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[House Hearing, 114 Congress]
[From the U.S. Government Publishing Office]

     THE NUCLEAR WASTE FUND: BUDGETARY, FUNDING, AND SCORING ISSUES

=======================================================================

                                HEARING

                               BEFORE THE

              SUBCOMMITTEE ON ENVIRONMENT AND THE ECONOMY

                                 OF THE

                    COMMITTEE ON ENERGY AND COMMERCE
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED FOURTEENTH CONGRESS

                             FIRST SESSION

                               __________

                            DECEMBER 3, 2015

                               __________

                           Serial No. 114-106

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

      Printed for the use of the Committee on Energy and Commerce
                        energycommerce.house.gov
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                    COMMITTEE ON ENERGY AND COMMERCE

                          FRED UPTON, Michigan
                                 Chairman
JOE BARTON, Texas                    FRANK PALLONE, Jr., New Jersey
  Chairman Emeritus                    Ranking Member
ED WHITFIELD, Kentucky               BOBBY L. RUSH, Illinois
JOHN SHIMKUS, Illinois               ANNA G. ESHOO, California
JOSEPH R. PITTS, Pennsylvania        ELIOT L. ENGEL, New York
GREG WALDEN, Oregon                  GENE GREEN, Texas
TIM MURPHY, Pennsylvania             DIANA DeGETTE, Colorado
MICHAEL C. BURGESS, Texas            LOIS CAPPS, California
MARSHA BLACKBURN, Tennessee          MICHAEL F. DOYLE, Pennsylvania
  Vice Chairman                      JANICE D. SCHAKOWSKY, Illinois
STEVE SCALISE, Louisiana             G.K. BUTTERFIELD, North Carolina
ROBERT E. LATTA, Ohio                DORIS O. MATSUI, California
CATHY McMORRIS RODGERS, Washington   KATHY CASTOR, Florida
GREGG HARPER, Mississippi            JOHN P. SARBANES, Maryland
LEONARD LANCE, New Jersey            JERRY McNERNEY, California
BRETT GUTHRIE, Kentucky              PETER WELCH, Vermont
PETE OLSON, Texas                    BEN RAY LUJAN, New Mexico
DAVID B. McKINLEY, West Virginia     PAUL TONKO, New York
MIKE POMPEO, Kansas                  JOHN A. YARMUTH, Kentucky
ADAM KINZINGER, Illinois             YVETTE D. CLARKE, New York
H. MORGAN GRIFFITH, Virginia         DAVID LOEBSACK, Iowa
GUS M. BILIRAKIS, Florida            KURT SCHRADER, Oregon
BILL JOHNSON, Ohio                   JOSEPH P. KENNEDY, III, 
BILLY LONG, Missouri                     Massachusetts
RENEE L. ELLMERS, North Carolina     TONY CARDENAS, California
LARRY BUCSHON, Indiana
BILL FLORES, Texas
SUSAN W. BROOKS, Indiana
MARKWAYNE MULLIN, Oklahoma
RICHARD HUDSON, North Carolina
CHRIS COLLINS, New York
KEVIN CRAMER, North Dakota

              Subcommittee on Environment and the Economy

                         JOHN SHIMKUS, Illinois
                                 Chairman
GREGG HARPER, Vice Chairman          PAUL TONKO, New York
  Vice Chairman                        Ranking Member
ED WHITFIELD, Kentucky               KURT SCHRADER, Oregon
JOSEPH R. PITTS, Pennsylvania        GENE GREEN, Texas
TIM MURPHY, Pennsylvania             DIANA DeGETTE, Colorado
ROBERT E. LATTA, Ohio                LOIS CAPPS, California
DAVID B. McKINLEY, West Virginia     MICHAEL F. DOYLE, Pennsylvania
BILL JOHNSON, Ohio                   JERRY McNERNEY, California
LARRY BUCSHON, Indiana               TONY CARDENAS, California
BILL FLORES, Texas                   FRANK PALLONE, Jr., New Jersey (ex 
RICHARD HUDSON, North Carolina           officio)
KEVIN CRAMER, North Dakota
FRED UPTON, Michigan (ex officio)

  
                             C O N T E N T S

                              ----------                              
                                                                   Page
Hon. John Shimkus, a Representative in Congress from the State of 
  Illinois, opening statement....................................     1
    Prepared statement...........................................     3
Hon. Fred Upton, a Representative in Congress from the State of 
  Michigan, prepared statement...................................    44
Hon. Frank Pallone, Jr., a Representative in Congress from the 
  State of New Jersey, prepared statement........................    45

                               Witnesses

David Bearden, Specialist in Environmental Policy, Congressional 
  Research Service...............................................     5
    Prepared statement...........................................     8
    Answers to submitted questions...............................    46
Kim P. Cawley, Chief of Natural and Physical Resources Cost 
  Estimates Unit, Congressional Budget Office....................    14
    Prepared statement...........................................    16
    Answers to submitted questions...............................    51
Travis Kavulla, Commissioner, Montana Public Service Commission, 
  President, National Association of Regulatory Utility 
  Commissioners..................................................    23
    Prepared statement...........................................    25
    Answers to submitted questions...............................    55
 
     THE NUCLEAR WASTE FUND: BUDGETARY, FUNDING, AND SCORING ISSUES

                              ----------                              

                       THURSDAY, DECEMBER 3, 2015

                  House of Representatives,
       Subcommittee on Environment and the Economy,
                           Committee on Energy and Commerce
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 9:59 a.m., in 
room 1100, Longworth House Office Building, Hon. John Shimkus, 
(chairman of the subcommittee) presiding.
    Present: Representatives Shimkus, Harper, Murphy, Latta, 
Johnson, Bucshon, Flores, Hudson, Tonko, Schrader, Green, and 
McNerney.
    Staff Present: Nick Abraham, Legislative Associate, Energy 
and Power; Will Batson, Legislative Clerk, Energy and Power, 
Environment and the Economy; Jerry Couri, Senior Environmental 
Policy Advisor; David McCarthy, Chief Counsel, Environment and 
the Economy; Andy Zach, Professional Staff, Environment and the 
Economy; Rick Kessler, Minority Senior Advisor and Staff 
Director, Energy and Environment; and Timia Crisp, Minority 
AAAS Fellow.

  OPENING STATEMENT OF HON. JOHN SHIMKUS, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF ILLINOIS

    Mr. Shimkus. I am going to ask my colleagues who are here 
to take seats. And for those here, we want to, first of all, 
thank the Ways and Means Committee for their allowing us this 
palatial committee hearing room. We also want to move rapidly, 
because they are going to call votes real soon. So we want to 
get this thing started so we can get back here and get to the 
meat and potatoes of the hearing.
    Good morning, and welcome to today's hearing to examine 
funding, budgetary, and scoring issues associated with efforts 
to manage and dispose of our Nation's spent nuclear fuel and 
high-level radioactive waste. As Congress deals with the 
yearend budget issues, today's testimony is timely.
    This subcommittee is continuing to examine specific 
challenges managing used fuel and national defense waste. 
Central to this discussion is providing adequate financial 
resources for a multigenerational repository program. In 1982, 
Congress passed the Nuclear Waste Policy Act, deciding 
commercial nuclear fuel consumers would fund permanent disposal 
of spent nuclear fuel through a one mil per kilowatt hour tax 
on nuclear-generated electricity to be paid into the Nuclear 
Waste Fund, and managed by the Department of Energy.
    A DOE audit of the fund released just this morning projects 
its total current value is $34.3 billion, an increase in $1.4 
billion over last year, and an $11 billion increase since 2009. 
This includes consumer payments, plus an interest calculation. 
Since the fee was instituted over 30 years ago, ratepayers in 
my home State of Illinois have contributed more than any other 
state at over $2.3 billion to the Nuclear Waste Fund. And I 
have paid some of that personally myself.
    The repository program was designed to be a 
multigenerational effort, which required long-term stability, 
so funding would be available at the most critical times of the 
program. The 1982 outlook for nuclear power was more optimistic 
than today's. That means a shrinking fleet of operating 
reactors must provide adequate financial resources for a 100-
year program. Meanwhile, the budgetary and scoring treatment of 
the Nuclear Waste Fund is broken. Comprehensive budget 
reconciliation measures enacted after 1982 counted revenues 
from the fee as reducing the budget deficit in the fiscal year 
they were paid. Yet programmatic outlays remained on the 
discretionary side of the budget ledger and counts against 
annual budget caps. That means spending on the repository 
competes every year with other Federal budget priorities, such 
as maintaining our nuclear defense capability, or building Army 
Corps water projects.
    Today, we will get a better perspective as to how and why 
these budget changes have complicated the program to 
permanently dispose of used fuel. The Nuclear Waste Policy Act 
required the Federal Government to begin accepting fuel from 
commercial power plants by 1998, and DOE entered into contracts 
with plant operators to do just that, but DOE was not ready in 
1998. As a result, commercial utilities started suing DOE for 
breach of contract, and the courts sided with the utilities. 
The damage payments are drawn from a permanent indefinite 
appropriation known as the Judgment Fund. Payments from the 
Judgment Fund don't count against total spending caps. So 
policy makers have little incentive to stop the bleeding.
    Three weeks ago, DOE updated its annual cost estimate of 
liability for failure to fulfill its obligations as required by 
the Nuclear Waste Policy Act, which will ultimately all be paid 
from the Judgment Fund. DOE estimates lifetime liability to 
reach $23.7 billion. This is $1 billion increase over last 
year, and a $10 billion, or 50 percent increase since President 
Obama shuttered the Yucca Mountain project.
    In 2014 the Federal Government paid out over $900 million 
from the Judgment Fund while not appropriating any money from 
the Nuclear Waste Fund for the Nuclear Regulatory Commission 
and DOE to work on the Yucca Mountain license application. That 
annual legal payment is nearly three times as much funding as 
the total amount the NRC needs to complete its review of the 
Yucca license. DOE's projection is predicated on the ability to 
begin taking title of commercial spent nuclear fuel in 5 years. 
Recently, the subcommittee received testimony it would take at 
least 7 to 9 years to just begin transporting used fuel, 
regardless when a site is available. It is likely the liability 
will continue to skyrocket until we get the stalled program 
back on track.
    Budgetary and funding challenges have been further 
complicated by President Obama's legally dubious decision to 
walk away from Yucca Mountain. When DOE stopped work on the 
repository program, the National Association of Regulatory 
Utility Commissioners filed suit to halt collection of nuclear 
waste fee. The courts found DOE's required financial 
projections absolutely useless, and based on pie-in-the-sky 
analysis. The decision stated the government's argument was 
flatly unreasonable, and obviously disingenuous. The court 
directed DOE to halt the annual collection of $750 million from 
ratepayers, but the payments by taxpayers for DOE's breach of 
contract continue.
    I look forward to hearing from NARUC today about their 
experience with the Nuclear Waste Fund. I welcome all our 
witnesses and urge my colleagues to take advantage of their 
expertise as we prepare to sort this out, and hopefully in the 
future, fix it. Thank you. And I yield to Mr. Tonko for his 
opening statement.
    [The prepared statement of Mr. Shimkus follows:]

                Prepared statement of Hon. John Shimkus

    Good morning and welcome to today's hearing to examine 
funding, budgetary, and scoring issues associated with efforts 
to manage and dispose of our nation's spent nuclear fuel and 
high-level radioactive waste. As Congress deals with year-end 
budget issues, today's testimony is timely.
    This subcommittee is continuing to examine specific 
challenges managing used fuel and national defense waste. 
Central to this discussion is providing adequate financial 
resources for a multigenerational repository program.
    In 1982, Congress passed the Nuclear Waste Policy Act, 
deciding commercial nuclear power consumers would fund 
permanent disposal of spent nuclear fuel through a one mil per 
kilowatt hour tax on nuclear generated electricity to be paid 
in to the Nuclear Waste Fund and managed by the Department of 
Energy.
    A DOE audit of the Fund released just this morning projects 
its total current value at $34.3 billion, an increase of $1.4 
billion over last year, and an $11 billion increase since 2009. 
This includes consumer payments plus an interest calculation. 
Since the fee was instituted over 30 years ago, ratepayers in 
my home State of Illinois have contributed more than any other 
state at over $2.3 billion to the Nuclear Waste Fund.
    The repository program was designed to be a multi-
generational effort, which required long-term stability so 
funding would be available at the most critical times of the 
program. The 1982 outlook for nuclear power was more optimistic 
than today's. That means a shrinking fleet of operating 
reactors must provide adequate financial resources for a 100 
year program.
    Meanwhile, the budgetary and scoring treatment of the 
Nuclear Waste Fund is broken. Comprehensive budget 
reconciliation measures, enacted after 1982, counted revenues 
from the fee as reducing the budget deficit in the fiscal year 
they were paid. Yet programmatic outlays remained on the 
discretionary side of the budget ledger and counts against 
annual budget caps. That means spending on the repository 
competes every year with other Federal budget priorities, such 
as maintaining our nuclear defense capability or building Army 
Corps water projects. Today we will get a better perspective as 
to how and why these budget changes have complicated the 
program to permanently dispose of used fuel.
    The Nuclear Waste Policy Act required the Federal 
government to begin accepting fuel from commercial power plants 
by 1998, and DOE entered into contracts with plant operators to 
do just that. But DOE was not ready in 1998. As a result 
commercial utilities started suing DOE for breach of contract, 
and the courts sided with the utilities. The damage payments 
are drawn from a permanent, indefinite appropriation, known as 
the Judgment Fund. Payments from the Judgment Fund don't count 
against total spending caps, so policymakers have little 
incentive to stop the bleeding.
    Three weeks ago, DOE updated its annual cost estimate of 
liability for failure to fulfill its obligations as required by 
the Nuclear Waste Policy Act, which will ultimately all be paid 
from the Judgment Fund. DOE estimates lifetime liability to 
reach $23.7 billion. This is a billion dollar increase over 
last year, and $10 billion dollar--or fifty percent--increase 
since President Obama shuttered the Yucca Mountain program. In 
2014 alone, the Federal government paid out over $900 million 
from the Judgment Fund, while not appropriating any money from 
the Nuclear Waste Fund for the Nuclear Regulatory Commission 
and DOE to work on the Yucca Mountain license application. That 
annual legal payment is nearly three times as much funding as 
the total amount the NRC needs to complete its review of the 
Yucca license.
    DOE's projection is predicated on the ability to begin 
taking title of commercial spent nuclear fuel in five years. 
Recently, the Subcommittee received testimony it would take at 
least seven to nine years to just to begin transporting used 
fuel, regardless when a site is available. It is likely the 
liability will continue to skyrocket until we get the stalled 
program back on track.
    Budgetary and funding challenges have been further 
complicated by President Obama's legally dubious decision to 
walk away from Yucca Mountain. When DOE stopped work on the 
repository program, the National Association of Regulatory 
Utility Commissioners filed suit to halt collection of the 
nuclear waste fee. The Courts found DOE's required financial 
projections ``absolutely useless'' and based on ``pie in the 
sky'' analysis. The decision stated the government's argument 
was ``flatly unreasonable,'' and ``obviously disingenuous.''
    The Court directed DOE to halt the annual collection of 
$750 million from ratepayers, but the payments by taxpayers for 
DOE's breach of contract continue. I look forward to hearing 
from NARUC today about their experience with the Nuclear Waste 
Fund.
    I welcome all our witnesses and urge my colleagues to take 
advantage of their expertise as we prepare to sort this out and 
fix it.

    Mr. Tonko. Thank you, Chair Shimkus, and good morning to 
our panelists. Thank you all for being here on what has become 
a very busy week.
    We all know the politics behind nuclear waste disposal are 
complicated. So it should come as no surprise that the 
budgetary and legislative histories are equally complex.
    In 1982, Congress passed its Nuclear Waste Policy Act, 
directing the Department of Energy to remove spent nuclear fuel 
from commercial nuclear power plants in exchange for certain 
fees and transport it to a permanent geologic repository, 
beginning no later than January 31, 1998.
    Obviously, that deadline has been missed. Utilities that 
generate nuclear waste had been paying an ongoing fee of one 
mil per kilowatt hour of nuclear-generated electricity. These 
fees were deposited in the Nuclear Waste Fund to cover the cost 
of the Department of Energy's acceptance, transport, and 
disposal of civilian nuclear waste. But the fund has not worked 
as intended. I am sure we will get into the recent history and 
options moving forward later in this hearing.
    More than 60 years after beginning and expanding our use of 
nuclear materials, nuclear waste disposal remains a difficult 
and an expensive problem. We will have to deal with 74,000 
metric tons of commercial spent fuel, with more being added 
each and every year. And I agree that we should be looking at 
all options for nuclear waste disposal in an effort to find the 
safest and the most cost-effective ways for us as a Nation to 
move forward. But we must recognize and deal with both the 
technical and the political challenges of disposing of all 
classes of nuclear waste.
    During this Congress, this subcommittee has examined a 
variety of nuclear waste disposal issues. I'm glad we are able 
to continue that work today. I thank you all again for your 
participation in this morning's activities. I look forward to 
your testimony and further discussion of what is a very 
important issue. And with that, I yield back, Mr. Chair.
    Mr. Shimkus. The gentleman yields back his time.
    The chair looks to the majority side. No one is seeking 
recognition.
    Anyone on the minority side?
    Seeing none, we want to thank my colleagues for moving 
expeditiously, and now welcome our witnesses. And we are going 
to admit your full statements into the record. We will ask you 
to speak for 5 minutes. And we will hopefully get to questions 
and answers.
    So I will introduce you one at a time. First it will be Mr. 
David Bearden, who has appeared before the subcommittee 
numerous times, or the committee as a whole, specialist in 
environmental policy for the Congressional Research Service. 
Welcome, and you are recognized for 5 minutes.

   STATEMENTS OF DAVID BEARDEN, SPECIALIST IN ENVIRONMENTAL 
POLICY, CONGRESSIONAL RESEARCH SERVICE; KIM P. CAWLEY, CHIEF OF 
      NATURAL AND PHYSICAL RESOURCES COST ESTIMATES UNIT, 
CONGRESSIONAL BUDGET OFFICE; AND TRAVIS KAVULLA, COMMISSIONER, 
    MONTANA PUBLIC SERVICE COMMISSION, PRESIDENT, NATIONAL 
        ASSOCIATION OF REGULATORY UTILITY COMMISSIONERS

                   STATEMENT OF DAVID BEARDEN

    Mr. Bearden. Chairman Shimkus, Ranking Member Tonko, and 
members of the subcommittee, my name is David Bearden. I am a 
specialist in environmental policy for the Congressional 
Research Service, called CRS. Thank you for inviting me to 
testify on behalf of the agency. In serving the U.S. Congress 
on a nonpartisan and objective basis, CRS takes no position on 
any of the issues examined today. CRS has been asked by the 
subcommittee to outline the budgetary framework for the 
management of the Nuclear Waste Fund. CRS also maintains a team 
of policy analysts and legislative attorneys who have prepared 
reports on an array of complex issues associated with the 
Nuclear Waste Fund, and so we remain available to assist the 
subcommittee and the full committee with broader issues than 
addressed in my testimony today.
    In terms of the statutory framework, as the chairman 
mentioned at the beginning in his opening remarks, section 302 
of the Nuclear Waste Policy Act of 1982 established the Nuclear 
Waste Fund, financed primarily with the collection of fees from 
civilian nuclear utilities to fund the permanent disposal of 
their spent or used nuclear fuel and related wastes. As 
amended, the statute authorizes the Department of Energy, DOE, 
to develop a deep geologic repository for the disposal of these 
wastes, subject to licensing by the U.S. Nuclear Regulatory 
Commission.
    The development of a repository and the selection of Yucca 
Mountain in Nevada for its location have been the subject of 
various scientific, technical, regulatory, budgetary, legal, 
and policy debates. The lack of a repository to accept spent or 
used nuclear fuel has been an ongoing issue. Nuclear utilities 
have paid fees to finance the Nuclear Waste Fund and entered 
contracts with the Federal Government for the disposal of their 
spent or used nuclear fuel by the statutory deadline of January 
31, 1998.
    Appropriations acts have made monies from the fund 
available to DOE and the Nuclear Regulatory Commission to 
support the licensing process, but construction of a repository 
could not begin until NRC approves the license pursuant to the 
Nuclear Waste Policy Act. Nuclear utilities have filed damage 
claims against DOE for partial breach of existing contracts to 
cover their spent or used nuclear fuel storage costs in the 
interim while a repository has been unavailable since the 
statutory deadline lapsed.
    The Nuclear Waste Fund is not explicitly authorized to pay 
damage claims. So the Judgment Fund of the U.S. Treasury, 
therefore, has been the source of Federal funds for the payment 
of eligible claims. DOE has reported that a total of $5.3 
billion in eligible claims have been paid from the Judgment 
Fund as of the end of fiscal year 2015.
    Now I will just briefly outline the basic budgetary 
framework of the fund itself and existing law. As authorized in 
the Nuclear Waste Policy Act, receipts from the nuclear utility 
fee collections are deposited in the fiscal year they are 
collected into the U.S. Treasury and credited to the Nuclear 
Waste Fund as assets available for discretionary 
appropriations.
    The receipts are not treated as a revenue or offsetting 
collections for discretionary spending, though. They are 
treated as negative direct spending that has the effect of 
reducing total Federal direct spending in the fiscal year in 
which the receipts are collected. The accumulated balance of 
past collections does not continue to count as a reduction to 
direct spending in future fiscal years, though, as it would 
result in the double counting of receipts.
    The unappropriated balance of the Nuclear Waste Fund is 
invested in U.S. Treasury securities that accrue interest 
credited to the fund that contributes to the total balance 
available for discretionary appropriation. The assets credited 
to the Nuclear Waste Fund from the nuclear utility fee 
collections are a liability to the general fund of the U.S. 
Treasury to provide these assets once discretionary 
appropriations are enacted. Regardless of the accumulated 
balance, though, appropriations from the fund remain subject to 
limitations on annual discretionary spending. And this 
framework for the fund is not unique within the Federal budget, 
though. Some other examples include the Harbor Maintenance 
Trust Fund, the Hazardous Substance Superfund Trust Fund, 
Leaking Underground Storage Tank Trust Fund, and the Uranium 
Enrichment Decontamination and Decommissioning Fund.
    And in its department-wide financial report for fiscal year 
2015, DOE reported a balance in the Nuclear Waste Fund of $34.3 
billion in net investments and related interest combined. And 
those investments refer to fee collections. There have been no 
new receipts credited to the fund from nuclear utility fees 
since the suspension of the collections on May 16, 2014 as a 
result of litigation challenging the present need for the fees. 
However, interest has continued to accrue, increasing the 
balance each year.
    So under current law, and existing budgetary procedural 
requirements, the unappropriated balance of the Nuclear Waste 
Fund does remain available for appropriation to carry out the 
purposes of the Nuclear Waste Policy Act, but it is subject to 
applicable limitations on Federal spending. The budgetary 
treatment of the receipts does not permit past collections to 
be applied as an offset to future spending, but other potential 
budgetary options may be dependent upon amendments or 
exceptions to current law or existing procedures.
    So that concludes the remarks of my prepared statement. 
Thank you for the opportunity to appear before the subcommittee 
today, and I will be happy to address any questions you may 
have.
    [The prepared statement of Mr. Bearden follows:]
    
  [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]  
    
    
    Mr. Shimkus. Thank you very much. We look forward to 
answering questions because that was very confusing.
    Now, we would like to turn to Mr. Cawley, Chief of Natural 
and Physical Resources Cost Estimate Unit of the Congressional 
Budget Office. You are recognized for 5 minutes.

                   STATEMENT OF KIM P. CAWLEY

    Mr. Cawley. Mr. Chairman and members of the committee, 
thank you for the invitation to present CBO's review of the 
status of the Nuclear Waste Fund, and to try to explain the 
budgetary treatment of the fund.
    I think if we look back over the last 33 years, about $22 
billion has been collected from nuclear power ratepayers, and 
about one-third of that has been spent on the waste disposal 
system. Five years ago, the administration found that 
developing the Yucca Mountain site for the disposal of waste 
was unworkable, and there has been no significant spending on 
the site project in recent years.
    Last year, as a result of a Federal court order, the 
Department stopped collecting the nuclear waste fee from 
electricity ratepayers. Those fees had amounted to about $750 
million a year, and they were stopped because the court found 
the Department could not demonstrate whether the fee 
collections were too small or too large relative to the 
expected life cycle cost of the program.
    Although the government is not collecting the waste fees, 
and is not spending any of the previous fee collections, the 
government is incurring another type of cost. Under the 
contracts the Department of Energy signed after the 1982 Act, 
we were set to begin accepting waste for disposal 17 years ago. 
Shortly after the deadline was missed in 1998, utilities filed 
claims and won judgments for a partial breach of the disposal 
contracts. At this point, the Federal taxpayers, through the 
Treasury's Judgment Fund, have paid over $5 billion to 
utilities as compensation for the breach. CBO expects that 
utilities will collect another $5 billion more in compensation 
in the coming decade. In the simplest terms, today the 
government is using taxpayer funds to pay for private storage 
of waste instead of spending ratepayer fees to permanently 
dispose of the waste as authorized in the 1982 Act.
    I wanted to make a couple of points about the nuclear waste 
program budget and the enforcement procedures that Congress 
uses in the congressional budget process.
    The fund accounts for both the receipt of fees from 
utilities, and amounts provided through the annual 
appropriations process. In addition, interest is credited and 
it becomes available to be spent for program purposes. In the 
congressional budget process, there is a distinction made 
between mandatory spending, that operates under permanent law, 
and discretionary spending, that flows from annual 
appropriations acts.
    The waste program has one foot in each of these spending 
categories. The fee collections are part of the mandatory 
category, and spending on waste disposal activities is in the 
discretionary category. To control legislative changes to the 
budget, the Congress established the pay-as-you-go system for 
mandatory spending, and currently, discretionary spending is 
controlled through a system of caps on total spending. As was 
mentioned, the split mandatory/discretionary treatment of the 
waste program is not unique in the budget. There are other 
programs with a similar treatment.
    In very practical terms, I think the program's budgetary 
treatment means two things: First, any future appropriations 
for the waste program will need to compete for funding along 
with all other discretionary Federal programs that are 
controlled by the caps on spending. The unspent balances in the 
fund cannot be used unless those amounts are appropriated. The 
collection of those balances in previous years helped to reduce 
the deficits in those earlier years, but they have no budgetary 
effect in future years.
    Second, if the waste fees are reinstated in the future, 
they will reduce the deficit. But those mandatory collections 
cannot be credited to, or directly offset the cost of 
discretionary appropriations for spending on the program.
    I think that is a good point for me to stop talking about 
the budget, and I would be happy to answer any of your 
questions.
    [The statement of Mr. Cawley follows:]
   
   
   [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    Mr. Shimkus. Thank you very much.
    And just for my colleagues, we will finish the opening 
statements, though they have called votes. We will go to the 
floor after the opening statements, and then we will return for 
the question period.
    So last but not least, we would like to recognize Travis 
Kavulla, Commissioner, Montana Public Service Commission, 
president of the National Association of Regulatory Utility 
Commissioners. Welcome, and you are recognized for 5 minutes.

                  STATEMENT OF TRAVIS KAVULLA

    Mr. Kavulla. Thank you, Chairman Shimkus and Ranking Member 
Tonko, members of the subcommittee, it is a pleasure to be 
before you today. I am the president of the National 
Association of Regulatory Utility Commissioners, which has long 
been involved in this issue from a policymaking and litigation 
front. NARUC applauds this subcommittee's tenacity and 
leadership on these issues. Unlike the previous two speakers, 
we have a full-throated and unambiguous opinion on this matter 
as well, which I will be happy to share with you today.
    NARUC is a nonprofit organization founded in 1889. Our 
members are the public utility commissions in all 50 states and 
U.S. territories. We regulate the retail rates and services of 
electric, gas, water, and some telecommunications utilities. 
NARUC and its state commission members were at the table when 
the Nuclear Waste Policy Act of 1982 was developed and passed. 
And at that time and today, state regulators agree that users 
of electricity from nuclear power plants should pay for the 
Federal nuclear waste management and disposal program. And the 
consumers have paid generously into that fund. Since 1982, more 
than $40 billion in direct payments and interests have been 
paid into the Nuclear Waste Fund. And so far, we have very 
little to show for it, just an $11 billion hole in the ground, 
to be exact. The Federal Government missed its statutorily-
mandated deadline to start accepting nuclear waste in 1998. In 
the late 1990s and early 2000s, at least, the program had shown 
progress, notwithstanding that missed deadline.
    However, since that time, efforts to block funding for the 
geologic disposal of nuclear waste at Yucca Mountain, as well 
as the Department of Energy's unlawful refusal to consider the 
project's licensing application, has kept the country in the 
exact same situation we occupied 28 years ago when Congress 
decided that Yucca Mountain should be the first site considered 
for the United States' permanent repository. The repercussions 
of the administration's failure to take title of nuclear waste 
and to develop the Yucca Mountain site have been substantial.
    Now taxpayers from each of your constituencies, even those 
whose utilities have no stake in nuclear-generated electricity, 
continue to fund court-awarded damages from the Department of 
Justice's Judgment Fund for DOE's partial breach of contract.
    The chairman and ranking member have described very well, I 
think, the history of some of these problems. So in the 
interest of cutting it short, I will move on to a few things 
NARUC views as solutions.
    First, access to the billions collected by the Nuclear 
Waste Fund is essential for any interim or permanent solution 
to nuclear waste disposal to succeed. Appropriations for the 
waste disposal program remain under the spending cap applicable 
to all domestic programs, even though the NWF is self-financed. 
This forces, as you just heard, spending from the NWF to 
compete with other spending programs that never have had a 
dedicated funding stream. This approach is unfair to 
ratepayers, and inappropriate for a fund designed to finance 
the extremely protracted life cycle of a capital intensive 
disposal program.
    It makes no sense to treat funds collected specifically to 
support the disposal of used commercial reactor fuel as 
discretionary. Over the life of the program, this approach has 
led to lower appropriations than were requested to accomplish 
this mission. Reduced funding contributed to project and 
schedule delays. Inadequate funding can only hamper efficient 
scheduling and planning, thereby driving up costs. The program 
must have full access to the revenues generated by consumers' 
fee payments if they resume, as well as to the balance of the 
NWF. This requires legislative changes to the NWPA.
    As related above, the U.S. Government has not lived up to 
the promises made under the NWPA and subsequent congressional 
enactments. This is really not a matter of opinion, but of 
legal record. And of particular relevance is the decision that 
the chairman cited from the Circuit Court of Appeals regarding 
the DOE fee collection. I think this sorry history strongly 
suggests that the management of Federal responsibilities for 
integrated-used fuel should be more successful if they were 
assigned to a new organization with a single-minded devotion to 
the cause of permanently storing used fuel. Congress should 
charter a new Federal corporation dedicated solely to 
implementing the nuclear waste management program and empowered 
with the authority and resources, including direct access to 
the NWF outside the current appropriations process that is 
necessary for such a mission to succeed.
    Congress would still have oversight over those, but they 
would be separately dedicated to the use by that organization. 
If implemented in the near term, these ideas can help create a 
solid foundation on which to build a viable spent nuclear fuel 
management program. NARUC is certainly open to the idea of 
interim solutions where nuclear fuel is stored, but these 
interim sites cannot be allowed to be mere parking lots in the 
absence of a permanent storage solution.
    Thank you very much, and I look forward to questions.
    [The statement of Mr. Kavulla follows:]
    
    
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    Mr. Shimkus. Thank you very much.
    For my colleagues, there are 7 minutes remaining on the 
floor to cast our votes. So we will, in a minute, recess. For 
our panelists, there are seven votes called. That is a good 45 
minutes to an hour. So hang around the building, get coffee, 
and we will be back to delve more deeply into this. We thank 
you for your time. And with that I am going to recess the 
hearing.
    [Recess.]
    Mr. Shimkus. We will call the hearing back in order. Again, 
apologize for the long delay, but we have to do our job, which 
is voting on the floor also. Thank you for the opening 
statements. We will go into the questions. And I will begin. I 
will recognize myself 5 minutes to start the questioning.
    The first one is for Mr. Kavulla. And I know, Mr. Kavulla, 
you have to leave. I have been informed. So when you have to 
go, just get up and go. Hopefully we will direct the questions 
that we can to you early enough to get responses, so hence, the 
first one.
    At a recent subcommittee hearing to examine the issues 
associated with transportation of nuclear materials, expert 
witnesses testified that pursuing consolidated interim storage 
for spent nuclear fuel would likely increase life cycle costs 
as a result of having to ship material more than once. The last 
DOE life cycle cost analysis for Yucca Mountain estimated total 
transportation costs to exceed $20 billion over the associated 
70-year national transportation campaign.
    You stated your concern with the possibility that 
consolidated interim storage would increase the financial 
burden on ratepayers without a justifiable return on 
investment, such as a reduction in payment from the judgment 
fund. What exactly is necessary to provide assurance that any 
authorization for consolidated interim storage is in the 
interest of electric ratepayers?
    Mr. Kavulla. Thank you, Mr. Chairman, for that question. I 
think the answer is that there needs to be unambiguously a 
cost-benefit analysis done of this. My real concern, on behalf 
of NARUC, is that we would establish these consolidated storage 
sites as an interim solution, but then they would become de 
facto, permanent sites rather than the kind of parking lot that 
undergirds the concept.
    So there needs to be more costing than has already been 
done. The sites, at least one of the sites that has raised its 
hand on a consent basis is one in New Mexico, but they have 
been very clear in that state that they are unwilling to go 
forward without the designation of a permanent repository. So I 
would imagine you would have difficulty of the same type you 
face in the Yucca Mountain issue with even identifying those 
interim locations.
    So I think, my own personal opinion on this, is that you 
would need to have a clear linkage between the interim site and 
the permanent site in the same breadth, acknowledging that it 
may be a reasonable idea because, realistically, we are decades 
off of creating a permanent repository, one way or another.
    Mr. Shimkus. Thank you very much.
    Now, for Mr. Bearden and Mr. Cawley, in both your 
testimonies, you reference potential issues of double-counting 
previous revenue from the nuclear waste fee that has been 
collected over the previous 30 years. For clarification, if 
Congress were to appropriate funding from the Nuclear Waste 
Fund on activities for which it was collected, under our 
scoring rules, I guess my question is, would Congress be 
increasing the Federal deficit?
    Mr. Cawley. Right. If next year, Congress were to 
appropriate $100 million from the Nuclear Waste Fund, that 
would add to the deficit in that year.
    Mr. Shimkus. Mr. Bearden, would you agree?
    Mr. Bearden. Well, most certainly I would agree with CBO in 
how they would score any impacts on the deficit. If funding 
were appropriated out of the Nuclear Waste Fund, within the 
discretionary spending caps, it would be part of that 
discretionary spending total and the effects it would have on 
the deficit.
    Mr. Shimkus. What exactly, then, is accounted for in the 
Nuclear Waste Fund audit release this morning by the Department 
of Energy inspector general?
    Mr. Bearden. I am not quite sure I understand your 
question. What is accounted for?
    Mr. Shimkus. Yes. Obviously, the audit was released today, 
so what are they accounting for in the release for that audit 
in their numbers?
    Mr. Bearden. Well, their numbers are reflecting what is the 
total balance of investments, which are the nuclear utility fee 
collections and the interest combined. That is available for 
discretionary appropriation, that $34.3 billion figure, by the 
end of fiscal year 2015. How Congress can use that money and 
the amounts each year are going to depend on the priorities 
when the discretionary spending caps.
    Mr. Shimkus. Great. Let me just finish up with Mr. Kavulla. 
NARUC's previous testimony suggested that Congress could 
structure payments from the utilities into an escrow account 
which would not be provided to the Federal Government until 
funding is appropriated by Congress. Please describe how this 
would protect the ratepayers?
    Mr. Kavulla. So in the other witnesses' testimony, Mr. 
Chairman, you heard examples of funds that work in the way this 
one does. It's NARUC's testimony that this budget approach for 
something like the disposal of nuclear waste really doesn't 
make sense when you are talking about a life cycle of many, 
many decades, possibly in excess of a century. It shouldn't be 
subject to annual appropriation decisions by Congress.
    The idea of an escrow account would be to maintain 
congressional oversight and authority over spending, even while 
making clear that the funding went into a fund available, for 
instance, by an independent body charged with oversight 
exclusively of used waste disposal. There are other examples of 
funds that are similar to this. The universal service fund that 
USEC administers is similar, special purpose fund that is 
subject in congressional oversight, but which is not subject to 
an annual appropriation.
    Mr. Shimkus. Great. Thank you. My time has expired.
    I was just going to end by saying, mandatory receipts, 
discretionary spending with possible deficit implications. That 
is why it is very confusing for us.
    And I recognize Mr. Tonko for 5 minutes.
    Mr. Tonko. Thank you, Mr. Chair.
    And, Mr. Cawley, you called the Nuclear Waste Fund an 
accounting mechanism. Is it a trust fund as we think of trust 
funds in a traditional sense?
    Mr. Cawley. It is categorized in the budget as a special 
fund. Like other funds in the Federal budget, they are used to 
account for moneys. The Treasury manages all of the cash on a 
unified basis, so when we want to spend money that has 
accumulated in these funds, that requires new spending.
    Mr. Tonko. Let me ask this then: The funding collected has 
already been used to offset past Federal deficits, so moving 
forward, that money would need to be appropriated as 
discretionary funding from the current fiscal year at that 
time. Do I have that right?
    Mr. Cawley. That is right. Yes.
    Mr. Tonko. OK. So from CBO's perspective, despite the 
collection of fees in the past, would a change in the law that 
would allow the waste disposal process to resume score and 
score significantly?
    Mr. Cawley. I guess I am not sure what the change in the 
law would be, but in the simplest terms, allowing the waste 
program to go forward could be just the appropriation of X 
million dollars, and that would be costed along with all other 
discretionary appropriations in that year, presumably under the 
cap that controls all discretionary appropriations in that 
year.
    Mr. Tonko. And, Mr. Bearden, are there other programs that 
use this accounting mechanism that are being appropriated 
discretionary funding annually based on a user fee paid to the 
Treasury?
    Mr. Bearden. Yes, some of the examples that I provided in 
my testimony with discretionary funding are the Superfund Trust 
Fund, Leaking Underground Storage Tank Trust Fund, Uranium 
Enrichment Decontamination and Decommissioning Fund, those are 
other examples.
    Mr. Tonko. Have these funds been as troubled with their 
accounting mechanism?
    Mr. Bearden. Each of them has had their own set of issues 
and viewpoints. For example, the Leaking Underground Storage 
Tank Trust Fund receipts accumulated at a faster pace than 
Congress appropriated, under the discretionary process leading 
to a higher balance than moneys going out. That is an example 
of an issue with that particular fund. That has dedicated 
receipts, but the use of it is subject to discretionary 
appropriations.
    Mr. Tonko. Thank you.
    Let me toss out a hypothetical, and it would include either 
this or a future administration reevaluating Yucca Mountain, or 
Congress changing the law about the location of a permanent 
geologic repository for the uses of nuclear waste fund fees. Do 
you believe the Secretary of Energy, under existing 
authorities, could begin reassessing fees, which have been 
stopped since May of 2014?
    Mr. Cawley. We think the fees could conceivably be charged 
again under administrative changes, absent a change in law. The 
court found, in our view, that DOE had not done a fee adequacy 
study correctly because it couldn't demonstrate if these fees 
were sufficient to pay the life cycle cost. Presumably, that 
study could be redone in a different way, and demonstrate to 
the court that these fees either are sufficient or are 
insufficient to pay for the life cycle cost of the program.
    In the original Act, DOE has the authority to 
administratively change the fee, present that proposed change 
to the Congress, and if Congress doesn't act, the fee change 
goes forward.
    Mr. Tonko. And are there concerns with the existing 
contracts, with utilities that might make this more difficult?
    Mr. Cawley. Might make a change to the fee difficult or a--
--
    Mr. Tonko. Yes. Or the assessing of the fees or----
    Mr. Cawley. I can't think of any.
    Mr. Tonko. OK. And, Mr. Bearden, can you explain the 
process for changing this fee. There is analysis by the 
Secretary of Energy that determined the appropriate fee, but 
then it must be submitted to Congress, I believe, for 
adjustment. Is that----
    Mr. Bearden. Yes, for review. Is that what you are asking?
    Mr. Tonko. Yes.
    Mr. Bearden. Yes. There is a process of a review for that.
    Mr. Tonko. Thank you.
    And, Mr. Kavulla, the industry estimates $50 billion in 
damages for utilities with DOE contracts. DOE's total liability 
estimate is $29 billion. Can you explain this discrepancy.
    Mr. Kavulla. Mr. Congressman, I really cannot speak for the 
industry on this point. I do know that DOE had suggested a 
number, I believe, that was nearly $20 billion in size. I am 
not sure of the $9 billion exposure, but it is true what you 
have said; in my testimony, there is a citation to an industry 
estimate of about $50 billion.
    I think the bottom line here is that there is a large 
amount of exposure, and whatever the ultimate liability may be, 
there is a collection of $750 million annually with a lot of 
unresolved claims that are still pending.
    Mr. Tonko. Thank you.
    My time is up, so I yield back.
    Mr. Shimkus. I thank my colleague and friend, and I turn to 
Congressman Johnson from Ohio for 5 minutes.
    Mr. Johnson. Thank you, Mr. Chairman. And thank you, 
gentlemen, for joining us today.
    Mr. Bearden, in addition to finding a disposal pathway for 
commercial spent nuclear fuel, the Nuclear Waste Policy Act 
required a determination regarding a management of the nuclear 
waste from atomic defense activities. What was the anticipated 
disposal path for that material?
    Mr. Bearden. Well, there are possible pathways of disposal 
for that material, including a separate repository or a 
consolidated repository, and the administration had issued its 
finding of moving forward with planning for a separate 
repository for defense waste, if that is what you are referring 
to.
    Mr. Johnson. OK. So what would it mean for defense accounts 
if we choose to pursue an entirely new disposal pathway for 
this type of material?
    Mr. Bearden. Well, any disposal facility for defense 
nuclear waste would be subject to appropriation by Congress to 
have the resources available for certain.
    Mr. Johnson. OK. Mr. Cawley, would that funding be subject 
to the current caps on defense spending under the Budget 
Control Act and, therefore, compete with other defense account 
activities as well?
    Mr. Cawley. Sounds like it would, yes.
    Mr. Johnson. I am sorry?
    Mr. Cawley. It sounds like it would, yes.
    Mr. Johnson. OK. All right. You know, the Department of 
Energy recently found that its estimated liabilities for 
failure to accept commercial spent nuclear fuel is over $23 
billion. That is an annual increase over $1 billion. This 
estimate, of course, is predicated on achieving the 
Department's strategy on used fuel management, and their 
ability to begin accepting title to stranded spent nuclear fuel 
in 5 years.
    So, Mr. Cawley and Mr. Bearden, will you describe how the 
development and operation of a pilot interim storage as the 
administration proposes would impact the overall estimated 
liability? And you can choose who goes first. I don't care.
    Mr. Cawley. I have heard the Department's estimate of their 
liability of some $23, $24 billion described as depending on 
their implementation of their strategy which would have a 
storage facility during the next 10 years.
    Mr. Johnson. So it is safe to say that it is significant?
    Mr. Cawley. Yes.
    Mr. Johnson. OK. Mr. Bearden, do you have a comment on 
that?
    Mr. Bearden. Well, as with any strategy of any 
administration, it would depend ultimately on implementation 
and the assumptions that it would be made for that, for that to 
result in the outcomes that they are estimating. And certainly, 
that involves a lot of complexities, and CRS would be happy to 
work with the committee to discuss those issues and challenges 
with you at your convenience.
    Mr. Johnson. OK. What portion of DOE's projected liability 
is tied to only the dozen sites that are completely 
decommissioned, absent removal of the spent nuclear fuel? 
Either of you want to comment on that?
    Mr. Cawley. I don't have a specific answer to that 
question, but I do know that under the original contracts, at 
this point, DOE was to have removed approximately 40,000 metric 
tons of waste out of the some 72,000 metric tons of waste that 
exists. It doesn't address specifically the spent fuel at the 
facilities that have closed. Some of that, no doubt, should 
have been removed by this time.
    Mr. Johnson. Can you take that question for the record, 
please, and do some research on that and get back to us?
    Mr. Cawley. Certainly.
    Mr. Johnson. OK. Thank you.
    Mr. Bearden, the Nuclear Waste Policy Act included a number 
of provisions to provide financial assistance to State-affected 
local and tribal governments. Will you please describe what 
this funding was intended to support?
    Mr. Bearden. There is a range of funding authorized subject 
to appropriation from the Nuclear Waste Fund for affected units 
of local government, states, and tribes. Some of that is for 
oversight during the licensing process and other assistance, 
and some of the totals of that have been approximately $520 
million, at least at the end of fiscal year 2009 that I am 
familiar with, and so, that assistance partly is to go for the 
oversight and the licensing process.
    Mr. Johnson. Are you aware of how much funding has 
previously been directed to the State of Nevada and local and 
tribal governments?
    Mr. Bearden. I do not have that figure with me today, but I 
would be happy to provide that as a follow-up response for the 
record.
    Mr. Johnson. Mr. Kavulla, your organization is on record 
supporting reasonable economic benefits and incentives for host 
states and communities. Would you like to discuss very 
briefly--because my time is expired--the nature of those 
benefits and the role of Federal-State partnerships?
    Mr. Kavulla. Congressman, I would be happy to follow up in 
more detail, but briefly, we acknowledge that this is liability 
for a State to take on. We agree that there needs to be some 
concessions made for units of local government to take them on. 
But those need to be tied to, frankly, the scope of the 
responsibilities they are shouldering, and not, I think, just 
to give away that would ultimately be placed on the consuming 
rate-paying public----
    Mr. Johnson. OK. My time has expired. Would you provide an 
expanded answer to that?
    Mr. Kavulla. I would be happy to.
    Mr. Johnson. Mr. Chairman, I yield back.
    Mr. Shimkus. The gentleman yields back.
    We now recognize Mr. Green from Texas for 5 minutes.
    Mr. Green. Thank you, Mr. Chairman. I am trying to get used 
to this Ways and Means Committee room. You think we could take 
some of our jurisdiction when we leave that they took from us 
over the years?
    But anyway, I want to welcome our colleagues from the 
agencies.
    The success of our Nation's nuclear waste management 
program is dependent on making fees raised from the Nuclear 
Waste Fund available as needed for construction, 
transportation, and storage of high-level nuclear waste. This 
is not the case currently. Congressional action, after the 
enactment of Nuclear Waste Policy Act, has sharply limited the 
ability of responsible agencies to access the funds to study, 
construct a storage facility, be it interim or permanent.
    As the committee of jurisdiction, we must begin to process 
affixing this broken system, uphold the Federal Government's 
contractual obligations to the ratepayers, and ensure a clear 
path for the prompt licensing and construction of permanent 
storage facility.
    Mr. Cawley, what is the current amount of money in the 
Nuclear Waste Fund?
    Mr. Cawley. Current balance is shown on table 1 in my 
prepared testimony. It is about $34 billion.
    Mr. Green. Pardon? $34 million or billion?
    Mr. Cawley. Billion.
    Mr. Green. OK. How much of the money has the Federal 
Government currently paid in damages to the electric utilities 
for failing to take the title of civilian nuclear waste by the 
required date?
    Mr. Cawley. So far, we have paid approximately $5.3 
billion. In the coming decade, we expect it will be about $5 
billion more.
    Mr. Green. You note in your testimony, several utilities 
have not paid their one-time fee into the Nuclear Waste Fund. 
Does CBO know how much these outstanding one-time fees are 
valued at?
    Mr. Cawley. One-time fees currently have a value of about 
$1.6 billion.
    Mr. Green. Is the Department of Energy currently doing 
anything to collect those outstanding fees from the utilities?
    Mr. Cawley. The one-time fees was an option given to 
utilities back at the beginning of the Act, and they are due 
when their first delivery of waste to a repository is made.
    Mr. Green. Mr. Kavulla, is our Nation's current system for 
high-level nuclear waste working for the people of your state?
    Mr. Kavulla. Well, Congressman, no. Montana has no nuclear 
waste and shouldn't be paying, frankly, for any of this. And 
the irony of the Federal policy is that through the damages 
awarded against DOE, even taxpayers of those States who have no 
connection with nuclear-generated electricity are, nonetheless, 
paying for this problem.
    Mr. Green. As a supporter of nuclear energy and expansion, 
and coming from Texas where we are trying to look at a midlevel 
waste facility in West Texas that obviously we need--and if you 
want nuclear power, we have to have some place, whether it be 
the temporary storage on site, the interim storage, or 
ultimately the long-term storage, but I can't say we have the 
solution, because there is no country in the world that has 
long-term storage.
    You know, France, who generates a great deal of their 
electricity from nuclear. Sweden, actually, has a big hole in 
the ground. But I asked how they afforded that, and they said, 
well, what they would call their local jurisdiction, it was a 
prototype, but they agreed they would never put anything in 
there. So, everybody wants their electricity turned on but we 
don't know where to put the nuclear waste.
    Do you believe the ratepayers in Montana and other states 
represented by NARUC have confidence in the Federal Government 
and Congress to fix the current system?
    Mr. Kavulla. Well, I have confidence, I hope, Congressman, 
that your subcommittee will do something about this.
    Mr. Green. I wish I had confidence we would fix it.
    Mr. Bearden, in the last 50 seconds, how are PAYGO 
requirements created under the enactment of the NWPA impacting 
the Energy Department's access to funds currently in the 
Nuclear Waste Fund?
    Mr. Bearden. Well, the access to those funds is dependent 
on the appropriations under the discretionary process, so it is 
the discretionary spending limits that are affecting the 
availability of moneys that Congress can prioritize each year 
out of the Nuclear Waste Fund.
    Mr. Green. Has the Budget Control Act of 2011 limited the 
Federal Government's access to the money in the Nuclear Waste 
Fund?
    Mr. Bearden. To the extent that there are caps on overall 
discretionary spending, that pressure that is on all 
discretionary spending and is also on appropriations that would 
come from the Nuclear Waste Fund.
    Mr. Green. If Congress were to create a single-purpose, 
independent corporation for nuclear waste storage, how would 
Congress continue to ensure the strong oversight by such an 
entity?
    Mr. Bearden. That would depend on the legislation that sets 
up the agency roles, and how that may be overseen and what the 
nature of that entity is, so it would not be possible to answer 
that without knowing all those details.
    Mr. Green. Thank you, Mr. Chairman.
    Mr. Shimkus. Gentleman yields back his time.
    And just for a point of information, last month, Finland's 
government became the first to approve construction on such a 
long-term storage--Finland--a deep underground repository after 
more than 30 years of efforts to find a suitable site. So maybe 
someday, Mr. Green. Maybe someday.
    The chair now recognizes the gentleman from Mississippi for 
5 minutes.
    Mr. Harper. Thank you, Mr. Chairman.
    And thanks to each of you, and for your knowledge and 
expertise on what is, overall, a very intriguing and 
challenging issue on how we go forward and what we are going to 
do. So thank you for your testimony.
    And, Mr. Cawley, and I will probably ask you, I will direct 
this toward you. When the Department of Energy instituted the 
nuclear waste fee in the 1980s, it had to account for the cost 
to dispose the spent nuclear fuel generated prior to the 
passage of the Nuclear Waste Policy Act. And certainly, as you 
know, they did this by providing utilities the option to pay a 
one-time fee upfront or defer payment.
    And I know, Mr. Bearden, you have discussed some of these 
issues on the structure and current value.
    Mr. Cawley, with CBO's cash-basis scoring process, can you 
explain, how does CBO account for this one-time fee that is yet 
to be collected?
    Mr. Cawley. So the one-time fee with the current value of 
approximately $1.6 billion is due upon delivery of the first 
amount of waste from the couple of utilities that chose that 
option. It hasn't affected the deficits in the past. It will 
affect deficits in the future if we receive that money. We 
don't really have an outlook for receiving that money, 
certainly in the next couple of years.
    Mr. Harper. Gotcha. As we have heard in some of today's 
testimony, when Congress appropriates funding by using the 
Nuclear Waste Fund authorization, it does not result in the 
overall increase in the amount of discretionary spending.
    Mr. Cawley, does it make a difference for CBO scoring 
purposes whether or not the appropriation from the Nuclear 
Waste Fund, regardless of the specific nuclear waste management 
activity?
    Mr. Cawley. I am not sure I got the question, but----
    Mr. Harper. Well, let me just ask this: This concept, would 
that concept apply for CBO's scoring of activities to support 
consolidated interim storage?
    Mr. Cawley. If work on a consolidated interim storage were 
authorized, and there were appropriation out of the waste fund 
for that, or out of the general fund for that, that would be 
scored as additional discretionary spending. And, again, 
presumably, that spending would come under current caps.
    Mr. Shimkus. Would the gentleman yield?
    Mr. Harper. Yes.
    Mr. Shimkus. But the authority to spend discretionary 
dollars in an interim plan would take a change in the current 
law?
    Mr. Cawley. That is my understanding.
    Mr. Shimkus. OK. Thank you.
    Mr. Harper. Mr. Cawley, therefore, is it correct that 
proposed legislation to authorize the development of a 
consolidated interim storage proposal would potentially be 
treated the same, whether or not the activities are authorized 
to be supported from the Nuclear Waste Fund?
    Mr. Cawley. Spending funds from the general fund versus an 
appropriation out of the Nuclear Waste Fund would both have a 
cost.
    Mr. Harper. Mr. Kavulla, if I could ask you this: Your 
testimony calls for the establishment of an independent body to 
manage nuclear waste disposal. If Congress cedes its authority 
under the appropriations process, how can Congress maintain 
control over such an entity to assure it is fulfilling its 
legal obligations intended under the law and in the taxpayer 
interest?
    Mr. Kavulla. Congressman, let me answer the question this 
way: Under the appropriations process currently, you have 
oversight jurisdiction over the DOE and the NRC, and your 
jurisdiction has been flouted, candidly. So I think NARUC's 
recommendation is to establish not only oversight of whatever 
appropriation you escrow or give under the control of such a 
body, but, also, positive timelines and steps to that body so 
that you are not essentially ruling by the power of the purse 
through negations of agency acts, but directing an agency, this 
new independent body, to do specific things that are 
enforceable by entities, like NARUC and courts of law, so that 
no administration in the future can, again, act to drag its 
feet on this important question.
    Mr. Harper. Thanks to each of you. My time is almost 
expired so I will yield back.
    Mr. Shimkus. Gentleman's time--he actually turns the 
balance of his time.
    Seeing no other members and knowing that people have other 
places to go, we want to thank you for your time. And the 
record will be open for a couple days should other members want 
to submit. We would ask that you would turn those in a timely 
manner. And thank you, again, for your time.
    And with that, I will adjourn the hearing.
    [Whereupon, at 12:05p.m., the subcommittee was adjourned.]
    [Material submitted for inclusion in the record follows:]

                 Prepared statement of Hon. Fred Upton

    When President Obama took office in 2009, the national debt 
had just surpassed ten trillion dollars. Now, as we approach 
the final year of the Obama administration, that number will 
soon eclipse nineteen trillion dollars. This long-term 
financial burden will be passed along to our children and 
grandchildren. I was proud to be a partner in a bipartisan 
solution to reduce Medicare's long term liability by three 
trillion dollars when Congress fixed the Medicare Sustainable 
Growth Rate formula. Now, I look forward to finding a 
bipartisan solution to reduce skyrocketing long-term 
liabilities in another important policy area, our nation's 
nuclear waste management policy.
    For over thirty years, ratepayers, including my 
constituents back in Michigan who rely on clean nuclear power, 
paid a tax on electricity generated from commercial nuclear 
power plants to study, license, and construct a permanent 
repository for spent fuel. When the current administration 
decided the Yucca Mountain project was ``unworkable,'' and 
illegally moved to withdraw its license application, it 
attempted to abandon a thirty-year, $15 billion investment. In 
2013, the D.C. Court of Appeals rightly suspended the federal 
government's collection of the nuclear waste fee, reasoning 
that the absence of a repository program meant DOE could not 
collect the tax. It is time for consumers to get what they paid 
for: a decision whether Yucca Mountain can be licensed by the 
Nuclear Regulatory Commission. If that decision is yes, the 
Department of Energy should proceed with construction of the 
facility.
    But the ratepayer's financial support is only one aspect of 
the funding story. This spring, Secretary Moniz announced a 
significant departure from the bipartisan, 30-year nuclear 
waste management policy in which both defense waste and 
commercial spent nuclear fuel are jointly disposed in a 
permanent repository located at Yucca Mountain, Nevada.
    DOE is now seeking to redirect defense material, which has 
long been destined for Yucca Mountain along with commercial 
spent nuclear fuel. Ranking member Pallone and I wrote to 
Secretary Moniz to express our concerns about this decision. 
Central to our concerns is the potential budgetary impact of 
walking away from the scientific and technical work that was 
already completed, paid from our national security accounts, 
and starting over in a new location. The federal government has 
already spent $3.7 billion in defense funding to develop the 
Yucca Mountain site. With turmoil in the Middle East and 
threats on our homeland, that money would be better spent 
addressing these major and immediate national security concerns 
instead of grasping in the short term for a new shiny object.
    I appreciate the testimony from the experts today about 
budget, funding and scoring issues with a nuclear waste 
management program.
                              ----------                              

             Prepared statement of Hon. Frank Pallone, Jr.

    Thank you Mr. Chairman. Safe disposal of spent fuel from 
our nation's nuclear reactors is an important issue in the 
realm of our country's energy future. We must find a long term 
solution to the issue of nuclear waste and how to finance its 
safe storage.
    Today's hearing focuses on the Nuclear Waste Fund and its 
budgetary, funding and scoring issues. Although the fund was 
intended to be ``off budget,'' appropriations from the fund 
have scored as expenditures and lead to insufficient funds 
being made available to meet the needs of the program. As our 
country pursues interim storage solutions--and ultimately a 
permanent repository for spent nuclear fuel--it is critical 
that we ensure the funds necessary to safely transport and 
store this material are available. And we must work to identify 
steps we can take now to set the stage for real reform on 
permanent disposal in the future, regardless of where the 
disposal facility ends up being sited.
    Whenever we have a discussion about the Nuclear Waste Fund 
and the safe disposal of spent nuclear fuel, it is also 
critical for us to consider ratepayers because they have paid 
billions of dollars into the fund and received very little in 
return. We also need to consider taxpayers who now find 
themselves paying for the failures of the program. We need to 
be focusing on efforts that can be enacted into law and that 
will move us forward over the next few years.
    I am very interested in hearing from our witnesses today 
about the challenges and state of play regarding the Nuclear 
Waste Fund and our efforts to safely store spent nuclear fuel.
    Thank you for holding this hearing, and I yield back the 
balance of my time.
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