Appropriations for FY2002: Energy and Water Development
Released: 2002-02-05T00:00:00

Most Recent Developments

The House and Senate approved $25.086 billion in appropriations for energy and water developmentprograms, $2.1 billion more than the Administration'srequest. The act funds the Corps at $4.49 billion, Interior at $914 million, and DOE at $14.54 billion. The bill wassigned ( P.L. 107-66 ) by the President onNovember 12, 2001.

A point of debate in the final passage of H.R. 2311 was an attempt by some Members to increase funding of DOE's nonproliferation programs by$131 million to help secure nuclear materials in Russia. The bill's managers blocked the move but promised to tryto obtain funding in another bill. OnNovember 28 the House passed H.R. 3338 , the FY2002 Defense Appropriations and EmergencySupplemental bill, without the additionalnonproliferation funding, after blocking a move to include it. However, the Senate-passed version ofthe bill included similar funding, and on December 20 boththe House and the Senate passed a conferenced H.R. 3338 with the Senate nonproliferation funding included($226 million). In addition, thesupplemental bill included $30.3 million in security funding for the Bureau of Reclamation and $139 million forthe Corps of Engineers.

Status

Table 1. Status of Energy and Water Appropriations,FY2002

Overview

The Energy and Water Development Appropriations Act 2002, P.L. 107-66 , includes funding for civil worksprojects of the Army Corps of Engineers, theDepartment of the Interior's Bureau of Reclamation (BOR), most of the Department of Energy (DOE), and a numberof independent agencies, including theNuclear Regulatory Commission (NRC) and the Appalachian Regional Commission (ARC). The Administrationrequested $22.5 billion for these programs forFY2002, compared with $23.6 billion appropriated for FY2001. The House bill contained $23.7 billion and theSenate bill $25.0 billion. The final bill ( P.L.107-66 ) appropriated $25.086 billion.

For the Corps of Engineers, the Administration sought $3.9 billion in FY2002, about $600 million less than the amount appropriated for FY2001. TheHouse-passed bill, H.R. 2311 , contained $4.47 billion. The Senate-passed version of H.R. 2311 contained $4.305 billion. The final billapproved $4.49 billion. The Administration requested $820 million for FY2002 for the Department of the Interiorprograms included in the Energy and Water bill-- the Bureau of Reclamation and the Central Utah Project. This would have been an increase of approximately $3.3million over FY2001. The House-passedversion of H.R. 2311 included $843 million for the DOI programs, and the Senate-passed version included$884 million. The final bill appropriated$914 million.

The request for DOE programs was $18.1 billion, about $276 million less than the previous year. The House bill approved $18.75 billion, the Senate bill $20.2billion. The final bill appropriated $19.5 billion. The major activities in the DOE budget are energy research anddevelopment, general science, environmentalcleanup, and nuclear weapons programs. (Funding of DOE's programs for fossil fuels, energy efficiency, and energystatistics is included in the Interior andRelated Agencies appropriations bill, H.R. 2217 . The FY2002 net appropriations request for these programswas $1.5 billion. For details see CRS Report RL31006 , Appropriations for FY2002: Interior and Related Agencies. ) For the NuclearRegulatory Commission and other independent agencies funded inTitle IV of the Energy and Water bill, the net appropriations requested for FY2002 was $182 million, compared to$172 million appropriated for FY2001. TheHouse bill contained $136 million and the Senate bill $197 million. The final bill approved $184 million.

Table 2. Energy and Water Development Appropriations, FY1995to FY2002 (budget authority in billions of current dollars*)

*These figures represent current dollars, exclude permanent budget authorities, and reflect rescissions.

Table 2 includes budget totals for energy and water appropriations enacted for FY1995 to FY2001 and the Administration's request for FY2002. Tables 3-7provide budget details for Title I (Corps of Engineers), Title II (Department of the Interior), Title III (Departmentof Energy) and Title IV (independent agencies)for FY2001 - FY2002.

Title I: Corps of Engineers

The House-passed version of H.R. 2311 recommended $4.468 billion for the civil projects of the U.S.Army Corps of Engineers (Corps) for FY2002,an increase of $568 million above the Administration's request of $3.900 billion. The Senate-passed versionrecommended $4.305 billion. The final billappropriated $4.486 billion.

Table 3. Energy and Water Development Appropriations Title I: Corps of Engineers (in millions ofdollars)

*Figures reflect enacted levels for FY2001 as reported by the House Appropriations Committee.

**Total reflects $25 million recission for Coastal Emergencies.

Key Policy Issues -- Corps of Engineers

Funding for the Corps' civil works program has often been a contentious issue between the Administration and Congress, with final appropriations typicallyproviding more funding than requested by the Administration, regardless of which political party controls the WhiteHouse and Congress. For FY2001, forexample, Congress added $480 million (12%) to the $4.08 billion requested by the Clinton Administration. Similarly, the FY2002 bill as passed the House wouldhave funded the Corps at almost 15% more than requested by the Bush Administration, and the final billappropriated slightly more than that.

Proposed Corps Reforms. The Corps has come under increasing criticism over the way it evaluates andundertakes its projects. Some have called for major agency "reforms"; others have called for review of Corpsprograms and policies. The 106th Congress, inpassing the Water Resources Development Act (WRDA) of 2000 ( P.L. 106-541 , Section 216), directed theCorps to contract with the NationalAcademy of Sciences to study the feasibility of establishing an independent review panel for Corps project studies. Further legislation proposing changes to theproject development and authorization process was introduced in the 107th Congress.

The House Appropriations Committee acknowledged the on-going criticisms in its report accompanying H.R. 2311 , and noted its belief that a studyof navigation improvements on the Upper Mississippi River and Illinois Waterway was "poorly managed by theCorps...." The House Appropriations Committeealso commented on the accusations that Corps officials were improperly trying to expand the civil works program;the report states "[t]he Committee finds thiscriticism to be somewhat absurd." The Senate Appropriations Committee also acknowledged recent criticisms ofthe Corps and stated it "is satisfied that theCorps has responded professionally to the issues raised...." Both Committees note that the Corps has a backlog ofapproximately $40 billion in projects. (Formore information, see CRS Report RL30928, Army Corps of Engineers: Reform Issues for the107th Congress. )

Auburn Dam Study. Section 103 of H.R. 2311 , as reported from the House AppropriationsCommittee, would have directed the Corps to include an "alternatives analysis" of a multipurpose Auburn Dam aspart of its American River watershed long-termstudy. However, as part of the rule adopted for consideration of the bill on the House floor, the provision wasdropped.

Congress has repeatedly debated complex measures to increase flood protection along the American River in California, in large part to protect the City ofSacramento. Proposals have included strengthening existing levees and flood warning systems, changing theoperation of an existing dam on the river, andbuilding a large new multi-purpose dam near Auburn. Debates over the Auburn Dam and other water supplyproposals for the area have been particularlycontentious - most recently during consideration of the Water Resources Development Act of 1999. Environmentalists generally oppose construction of a highdam at or near the Auburn site, while others interested in developing water supplies for the area have continued tosupport a multi-purpose Auburn dam. Othersweighing in on the debate have advocated strengthening levees and taking other measures to increase floodprotection for the City of Sacramento in lieu ofbuilding a large, multi-purpose dam.

Missouri River Water Flows. After extended debate in both the House and the Senate, Section 116 of the finalbill included Senate language that prohibits the use of funds "to accelerate the schedule to finalize the Record ofDecision for the revision of the Missouri RiverMaster Water Control Manual and any associated changes to the Missouri River Annual Operating Plan." Theprovision was a temporary compromise of anon-going issue that had led President Clinton to veto the previous year's Energy and Water Developmentappropriations bill.

The central issue behind the revision of the manual is how to operate dams along the Missouri River. Their operation determines the timing of water releases,which affect competing uses of the river such as barge traffic, threatened and endangered species protection, andupstream recreation. In November 2000, the U.S.Fish and Wildlife Service (FWS) issued a biological opinion pursuant to the Endangered Species Act, whichrecommended altering dam operations to providehigher springtime water releases to benefit the pallid sturgeon. This change is also believed by some to benefit otherthreatened and endangered species affectedby current dam operations. The Corps has issued a draft implementation plan and is currently evaluating the effectsof the proposed spring rise on other MissouriRiver water users. The Corps is scheduled to release the new Master Manual no earlier than 2003.

The House-passed version of H.R. 2311 prohibited using funds to "revise" the manual "if such revision provides for an increase in the springtimewater release program during the spring heavy rainfall and snow melt period in the States that have rivers draininginto the Missouri River below the Gavins PointDam." Opponents of the House provision claimed it threatened to stop all work on the manual; the Senate versioncontained a milder prohibition against"accelerating" the process. During Senate floor debate both sides agreed to an amendment to allow the Corps toconsider alternatives for species recovery otherthan the much debated "spring rise" recommended in the FWS biological opinion. The amended provision alsodirected the Corps to consider the views of otherfederal and non-federal agencies and individuals "to ensure that other congressionally authorized purposes aremaintained." This language was included in Section116 of the final bill.

Everglades. Implementation of a Comprehensive Everglades Restoration Plan (CERP) was authorized in theWater Resources Development Act of 2000 (Title VI). Funding for CERP activities, as well as other Evergladesrestoration projects is included in both the annualEnergy and Water Development Appropriations Act (for the Corps) and in the annual Department of the Interiorand Related Agencies Appropriations Act (forDOI agencies such as the National Park Service and Fish and Wildlife Service). The Energy and Water bill alsoincludes funding for other Everglades and Southand Central Florida projects. For FY01, approximately $150 million for the South Florida ecosystem was in theAdministration request. In addition, the requestincluded $28 million to fund the first of the WRDA 2000 pilot restoration activities. The final bill includedapproximately $95 million for existing Central andSouthern Florida project construction; $20 million for Everglades ecosystem restoration (for CERP activities); and$26 million for Kissimmee river restoration.(For more information, see CRS Report RL20702, South Florida Ecosystem Restoration and the ComprehensiveEverglades Restoration Plan.)

Title II: Department of the Interior

For the Department of the Interior, the Energy and Water Development bill provides funding for the Bureau ofReclamation (BOR) and the Central Utah ProjectCompletion Account. For FY2002 the President requested $783.5 million for BOR and $36.2 million for theCentral Utah Project Completion Account (grosscurrent authority). The final appropriation for FY2001 ( P.L. 106-377 ) included $776.5 million for BOR,approximately $10 million more than enacted forFY2000, and $39.9 million for the Central Utah Project Completion Account, the same as enacted for FY2000. TheHouse-passed version of H.R. 2311 included $36.2 million for the Central Utah Project (CUP) - the same as requested - and $806.7 million forBOR. The Senate-passed version included $884million for both programs: $36.2 million for the CUP, and $848 million for BOR. The final bill appropriated $36.2million for CUP and $878 million for BOR,for a total of $914 million.

Table 4. Energy and Water Development Appropriations Title II: Central Utah Project CompletionAccount (in millions of dollars)

* Includes funds available for Utah Reclamation Mitigation and Conservation Commission activities and $5 millionfor the contribution authorized by ï¿½402(b)(2)of the Central Utah Project Completion Act ( P.L. 102-575 ). Totals do not reflect permanent appropriations ofapproximately $1.2 million.

Table 5. Energy and Water Development Appropriations Title II: Bureau of Reclamation (in millions ofdollars)

*The Senate Appropriations Committee recommended $40 million for CVP activities that support the CALFEDprogram, but no funding for the program itself.

Background on Reclamation Policy

Most of the large dams and water diversion structures in the West were built by, or with the assistance of, the Bureau of Reclamation (BOR). Whereas the Corpsbuilt hundreds of flood control and navigation projects, BOR's mission was to develop water supplies and to reclaimarid lands in the West, primarily forirrigation. Today, BOR manages more than 600 dams in 17 western states, providing water to approximately 10million acres of farmland and 31 million people. BOR is the largest supplier of water in the 17 western states and the second largest hydroelectric power producerin the Nation.

Key Policy Issues -- Bureau of Reclamation

The FY2002 request for Water and Related Resources, BOR's primary account for managing water and energy projects and programs, was $648.0 million, $31million less than the FY2001 appropriation. The House recommended $679.0 million for this account, and theSenate recommended $732.5 million. The finalbill appropriated $762.5 million for the Water and Related Resources Account.

Included in the Water and Related Resources request was $21million for Garrison Diversion Unit in North Dakota, $20.5 million for Mni Wiconi rural watersupply project in South Dakota, and $12 million for Animas-La Plata in Colorado. The House bill included $21million for the Garrison, $25.5 million for the MniWiconi, and $16 million for Animas-La Plata. The Senate bill included $24 million for Garrison, $26 million forMni Wiconi and $16 million for Animas-LaPlata. The final bill funded Garrison at $22.5 million, Mni Wiconi at $30 million, and Animas-La Plata at $16million. (Figures for these three projects do notinclude funds for operations, management, and rehabilitation or repair.)

The House Appropriations Committee did not fund the President's request of $20 million for the California Bay-Delta Restoration Program (Bay-Delta, orCALFED). As it did last year, the Committee stated it would not fund the Administration's request until theprogram received an authorization for suchappropriations. No funds were provided for CALFED in FY2001. When the Senate Appropriations Committeereported out S. 1171 July 12, Senator Reid, Chairman of the Energy and Water Subcommittee, said the bill funded $40 million ofCALFED-related projects under other accounts, in theabsence of authorizing legislation. Although an attempt was made on the Senate floor to cut this funding by $10million (as an offset for another unrelatedprogram), the amendment was tabled on a 56-44 vote ( S.Amdt. 1018 ; vote #238). The final bill included $30million in the Water and RelatedResources account for projects supporting the goals of CALFED; however, it did not fund the CALFED programper se. The Conference Committee report, whilekeeping language similar to the Senate bill, directs funding toward several specific CALFED-related projects,including planning for the Sites Reservoir ($0.75million) and assessment of raising Shasta Dam ($1.9 million).

Funding for CALFED was requested in BOR's budget, but the appropriation would be allocated among several federal agencies. According to BOR, there are stillunobligated prior year funds that may be used for some CALFED projects. The final bill also included $15 millionfor the Klamath project in Oregon. (For moreinformation on these issues, see CRS Issue Brief IB10019, Western Water Issues. )

Title III: Department of Energy

The Energy and Water Development bill includes funding for most of DOE's programs. Major DOE activitiesin the bill include research and development onrenewable energy and nuclear power, general science, environmental cleanup, and nuclear weapons programs. TheAdministration's FY2002 request for DOEprograms in the Energy and Water bill was $18.1 billion, about $200 million less than the amount appropriated forFY2001. The House bill contained $18.7billion and the Senate bill $20.1 billion. The final bill appropriated $19.5 billion for DOE programs in Title III. (The FY2002 appropriation request for DOE'sprograms for fossil fuels, energy efficiency, the Strategic Petroleum Reserve, and energy statistics, included in theInterior and Related Agencies appropriationsbill, was $1.50 billion. The final bill, P. L. 107-63, appropriated $1.77 billion for these programs. For details, see CRS Report RL31006 , Appropriations forFY2002: Interior and Related Agencies. )

Table 6. Energy and Water Development Appropriations Title III: Department of Energy (in millions ofdollars)

*Figures reflect enacted levels for FY2001 as reported by the House Appropriations Committee.

Key Policy Issues -- Department of Energy

Funding to Combat Terrorism. The Department of Energy is a major participant in activities to combatterrorism, largely because of its role in producing and maintaining nuclear weapons capability. According to OMB'sAugust 2001 report to Congress (see theonline version at http://www.whitehouse.gov/omb/legislative/nsd_annual_report2001.pdf ), the FY2002 requestincluded $792.5 million for these activities, ofwhich $307 million was concerned with weapons of mass destruction (WMD), in this case nuclear weapons. Thiscompared with $710 million appropriated forFY2001, $324 million of it for WMD defense. (These funds are distributed among several activities listed in Table6 above. The OMB report does not specifyhow much is attributed to individual activities.)

The major portion of this funding is for physical security of DOE's facilities, and the increase in requested funding would be directed to this activity: $691 millionrequested for FY2002 compared to $594 million appropriated for FY2001.

Other DOE activities, identified by OMB as combating terrorism, include preparing for and responding to terrorist acts, $47 million appropriated for FY2001, $45million requested for FY2002, and research and development, $68 million appropriated for FY2001, $56 millionrequested for FY2002.

In its report filed October 30 [ H.Rept. 107-258 ], the Conference Committee said it expected new security requirements that arise because of the September 11attacks to be addressed within the $40 billion emergency supplemental appropriation, or to be included in theFY2003 budget submission. The Committee alsodirected the Secretaries of the Army, Energy and Interior each to submit a report to the Appropriations Committeesby February 15, 2002, identifying all knownphysical security requirements that have surfaced since the attacks, and the degree to which they have been funded.

Additional funding for DOE's anti-terrorist activities was included in H.R. 3338 , the FY2002 Defense Appropriations and Emergency SupplementalAppropriations bill, passed by both House and Senate on December 20. $118 million was added to DOE's weaponsprogram accounts to increase security atnuclear weapons complex facilities, and $226 million went to the Nonproliferation and National Security Programs. (See below.)

Renewable Energy. In May 2001, the Bush Administration issued its revised FY2002 budget request forRenewable Energy programs at DOE. Despite a "growing need for clean and affordable energy," it proposed to cut Renewable Energy funding from $375.7million in FY2001 to $276.7 million (excluding funding for programs under the Office of Science) -- a decrease of$99.0 million (26%) below the FY2001 level. The final bill provided $396 million for renewable energy programs - $120 million more than the request and $20million, or 5%, above the FY2001 level.

For the technology programs, the Administration requested $36.8 million less for photovoltaics, $19.5 million less for wind, $13.1 million less for geothermal, and$11.8 million less for concentrating solar power. Also, for the support and implementation programs, it eliminatedthe Renewable Energy Program for AmericanIndians and cut $2.5 million from the International Renewable Energy Program.

The House Appropriations Committee, in reporting out H.R. 2311 , reversed some of the cuts proposed by the Administration. The Committee'sreport language said the request has "no clear rationale to explain the selective budget cuts" and no "apparentcoordination" with the National Energy Policy report. At the same time, the report cited a 2000 study by the National Academy of Public Administration that foundan absence of clear goals, priorities, workprogram, and milestones. The Committee report also stressed that DOE technology programs are designed for long-term energy solutions, not immediate relief tothe energy crisis, which is better addressed by incentives other than appropriations. The House billprovided $376.8 million for renewable energy, which is $100.2million (36%) above the request and essentially level with the FY2001 appropriation.

Relative to the FY2001 appropriation, however, the House bill included significant cuts in some individual programs. Under technology programs, there werecuts of $5.9 million for Concentrating Solar Power and $2.0 million for Small Hydro. A $9.1 million cut for supportand implementation programs includedreductions of $6.6 million to eliminate the Renewable Energy Program for American Indians, $2.0 million forInternational Renewables, and $1 million forProgram Support. These funding reductions were offset by proposed increases of $6.0 million for Photovoltaicsand $8.0 million for Electric/Storage, whichincluded $4.0 million for the Transmission Reliability Program and $2.9 million for the Superconductivity Program.

In reporting out S. 1171 , the Senate Appropriations Committee, noted that although the Administration's National Energy Policy report recognizedthe importance of renewables, "... the Administration's budget, even as amended, it provided inadequate resourcesto accomplish these goals." Thus, theCommittee recommended, and the Senate approved, $435 million, which is $158.3 million more than the request,and $58.2 million more than the Houserecommendation. Relative to the House recommendation, the Senate bill had $11.8 million less for Photovoltaics,and $1.5 million less for Departmental EnergyManagement. However, it also included $12.0 million more for Biomass Power, $11.0 million more forElectric/Storage, $8.0 million more for Hydrogen, $7.4million more for Concentrating Solar Power, $7.0 million more for the National Renewable Energy Lab (NREL),and $6.3 million more for Small Hydro.

Also, the Senate bill had $59.3 million more than the FY2001 appropriation. Further, relative to the FY2001 level, the Senate bill had $5.8 million less forPhotovoltaics, $2.6 million less for Renewable American Indian Resources, and $2.0 million less for InternationalRenewables. However, it also included $19.0million more for Electric/Storage, $12.2 million more for Biomass Power, $8.0 million more for Hydrogen, and $8.0million more for NREL. The funding forNREL included $5.0 million to address electric power needs in the Southwest.

The final bill appropriated $396.0 million, which was $19.2 million more than the House recommendation and $39.0 million less than the Senaterecommendation. Also, the final bill level was $20.3 million, or 5%, more (excluding inflation) than the FY2001appropriation. This included increases of $11.0million for Electric/Storage, $6.0 million for Biomass/Biofuels and $4.0 million for Hydrogen. However, the finalbill level also had a $7.1 million, or 33%, cutfor Renewable Support and Implementation, including reductions of $3.6 million for Renewable American IndianResources and $2.0 million for InternationalRenewables.

Nuclear Energy. For nuclear energy programs -- including reactor research and development, space powersystems, and closing of surplus facilities -- the Bush Administration requested $223.1 million for FY2002, $35million below the FY2001 appropriation. TheHouse-passed bill provided $224.1 million, while the Senate approved $264.1 million. The enacted measureprovides $250.1 million, about $10 million below theFY2001 level but more than $25 million above the request.

The Bush Administration requested $18.1 million for FY2002 for the "nuclear energy research initiative" (NERI), a program to support innovative nuclear energyresearch projects, only about half the FY2001 level. The final FY2002 Energy and Water DevelopmentAppropriations bill provides $32 million for this program.

The new "nuclear energy technologies" program would have been reduced in the Administration request from $7.5 million in FY2001 to $4.5 million in FY2002;the enacted bill provides $12 million. The program is designed to produce a "Generation IV Technology Roadmap"for near-term commercial deployment ofadvanced nuclear power plants. Included in the approved FY2002 funding is $3 million for sharing the nuclearindustry's costs of applying to the NuclearRegulatory Commission (NRC) for early site permits, combined operating licenses, and design certifications for newreactors and reactor technology, as well as $2million for testing new reactor designs, fuels, and materials at DOE national laboratories. DOE issued an interimreport on new technology deployment in May2001 under the program.

Another $4.5 million was requested for "nuclear energy plant optimization" (NEPO), a research program to improve the economic competitiveness of existingnuclear power plants. That level is $500,000 below the FY2001 appropriation, but the final Energy and Water billincreases the program to $7 million.

The DOE budget justification contends that federally funded nuclear power research will help ensure the future availability of "the only proven large-scale powersource that has unlimited potential to provide reliable electricity without producing environmentally damaging airemissions." However, environmental groupsand other members of the "Green Scissors Campaign" have targeted DOE's nuclear R&D for elimination,contending that "the highly dangerous radioactive wastethat results from nuclear power eliminates it as an acceptable alternative." (1)

Controversy has also been generated by the "electrometallurgical treatment" of DOE spent fuel, a process in which metal fuel is melted and highly radioactiveisotopes are electrochemically separated from uranium and plutonium. DOE decided in September 2000 that suchtreatment would be the best way to rendersodium-bonded spent fuel -- particularly from the closed Experimental Breeder Reactor II (EBR-II) in Idaho -- safefor long-term storage and disposal. DOErequested $15.8 million for the treatment program in FY2002, plus $10.0 million for further development of theprocess. The $25.8 million total request for thetwo programs, funded under Nuclear Facilities Management, represents a boost of about $1 million over FY2001. The House-passed bill further increased theprograms to $26.1 million, the Senate approved the requested funding level, and the enacted bill adopted the higherHouse level.

Opponents of electrometallurgical treatment contend that it is unnecessary and that the process could be used for separating plutonium to make nuclear weapons. They note that the process uses much of the same technology and equipment developed for the plutonium-fueledIntegral Fast Reactor, or Advanced Liquid MetalReactor, which was canceled by Congress in 1993 partly because of concerns about nuclear weapons proliferation.

No funding was requested for a DOE program established by Congress last year called Advanced Accelerator Applications (AAA), which received anappropriation of $68 million in FY2001 through the Office of Nuclear Energy and the Office of Defense Programs. The primary purposes of the AAA programare to study the use of powerful particle accelerators for producing tritium for nuclear weapons and for transmutinglong-lived radioactive waste into shorter-livedisotopes. The House-passed bill would have provided no new funding for the program, but the Senate approveda total of $70 million - $55 million under OtherDefense Activities and $15 million to close out the Accelerator Production of Tritium (APT) program. The enactedbill provides $50 million for the AAAprogram, including $4.5 million for research on spent fuel treatment in Nevada. No funding was provided for APT. The bill's conferees directed DOE to preparea report by May 2002 on nuclear waste transmutation options.

DOE requested $38.4 million to shut down the Fast Flux Test Facility (FFTF) at Hanford, Washington, the same as the FY2001 funding level. FFTF, asodium-cooled research reactor originally designed to support the commercial breeder reactor program, has notoperated since 1992 and had been maintained instandby condition. The Clinton Administration had considered restarting the reactor for nuclear research andmedical isotope production but decided in January2001 to permanently shut it down. The Bush Administration budget request appeared to concur with that decision. However, after the budget was issued, EnergySecretary Abraham suspended DOE's final decision on closing FFTF until late July 2001 to allow time for furtherstudy. Abraham announced a further review ofthe medical isotope production option on August 1, 2001. The House-passed bill included the funding initiallyrequested for closing the facility. The Senate alsoprovided the full funding request but directed DOE to give the House and Senate Appropriations panels a reportafter the latest FFTF review was completed. Theenacted bill also provides the full funding request, but the conferees specified that the money be used only for FFTFshutdown activities "until 90 days afterreceipt of the Secretary's recommendations for alternative actions at FFTF and the approval of those recommendedalternative actions" by the House and SenateAppropriations Committees.

Science. DOE's science programs consist of a wide variety of basic research activities designed to explorefundamental science and engineering issues about energy. The programs are high-energy physics, nuclear physics,basic energy sciences (BES), biological andenvironmental research (BER), fusion energy sciences, and advanced scientific computing. Through the Office ofScience programs, DOE is the third largestsupporter of basic research and the largest supporter of physical science research in the federal government.

For FY2002, DOE requested $3.160 billion for Science, 0.6% below the FY2001 level. The House-passed bill provided $3.166 billion, 0.2% over the request, but0.4% below the FY2001 level. The House noted its strong support of most of the research funded by the Office ofScience, but stated that constrained resourcesprevented any significant increase in funding for FY2002. The House also directed DOD to prepare a report thatprovides a strategy for improving the connectionbetween the research funded by the Office of Science and energy technology development. The Senate appropriated$3.269 billion for the Office of Science, 3.4%above the request and the FY2001 level. The Senate expressed concern, however, that this increase was inadequate,and that budget constraints made itimpossible to provide these programs with the funds they deserve. The final bill provides $3.233 billion, $53million above the FY2001 level and $73 millionabove the request.

DOE requested an increase in funding for BES by 1.3% as a result of an increase of $17.4 million in construction funding for the Spallation Neutron Source(SNS), a large physics research facility at Oak Ridge National Laboratory. The House provided an increase of $2million over the request for BES for FY2002and the full request for the SNS construction. The Senate approved an increase of $36.0 million above the requestfor BES. The final bill provides $1.004 billionfor BES, $1 million below the request, including full funding for the SNS.

For BER, DOE's request is 8.2% below the FY2001 level because of the completion of 24 projects mandated by Congress in the FY2001 appropriations. DOEdid not request additional funds for those projects. The House bill provided an increase of $2.9 million above therequest, which would put the BER program7.6% below the FY2001 level. The Senate approved an increase of $47.0 million above the request for BER. Onenew initiative is being proposed this year, theGenomes-to-Life project, within BER, that follows from the human genome sequencing project. The new projectwould make use of DOE computational andadvanced imaging capabilities to examine the behavior of proteins encoded by DNA, and to build computer modelsof cellular behavior. The House-passed billwould fully fund this project. The Senate approved a $10 million increase over the request for this initiative. Thefinal bill approved a level of $527.4 million forBER, $84.4 million above the request. Most of the increase is for projects specifically identified by Congress. Theconferees did not approve any such projectsincluded in either the separate House or Senate bills.

Funding for the nanoscience initiative begun this year is expected to remain at current levels. DOE did request $4 million for the establishment of three to fivenanoscale science research centers. The House indicated its support for this initiative but directed DOE to ensurethat the nanoscience centers be selected on acompetitive, peer review basis. The Senate approved funding to meet the full request for these centers andexpressed its strong support for the program. The finalbill included $3 million to begin engineering and design for these three nanoscience centers. DOE also requestedlevel funding for the advanced scientificcomputing and networking initiative, announced last year, that are housed in the Advanced Scientific ComputingResearch (ASCR) program. The House andSenate bill provided the full request for the Advanced Scientific Computing program. The final bill, however,reduced this amount by $5 million below therequest. In the report accompanying the final bill, Congress expressed its support for the Scientific Discoverythrough Advanced Computing program. It alsourged DOE to ensure maximum involvement of the academic community in the ASCR program.

The House directed DOE to provide a rationale linking the programs within the Office of Science and the nations' energy needs. It stated that DOE does not seemto have a clear plan or policy making that connection and that there was little coordination between the Office ofScience and the DOE Energy Resource R&Dprograms. Neither the Senate or the final bill, however, contained this language. The House also directed DOEto prepare an implementation plan to transfersafety and health regulation of its nuclear facilities at the non-defense laboratories to the Nuclear RegulatoryCommission and Occupational Safety and HealthAdministration in FY2003. Currently, DOE is self-regulating as authorized by the Atomic Energy Act of 1954. The facilities that would be affected include all ofDOE's major basic research facilities that generate nuclear reactions. Again, such language did not accompany theSenate or the final bill.

Nuclear Weapons Stockpile Stewardship. Congress established this program in the FY1994 National DefenseAuthorization Act ( P.L. 103-160 ) "to ensure the preservation of the core intellectual and technical competencies ofthe United States in nuclear weapons." Theprogram is operated by the National Nuclear Security Administration (NNSA), a semiautonomous agencyestablished by Congress in the FY2000 NationalDefense Authorization Act ( P.L. 106-65 , Title XXXII) within the Department of Energy (DOE). Its central goalis to maintain the safety and reliability of the U.S.nuclear stockpile without nuclear testing. In a 1994 statement that is still in effect, the Department of Defense, asthe customer of DOE's nuclear weapons, did notrequire DOE to undertake "new-design nuclear warhead production," but required DOE to "[d]emonstrate capabilityto refabricate and certify weapon types in[the] enduring stockpile" and "[m]aintain capability to design, fabricate, and certify new warheads."

Stockpile stewardship consists of all activities in NNSA's Weapons Activities program, for which $5,300.0 million was requested and $5,429.2 million wasappropriated for FY2002, compared to $5,006.2 million appropriated for FY2001. Appropriations conferees statedthat the FY2002 appropriation was actually$400.9 million above the request. While the request included $271.1 million for program direction activities, thefinal legislation transferred that funding to theOffice of the NNSA Administrator, effectively reducing the Weapons Activities request to $5,028.9 million. Thethree main elements of stockpile stewardship,described below, with their requested and appropriated amounts, respectively, are Directed Stockpile Work,$1,043.8 million and $1,045.8 million; Campaigns,$1,996.4 million and $2,167.1 million; and Readiness in Technical Base and Facilities, $1,447.0 million and$1,553.1 million. The final legislation also provides$200.0 million for a new program to upgrade nuclear weapons complex facilities and infrastructure.

In earlier action on the measure, the House-passed bill, H.R. 2311 , funded Weapons Activities at $5,123.9 million. The Senate AppropriationsCommittee reported S. 1171 on July 12 with $6,062.9 million for Weapons Activities. Energy and WaterSubcommittee Chairman Harry Reid saidthe bill's funding was "a huge increase, but necessary to get the NNSA...programs back on track." The committee'sreport ( S.Rept. 107-39 ) noted such concernsas the long time before new components for aging weapons can be certified, an "unacceptable decline in the physicalplants," and the lack of progress towardestablishing an enduring production complex. The Senate passed the bill on July 19 without amending the WeaponsActivities section.

NNSA manages two major programs in addition to Weapons Activities: Defense Nuclear Nonproliferation ($773.7 million requested, $803.6 millionappropriated; see below) and Naval Reactors ($688.0 million requested and appropriated). Total funding for NNSA,including the foregoing elements and severalsmaller ones, was $6,776.8 million requested and $7,233.5 million appropriated.

Most stewardship activities take place at the nuclear weapons complex, which consists of three laboratories (Los Alamos National Laboratory, NM; LawrenceLivermore National Laboratory, CA; and Sandia National Laboratories, NM and CA), four production sites (KansasCity Plant, MO; Pantex Plant, TX; SavannahRiver Site, SC; and Y-12 Plant, TN), and the Nevada Test Site. NNSA manages and sets policy for the complex;contractors to NNSA operate the eight sites.

Directed Stockpile Work (DSW). This program involves work directly on nuclear weapons in the stockpile,such as monitoring the condition of weapons and maintaining them through repairs, refurbishment, life extension,and modifications. It includes R&D to supportactivities to be undertaken for specific warheads. FY2002 activities include refurbishment of the W87 warhead forthe MX (Peacekeeper) missile, developmentengineering to modify the fins on certain B61 bombs, studies to examine aging of the secondary stage(thermonuclear component) of other B61 bombs, a study onlife extension and upgrades to the W80 cruise missile warhead, and engineering on the W76 warhead for Trident missiles to extend the warhead's life, upgradecertain components, and refurbish elements of the nuclear explosive package. Conferees expressed concern thatthe Administration's Nuclear Posture Review,which was nearing completion when the conference bill was passed, could result in funds spent by NNSA in earlyFY2002 being "wasted effort." Accordingly,the conferees instructed NNSA to minimize use of FY2002 Weapons Activities funds for "weapon-uniqueinvestments." They expressed particular concern aboutrefurbishing the W80 warhead given that DOD had not budgeted any funds to extend the life of the air-launchedcruise missile, which carries the W80, andaccordingly required advance approval by the Armed Services and Appropriations Committees for using FY2002funds for long-term life extension of thatwarhead.

Campaigns. These are "focused scientific and engineering efforts" that seek to "develop and maintain specialcapabilities and tools needed for continued certification of the stockpile ... in the absence of underground nucleartesting." For FY2002, there are 17 campaigns,with requests ranging from $1.3 million to $747.1 million. Examples (with FY2002 and FY2001 appropriations,respectively) are: Enhanced Surveillance ($82.3million vs. $106.7 million), which seeks to assess lifetimes of weapons components and predict defects resultingfrom aging; Advanced Design and ProductionTechnologies ($75.5 million vs. $75.7 million), which seeks to improve individual manufacturing processes,integrate product information, and develop the abilityto fabricate complex parts in small lots; and Tritium Readiness ($196.9 million, vs. $167.0 million), which isdeveloping means of using a commercial light waterreactor to produce tritium, an isotope of hydrogen that is a key ingredient in nuclear weapons. "Nuclear WeaponsStewardship R&D," below, offers details on keyR&D programs, including some funded by Campaigns.

One campaign that has attracted much congressional interest, and the greatest increase above the FY2002 request ($128.5 million requested, $219.0 millionappropriated), is Pit Manufacturing and Certification. Pits are the fissile cores of nuclear warheads that trigger thethermonuclear secondary stage. The UnitedStates has been unable to produce pits for use in stockpiled weapons since 1989, when DOE suspended pitproduction at Rocky Flats Plant (CO). As a result, theUnited States has been unable to make all-new nuclear warheads of existing or advanced new designs. Thecampaign supports two pit projects: installation of alow-capacity pit production facility, and supporting R&D, at Los Alamos National Laboratory; and planningfor a higher-capacity pit facility. R&D, procurement,and construction costs for the two projects might total some $5 billion over two decades. The appropriated amountincludes $213.0 million, which NNSA toldCongress in September 2001 was the projected FY2002 cost for the program; $2.0 million for pit activities notspecifically supporting the W88 warhead for theTrident II missile; and $4.0 million for preconceptual design activities for the higher-capacity pit facility.

In earlier action on this issue, the House Appropriations Committee recommended the requested amount for FY2002, but asserted that DOE cannot show "that ithas a viable plan to manufacture and certify pits on the schedule dictated by national security needs," criticized theproject as "years behind schedule and hundredsof millions of dollars over the original cost estimate," and stated that it will judge NNSA's success on how well thepit project succeeds. The SenateAppropriations Committee recommended increasing funding by $109.2 million to $237.7 million. The committeesought to "fully fund" all relevant activities,viewing the current schedule, which would not certify a pit for use in the stockpile until FY2009, as "unacceptable."

Readiness in Technical Base and Facilities (RTBF). This program provides infrastructure and operations at thenuclear weapons complex sites. The request included eight categories. By far the largest was Operations ofFacilities ($830.4 million requested, $897.8 millionappropriated). Other large categories include Program Readiness, which supports activities occurring at multiplesites or in multiple programs ($188.1 millionrequested, $192.0 million appropriated), Material Recycle and Recovery ($101.3 million $90.3 millionappropriated), and Construction ($1,447.0 millionrequested, $1,553.1 million appropriated). Specific RTBF items in the final legislation include an additional $25.0million for Pantex Plant, an additional $10.0million for Y-12 Plant, $10.0 million for the National Center for Combating Terrorism at the Nevada Test Site, and$88.9 million for nuclear weapons incidentresponse.

Nuclear Weapons Stewardship R&D. An important part of the stockpile stewardship program is aimed atdeveloping the science and technology to maintain the nation's nuclear weapons stockpile in the absence of nucleartesting. Principal activities are thedevelopment of computational capabilities that can simulate weapons explosions and perform other importantcomputations, and experimental facilities tosimulate and test various aspects of weapons behavior without resorting to a full-scale explosion. DOE's weaponsR&D efforts are spread across all threestewardship programs: directed stockpile work, campaigns, and readiness in technical base and facilities (RTBF). (2)

For FY2002, DOE requested $2.506 billion for nuclear weapons R&D, an increase of 6.2% above the FY2001 level. Included in the request are $738.0 millionfor Advanced Simulation and Computing (ASC), $467.9 million for Inertial Confinement Fusion (ICF) (including$245.0 million for the National Ignition Facility(NIF)) and $379.7 million for other R&D within the Campaigns account; $305.5 million for StockpileR&D within the Directed Stockpile Work (DSW) account;and $614.5 million for R&D within the RTBF account. All of these amounts are above the current year's levelexcept Advanced Computing, which wouldreceive $9 million less than FY2001.

For FY2002, increased activity is expected on assessment and certification of selected weapons within the stockpile. Funding for advanced radiography isscheduled to decline because of the completion of the Dual Axis Radiographic Hydrodynamic Test (DARHT)facility at Los Alamos. Under the AdvancedScientific Computing activity, efforts are expected to focus on developing the 30 TeraOps supercomputer at LosAlamos National Lab and the visual interactiveenvironment for weapon simulation strategy that would permit researchers realtime visualization of the output ofASC computers. Under RBTF, funding addedby Congress for FY2001 in support of pulsed power and microelectronics research at Sandia National Laboratorywould not be requested for FY2002.

For the NIF project, construction funding would increase by 24.2%. The FY2002 request meets the requirements of the project "rebaseline" submitted toCongress in September 2000 as a result of the large cost overrun incurred in 1999. The FY2002 request does notmake any change in the scope or mission of thefacility. Currently, first laser light is expected in June 2004 and the project is scheduled to be completed inSeptember 2008. In the ICF request justification, DOEnoted that the level of funding it is requesting for NIF risk reduction and technology development activities is lessthan that recommended in the rebaseline. DOEstates, however, that lower funding is acceptable given the priorities of the entire stockpile stewardship budgetrequest for FY2002.

The House bill provided $2.44 billion for nuclear weapons R&D, 2.7% below the request but 3.3% above the FY2001 level. The House cut $100 million from therequest for the Advance Simulation and Computing program. The noted advances in the private sector in highperformance computing technology as well as theCommittee's support of the Advanced Scientific Computing Research (ASCR) program in the DOE Office ofScience in arguing that the ASC program in DOE'sOffice of Defense Programs may need to rethink its current strategy. The House approved full funding for NIFconstruction but did note its concerns about theprogram. In particular, it cited a recent GAO report about the project and directed DOE to address the GAOfindings. (3) The House also added $25 million to theICF program for work on high average power lasers. All other activities within the weapons R&D programwould be funded at full request by the House-passedbill.

The Senate approved $2.79 billion for nuclear weapons R&D, 11.3% above the request and 18.3% above the FY2001 level. The Senate noted that whilesignificant progress has been made in developing the science and technology for stockpile stewardship, thecertification capability is still a long way off.

The Senate approved an increase of $59.68 million for directed stockpile work R&D, an additional $25.29 million for advanced radiography, an increase of $24.5million for inertial confinement fusion, and an increase of $34.0 million for advanced simulation and computing(ASC). The extra advanced radiography fundsare to be used for design of an advanced hydrodynamic test facility while the additional ASC funds are for variousASC construction projects. The Senate alsoappropriated an increase of $65 million above the request for construction of the microsystems and engineeringscience applications project at Sandia NationalLaboratory. As for NIF, the Senate approved full funding but noted that a high level of oversight and managementattention was still necessary for the project. The Senate also noted the GAO report and expressed concern that individuals with NIF oversight responsibilitywhen it suffered major cost overruns, are still inthat role.

In the final bill, Congress provided $2,629.0 million for nuclear weapons R&D for FY2002, 4.9% above the request and 11.4% above the FY2001 level. Included in the appropriation are $349.0 million for directed stockpile work R&D, $1,631.8 million forcampaigns (including $506.4 million for ICF and $729.8million for the ASC program), and $658.1 million for R&D activities within RTBF. An additional $25 millionwas provided for continued R&D and design of theadvanced hydrodynamic test facility. The ICF program was appropriated an additional $39.5 million, and the fullrequest for NIF construction funding wasprovided.

Nonproliferation and National Security Programs. DOE's nonproliferation and national security programsprovide technical capabilities to support U.S. efforts to prevent, detect, and counter the spread of nuclear weaponsworldwide. These nonproliferation and nationalsecurity programs are included in the newly established National Nuclear Security Administration (NNSA).

The Bush Administration's FY2002 request for these programs was $773.7 million, a decrease of $100.5 million from FY2001. Most of the reductions wouldhave been Research and Development, Arms Control, and International Materials Protection, Control andAccounting (IMPCA) programs, which would have beenreduced 16%, 32% and 18% respectively. Construction of the MOX Fuel Fabrication Facility, which is intendedfor disposing of U.S. surplus weapons plutoniumby using it as fuel in nuclear power reactors, would have received a large increase, from $26 million in FY2001 to$63 million in FY2002.

The House bill, H.R. 2311 , restored some of the Administration's proposed cuts, increasing R&D $10 million to $216 million, and boosting IMPCA$51 million to $190 million. Arms control, however, would have been reduced further under the House bill, to$75.7 million. The total nonproliferation andnational security program funding in the House bill was $845.3 million. S. 1171 , as passed by the SenateJuly 19, funded these programs at $880.5million. The final bill appropriated $803.6 million.

The Conference Committee voted down a proposal by Representative Edwards to redirect $130 million from other weapons program funding to increasenon-proliferation activities in the Former Soviet Union. Promises were made to seek funding in other appropriationsbills, and during floor debate on the billNovember 1 Energy and Water Development Subcommittee Chairman Callahan repeated the promise toRepresentative Edwards. On November 28 the Housepassed H.R. 3338 , the FY2002 Defense Appropriations and Emergency Supplemental bill, without theadditional nonproliferation funding, afterblocking a move to include it. However, the Senate-passed version of H.R. 3338 contained $226 million forDOE's Defense Nuclear Nonproliferationprograms (Division b, Chapter 5), and that funding survived in the conference bill passed by both House and SenateDecember 20. Included in the additional $226million was $78 million for Nonproliferation and Verification R&D, $15 million for the IPP and NCI programswithin Arms Control, $120 million for MaterialsProtection, Control and Accounting, $10 million for international Nuclear Safety, and $3 million for programadministration. This FY2002 funding is in additionto the $803.6 million appropriated in the Energy and Water Development Appropriations Act, P. L. 107-66.

Environmental Management. DOE's Environmental Management Program (EM) is responsible for cleaning upenvironmental contamination and disposing of radioactive waste at DOE nuclear sites. DOE requested $6.33 billionfor the program for FY2002, nearly $450million below the comparable FY2001 level. This includes $5.74 billion for defense-related EM and $592 millionfor non-defense EM. The House-passed billincluded $699 million more than the request, for a total of $7.03 billion. The Senate approved $7.28 billion, nearly$950 million above the request. The enactedbill provides $7.14 billion, $170 million above the FY2001 level and $803 million above the request.

The FY2002 EM budget request was based on the program's accelerated cleanup strategy, which attempts to maximize the number of sites that can be completelycleaned up by the end of FY2006. DOE managers contend that substantial long-term savings can be gained byfocusing on completing work at those sites,allowing the earliest possible termination of infrastructure costs. Major sites scheduled for shutdown during thatperiod are included in the "defense facilitiesclosure projects" account, for which $1.05 billion was requested, about $30 million below the FY2001 level; theHouse voted to boost that amount by about $40million and the Senate by $30 million, and the enacted bill provides the higher House level. The largest facilitiesunder that account are the Rocky Flats site inColorado and the Fernald site in Ohio.

Another $912 million was requested for "site/project completion," for cleanup activities to be finished by 2006 at DOE sites that will remain in operation. TheHouse voted $1.04 billion for that program, while the Senate approved $1 billion. The final bill provides theSenate-passed level, specifying an additional $77.3million for cleanup projects at the Savannah River Site in South Carolina, the Hanford Site in Washington, and otherDOE locations.

Despite the 2006 cleanup goal, the bulk of EM's funding is in the defense and non-defense "post-2006 completion" accounts, plus a separate account for theOffice of River Protection that handles high-level waste disposal at Hanford. This category includes cleanupprojects that are expected to continue significantlyafter 2006. The Administration sought $2.92 billion for post-2006 completion, nearly $300 million below theFY2001 level; the House bill would have provided$3.39 billion and the Senate $3.59 billion. The enacted measure adds $389.5 million to the budget request forprojects at the Idaho National Engineering andEnvironmental Laboratory, Savannah River, Hanford, and other sites, for a total of $3.57 billion. The final bill alsoprovides $1.033 billion for the Office of RiverProtection, $221 million above the request.

Civilian Nuclear Waste. DOE requested $445 million for the civilian nuclear waste program in FY2002 - morethan $50 million (14%) above the FY2001 base appropriation of $391 million. The House voted to cut the requestby $2 million. However, the Senate voted tocut the program to $275 million, a move that drew controversy during floor debate. The final bill provides $375million for the program.

As required by the Nuclear Waste Policy Act, DOE is studying Yucca Mountain, Nevada, as the potential site for a national waste repository, currently scheduledto open in 2010. In recommending deep cuts in the waste program, the Senate Appropriations Committee contendedin its report that DOE had spent $8 billion onwaste site studies without showing that Yucca Mountain would be suitable. The Senate Committee report describeda number of potential problems with YuccaMountain and recommended that DOE not issue a recommendation to build a repository at the site until completingwork on key technical issues. Senate Energyand Water Subcommittee Chairman Harry Reid of Nevada strongly opposes using Yucca Mountain as a nationalnuclear waste repository.

The Senate Appropriations Committee's recommended funding cut for the nuclear waste program drew significant opposition on the Senate floor. SenatorMurkowski warned that the reduction would delay the program by several years and force layoffs of 650 federal andcontractor personnel working on the YuccaMountain project. In response to such criticism, Senator Reid added a Sense of the Senate resolution to the Energyand Water Appropriations bill that urgedSenate conferees to "ensure that the levels of funding included in the Senate bill for the Yucca Mountain programare increased to an amount closer to thatincluded in the House-passed version. . . ."

Even with the funding increase sought by the Bush Administration, the next several program milestones would have been pushed back, according to the budgetrequest. A final Environmental Impact Statement (FEIS) for the proposed Yucca Mountain repository and theaccompanying site recommendation by the Secretaryof Energy will be delayed from FY2001 to FY2002, and perhaps further, according to recent press reports. (4) If the site is recommended by the Secretary andapproved by the President, a license application to the Nuclear Regulatory Commission (NRC) would not besubmitted until FY2003, rather than FY2002 aspreviously planned. Energy and Water Conferees directed DOE to submit the site recommendation and FEIS byFebruary 28, 2002, and to begin terminatingYucca Mountain activities if the findings were negative.

Funding for the program comes from two sources. Under the FY2002 budget request, $135 million was to be provided from the Nuclear Waste Fund, whichconsists of fees paid by nuclear utilities, and $310 million from the defense nuclear waste disposal account, whichpays for disposal of high-level waste generatedby the nuclear weapons program. The House bill provided the full request for the defense account and cut $2million from the Nuclear Waste Fund appropriation. The Senate would have provided $25 million from the Nuclear Waste Fund and $250 million from the defenseaccount. The final bill provides $95 million fromthe Nuclear Waste Fund and $280 million from the defense account.

The 2010 target for opening a permanent repository is 12 years later than the Nuclear Waste Policy Act deadline of January 31, 1998, for DOE to begin takingwaste from nuclear plant sites. Nuclear utilities and state utility regulators, upset over DOE's failure to meet the1998 disposal deadline, have won two federalcourt decisions upholding the Department's obligation to meet the deadline and to compensate utilities for anyresulting damages. Utilities have also won severalcases in the U.S. Court of Federal Claims, although specific damages have not yet been determined. In August2000, a U.S. appeals court ruled that utilities couldsue DOE for damages without first pursuing administrative remedies.

Power Marketing Administrations. DOE's four Power Marketing Administrations (PMAs) developed out ofthe construction of dams and multi-purpose water projects during the 1930s that are operated by the Bureau ofReclamation and the Army Corps of Engineers. The original intention behind these projects was conservation and management of water resources, includingirrigation, flood control, recreation and otherobjectives. However, many of these facilities generated electricity for project needs. The PMAs were establishedto market the excess power; they are theBonneville Power Administration (BPA), Southeastern Power Administration (SEPA), Southwestern PowerAdministration (SWPA), and Western Area PowerAdministration (WAPA).

The power is sold at wholesale to electric utilities and federal agencies "at the lowest possible rates ... consistent with sound business practice," and priority onPMA power is extended to "preference customers," which include municipal utilities, co-ops and other "public"bodies. The PMAs do not own the generatingfacilities, but they generally do own transmission facilities, except for Southeastern. The PMAs are responsible forcovering their expenses and repaying debt andthe federal investment in the generating facilities.

The 104th Congress debated sale of the PMAs and did, in 1995, authorize divestiture of one PMA, the Alaska Power Administration. There has been no press todispose of the remaining PMAs, and none seems likely given the broader uncertainties governing electric utilityrestructuring.

The Administration's request for SEPA, SWPA, and WAPA for FY2002 was $205.1 million, a very slight increase over the FY2001 appropriation of $200.1million. The House-passed H.R. 2311 increased the Western PMA by $2.7 million to $172.2 million,bringing the total PMA budget to $207.8million. The Senate approved $205.1 million, consistent with the request. The conferees settled on $207.5, a veryslight reduction from the House-approvedlevel. The conferees stipulated that not less than $200,000 would be provided to WAPA to conduct a technicalanalysis of the costs and feasibility of transmissionexpansion methods and technologies.

BPA receives no annual appropriation, but funds some of its activities from a permanent borrowing authority, currently $3.75 billion. For FY2002 BPA plans toborrow $374.5 million, to be used for transmission system construction, system replacement, energy resources, fishand wildlife, and capital equipment programs. BPA also requested an additional $2 billion in permanent borrowing authority "to address critical infrastructureneeds." The Senate bill included the additional $2billion for the permanent authority, but the House Appropriations Committee said it did not have enoughinformation to approve the increase. No increase inpermanent borrowing authority was included in the final bill.

Beginning with FY2001, the PMAs were authorized to use power revenues from their customers to fund power purchases to supplement federal generation.Previously, under the Purchase Power and Wheeling Program (PPW), the PMAs used appropriated funds for thesepurchases. One probable reason for the changewas that the money appropriated to the PMAs under PPW was repaid to the Treasury rather than to DOE. Thismeant that the PPW appropriation was fully scoredagainst the caps on discretionary domestic spending with which DOE must comply. The House and Senatecontinued to favor this approach for FY2002.

Federal Energy Regulatory Commission (FERC). The appropriations provisions for FERC are generally notcontroversial, since the agency receives in fees the entire cost of operations. In the version of H.R. 2311 reported out by the House AppropriationsCommittee, however, was a provision prohibiting FERC from using funds to authorize construction of theGulfstream Natural Gas Project, which would pipenatural gas from the Gulf of Mexico from Mobile, AL, to Florida. When the bill came up on the floor of the HouseJune 28, an amendment by RepresentativeDavis of Florida to strike the prohibiting language was defeated by a vote of 210 to 213. The provision does notappear in S. 1171 as reported by theAppropriations Committee July 12.

Title IV: Independent Agencies

Independent agencies that receive funding from the Energy and Water Development bill include the NuclearRegulatory Commission (NRC), the AppalachianRegional Commission (ARC), and the Denali Commission.

Table 7. Energy and Water Development Appropriations Title IV: Independent Agencies (in millions ofdollars)

*Includes appropriations from the Nuclear Waste Fund, and excludes the NRC Inspector General's Office

Key Policy Issues -- Independent Agencies

Nuclear Regulatory Commission. . The Nuclear Regulatory Commission (NRC) requested a total budget of$513.1 million for FY2002, including $6.2 million for the NRC inspector general's office. The funding requestprovided an increase of $25.8 million fromFY2001, including a boost of nearly $700,000 for the inspector general's office. Major activities conducted by NRCinclude safety regulation and licensing ofcommercial nuclear reactors, licensing of nuclear waste facilities, and oversight of nuclear materials users.

The House-passed bill added $10 million to the NRC budget request to help cover the anticipated costs of reviewing new reactor designs and applications for earlysite permits for potential new reactors. According to the House Appropriations Committee report, "Industry hasrecently indicated intent to submit at least oneearly site permit application . . . in fiscal year 2002, and several firms have already initiated preliminary discussionswith the NRC regarding new reactor designs." Following the House action, the Senate also provided a $10 million increase from the budget request to cover thecosts of new license reviews, designcertifications, and site permits. The enacted Energy and Water bill provides the $516.9 million approved by bothHouses.

The House approved NRC's requested increase for the NRC inspector general's office, but the Senate voted to hold the office to the FY2001 level of $5.5 million. The final bill includes the higher House figure, bringing total NRC funding to $523.1 million.

The House and Senate Appropriations Committees sharply criticized NRC in 1998 for allegedly failing to overhaul its regulatory system in line withimprovements in nuclear industry safety. The committees contended, among other problems, that NRC's regionaloffices were inconsistent with one another, thatNRC was inappropriately interfering with nuclear plant management, and that numerous NRC review processeswere outdated and unnecessary. But the panelspraised NRC for changing its regulatory process during the FY2000 budget cycle, and have continued supportingthe agency's regulatory initiatives. On the otherhand, industry critics have raised concerns that NRC's new procedures may result in relaxed safety oversight.

For most of the past decade, NRC's budget has been offset 100% by fees on nuclear power plants and other licensed activities, including the DOE nuclear wasteprogram. The nuclear power industry had long contended that the fee structure required nuclear reactor owners topay for a number of NRC programs, such asforeign nuclear safety efforts, from which they did not directly benefit. To account for that concern, the FY2001Energy and Water Appropriations Bill includedan NRC proposal to phase down the agency's fee recovery to 90% during the subsequent 5 years - two percentagepoints per year. As a result, 96% of theFY2002 NRC appropriation - minus $23.7 million transferred from the Nuclear Waste Fund to pay for licensingactivities involving the proposed YuccaMountain, Nevada, nuclear waste repository - is to be offset by fees on licensees. However, the bill approved bythe Senate would have required that fees coveronly half of the $10 million added to the NRC request to pay for reviews of new licenses, permits, and certifications. The Energy and Water Conferees did not goalong with the Senate position, so the enacted bill requires that fees recover 96% of the additional $10 million, aswith the rest of the NRC budget.

For Additional Reading

CRS Issue Briefs

CRS Issue Brief IB88090. Nuclear Energy Policy

CRS Issue Brief IB92059. Civilian Nuclear Waste Disposal.

CRS Issue Brief IB10041. Renewable Energy: Tax Credit, Budget, and Electricity Restructuring Issues

CRS Issue Brief IB10019. Western Water Issues.

CRS Reports

CRS Report RL30307(pdf) . Department of Energy Programs: Programs and Reorganization Proposals.

CRS Report 96-212. Civilian Nuclear Spent Fuel Temporary Storage Options.

CRS Report RL30445. Department of Energy Research and Development Budget for FY2001: Description and Analysis.

CRS Report RS20702 . South Florida Ecosystem Restoration and the Comprehensive Everglades Restoration Plan.

CRS Report RL30928. Army Corps of Engineers: Reform Issues for the 107th Congress.

CRS Report RS20569 . Water Resource Issues in the 107th Congress.

CRS Report RS20866 . The Civil Works Program of the Army Corps of Engineers: A Primer.