Appropriations for FY2000: Energy and Water Development
Released: 1999-10-26T00:00:00

Most Recent Developments

The President submitted his budget for FY2000 on February 1, 1999. In it was $22.0 billion for energyand water development programs. The request was $800million larger than the FY1999 appropriation of $21.2 billion. The Senate Subcommittee marked up the bill, S. 1186 , on May 25. As reported outby the full Appropriations Committee May 27 ( S.Rept. 106-58 ), the bill's appropriation totaled $21.7 billion. TheSenate passed S. 1186 on June 16. The House Appropriations Committee reported out a $20.4 billion bill on July 20. The House passed the bill( H.R. 2605 ) July 27. House-SenateConference reached an agreement to spend $21.3 billion (including scorekeeping adjustments of $450 million) September 24. The bill was signed ( P.L. 106-60 )by the President September 29, 1999.

Status

Table 1. Status of Energy and Water Appropriations,FY2000

Overview

The Energy and Water Development appropriations bill includes funding for civil projects of the Army Corpsof Engineers, the Department of the Interior'sBureau of Reclamation, most of the Department of Energy (DOE), and a number of independent agencies, includingthe Tennessee Valley Authority (TVA) andthe Nuclear Regulatory Commission (NRC). The Administration requested $22 billion for these programs forFY2000, compared with $21.2 billion appropriatedfor FY1999.

As with other FY2000 appropriations bills, the Energy and Water Subcommittees had difficulty meeting the spending allocations assigned them under Section 302(b) of the Budget Act. In the Senate, the allocation was $21.28 billion; the House limit originally was significantlylower at $19.39 billion, but by the time theHouse bill was reported out by the Appropriations Committee the allowance was increased about $800 million.

For the Corps of Engineers, the Administration requested $3.9 billion in FY2000, about the same as appropriated in FY1999. The Senate bill, S. 1186 , would have reduced this figure to $3.76 billion, with most of the reductions in the construction budget. TheHouse bill ( H.R. 2605 )recommended raising the Corps appropriation to $4.19 billion. The Bureau of Reclamation would have receivedan increase of more than 10% (excluding offsets),to $857 million. The Senate bill would have reduced this to $761 million, below the FY1999 level. The Houserecommendation was $785 million. The Houseand Senate Conference settled on $4.14 billion for the Corps of Engineers and $769.3 million for the Bureau ofReclamation.

DOE programs funded by the Senate bill would have risen about 4% to $17.1 billion, about what the Administration requested. The major activities in the DOEbudget are research and development on energy and general science, environmental cleanup, and nuclear weaponsprograms. The House would have reducedfunding for these programs to $15.6 billion, with most of the cuts coming in the cleanup and weapons programs. The House and Senate Conference agreed tofund DOE programs at $16.6 billion. The remaining $1.2 billion of DOE's FY2000 net appropriations request (forfossil fuels programs, energy efficiency, andenergy statistics) is included in the Interior and Related Agencies appropriations bill.

Table 2. Energy and Water Development Appropriations, FY1993 to FY2000 (budget authority inbillions of current dollars) *

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

Table 2 includes FY2000 budget request figures and budget totals for energy and water appropriations enacted for FY1993 to FY1999. Tables 3-7 provide budgetdetails for Title I (Corps of Engineers), Title II (Department of the Interior), Title III (Department of Energy) andTitle IV (independent agencies) for FY1998 -FY2000.

Title I: Corps of Engineers

The Clinton Administration was seeking a slight increase for civil projects of the Army Corps of Engineers inFY2000, in contrast to the substantial cuts proposedduring the previous two budget cycles that were largely rejected by Congress. The $3.9 billion request would havefunded 19 new construction starts involvingport improvements, navigation, flood control, and environmental projects. The Senate approved $3.7 billion, whilethe House supported $4.2 billion. Theconference agreement funds the Corps of Engineers for $4.14 billion.

Major initiatives in the Corps request included a proposed $951 million Harbor Services Fund for port improvements and harbor maintenance, and $25 million forthe "Challenge 21" river restoration and flood mitigation program. A $10 million increase was proposed for theFormerly Utilized Sites Remedial ActionProgram (FUSRAP), which was transferred from DOE in FY1998. The program cleans up contamination at oldindustrial sites that processed nuclear materialsfor defense purposes.

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

Key Policy Issues -- Corps of Engineers

Funding for Corps of Engineers civil programs is often a contentious issue between the Administration and the Congress, with final appropriations bills typicallyfunding more projects than requested. For FY1998, for example, the Congress added $270 million (7%) to the$3.63 billion requested by the Administration. Similarly, the FY1999 bill as passed included a total of $3.86 billion for the Corps, $638 million (20%) more thanrequested.

The Administration's FY2000 Corps request was somewhat less controversial. At $3.9 billion it was slightly above the last year's appropriation, and it provided$80 million for 19 new construction starts (including numerous port improvements, navigation, flood control andenvironmental projects) and the proposedChallenge 21 River Restoration and Flood Mitigation initiative at $25 million.

A newly-proposed Harbor Services Fund would have provided for both port improvements and harbor maintenance -- $693 million requested under the operationand maintenance account, and $258 million requested for construction. The Harbor Services Fund would havereplaced the existing Harbor Maintenance TrustFund with a new fund from a proposed Harbor Services User Fee (which would replace the existing HarborMaintenance Tax, part of which was declaredunconstitutional by the Supreme Court in 1998).

The Senate bill reduced Corps funding by more than $200 million below the Administration's request. Most of the cuts would have come in the constructionbudget. The Senate Appropriations Committee report said it was attempting to provide continuity of previouslyfunded construction with specified "stretchingout" in contracting or completion schedules. The Senate also declined to initiate the Challenge 21 proposal; nor didit modify harbor maintenance through theappropriations language.

The House bill increased the Corps funding by more than $280 million above the Administration's request, including increases in most of the Corps programs. However, the House also declined to initiate the Challenge 21 proposal and did not modify harbor maintenancethrough appropriations language.

Policy issues related to wetlands regulatory programs were addressed in the final bill. As approved by the House on July 27, the bill included two such provisions. One would require the Corps to modify a recently-established administrative appeals process for certain Corpsregulatory decisions to allow unsuccessfulappellants to directly challenge the decisions in court. The Administration supported creation of an administrativeappeals process but opposed this provision,saying that it would impose excessive burdens on the Corps and the courts. Landowner and developer groupsfavored it. The conference report ( H.Rept. 106-336 )deleted the House language that would have made certain administrative decisions appealable to federal courts priorto a final permit decision. It included Senatelanguage providing that $5 million in additional funds for the Corps' regulatory program in FY2000 shall be usedto establish an administrative process forappeals of jurisdictional determinations by the Corps (i.e., whether an area contains wetlands that are subject toCorps permitting requirements).

The House bill also included a provision to require the Corps to submit a study on the workload impact andcompliance costs of replacement permits for"nationwide permit 26" (NWP 26) 30 days prior to publication of the final permits, but no later than December 30,1999. The NWP 26 program permits certainactivities to fill wetlands of less than 3 acres and has been highly controversial with environmental and conservationgroups. The Corps has proposed programchanges to restrict use of NWP 26 which are due to take effect by December 30, 1999. Landowner and developergroups supported the House-passed provision,but the Administration opposed it, saying that the study was unnecessary and, even with a Dec. 30 deadline, wouldincrease wetlands loss in the nation by delayingissuance of replacement permits. The conference report on H.R. 2605 modified the House-passed languageby directing the Corps to study theworkload impacts and costs of compliance of proposed replacement permits, but dropped language that would haverequired submission of a report to Congressbefore publication of final permits. (For more information, see CRS Issue Brief IB97014, WetlandIssues , and CRS Report 97-223 , Nationwide Permits forWetlands Projects: Permit 26 and Other Issues and Controversies .)

Title II: Department of the Interior

For the Department of the Interior, the Energy and Water Development bill provides funding for the Bureau of Reclamation and the Central Utah ProjectCompletion Account. The Administration's FY2000 request for the Bureau of Reclamation was up more than 10%from the FY1999 appropriation (excluding a$37 million offset involving the Central Valley Project Restoration Fund). The Administration proposed and thefinal bill included no new funding for thecontroversial Animas-La Plata water supply project in Colorado, and instead proposed allocating $3 million (witha recommendation of $2 million) from previousappropriations for preconstruction activities.

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 $5million for the contribution authorized by ï¿½402(b)(2)of the Central Utah Project Completion Act ( P.L. 102-575 ).

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

* Does not reflect appropriations derived from transfer of $25.8 million from the Working Capital Fund, butdoes include $1.5 million in supplementalappropriations ( P.L. 106-31 ).

** The Office of Management and Budget and the Congressional Budget Office disagree as to whether thereis an offset for this fund.

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 (Bureau). Whereas theCorps built hundreds of flood control and navigation projects, the Bureau's mission was to develop water suppliesand to reclaim arid lands in the West, primarilyfor irrigation. Today, the Bureau manages more than 600 dams in 17 western states, providing water toapproximately 10 million acres of farmland and 31 millionpeople.

The Bureau has undergone many changes in the last 15 years, turning from largely a dam construction agency to a self-described water resource managementagency. The agency describes the "intent" of its programs and projects as follows:

to operate and maintain all facilities in a safe, efficient, economical, and reliable manner;

to sustain the health and integrity of ecosystems while addressing the water demands of a growing west; and

to assist states, tribal governments, and local communities in solving contemporary and future water and related resource problems in anenvironmentally, socially, and fiscally sound manner.

In practice, however, the agency is limited in how it can address new demands and new priorities because of numerous federal, state and local statutes, compacts,and existing contracts, which together govern the delivery of water to project users. Consequently, any proposalto change Bureau water allocation or watermanagement policies often becomes difficult to implement and extremely controversial.

Key Policy Issues -- Bureau of Reclamation

The Administration requested an appropriation of $856.6 million for the Bureau for FY2000 (gross current budget authority), approximately $80 million morethan enacted for FY1999 (excluding the $37.1 million offset to the CVP Restoration Fund). The Senate billincluded $761.2 million, $95.4 million less thanrequested and $19.3 million less than enacted for FY1999 (excluding offsets). Appropriations for water projectswere recommended to be $40.4 million less thanrequested, with reductions for many projects and increases for a few. The House bill included $784.7 million, $71.9million less than requested, but $2.7 millionmore than enacted for FY1999 (excluding offsets) and $23.5 million more than in the Senate bill. The final billappropriated $769.3 million for FY2000,approximately $85 million less than requested and $11 million more than enacted for FY1999.

One major difference between the House and Senate bills was funding for the California Bay-Delta Ecosystem Restoration program (CALFED). (Funding forCALFED is requested in the Bureau's budget, but the appropriation will be allocated among several federal agencies. The majority of funding is expected to go tothe Bureau and the Corps.) The FY2000 request for CALFED is $95.0 million, $43.3 million less than the FY1999request, but $20 million more than enacted forFY1999. The Senate bill figure is $50 million for FY2000, $45 million less than requested and $25 million less thanenacted for FY1999. In addition, the Senatebill has $37.3 million for the Central Valley Project Restoration Fund, $4.2 million more than enacted for FY1999,but $10 million less than the Administrationrequested for FY2000. The House Appropriations Committee recommended $75.0 million for CALFED, matchingthe FY1999 funding, but $20.0 million lessthan requested for FY2000 and $25.0 million more than recommended in the Senate. The House Committee alsorecommended the full amount requested for theCentral Valley Project Restoration fund, $47.3 million. P.L. 106-60 appropriates $60 million for CALFED, $15million less than requested, and $42 million forthe Central Valley Project Restoration fund ($5.3 million less than requested).

Title III: Department of Energy

The Energy and Water Development bill includes all but $1.2 billion of DOE's $17.8 billion FY2000 netappropriations request (including about $700 million inoffsets). Major DOE activities in the bill include research and development on renewable energy and nuclear power,general science, environmental cleanup, andnuclear weapons programs. The Administration's FY2000 request would boost DOE programs in the bill by about4% to $17.1 billion. The remainder of DOE'sFY2000 budget request -- for fossil fuels programs, energy efficiency, and energy statistics -- is included in theInterior and Related Agencies appropriationsbill.

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

Key Policy Issues -- Department of Energy

Research and Development Programs. For FY2000, DOE requested $3.48 billion for civilian R&D within thejurisdiction of this bill, an increase of 5.4% over the comparable FY1999 appropriation. For national securityprograms, DOE requested $3.40 billion for R&D,4.7% above FY1999. While not as large as the changes from FY1998 to FY1999, 7.5% and 8.6% respectively,requested increases for FY2000 were well abovethe year-to-year average received by DOE for all R&D in the 1990s.

Renewable Energy. "The solar and renewable energy program is a major component of the Administration'sactivities to address global climate change," according to the Appendix to the U.S. Government's FY2000 Budget(p. 397). In accordance with that policy, DOEproposed to boost solar and renewables funding to $398.9 million (net) -- an increase of $62.9 million (19%) overthe FY1999 level. Within DOE's Office ofEnergy Efficiency and Renewable Energy (EERE), this includes $21.1 million more for photovoltaics, $19.2 millionmore for biomass, $10.8 million more forwind, and $10 million more for solar program support. Also, DOE's request sought $47.1 million for renewableenergy-related research programs under theOffice of Science (OS).

In passing S. 1186 on June 16, the Senate voted to reject most of the requested increase, recommending $353.9 million for DOE's renewable energyprograms. A Jeffords floor amendment (No. 648) to increase funding by $70 million failed due to a technical flawand a parliamentary maneuver to block itscorrection. The Senate-approved figure covers $306.8 million for EERE programs (including $33.5 million forelectric energy systems and storage) and $47.1million for OS programs. The figure for EERE is $92.1 million less than the request and $11.2 million less thanthe FY1999 appropriation.

The House Appropriations Committee also voted to reject the Administration-proposed increase. It recommended $326.5 million for FY2000, including $279.4million for EERE programs (including $38.0 million for electric energy systems and storage) and $47.1 million forOS programs. The figure for EERE is $119.6million, or 27%, less than the request; including $26.3 million less for photovoltaics, $21.6 million less for biomass,$20.6 million less for wind, and $8 millionless for solar program support. Also, the Committee recommendation is $39.5 million, or 11%, less than theFY1999 appropriation. In a July 20 letter tocommittee leaders, the Office of Management and Budget expressed strong opposition to the bill as approved bythe House Appropriations Committee, partly dueto the cuts proposed for renewable energy. The House-passed bill included a floor amendment (#350) that added$30 million more for renewable energy that wasoffset by a reduction for DOE contractor travel expenses.

The Conference-approved total of $362.2 million covers $315.1 million for EERE (including $38.4 million for Electric Energy Systems and Storage) and $47.1million for DOE's OS Programs. The figure for EERE is $84.3 million, or 21%, less than the request and it is $3.4million, or 1%, less than the FY1999appropriation. Compared to the request, the Conference figure seeks $26.3 million less for Photovoltaics, $20.4million less for Biomass, $12.6 million less forWind, and $5 million less for Solar Program Support.

A new $1 million Electricity Restructuring Program included in the bill would provide technical assessments of policy concepts and programs such as renewableportfolio standards (RPS), public benefits funds, consumer information and disclosure provisions, "green power"marketing programs, and distributed generationconcepts. Also, a new $1 million Competitive Solicitation Program is to support cost-shared field verificationprojects, including data on generation and system outages, to address market barriers arising from a lack of cost and operational information.

Nuclear Energy. For nuclear energy programs -- including research and development, space power systems,closing of surplus facilities, and uranium programs -- DOE was appropriated $288.7 million for FY2000, a boostof nearly $20 million from the Administration'srequest. Funding was increased for a program begun in FY1999 to support innovative nuclear energy researchprojects, the "nuclear energy research initiative"(NERI), from $19 million to $22.5 million. The energy and water bill also provides DOE's full request --$5 million-- for a separate research program rejectedby Congress in FY1999 to improve the economic competitiveness of existing nuclear power plants, called "nuclearenergy plant optimization" (NEPO).

Funding for NEPO was identified by DOE as part of the Administration's "Climate Change Technology Initiative." To be matched by industry, the NEPOfunding would focus on research to extend the operating lives of existing reactors and to allow them to operate moreefficiently and reliably. Because nuclearplants directly emit no carbon dioxide, greater production of nuclear power from existing reactors could help theUnited States reduce its total "greenhouse gas"emissions. "Continued operation of existing nuclear power plants avoids over 620 million tons of carbon dioxideannually," according to the DOE budgetjustification. However, opponents have criticized DOE's nuclear energy research programs as providing wastefulsubsidies to a failing industry.

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 contends that such treatment may bethe best way to render certain types of spent fuel-- particularly from the closed Experimental Breeder Reactor II in Idaho -- safe for long-term storage and disposal. DOE received $40 million in FY1999 tocomplete a demonstration program for the technology.

According to the DOE budget justification, a decision will be made in FY2000 on whether to proceed with a full-scale electrometallurgical treatment program, and$10.7 million was requested to maintain the necessary facilities in case the option is pursued. The HouseAppropriations Committee report specified that $40million under nuclear facility "termination costs" be provided for the program in FY2000, including $20 millionfor demonstration activities. The ConferenceReport boosts "termination costs" by $15 million over the Administration request but does not specify how muchshould be spent for electrometallurgicaltreatment.

Opponents contend that such treatment is unnecessary and that the process could be used for separating plutonium to make nuclear weapons. They note that theprocess uses much of the same technology and equipment developed for the plutonium-fueled Integral Fast Reactor,or Advanced Liquid Metal Reactor, whichwas canceled by Congress in 1993 partly because of concerns about nuclear weapons proliferation.

The final bill also includes $9 million under the category "civilian research and development" for research into the use of particle accelerators to transmutelong-lived elements in radioactive waste into shorter-lived elements for safer disposal.

Science. For the Science programs, DOE requested an increase of $116.9 million over FY1999, or about 4.3%. Most of this increase consists of two items: $84 million (65%) for continued construction of the Spallation NeutronSource (SNS) and $70 million for thescientific simulation initiative (SSI). The former is to be a major user facility providing a new source of neutronsfor a wide variety of research goals. The latter isdesigned to develop very high speed computational capability for use in simulating complex physical andbiomedical problems such as global climate change andgenome structure and to carry out such simulations. While both of these efforts have much support in the scientificcommunity, the extent of the increaserequested for these two activities would be to leave funding for the rest of the DOE Science research somewhatlower than FY1999.

The Senate appropriated $2.73 billion for Science for FY2000, 3.7% below the request, but 0.4% above the FY1999 level. The Senate approved $169.0 millionfor SNS construction, which, it stated, would amount to full funding given delays that have taken place in thatproject. The Senate did not, however, provide anyfunding for the SSI project. Most of the other programs would receive small reduction, which, the Senate noted,were primarily the result of constrained budgetresources.

The House recommended $2.72 billion for Science for FY2000, 4.5% below the request and nearly equal to the FY1999 level. Included in the House bill is $51million in contractor travel and other directed reductions. The House bill increases funding for High Energy Physicsand Nuclear Physics over the request. It didnot provide any funding for the SSI program arguing that it could not support two supercomputer developmentprograms within DOE given the existence of theAccelerated Strategic Computing Initiative (ASCI) within the DOE weapons activities. The House also provided$50 million for SNS construction, stating thatproject management problems needed to be resolved before full construction funding could be provided. The Housebill directs DOE to meet a series ofconditions to demonstrate such resolution.

The final appropriations bill provides $2.80 billion for Science programs for FY2000, a reduction of 1.1% from the request but 3.0% above the FY1999 level. This amount includes $31.8 million in general reductions for contractor travel and other purposes. The confereesprovided $117.9 million for SNS constructionbut no funds for the SSI. The report contained language expressing strong support for the DOE supercomputerprograms -- both civilian and defense. Theconferees, however, did urge DOE to submit a comprehensive plan for a civilian supercomputing program. Congress is providing $250 million for the FusionEnergy Science program, an increase of nearly $28 million over the request. The conferees expressed their approvalof the program's reviews recently completedby the Secretary of Energy's Advisory Board and the Fusion Energy Science Advisory Committee.

Stockpile Stewardship. The primary element of DOE's national security R&D request is the stockpilestewardship program, aimed at developing the science and technology to maintain the nation's nuclear weaponsstockpile in the absence of nuclear testing. Themain focus of the program is the development of computational capabilities that can simulate weapons explosionsand perform other important computations. ForFY2000, DOE requested $542.5 million for this element, the Accelerated Strategic Computing Initiative(ASCI)/Stockpile Computing. That sum is 23.7% of theentire stockpile stewardship request, and is 12.2% above the FY1999 appropriation.

The Senate appropriated $2.352 billion for Stockpile Stewardship, 2.9% above the request and 10.6% above the FY1999 level. The Senate repeated its concernthat DOE is not requesting sufficient funding for this program. It considers Stockpile Stewardship to be "criticallyimportant" particularly in view of the cessationof underground testing. The Senate directed DOE to take steps to improve management of the weapons activitiesin order to operate effectively in the restrictedbudget environment. The Senate also noted its concern with the rate of growth of the ASCI project, but it didprovide DOE with its full request for the project. Further, the Senate commended DOE on its achievements so far and recommended that the project speed up to reachthe 100 teraflop goal. A set of strategicactions now under study by DOE was noted by the Senate which approved an additional $35 million to the coreStockpile Stewardship program to begin thoseactions. The Senate also provided an additional $10 million for the Inertial Confinement Fusion program to assistthe National Ignition Facility (NIF) project toavoid delays in reaching ignition once completed.

The House approved about $2 billion for Stockpile Stewardship for FY2000, 12.1% below the request and 5.4% below the FY1999 level. Included in therecommendation are $88.2 million in contractor travel and other reductions that are assumed to be this program'sshare of the $180 million reductionrecommended by the Committee for all DOE weapons activities. Nearly all of the reduction from the request wouldtake place in the core stockpile stewardshipactivity, which the bill would fund at the FY1999 level. Within that activity, the House bill provides the ASCI efforta $6.1 million increase over FY1999. TheCommittee argued that cost efficiencies could be achieved throughout the weapons complex that would permit theserecommendations. The Inertial ConfinementFusion (ICF) activity would receive an additional $10 million above the request and the NIF would be fully fundedfor FY2000. The House bill directs that $10million be made available to further high-average-power laser development. For the technology transfer andeducation activities, the House recommended $14million compared to a request of $52 million. The House argued that budget constraints make it necessary toconcentrate available funds on the weapons mission.

In the report accompanying its recommendations, the House noted the security problems reported about the DOE weapons labs. In particular, it cited the report bythe President's Foreign Intelligence Advisory Board that argued for a restructuring of the DOE national securityprograms as the only way to deal with thoseproblems, which, the Board found, were very serious. The House has concluded that an independent agency willbe needed. It argued that even a separate agencywithin DOE would not suffice because no significant staffing changes would take place. In order to ensure thataction will take place, the House recommended aprovision that would delay $1 billion in obligations for DOE until after June 30, 2000, in order to give time forCongress "to craft careful, bipartisan legislation"addressing the problem. Provisions reorganization the weapons program into a semi-autonomous agency withinDOE were included in the FY2000 DefenseAuthorization Act ( S. 1059 , P.L. 106-65 ), signed into law October 5, 1999.

The final appropriations bill provides $2.252 billion for Stockpile Stewardship for FY2000, $3.6 million above the request. The conferees directed DOE to reducefunding for weapons activities by $64.8 million. It is likely that some of that reduction will be applied to theStockpile Stewardship program, which makes upabout 50% of the weapons activities budget. Therefore, the actual amount available for the program will probablybe less than the $2.252 billion. The confereesprovided $316 million for the ASCI program, $25 million below the request. Also, the additional $10 millionappropriated by the House for high-average-powerlaser development remains in the final bill. The conference report contained language expressing strongdisappointment about news that the NIF cost estimate hasincreased, and the conferees ordered DOE to submit a certified cost estimate to the Appropriations Committees byJune 1, 2000. If that is not possible, theconferees directed DOE to submit a project termination cost estimate.

Nonproliferation and National Security Programs. The Administration's FY2000 request for these programswas $747 million, about $70 million over FY1999. The House bill included $691 million funding, and the Senatebill $822 million. The bill as passedappropriated $745 million for nonproliferation and national security programs (which are included in the "OtherDefense Activities" listed in Table 6).

Much of the requested increase was aimed at helping Russia and other former Soviet states deal with the cutbacks of their nuclear weapons activities. Among theprograms are the Nuclear Cities Initiative (NCI), to help unemployed nuclear weapons designers find civilian jobs,and the Initiative for Proliferation Prevention(IPP), to help develop new non-defense technologies in the Former Soviet Union. NCI's budget would have beendoubled to $30 million and IPP received $25million in the FY2000 request. The bill as passed included $7.5 million for NCI and $22.5 million for IPP. For theMaterials Protection, Control and Accounting(MPCA) program, aimed at improving security and accounting systems at Russian nuclear weapons facilities, therequest was $145 million, a $5 million increaseover FY1999. The bill as passed appropriated $150 million.

Environmental Management. DOE's Environmental Management Program (EM) is responsible for cleaning upenvironmental contamination and disposing of radioactive waste at DOE nuclear sites. The FY2000 appropriationfor the program totals $6.32 billion, including$189 million for the "privatization" of several DOE waste management projects, such as the solidification ofhigh-level radioactive waste at Hanford, Washington,and $250 million for the uranium enrichment decontamination and decommissioning fund. The total EMappropriation is about $35 million below theAdministration's request but $93 million above the FY1999 funding level.

The FY2000 EM budget is based on the program's accelerated cleanup strategy, which attempts to maximize the number of sites that can be completely cleanedup by the end of FY2006. DOE managers contend that substantial long-term savings can be gained by focusing oncompleting work at those sites, allowing theearliest possible termination of infrastructure costs. Major sites scheduled for completion during that period areincluded in the "Defense Facilities ClosureProjects" account, for which about $1 billion was provided in FY2000 -- about the same level as in FY1999. Thelargest facilities under that account are theRocky Flats site in Colorado and the Fernald site in Ohio.

Nearly half of EM's FY2000 privatization funding request would go for Phase 1 of the Hanford Tank Waste Remediation System, consisting of a pilotvitrification plant that would turn liquid high-level waste into radioactive glass logs for eventual disposal. Othermajor privatized projects include a facility totreat "mixed" radioactive and hazardous waste at the Idaho National Engineering and Environmental Laboratory,and waste treatment, storage, and disposalfacilities at Oak Ridge, Tennessee.

The EM privatization effort is intended to reduce costs by increasing competition for cleanup work and shifting a portion of project risks from the federalgovernment to contractors. Profits to contractors would depend on their success in meeting project schedules andholding down costs; potentially, profits could besubstantially higher or lower than under traditional DOE contracting arrangements.

In a typical non-privatized DOE project, a contractor would be hired to build and operate a facility with government funds. DOE would approve and pay all thecontractor's costs, and then award the contractor a profit based on performance. Under the privatization initiative,a contractor would be expected to raise almostall funding for necessary facilities and equipment for a project. The contractor would recover that investment andearn a profit by charging previously negotiatedfees to DOE for providing services under the contract, such as solidification of radioactive waste. The contractorcould earn higher profits by reducing costs, butthe contractor could lose money if project costs were higher than expected or the required services were notdelivered.

For non-defense environmental management, the House recommended elimination of all funding -- $3.7 million -- for the DOE National Low-Level WasteProgram. The program provides technical assistance to states and interstate compacts in managing commerciallow-level waste. "Over $80,000,000 has beenprovided for the low-level waste program over the past two decades, and State expertise is now mature enough thatFederal funding is no longer required,"according to the House Committee report. The Conference Report specifies that $595,000 be provided to theprogram in FY2000 for maintaining federallow-level waste data bases.

An additional $10 million was provided for cleanup activities at DOE's uranium enrichment plants at Paducah, Kentucky, and Portsmouth, Ohio, which arecurrently leased to a private firm. Recent controversy has focused on environmental hazards posed by the plants,particularly contamination resulting from thepast enrichment of reprocessed uranium at Paducah.

Civilian Nuclear Waste Disposal. DOE requested $409 million for the civilian nuclear waste program inFY2000, an increase of $51 million over the level provided for FY1999. Of that increase, $39 million would havecome from unspent funds appropriated inFY1996 for an interim waste storage program that has yet to receive congressional authorization. Because the $39million has already been appropriated, the useof that funding reduced the program's FY2000 net appropriation request to $370 million. The FY2000 Energy andWater Development bill provides $352.5million for the program but does not release the previously appropriated funding sought by DOE.

The Civilian Nuclear Waste Program is focused almost entirely on studying a proposed permanent underground repository for highly radioactive waste at YuccaMountain, Nevada. DOE's budget justification contends that the $409 million proposal for FY2000 is the minimumrequired to keep the waste disposal programon its current schedule. The major program efforts planned for FY2000 are completion of the final EnvironmentalImpact Statement for the proposed YuccaMountain repository, preparation of a site recommendation report to be submitted to the President in FY2001, anda license application to be sent to NRC in 2002. If any of those "critical near-term milestones" are missed, DOE says it might not be able to open the repository in2010 as planned.

Although DOE did not receive its full request for the waste program, the final amount was substantially more than the level approved by the House. Citing"severe budget constraints," the House Appropriations Committee had voted to cut total appropriations for the wasteprogram to $281 million and directed DOEto "review all cost components to see what savings can be achieved in fiscal year 2000." The final appropriationincludes $240.5 million from the Nuclear WasteFund, which consists of fees paid by nuclear utilities, and $112 million from the defense nuclear waste disposalaccount.

The 2010 target for opening a permanent repository is 12 years later than a statutory deadline of January 31, 1998, for DOE to begin taking waste from nuclearplant sites. Nuclear utilities and state utility regulators, upset over DOE's failure to meet the 1998 disposal deadline,have won two federal court decisionsupholding the Department's obligation to meet the deadline and to compensate utilities for any resulting damages. Utilities have also won several cases in theU.S. Court of Federal Claims, although specific damages have not yet been determined.

For FY1999, Congress provided $4 million from general revenues to pay for research on treating high-level radioactive waste with advanced particle accelerators. Such treatment would be intended to transmute long-lived radioactive waste into shorter-lived isotopes. DOE didnot request further funding for the effort inFY2000, but the energy and water bill provides $9 million for the program under nuclear energy research anddevelopment.

DOE requested the restoration of funding for the State of Nevada to monitor the Yucca Mountain Project in FY2000, totaling $12.3 million for the state and nearby units of local government. For FY1999, Congress rejected all but $250,000 of DOE's nearly $5 millionrequest for funds for Nevada, because of concernsthat the state was using the money to fight the waste program, while providing $5.5 million to local governments. The Senate voted to provide $10.1 million forNevada and affected local governments in FY2000, but the House recommended no state and local funding. Theconference agreement provides $500,000 forDOE reimbursement of state oversight costs, and $5.4 million for affected local governments.

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 (SEPA), Southwestern (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. Sale of the remaining PMAshas not since been an issue, pending decisions yet to be made about the treatment of public power in the broadercontext of electric utility restructuring.

BPA receives no annual appropriation. The Administration's request for the PMAs for FY2000 was $200 million, a reduction of 15.8% from the FY1999appropriation. The savings stemmed from the Administration's proposal that, beginning in FY2000, customers of SEPA, WAPA, and SWPA would beresponsible for making their own power purchases and transmission arrangements from any suppliers other thanthe PMA to satisfy their needs. Under thePurchase Power and Wheeling Program (PPW), the PMAs have purchased electricity and transmission capability,which is repaid by PMA customers, tosupplement federal generation. The premise behind the proposed elimination of the PPW program was thatderegulation should make it less expensive and lesscomplicated for PMA customers to make these arrangements. Another possible reason is that the moneyappropriated to the PMAs under PPW is repaid to theTreasury rather than to DOE. This means that the PPW appropriation is fully scored against the caps ondiscretionary domestic spending with which DOE mustcomply. Bipartisan groups in both the House and Senate found this feature of the budget request controversial.

The Senate passed the bill with the PPW program maintained and more than $80 million restored. In its report, the Senate Appropriations Committee said it"disagrees" with the Department's proposal. However, the House supported the Administration proposal andrequested levels. The Senate position prevailed inconference and in the enacted bill.

Title IV: Independent Agencies

Independent agencies that receive funding from the Energy and Water Development bill include the NuclearRegulatory Commission (NRC), the TennesseeValley Authority (TVA), and the Appalachian Regional Commission. TVA, which pays for most of its activitieswith electricity revenues, requested only a smallcongressional appropriation for FY2000 for its land management activities.

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

Key Policy Issues -- Independent Agencies

Tennessee Valley Authority. The Tennessee Valley Authority (TVA) was established as a federal corporationin 1933 to bring electricity and development to a region encompassing all of Tennessee and portions of Kentucky,Virginia, North Carolina, Georgia, Alabama,and Mississippi. The agency's electric power operations are self-supporting and receive no appropriation.

TVA is also responsible for certain non-power functions intended to further the agency's mission to develop and conserve the region's natural resources. Theseinclude flood control, recreation, navigation, and an Environmental Research Center. TVA operates more than 50dams and reservoirs and a 170,000-acrerecreational area in Kentucky and Tennessee, Land Between the Lakes (LBL). These non-power programs representroughly 2% of TVA's total budget and havebeen supported by congressional appropriation. However, critics of TVA have argued in recent years that TVAshould absorb the cost for these programs andcould do so with the savings that could be realized from more efficient operation.

In recent years, the congressional appropriation for the TVA non-power programs has been declining. The appropriation for the non-power programs was $106million for FY1997. The conferees on the FY1998 Energy and Water Appropriations bill recommended anappropriation of $70 million, but stipulated that TVAwould thereafter absorb the entire cost of these programs through "internally generated revenues and savings." Nonetheless, the Administration requested $77million for TVA non-power programs for FY1999. The House held to the intent of the prior year's conference reportwhile the Senate proposed appropriating $70million again to TVA for FY1999. The House position prevailed in the enacted Energy and Water Appropriations( P.L. 105-245 ).

However, shortly before the end of the 105th Congress conferees restored $50 million to TVA for the non-power programs in an omnibus spending bill ( P.L.105-277 ). The conferees also authorized TVA to refinance $3.2 billion of its debt to the Federal Financing Bank(FFB) without prepayment penalty. It wasexpected that the refinancing would save TVA $100 million annually. This, it was further argued, should give TVAsufficient annual cost savings to support thenon-power programs without further appropriations. The legislation also stipulated that if LBL were not provided$7 million by Congress in future annualappropriations, administration of LBL would be transferred from TVA to the Forest Service.

In line with these enactments in the 105th Congress, the Administration requested only $7 million specifically for the operation of LBL for FY2000. The Senateconcurred; the House did not. House Appropriations recommended no funding for TVA, commenting in thecommittee report that "final year appropriations forthe non-power programs" were provided in FY1999. The conferees authorized TVA to spend $3 million frompreviously appropriated funds for administration ofTVA, pending transfer of LBL to the Forest Service, and for expenses relating to the transition in stewardship.

Nuclear Regulatory Commission. The Nuclear Regulatory Commission (NRC) requested $471 million forFY2000, an increase of $1.6 million over FY 1999. Major activities conducted by NRC include safety regulationof commercial nuclear reactors, licensing ofnuclear waste facilities, and oversight of nuclear materials users. The funding request also included about $6 millionfor the NRC inspector general's office. Theconference report provides nearly all of the NRC request, although the funding request for the inspector general wascut by $1 million.

The House and Senate Appropriations Committees sharply criticized NRC last year 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. NRC's FY2000budget justification asserted that sufficient funding was included to address those concerns

The Senate expressed satisfaction with NRC's response to last year's criticism and granted the agency's full request for FY2000. "The Commission as a whole,the five Commissioners individually, and the Commission staff deserve a great deal of credit for the Commission'saccomplishments in the last year," theCommittee report says. The House echoed that statement, but, on the grounds that the changes at NRC would resultin reduced budget requirements, it cut NRC'srequest by $10 million, a cut that was reversed in conference.

To ensure that NRC's budget will continue to be mostly offset by fees on nuclear power plants and other licensed entities, the FY2000 Energy and Water billincludes a one-year extension of the agency's current fee-collection authority. The nuclear power industry has longcontended that the existing fee structurerequires nuclear reactor owners to pay for a number of NRC programs, such as foreign nuclear safety efforts, fromwhich they do not directly benefit. As in thepast, DOE is to reimburse NRC for oversight of DOE's high-level nuclear waste disposal program.

For Additional Reading

CRS Issue Briefs

CRS Issue Brief IB92059 . Civilian Nuclear Waste Disposal.

CRS Issue Brief IB97031. Renewable Energy: Key to Sustainable Energy Supply?

CRS Issue Brief IB91039. The DOE Fusion Energy Science Program.

CRS Issue Brief IB10036. Restructuring DOE and Its Laboratories: Issues in the 106th Congress.

CRS Reports

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

CRS Report 97-464. The National Ignition Facility and Stockpile Stewardship.

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

CRS Report RL30054. Research and Development Budget of the Department of Energy for FY2000: Description and Analysis .

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