countries where they are 

looking for their demonstrations to be built. So I think the best 

way that we can support more manufacturing here in the States 

is to really support the innovators’ ability to be licensed and to 

demonstrate their technologies here in the U.S., and I think that 

S. 512 goes a long way toward assisting that. We also need to support the supply chain here to make sure that the manufacturing 

is available for those technologies. 

Senator DUCKWORTH. Thank you. 

Ms. Korsnick, how can advanced reactors and innovation contribute to overcoming the economic challenges that current nuclear 

power plants are facing in States like Illinois? 

Ms. KORSNICK. Well, if we were to look ahead in the future, you 

know, 30 or 40 years, I see a grid that is supported by advanced 

nuclear in strong partnership with, say, wind and solar for a clean 

energy future. And by doing that, these advanced reactors, they 

produce more than just the electricity that we are all interested in; 

they are partnering with other systems, say, high temperature, 

steam that maybe another technology might need to use. So you 

can imagine these reactors of the future supporting desalinization 

plants or supporting, again, other technologies that are in need of 

this high pressure steam, for example. 

So I see the design very different than just reactors that are 

there and supporting of just an electric grid. It will be more of an 

integrated view. 

And, also, as you look at these advanced reactors, they are not 

all the large reactors that we think of today and benefit today 

from; they are reactors that are a 1 or 2 megawatt size, a 50 megawatt size, as well as the large size. So you can then see a variety 

of deployments, right? Think of some remote locations out in the 

118 

middle of the desert or out in the middle of, say, Alaska, that 

maybe you only need a couple of megawatts or maybe you want a 

couple of megawatts that you put together that you are now able 

to have in this remote location. Maybe it only needs fuel every 10 

to 15 years. Well, that is very helpful in some of these remote locations. 

We talked about the fact that the world needs energy. But some 

places in the world are relatively remote. So being able to provide 

this technology in a case where you don’t have to refuel it very 

often, also very significant. So we really look ahead to see a very 

dynamic future. Our challenge is what can we do today to spur 

that future to a reality. 

Senator DUCKWORTH. I really see nuclear as a consistent source 

of fuel in that coalition with wind and solar and all of the other 

sources, because it is always there. 

Ms. KORSNICK. Absolutely. 

Senator DUCKWORTH. Thank you. 

I yield back, Mr. Chairman. 

Senator BARRASSO. Thank you very much. 

At this time I would like to ask unanimous consent to submit for 

the hearing record three letters in support of the bill, one from Mr. 

Ed Wallace of GNBC Associates, Mr. Jay Faison of ClearPath Action, and Mr. Josh Freed of the Third Way. 

[The referenced information follows:] 

119 


26151.079

GNBG 

ASSOCIA"()tS ""'"' 

March 6, 2017 

Senator John Barrasso (R-WY) Chairman, 

Senator Tom Carper (O-DE) Ranking Member 

Senate Committee on Environment and Public Works 

Re: S512 Nuclear Energy Innovation and Modernization Act (NEIMA) 

Dear Honorable Chairman and Ranking Member: 

8121 E. 6'" Ave 

Denver, CO 80230 

423-902-5330 

I am writing in support of the timely passage of Senate bill S512. I am a 47 year veteran of 

the power industry who has been involved in development, design, construction, licensing 

and operations of multiple generations of nuclear and non-nuclear power plants. This is a 

very important moment in American history, one where the opportunity to become energy 

independent, with a well-crafted mix of reliable, secure, carbon free and affordable energy 

can drive a renewed, reinvigorated economy capable of supporting the needs of American 

citizens. Nuclear power is an important part of that mix and must remain so for generations 

to come. Renewables are not a singular answer. The true cost of renewable energy is hidden 

since backup power, currently in the form of nuclear, natural gas and some coal plants is 

needed to take up the slack at times wind and solar power are not available. Economic growth 

and reliable, affordable electricity remain intimately and inextricably tied. Without a new 

generation of advanced reactors, some envisioned as far back as the Atoms for Peace 

Program, nuclear energy will wither and die exactly at the time the nation needs it most. 

The vision and purpose demonstrated in S512 is essential to have the next generation of 

nuclear designs ready to fill the gaps caused by retirements of existing generation and to 

supply the needed new capacity that fuels America's prosperity and security. One key to 

delivering on time is to make the nuclear regulatory process far more efficient and timely. The 

first decade of reactors still operating safely and reliably today were designed, licensed and 

constructed in less than ten years. That should be the goal today. Simpler, safer and more 

economical reactors are on the drawing boards of small and large companies anxious to fill 

the energy gap. Yet the single impediment most often heard in boardrooms, financial 

institutions and energy planning agencies, is can we count on them being delivered in time? 

To be sure, there are any number of events, natural and man-made that can slow or stop a 

major project like a nuclear power plant. However, modernizing the regulatory practices and 

requirements to achieve a predictable, practical and timely end is at the top of the list. This 

bill recognizes the essential features well. It deserves prompt and bipartisan support for what 

it can enable if done right. It can open the path to advanced nuclear energy delivery in the 

early 2030's, just when the country needs it most. 

Thank you for your vision and support for this critical legislation. 

Edward G. Wallace 

President, GNBC Associates, Inc. 

ed.wallace@gnbcassociates.com 
120 


26151.080

GNBC \ ASSqs::IATIES 

8121 E. 6'h Ave 

Denver, CO 80230 

423-902-5330 

CC: The Honorable Senators Sheldon Whitehouse (D-RI), Jim lnhofe (R-OK), Cory Booker 

(D-NJ), Mike Crapo (R-ID), Deb Fischer (R-NE), Shelley Moore Capito (R-WV), Joe 

Manchin (D-WV) and Michael F.Bennet, (D-CO), Cory Gardner (R-CO), Lamar Alexander 

(R-TN) 
121 


26151.081

March 7, 2017 

Chairman John Barrasso 

U.S. Senate Environment & Public Works Committee 

Washington, DC 20510 

Ranking Member Tom Carper 

U.S. Senate Environment & Public Works Committee 

Washington, DC 20510 

Dear Chairman Barrasso and Ranking Member Carper, 

On behalf of ClearPath Action, a 501 (c)4 organization working to accelerate 

conservative clean energy solutions, I want to let you know of our support for the 

proposed Nuclear Energy Innovation and Modernization Act. 

Nuclear power is one of the most important energy resources of the United States, 

representing a triumph of American ingenuity and engineering. Nuclear energy is highly 

reliable, clean and affordable, and is a vital part of our electricity mix. 

Nuclear plants built decades ago still safely provide 20% of our electricity. But as these 

plants near retirement, a new generation of advanced nuclear technology is being 

developed by dozens of companies and universities across the nation. Advanced 

nuclear reactors promise benefits from increased safety and affordability, resistance to 

proliferation, and the ability to run on old nuclear waste. 

Several of these advanced nuclear companies will begin applying for design 

certifications within the next 5 years, and one company called NuScale Power recently 

submitted the first Design Certification Application for a Small Modular Reactor. 

However, expensive and arduous regulations at the NRC are encouraging some others 

to consider building abroad for initial deployment. 
122 


26151.082

Instead of driving our engineers overseas, we should be promoting a regulatory 

environment that is safe, innovative and efficient. The Nuclear Energy Innovation and 

Modernization Act does just that- directing the NRC to develop a technology-inclusive 

licensing plan that promotes safety without being prescriptive, while modifying the cost 

recovery mechanism so utilities aren't on the hook for other companies' technologies. 

Updating our regulatory system for advanced reactors is an important part of the 

broader need to "rightsize" the NRC to match its workload. To that end, this legislation 

also wisely prevents the NRC from allowing its annual fees and administrative costs to 

overwhelm the broader nuclear industry. 

The NRC is second to none for safety, but it has unfortunately also become second to 

none for cost, delays, and complex rulemaking. This legislation preserves our record of 

safety while preserving an abundant clean energy future for our children. 

Sincerely, 

Jay Faison 

President 

ClearPath Action Fund for Conservative Clean Energy, Inc. 

300 New Jersey St, NW, #907 

Washington, DC 20001 

cc: Senators Jim inhofe, Mike Crapo, Cory Booker, Sheldon Whitehouse, Deb Fischer, 

Shelley Capito, Joe Manchin 
123 


26151.083

thirdWCjY 

Chairman John Barrasso 

307 Dirksen Senate Office Building 

Washington, D.C. 20510 

March 6. 2017 

Dear Chairman Barrasso and Ranking Member Carper: 

IH ENERGY f'ROGRA1'vl 

Ranking Member Tom Carper 

513 Hart Senate Office Building 

Washington, D.C. 20510 

I am writing to voice strong support for the recently-introduced bill, S. 512, the Nuclear Energy 

Innovation and Modernization Act. Protecting the continued safe operation of the existing fleet of nuclear 

reactors and enabling the development and deployment of advanced reactors can play a major role in 

meeting both domestic and global targets for emissions reductions. It can also allow U.S. industry to 

compete for a growing global market, create domestic job growth, and enhance America's international 

influence. To reap these rewards, U.S. policy must encourage continued production from our existing 

nuclear fleet while also providing a viable path to commercialization for advanced nuclear. The current 

structure of certain processes at the Nuclear Regulatory Commission (NRC), however. may actually act 

as a deterrent to safe and economical operation and advancement of nuclear technology. 

Innovation in the private sector has grown rapidly over the past several years, but regulatory uncertainty 

at the NRC is hampering long-term investment. The current licensing process was developed for a 

previous generation of technology and is ill-equipped for advanced reactors. This bipartisan bill would 

require the NRC to provide a pathway for advanced reactor licensing that would better guarantee their 

safety and encourage continued investment in innovation. It would also provide much-needed 

transparency and fee reform to address concerns about increasing regulatory costs for our existing nuclear 

fleet. 

We applaud the introduction of'S. 512 and hope that your Committee quickly approves it. The United 

States government plays a vital role in the future of the advanced nuclear sector and this bill establishes 

the regulatory certainty the industry needs to succeed. We look forward to continuing to support it as it 

moves through the House and Senate. 

Sincerely, 

__ Y!r <--tf;_-t 

Josh Freed 

Vice President for the Clean Energy Program 

Third Way 

cc: 

Senator Mike Crapo 

Senator Sheldon Whitehouse 

Senator Cory Booker 

Senator Jim Jnhofe 
124 

Senator BARRASSO. Senator Carper. 

Senator CARPER. Thanks, Mr. Chairman. 

Thanks again to all of you for joining us today and for your testimony. I think we feel encouraged on much of what has been said. 

Dr. Lyman, in his comments when he was speaking earlier today, 

reminded us of Fukushima and the horror and havoc that it has 

created for a place in Miyagi Prefecture, a place which is a sister 

State of the State of Delaware. I have been there before and have 

a great affection for Miyagi and the people who live there. 

I am going to ask a question for the record, but I am going to 

tell you what it is now and we will ask it for the record. There are 

a number of lessons we needed to learn; the Japanese needed to 

learn from Fukushima: What went wrong? Maybe what went right, 

but mostly what went wrong. I am not going to ask you to respond 

right now, but I am going to be asking for the record. In terms of 

what went wrong, what have we learned? What are we doing differently hear in this Country? Maybe what more do we need to do 

in order to fully realize and gain from the lessons of something 

very bad that happened? 

I would like to say sometimes out of something bad something 

good comes, and my hope is that certainly is the case here. 

The other thing I want to ask, one of our witnesses before this 

Committee once talked about if you could take all the spent fuel 

from nuclear power plants in this Country and stack them up on 

a football field, Mr. Chairman, it would fill up a football field and 

go up into the sky not a couple of miles, but it would go up into 

the sky for some distance. And some of you probably know the answer to that question. Does anybody know how high it would be 

today? Anybody know? I don’t know. 

Ms. KORSNICK. I think the estimate is 20 yards. It is not very 

tall. 

Senator CARPER. It is not that far. 

Ms. KORSNICK. No. If you used all of your energy personally that 

you got for your entire lifetime, and you got it from nuclear power, 

that waste would fill a 12 ounce can of soda. 

Senator CARPER. Thank you. 

Ms. KORSNICK. So the volume is not very large. 

Senator CARPER. I am encouraged by what Dr. Back told us 

about 97 percent spent fuel being really burned up or consumed. 

Whether it is 20 yards or however high that pile of spent fuel 

rods goes in that football field, do we have the ability to derive additional energy from that spent fuel? I know a lot of it is in casks 

and so forth, but is it gone forever and just has to sit around for 

tens of thousands of years, or is there some potential to derive energy from it going forward? 

Ms. KORSNICK. Oh, we can absolutely. There is about 95 percent 

of the energy left in that spent fuel; it has just been transitioned 

to a different isotope, if you will. There is technology available 

around the world today in reprocessing. As you may know, France 

reprocesses fuel. 

Senator CARPER. I have been there. 

Ms. KORSNICK. And that is how they tap into that additional energy, because you then make that available, if you will, for a different source. And some of the technologies that these folks here 

125 

are talking about are other ways that they can tap into the use of 

that energy? 

Senator CARPER. All right. 

Do you have any closing statement, any briefly closing thought 

that comes to mind before we conclude that might be helpful for 

us? Anybody? Please. Just very brief. 

Mr. LYMAN. Yes. I would just like to go back to this issue that 

keeps coming up about consuming spent fuel, about reprocessing. 

You know, I appreciate Senator Booker’s enthusiasm for these technologies, but I do believe that many of them still are in the science 

fiction stage, and it is not clear that throwing a lot more money 

and time after them is going to realize their promise. 

Reprocessing is dangerous, it is dirty, and it is expensive. Other 

countries have had terrible experience with it and they are dealing 

with the legacy. The French company AREVA, is practically bankrupt, or it is bankrupt, and a large part of that has to do with its 

reprocessing activity. So reprocessing is not a solution for nuclear 

waste. 

And my concern is that a focus on the pipe dream of trying to 

burn up or consume spent fuel is distracting from developing systems where you increase uranium utilization on a once-through 

basis, and one example of that was the original TerraPower reactor 

that was being developed by the company Bill Gates sponsored. 

The promise of that type of system is that you can achieve the 

goals that people who claim are for reprocessing without having to 

actually process the spent fuel, extract plutonium, and securing the 

safety liabilities associated with that process. 

So our recommendation as the main direction for innovation 

should be to pursue once-through cycles where you can get some 

of the purported benefits of reprocessing without separating plutonium, which is a proliferation and terrorism risk. And I would really hope that you would look into those issues in your reconsideration of whether it is really feasible or practical to burn up spent 

fuel. 

Senator CARPER. My time is about over. 

I am going to ask, for the record, I will ask our other witnesses 

to respond to what Dr. Lyman has said. And we appreciate you 

raising those points. 

I will close with this thought. We know climate change is real. 

We only have to look at what has happened this winter on the east 

coast and California, where they got more rain in a couple of weeks 

than they have gotten in years, and stuff like that. So it is apparent that it is real. 

The question is what do we do about it. About two-thirds of the 

carbon-free electricity being produced in this Country comes from 

nuclear, and that is a good thing, and we need to figure out how 

to come up with more carbon-free energy. But we need, at the same 

time, to keep in mind that nuclear has a lot to offer, and hopefully 

in the future even more. 

Thanks so much. 

Senator BARRASSO. Well, thank you, Senator Carper. 

Thanks, Senator Booker, for staying with us all the time. 

Thank you all for your testimony. It was, I think, very beneficial 

to all of the members of the Committee. Some members who 

126 

weren’t able to be here for the whole time may submit written 

questions. I hope you will try to get those answers back to us. 

The hearing record will remain open for 2 weeks. Thank you for 

being here. The hearing is adjourned. 

[Whereupon, at 12:05 p.m. the committee was adjourned.] 

[Additional material submitted for the record follows.] 

127 


26151.084

Uranerz Energy Corporation 

(an Energy Fuels Company) 

1701 East "E" Street, Suite 100 

Casper, WY, US 82601 

307 265 8900 

www.energyfuels.com 

STATEMENT OF WILLIAM PAUL GORANSON 

EXECUTIVE VICE PRESIDENT, ENERGY FUELS RESOURCES (USA) INC. ON 

BEHALF OF THE URANIUM PRODUCERS OF AMERICA 

ON 

THE NUCLEAR ENERGY INNOVATION AND MODERNIZATION ACT (S. 512) 

SENATE ENVIRONMENT AND PUBLIC WORKS COMMITTEE 

MARCH 8, 2017 
128 


26151.085

My name is William Paul Goranson, and I am the Executive Vice President of ISR Operations for 

Energy Fuels Resources (USA) Inc., with offices in Casper, Wyoming. On behalf of Energy Fuels 

Resources (USA) Inc. and the Uranium Producers of America (UPA), I am pleased to offer 

testimony in support of the Nuclear Energy Innovation and Modernization Act, S. 512. We greatly 

appreciate the leadership of Chairman John Barrasso and Senators Sheldon Whitehouse, Jim 

Inhofe, Cory Booker, Mike Crapo, Deb Fischer, Shelly Moore Capito, and Joe Manchin for 

introducing this important legislation. While we support many aspects of this bill, including 

nuclear industry innovation and advancement, we want to call attention to provisions in Title 3 

that are particularly important to the uranium mining and conversion industries. It is imperative 

that the United States maintain a domestic uranium industry for national security reasons, and the 

actions of the federal government must encourage the industry and not undermine it. Without a 

viable long-term domestic uranium industry, the reliability of one-fifth of the U.S. electricity 

supply could be jeopardized. 

SEC. 201 -URANIUM RECOVERY REPORT 

We are supportive of this section of the Act. The current license renewal process is unnecessarily 

burdensome and lengthy. The uranium industry can provide several examples of licensees that 

have been in "timely" renewal of their licenses for years due to the lengthy administrative review 

process and the fact that these reviews are not a high priority for the NRC because of the low risk 

nature of these projects. As directed under this Act, a review of extending the duration oflicenses 

from I 0 years to 20 years will be consistent with what is already known - a uranium recovery 

license is low risk. The extension of the license duration will not elevate risks associated with these 

licensed activities. Additionally, extending the duration of the licenses will significantly reduce 

the regulatory agency's burdens caused by the frequency of current renewal periods. This will 

allow the agency to better utilize and allocate its review resources. 

SEC. 202- PILOT PROGRAM FOR URANIUM RECOVERY FEES 

We strongly support this pilot program. Several licensing actions performed by the Commission 

are ripe for consideration of fee recovery using a flat fee structure. Several Agreement States 

successfully usc a similar approach for all licensing activities, and this provides an efficient 

regulatory review process. As a licensee, we see several specific activities that would fit the 

expectations of this program. 1.) The annual review of financial assurance under I 0 CFR § 40 

Appendix A Criterion 9; 2.) Routine inspection activities; 3.) License renewal applications for 

source material licensees that are on standby; and 4.) Licenses for facilities that fit within the scope 

of environmental impacts that were analyzed in the General Environmental Impact Study and 

supplemental environmental impact studies already issued for Uranium Mills and In Situ Uranium 

recovery source material licensees. 

SEC. 203- URANIUM TRANSFERS AND SALES 

We are pleased the Nuclear Energy Innovation and Modernization Act includes a bipartisan 
129 


26151.086

proposal to bring greater accountability and transparency to Department of Energy's (DOE) 

management of the excess uranium inventory, and we want to thank Senators Barrasso and Markey 

for their leadership on similar legislation introduced last Congress. Since 2009, the DOE has sold 

(or bartered) inventory to pay for agency priorities, particularly the cleanup of legacy federal 

nuclear sites. We recognize the importance of cleaning up these legacy sites and understand 

DOE's desire to monetize excess uranium, but DOE's actions have caused great harm to our 

industry. 1 

We recognize DOE's transfers are not fully responsible for the current adverse market conditions; 

however, they have made the situation decidedly worse. At the same time our industry is reducing 

production, shutting in mines, making workforce reductions, and cancelling new projects, the 

federal government has continued to transfer significant amounts of uranium into an oversupplied 

market, competing with domestic producers. For context, in 2016, DOE sold more than twice as 

much uranium as the entire domestic industry produced. DOE sales have accounted for more than 

I 00 percent of the global uncommitted utility demand, meaning there is no room for the domestic 

producers to compete. 

Under the USEC Privatization Act (P.L. 104-134), before making any uranium transfers, the 

Department must certify the proposed transfers will not have "an adverse material impact on the 

domestic uranium mining, conversion, or enrichment industry." In our view, DOE has violated 

this obligation. It is hard for any reasonable person to conclude DOE transfers that exceed twice 

our domestic uranium production, with prices well below our cost of production, are not having 

an adverse material impact 

Last year UPA called on DOE to temporarily suspend transfers until market conditions recover. 

In our view, DOE should not make any transfer when the spot market price is below the average 

cost of producing uranium in the United States. According to the U.S. Energy Information 

Administration (EIA), the average total cost for U.S. uranium production was $66.86 per pound in 

2015. The average total cost includes exploration, production, restoration, land, plant capital, 

wellfield capital, regulatory permitting, etc. EIA estimates average production ("cash'') costs at 

$35.44 per pound. With the current uranium spot price near $25, DOE should halt any additional 

transfers in 20 17 and postpone all future transfers until the market recovers. 

If DOE continues transfers at the current rate and market conditions do not recover, the domestic 

industry may not survive. According to EIA, only 2.9 million pounds of uranium were produced 

in the U.S. during 2016. The United States now imports more than 93 percent of the uranium 

needed to fuel our nuclear reactors, putting 20 percent of our electricity supply at risk to foreign 

supply disruptions. Rather than compete with our industry and drive down prices, DOE should be 

looking at what steps it can take to support our industry and ensure we have a stable, domestic 

uranium supply. 

Before DOE transfers any more of their inventory, UPA encourages DOE to conduct a full review 

1 The Department's position that its barter transfers are not the "driver" of market conditions to justify its increased 

disposition of excess uranium inventories was rejected by Judge Reggie Walton in Converdyn v. Moniz 68 F Supp. 

3'' (2014). Whether the Department's transfers are "the driver" of market conditions is not the inquiry set forth in 

Section 2297h-1 0( d). 
130 


26151.087

of the barter program. This should include identifying ways to minimize the impact of any future 

transfers on the domestic industry and examining whether prior DOE transfers have violated the 

miscellaneous receipts statute (31 U.S.C. § 3302(b)). According to the Government 

Accountability Office, DOE's barter program is in violation of the miscellaneous receipts statute 

because the value of uranium DOE transfers is not deposited into the Treasury. We encourage the 

DOE to investigate the application of the statute to these barter transfers. 

The UPA has also encouraged DOE and the National Nuclear Security Agency (NNSA) to 

consider revising the current practice of downblending High Enriched Uranium (HEU) to 

commercial grade Low Enriched Uranium (LEU) below 5 percent U-235. Instead, DOE-NNSA 

should be downblending HEU to levels between 5-19.75 percent LEU for research and advanced 

reactor fuel. This would be supportive of U.S. non-proliferation policy as well as eliminate the 

adverse material impact the uranium, conversion and enrichment components contained in the 

DOE LEU below 5 percent are having on the commercial market. 

The UPA strongly supports the inclusion of Section 203 dealing with DOE uranium transfers and 

sales. Section 203 will help bring greater accountability and transparency to the management of 

DOE inventory and will place limits on the amount of material DOE may transfer in a given year. 

The legislation will require DOE to issue a new 10-year management plan for the federal excess 

uranium inventory, including steps the Secretary will take to minimize the impact on the domestic 

industry and maximize taxpayer value for this asset. Importantly, the legislation would require the 

DOE to issue a proposed management plan for public review and comment similar to the regular 

rulemaking process. In the past, DOE issued management plans with minimal public input, and 

in 2013, DOE determined it would manage the inventory without any public input. Requiring 

DOE to develop a new management plan is an important step to reforming this program and one 

the UPA strongly supports. 

Despite our concerns about the DOE inventory and legitimate questions about whether DOE's 

current program is legal, the industry has always been willing to engage in a collaborative dialogue 

with DOE and other stakeholders. In fact, in 2008, the industry, utilities, and DOE developed a 

consensus-based approach to cap annual transfers to no more than I 0 percent of domestic reactor 

requirements- about 5 million pounds per year. Unfortunately, DOE exceeded the cap in 2009 

and never looked back. The UPA strongly supports the provisions in Section 203 to place a 

statutory cap on the amount of material DOE can transfer in any given year, subject to a Secretarial 

Determination that the proposed transfers would not have an adverse material impact on the 

domestic uranium, conversion, or enrichment industry. 

The legislation will also ensure the Secretarial Determination process is more rigorous and subject 

to a public process. Although DOE issued a request for information in advance of its most recent 

Determination, DOE only solicited comments on the factors the agency should consider in its 

pending determination, rather than take comment on a draft Determination. Under the legislation, 

DOE would be required to release a draft Secretarial Determination for public review and comment 

before it could be finalized. This additional step will help ensure there is more meaningful public 

input and will allow stakeholders to better evaluate the impact of a specific proposal. 
131 


26151.088

DEFINING STANDARDS OF GENERAL APPLICATION 

As this legislation moves forward, we encourage the Committee to consider adding a provision to 

clarify the regulatory responsibilities of the Nuclear Regulatory Commission (NRC) and the 

Environmental Protection Agency (EPA) for uranium recovery. Under the current framework, 

EPA sets generally applicable standards and the NRC is charged with developing the specific 

implementation standards. Yet, there is no definition in the Atomic Energy Act (43 U.S.C. 2014) 

of generally applicable standards, which has created confusion and conflict between the EPA and 

NRC. This is evidenced by EPA's recent proposed rulemaking revising 40 CFR §Part 192, and 

the concerns expressed by the NRC General Counsel that EPA's proposal went well beyond setting 

general standards. Clearly defining standards of general application, without reducing any 

oversight of the industry, would help clarifY the roles and responsibilities of EPA and NRC, reduce 

regulatory conflict, and provide for a more effective regulatory framework. 

Respectfully submitted, 

William Paul Goranson 
132 


26151.089

Senate Environment and Public Works Committee 

Hearing entitled, "Legislative Hearing on S.Sl2, the Nuclear Energy Innovation and 

Modernization Act" 

March 8, 2017 

Questions for the Record 

Paul Goranson 

Chairman Barrasso: 

I. Your written testimony states: "Several licensing actions performed by the Commission 

are ripe for consideration of fee recovery using a flat fee structure. Several Agreement 

States successfully use a similar approach for all licensing activities, and this provides an 

efficient regulatory review process." Would you please describe several examples that 

you believe are effective? 

Response: 

Our company, Energy Fuels Resources (USA) Inc. operates uranium recovery operations 

in several jurisdictions, including Wyoming, Texas and Utah. The first jurisdiction being 

a Non-Agreement State where the State and the Commission both regulate uranium 

recovery activities, and the latter two are Agreement State that regulate uranium recovery 

activities solely through their own statutory programs. This provides a unique ability to 

compare fee recovery programs in these jurisdictions regarding their effectiveness and 

their relevance to uranium recovery programs. 

Utah's fee recovery program is described in Utah Administrative Rules §R313-70-7, 

License Categories for Types of Fees for Radioactive Materials Licenses. §R313-70-

7(2)(b)(l), a monthly fee of$8,540.00 is assessed for Licenses for possession and use of 

source material such as conventional milling. Included in this fixed fee is all activities 

related to the regulation and oversight of an active conventional uranium mill, such as our 

White Mesa Mill located in Southeast Utah. Most license activities, including the license 

renewal and amendments are included in this fee. Only pass through costs are added to 

the fixed fee if the State engages 3rd party contractors, and that is infrequent. 

Texas' fee recovery program is described in title 30 of the Texas Administrative Code 

Chapter 336.105, and uranium recovery operations are described as Subchapter L 

facilities from the same chapter. §336.105(a)(4) assess a fixed fee for new license 

applications for Subchapter L facilities, and this fee covers all review costs, unless the 

application is not determined to be administratively complete, where supplemental costs 

may be applied. §336.105(b)(4) establishes annual fees for operating Subchapter L 

facilities. §336.105(b)(5-8) provides annual fees for other activities described for 

Subchapter L facilities. §336.105(b)(9)(A-E) describe one-time for specific types of 

license amendments and the related environment assessments. 
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26151.090

In summary, I have focused the response to two specific Agreement State fee recovery 

programs because they are related to active uranium recovery regulatory programs. There 

are other Agreement States with similar fee recovery approaches, but are less relevant to 

the overall uranium mining industry. These fee recovery programs assure that the 

regulation of these facilities remain robust and demonstrate compliance with the 

Agreement State programs described in the Atomic Energy Act of 1958 (as amended). 

They provide the licensee the financial accountability and certainty when engaging in 

licensed activities and licensing actions. 

This subset of Agreement State fee recovery programs demonstrate that regulatory 

programs can remain effective, even with a fixed fee. As I provided in my March 8, 2017 

written statement, there are specific minor licensing actions performed by the 

Commission that would provide an opportunity to test the effectiveness of fixed fees. 

2. Would you please provide information on the extent of DOE's transfers and the market 

price for uranium? Please provide in a graph, if possible. 

Response: 

Figure 1 (attached) provides a graphical representation of the annual volumes of uranium 

transfers from 2009 to 2017, and the monthly spot price is superimposed onto the graph. 

The annual volumes associated with the barter transfers are derived from a combination 

of amounts described in Secretarial Determinations dating from 2009 to 2017 and the 

Excess Uranium Inventory Management Plans from 2008 and 2013. 

On Figure I, the annual volumes are labeled as below: 

• "EM" represents transfers to U.S. Enrichment Corporation (USEC) and Flour 

B&W Portsmouth (FBP) related to the accelerated cleanup work being performed 

at the Portsmouth Gaseous Diffusion Plant managed by DOE's Office of 

Environmental Management (EM). Total transfers for the period 2009- 2016 is 

32.37 million lbs UJOsequivalent. 

• "NNSA" represents the uranium bartered to WestDyne International LLC by 

NNSA for the downblending ofHEU. Total transfers for the period 2009-2016 

is 6.83 million !bs UJOsequivalent. 

• "ENW" represents 9,075 MTU of high assay UFo tails transferred to Energy 

Northwest (ENW) for re-enrichment at the Paducah GDP by USEC with the 

excess to ENW needs being purchased by Tennessee Valley Authority (TVA). 

Total transfers for 2012 are 9.8 million lbs UJOs equivalent. 

• "USEC" represents a transfer of up to 48 MT of LEU (equivalent to 409 MTU) 

for DOE's cost share under the 2012 Cooperative Agreement between DOE, 

USEC, and the American Centrifuge Demonstration, LLC. Total transfer tor 2013 

is 1.07 million lbs UJOs equivalent. 

• 'TV A BLEU" represents blending of off-spec HEU from the NNSA under the 

BLEU program. Total transfers for 2009-2016 are 9.09 million lbs U30s 

equivalent. 

26151.091

Figure 1: Annual Cumulative Uranium Transfers by DOE from Excess Uranium Inventories 

Uranium Spot Price and DO£ Uranium Transfer Volumes (2009- 2017) 

ShOO ,.----------------------------------------, 

17.2 million 

~~4500 v'vV y 

1?,C(i0

c 1(~(/.)J.)

~ g " E 

!s3.s.oo ~ ! BOWOO

g 

i S2S.OO 6.5mi!lion ~ " 

fllll!I!WliNN:i.A(3} -spotl'rkc-{ll 

Notes: 

(1) Source: Tradetech LLC (www.uranium.info}. 

(2) Secretarial Determinations dated: November 9, 2009; March 1, 2011; May 15, 2012; May 15, 2014; May 1, 2015; and April26, 2017. 

(3) For Periods 2009-2011: Excess Uranium Inventory Management Plan December 16, 2008; and Excess Uranium Inventory Management Plan J

Periods 2012- 2017: Secretarial Determinations dated: May 15, 2012; May 15, 2014; May 1, 2015; and April26, 2017. 

(4) Secretarial Determination dated May 15, 2012 

(5) Secretarial Determination dated March 15, 2013 

(6) Source: Excess Uranium Inventory Management Plans dated December 2008 and May 2013 
135 


26151.092

HEARING STATEMENT FOR THE RECORD 

MR. VICTOR M. McCREE, EXECUTIVE DIRECTOR FOR OPERATIONS 

UNITED STATES NUCLEAR REGULATORY COMMISSION 

FOR THE 

SENATE COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS 

March 8, 2017 

INTRODUCTION 

On behalf of the staff of the U.S. Nuclear Regulatory Commission (NRC), I appreciate 

the opportunity to provide written comments on the bill entitled the "Nuclear Energy 

Innovation and Modernization Act" (S. 512), and to offer some highlights of NRC 

activities regarding uranium recovery licensing. 

S. 512, THE "NUCLEAR ENERGY INNOVATION AND MODERNIZATION ACT" 

On April 21, 2016, I testified before the Clean Air and Nuclear Safety Subcommittee on a 

predecessor to the current bill, S. 2795, which was introduced in the last Congress. As I 

indicated at that time, my comments represented the NRC staffs assessment of factual 

issues associated with the bill, consistent with my role as the NRC's Executive Director 

for Operations. This characterization also applies to the comments on the current bill 

that I am providing today. 

The current bill contains provisions on advanced nuclear reactors, NRC fees, uranium 

recovery, and several other matters. While there are many similarities between S. 512 

and S. 2795, a number of modifications and clarifications have been made since I 

testified on the bill last year. The current bill incorporates "to the maximum extent 

practicable" or "where appropriate" language in a number of provisions, allows the NRC 

to waive the cap on annual fees for operating reactor licensees if the cap may 

compromise the NRC's safety and security mission, and presents other changes that 

provide additional flexibilities not included in the prior bill. 

The current bill continues to require the NRC to undertake a number of activities related 

to advanced reactors and to report on those activities to Congress. As I testified last 

year, the NRC currently has significant ongoing and planned activities in the areas of 

advanced reactor licensing infrastructure, technical preparation, and stakeholder 

outreach. There are many similarities between the requirements inS. 512 and the 

NRC's ongoing activities, although the bill would require the NRC to undertake these 

activities on an accelerated schedule and would require development of additional 

reports to Congress. The fundamental requirements related to advanced reactors in the 

bill are complementary in concept to the NRC's ongoing activities, but significant time 

and resources would be required over several years to implement the full range of 

additional activities on the schedules described in the bill, particularly with regard to 

rulemaking. 
136 


26151.093

Another area addressed in both the earlier bill and the current bill is performance and 

reporting. S. 512 continues to require the NRC to develop performance metrics and 

milestone schedules for any activity requested by a licensee or applicant and to report 

certain delays to Congress. In particular, subsections 4(11) and 1 02(c) of the bill, when 

read together, could be read as potentially requiring the NRC to develop performance 

metrics and milestone schedules for many activities beyond those for which such metrics 

and milestones are currently prepared, including many routine interactions with 

licensees and applicants. We believe we currently have appropriate, challenging, and 

outcome-oriented performance metrics that are consistent with the NRC Strategic Plan, 

Congressional Budget Justification, and the GPRA Modernization Act of 2010. These 

measures recognize that schedule performance can be affected by applicant, licensee, 

or NRC performance, and that the NRC may need flexibility to account for emerging 

safety or security issues, changes in licensee plans, and other circumstances. 

URANIUM RECOVERY 

In addition, the bill contains a requirement to submit a report to Congress describing the 

"safety and feasibility of extending the duration of uranium recovery licenses from 10 to 

20 years, including any potential benefits ofthe extension." The NRC staff is in the 

process of analyzing the possibility of changing the current 1 0-year licensing term to a 

longer period, such as 20 years. The staff is developing a paper with options and 

recommendations that will be submitted to the Commission by August 31, 2017. 

The bill also includes a provision for a pilot for uranium recovery flat fees. As directed by 

the Commission, the NRC is undertaking a flat fee pilot program for uranium recovery 

licensees. As described in the staff paper SECY-16-0097, "Fee Setting Improvements 

and Fiscal Year 2017 Proposed Fee Rule," this pilot will involve evaluation of data to 

collect a representative sample of the costs for various licensing reviews. While the 

agency has identified initial estimates of the current range of costs for major uranium 

recovery licensing actions on our public website, the NRC does not have sufficient data 

in a standardized form that would support completing the pilot by July 31, 2018. The 

agency is in the process of developing the new data recording structure and is 

scheduled to complete that activity this fiscal year. Subsequently, we will train our staff 

to record the data using the new data structure. After a period of recording data using 

the new data structure, the staff will analyze the data and develop recommendations. 

These recommendations will continue to address our requirements under the Omnibus 

Budget Reconciliation Act of 1990 (OBRA-90) to collect approximately 90 percent of the 

NRC's annual budget through fees and under the Independent Offices Appropriation Act, 

1952 (IOAA) to assess user fees that are fair and based on the costs to the government 

and certain other factors. We are scheduled to submit our recommendations to the 

Commission for approval in FY 2019, and implement the Commission's direction in FY 

2020. 

In July, the NRC expects to receive Wyoming's final application to become an 

Agreement State. The NRC staff has been working with Wyoming on its transition to 

Agreement State status since 2014. On August 3, 2016, the Commission approved the 

proposed approach for a "limited" Agreement, which would allow Wyoming to assume 

regulatory authority over the subcategory of source material involved in the extraction 

and concentration of uranium and thorium milling and the management and disposal of 

byproduct material as defined in section 11 e.(2) of the Atomic Energy Act Wyoming's 

subsequent draft application differed from the Commission-approved subcategory 
137 


26151.094

approach in that it proposes that the NRC retain regulatory authority for six Uranium Mill 

Tailings Radiation Control Act (UMTRCA) Title II sites (i.e., six uranium recovery sites in 

decommissioning). The NRC staff met with Wyoming staff in December 2016 to provide 

preliminary comments on the draft application and plans to complete its review ofthe 

draft application next month. Currently, the NRC staff is developing a paper for 

Commission review to address the handling of the six UMTRCA Title II sites. 

The NRC staff continues to look for opportunities to improve our processes and engage 

further with stakeholders. The NRC staff sponsors and participates in workshops with 

industry and members of the public to enhance communication on topics such as 

licensing and acceptable approaches to meeting NRC requirements for radiation 

protection. These efforts are expected to increase the predictability of the licensing 

process and risk-inform our approaches by facilitating discussion on NRC expectations 

to meet regulatory requirements and focusing attention on issues commensurate with 

their importance to public health and safety. 

To build on these accomplishments, the NRC staff is finalizing an assessment of current 

licensing processes and practices. Preliminary recommendations include further 

augmenting pre-application activities, developing or updating key guidance documents, 

improving coordination and reducing unnecessary duplication with State and other 

Federal agencies, and establishing additional internal processes for the oversight of the 

uranium recovery licensing activities. 

CLOSING 

I appreciate the Committee's interest in enhancing the NRC's performance to 

accomplish our safety and security mission in an effective and efficient manner. 
138 


26151.095

QUESTION 1. 

ANSWER. 

Senate Committee on Environment and Public Works 

Hearing entitled, "Legislative Hearing on S. 512, 

the Nuclear Energy Innovation and Modernization Act" 

March 8, 2017 

Questions for the Record for Mr. Victor McCree 

S. 512 directs the NRC to complete a pilot program regarding flat 

fees for routine uranium recovery licensing actions. Your written 

testimony states: " ... the NRC does not have sufficient data in a 

standardized form that would support completing the pilot by July, 

2018." Please describe why the past two years of data are sufficient 

to serve as a basis for recovering fees from licensees, but not 

sufficient to serve as a basis for the pilot program. 

Our existing data are sufficient for recovering fees from licensees for work performed, but they 

may not include sufficient granularity to allow the NRC to determine whether potential subtasks 

are amenable to flat fees. Using the existing data may result in the flat fees developed being 

less accurate for this small class of licensees. Accordingly, as part of its pilot project, NRC staff 

plans to ensure sufficient data are available for its analysis and develop recommendations for 

the Commission. 

QUESTION2. Written testimony provided by the Uranium Producers of America 

states: "Several licensing actions performed by the Commission are 

ripe for consideration of fee recovery using a flat fee structure. 

Several Agreement States successfully use a similar approach for 

all licensing activities, and this provides an efficient regulatory 
139 


26151.096

ANSWER. 

review process." If Agreement States already use this process, why 

does the NRC need four years to implement It? 

The schedule for implementing a flat fee structure in fiscal year 2020 must allow sufficient time 

for the NRC to implement an effective voluntary pilot initiative. This includes time to develop a 

new data recording structure, to train staff to use the new structure, to analyze the new data 

collected, to develop recommendations, and to engage a licensee volunteer to participate in the 

pilot. Accelerating the timeline would limit our ability to collect and utilize the new data and to 

have thoughtful interaction with the licensee community. As part of this process, we will reach 

out to the Agreement States to understand their methodologies. 

QUESTION3. 

ANSWER. 

Any nuclear material in DOE's possession that is transferred to a 

private entity would be logged by DOE into the Nuclear Materials 

Management and Safeguards System (NMMSS) database. Please 

provide copies of the DOE/NRC 741 Forms for all transfers of 

uranium, in any form, from the Department of Energy to NRC license 

holders for the last ten years. 

Please note our response to Question 3 is "Official Use Only- Business Proprietary Information" 

and will be transmitted under a separate cover. We respectfully ask that the handling instructions 

accompanying the letter be honored. 
140 


26151.097

QUESTION4. 

ANSWER. 

As an example, please provide a copy of a report generated from 

NMMSS database resulting from a transfer of uranium from DOE to a 

NRC licensee. 

Attached is a sample NMMSS report. The report identifies two transactions that occurred on 

September 26, 2016, from Babcock & Wilcox Conversion Services (BWCS) Paducah 

(referenced as "GBB'), to Honeywell International, Inc. (referenced as "YSP"). The transactions 

involved government-owned natural uranium. The document is Official Use Only and contains 

business proprietary information. We respectfully request that you honor these markings. 

QUESTION 5. How does the NRC determine that a permanently defueled reactor 

may modify security and emergency preparedness to reflect the 

reduction in risk that occurs when an operating reactor enters the 

decommissioning phase? Is there opportunity for public 

involvement in the process? On what basis does the NRC approve 

exemptions? Are site-specific analyses considered? 

The emergency preparedness (EP) requirements are based upon an anticipated prompt 

response to a wide range of events for an operating power reactor. Following the permanent 

removal of all spent fuel from the reactor vessel, the range of events that can have significant 

offsite consequences is greatly reduced. The physical protection programs at operating 

reactors and permanently defuefed reactors are required to protect against the design basis 
141 


26151.098

threat for radiological sabotage, meaning that licensees must protect against significant core 

damage and spent fuel sabotage. However, physical security protective strategies shift to focus 

principally on protection of the spent fuel at a permanently defueled reactor site. 

Licensees may seek regulatory relief through the exemption processes described in NRC 

regulations (10 CFR 50.12, "Specific exemptions," and 10 CFR 73.5). Licensees have 

requested exemptions to revise or reduce EP and security requirements to reflect the lower risk 

and reduced security focus associated with a power reactor being permanently shut down and 

all spent fuel being permanently moved from the reactor vessel to a spent fuel pool (SFP) or dry 

cask storage installation. Licensees also submit amendments for revised emergency plans to 

reflect the permanently shut down condition of the reactor and the EP requirements that would 

be applicable if the requested EP exemptions were granted. 

Exemption requests are not subject to a hearing opportunity under section 189a of the Atomic 

Energy Act of 1954, as amended. For license amendment submittals, the NRC publishes in the 

Federal Register a notice and opportunity for a hearing on the amendment. In addition, the 

NRC may hold public meetings, such as pre-submittal meetings related to decommissioning 

licensing actions, which the public can attend to get information and ask questions of NRC staff. 

The NRC reviews requested EP and security exemptions on a case-by-case basis, and will only 

grant an exemption if a licensee's request demonstrates that the applicable regulatory criteria 

are met. 

The NRC staff review must conclude that granting the exemption to EP requirements is 

authorized by law, will not present an undue risk to the public health and safety, is 

consistent with the common defense and security, and that at feast one of the special 
142 


26151.099

circumstances provided in 10 CFR 50. 12(a)(2) is present. The NRC staff reviews sitespecific analyses submitted by the licensee. A detailed description of the NRC's process 

for the evaluation of EP exemption requests and associated emergency plan changes 

for decommissioning power reactors is provided in NSIRIDPR-ISG-02, "Emergency 

Planning Exemption Requests for Decommissioning Nuclear Power Plants." 

• The NRC review must conclude that granting the exemptions to security requirements is 

authorized by law, will not endanger life or property or the common defense and 

security, and is otherwise in the public interest. A licensee is required to ensure that its 

physical protection program will continue to protect against the design basis threat given 

the change in security focus to the spent fuel and spent fuel pool. The NRC's review of 

10 CFR 73.5 exemptions and site-specific security plan revisions is outlined in NSIR 

ISG-03, "Interim Staff Guidance on Review of Security Exemptions/License Amendment 

Requests for Decommissioning Nuclear Power Plants." 

Because the development of regulations for operating nuclear power plants often did not 

consider decommissioning, the requirements imposed on decommissioning power reactors may 

be inappropriate, may not be applicable, or may not align with safety significance. Given the 

number of exemptions the NRC has received for decommissioning facilities, the Commission 

has directed the NRC staff to proceed with rulemaking on decommissioning to address whether 

the NRC regulations imposed on operating nuclear power plants are appropriately imposed on 

decommissioning power reactors. Staff plans to provide the draft final rule for Commission 

review and approval in October 2019. 

Among other things, the rulemaking seeks to make the decommissioning process more efficient, 

open, and predictable by reducing the reliance on licensing actions, including license 
143 


26151.100

amendments and exemptions, to achieve a long-term regulatory framework. The rule making 

provides opportunities for public participation that can help the NRC revise the security and 

emergency planning requirements applicable to decommissioning power reactors. To date, the 

NRC has provided four opportunities for public participation in this ru!emaking process. The first 

was an opportunity to comment on the Advance Notice of Proposed Rulemaking (ANPR) (80 FR 

72358; November 19, 2015); the second was a December 9, 2015, public meeting to discuss 

the ANPR; the third was the draft regulatory basis for a proposed rulemaking, entitled 

"Regulatory Improvements for Power Reactors Transitioning to Decommissioning," which was 

published on March 15, 2017, for a 90-day comment period; the fourth was a public meeting on 

May 8-10, 2017, to discuss the draft regulatory basis as well as the preliminary draft regulatory 

analysis. An additional opportunity for public participation will be provided upon publication of 

the proposed rulemaking for comment. 

QUESTIONS. 

ANSWER. 

When considering exemptions for shutdown and defueled reactors, 

does the NRC take into account initiating events that could result In 

offsite radiological releases, including beyond design basis threats? 

Yes. For exemptions requested by decommissioning power reactor licensees that relate to 

protection from offsite radiological releases, such as requests for relief from EP requirements, 

the NRC's review has included consideration of initiating events that can result in offsite 

releases, including beyond design basis events. However, for exemption requests that do not 

relate to protection from offsite radiological releases, such as requests for relief from financial 

based requirements, the NRC's review does not include consideration of initiating events that 

can result in offsite releases. 
144 


26151.101

QUESTION7. 

ANSWER. 

After exemptions are approved, what emergency planning 

capabilities must be maintained by the licensee? 

Exemption requests from permanently shut down power reactor licensees have included 

exemptions from EP regulations that reduced the requirements to those consistent with the 

following EP standards: (1) 10 CFR 50.47(d), which addresses the requirements for a license 

authorizing fuel loading and low power testing only; and {2) 10 CFR 72.32(a), which establishes 

the information required in an emergency plan for an independent spent fuel storage installation 

(ISFSI) licensee. If these exemptions are granted, licensees must continue to maintain an 

onsite emergency plan addressing the declaration of an emergency up to the second-lowest 

classification level ("Alert"), capability to notify licensee personnel and offsite authorities of 

emergencies, onsite exercises with the opportunity for offsite response organization 

participation, arrangements for offsite response organizations (i.e., law enforcement, fire and 

medical services) that could respond to onsite emergencies, and coordination with designated 

offsite government officials following an event declaration so that, if needed, offsite authorities 

can implement appropriate response actions. 

QUESTIONS. 

ANSWER. 

Why is it beneficial for licensees to maintain the option to seek 

exemptions and license amendments related to reducing emergency 

planning and security requirements once the reactor has been 

permanently defueled? 

The practice of considering exemptions is a well-established part of the NRC's regulatory 

process that allows licensees to address site-specific situations or implement alternative 
145 


26151.102

approaches for circumstances not necessarily contemplated in the regulations for operating 

reactors. 

The opportunity to seek regulatory relief from existing requirements allows a licensee to address 

special circumstances, such as when application of the regulation in the particular 

circumstances is not necessary to achieve the underlying purpose of the rule or to avoid undue 

hardship or other costs that are significantly in excess of those contemplated when the 

regulation was adopted. This allows a decommissioning power reactor licensee to develop 

programs and focus resources on decommissioning, while continuing to maintain adequate 

measures to protect the health and safety of the public and not endanger common defense and 

security. These measures take into account the lower risk and reduced security focus 

associated with a power reactor being permanently shut down and all spent fuel being 

permanently moved from the reactor vessel to a spent fuel pool or dry cask storage installation. 

QUESTION9. 

ANSWER 

Why is it important that the NRC maintain flexibility in addressing 

certain emerging safety and security issues associated with 

decommissioning nuclear power plants? 

Flexibility allows the NRC to adjust our licensing and oversight programs and resources, as 

appropriate and on a case-by-case basis, for decommissioning power reactors to be 

commensurate with the reduced risk after permanent shutdown and the change in focus to 

decommissioning activities. Should any specific circumstances of concern arise, the NRC must 

also maintain the authority and capability to modify requirements as necessary to address 

emergent safety and security issues. Exercise of this authority may be accomplished by various 

regulatory actions, up to and including the issuance of orders to modify, suspehd, or revoke a 
146 


26151.103

license. In addition, exemptions and amendments are important mechanisms for NRC and 

licensees to revise the authorities and requirements conveyed to licensees to reflect changes in 

their specific circumstances, including those that were not considered when a regulation or 

other requirement was established. 

QUESTION 10. 

ANSWER. 

Some have advocated the use of a process similar to the Vendor 

Design Review conducted by the Canadian Nuclear Safety 

Commission to inform the vendor of the overall acceptability of the 

reactor design and provide early identification of regulatory and 

technological issues. Does the NRC consider this process to be 

contrary to public health and safety? If not, please describe the 

benefits and drawbacks of implementing such a process for 

advanced reactors. 

The NRC sees significant benefit in pre-application Interactions to provide early feedback to 

advanced reactor designers. The Canadian Nuclear Safety Commission (CNSC) Vendor 

Design Review is one example of pre-application interactions by which early feedback can be 

provided to designers on the ability of their designs to meet the requirements necessary for 

licensing. 

The NRC does not consider the CNSC Vendor Design Review process to be contrary to public 

health and safety. In fact, the NRC encourages pre-application interactions as discussed in its 

Advanced Reactor Policy Statement which states; 
147 


26151.104

To provide for more timely and effective regulation of advanced reactors, the Commission 

encourages the earliest possible interaction of applicants, vendors, other government 

agencies, and the NRC to provide for early Identification of regulatory requirements for 

advanced reactors and to provide all interested parties, Including the public, with a timely, 

independent assessment of the safety and security characteristics of advanced reactor 

designs. Such licensing interaction and guidance early in the design process will 

contribute towards minimizing complexity and adding stability and predictability in the 

licensing and regulation of advanced reactors. 

The NRC has engaged in pre-application discussions with reactor designers and the 

Department of Energy (DOE) on several advanced reactor designs and has provided feedback 

on designs and testing programs related to the development of these designs. An example of 

NRC feedback similar to that which would be provided by the CNSC during a Vendor Design 

Review is the NRC staffs review and issuance of pre-application safety evaluation reports such 

as: NUREG-1368, "Pre-application Safety Evaluation Report for the Power Reactor Innovative 

Small Module (PRISM) Liquid-Metal Reactor," NUREG-1369, "Pre-application Safety Evaluation 

Report for the Sodium Advanced Fast Reactor (SAFR) Liquid Metal Reactor," and NUREG1338, "Draft Pre-application Safety Evaluation Report for the Modular High-Temperature GasCooled Reactor." 

In response to increasing interest In advanced reactor designers in a staged licensing process, 

on October 19, 2016, the NRC published a draft Regulatory Review Roadmap for Non-Light 

Water Reactors, which describes the spectrum of regulatory interactions available from the 

conceptual through the final design procasses. NRC staff has confirmed that our existing 

regulations and processes provide the means for early and incremental feedback to designers 
148 


26151.105

on the ability of their designs to meet the NRC's licensing requirements, in a manner similar to 

the CNSC vendor design review. 

26151.106

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