Order Code IB88090
CRS Issue Brief for Congress
Received through the CRS Web
Nuclear Energy Policy
Updated November 7, 2001
Mark Holt and Carl E. Behrens
Resources, Science, and Industry Division
Congressional Research Service ˜ The Library of Congress

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CONTENTS
SUMMARY
MOST RECENT DEVELOPMENTS
BACKGROUND AND ANALYSIS
Overview of Nuclear Power in the United States
Nuclear Power Research and Development
Nuclear Power Plant Safety and Regulation
Safety
Domestic Reactor Safety
Reactor Safety in the Former Soviet Bloc
Regulation
Decommissioning and Life Extension
Nuclear Accident Liability
Nuclear Waste Management
Nuclear Weapons Proliferation
Environmental Problems at Nuclear Weapons Facilities
Federal Funding for Nuclear Energy Programs
LEGISLATION

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Nuclear Energy Policy
SUMMARY
Nuclear energy policy issues facing Con-
high-level waste.
gress include questions about radioactive
waste management, research and development
Whether progress on nuclear waste
priorities, power plant safety and regulation,
disposal and other congressional action will
terrorism, the Price-Anderson Act accident
revive the U.S. nuclear power industry’s
liability system, nuclear weapons proliferation,
growth will depend on economic consider-
nuclear weapons facilities cleanup, and
ations. Natural gas- and coal-fired power-
technology for producing nuclear fuel.
plants currently are favored over nuclear
reactors for new generating capacity. Howev-
Federal funding for nuclear energy re-
er, rising energy prices and electricity short-
search and development was substantially
ages have led some utilities to consider build-
reduced by the Clinton Administration, and the
ing new reactors.
Bush Administration has proposed further
cuts. However, in the FY2002 Energy and
Concern about the spread, or prolifera-
Water Development Appropriations bill (H.R.
tion, of nuclear weapons throughout the world
2311), the House and Senate have generally
has risen sharply since longtime rivals India
rejected those reductions.
and Pakistan conducted competing nuclear
weapons tests in May 1998. The heightened
Several bills have been introduced in the
tensions in Southeast Asia have focused atten-
107th Congress to encourage the growth of
tion on the effectiveness of the international
nuclear power. A number of nuclear provi-
nuclear nonproliferation regime. Potential
sions are included in comprehensive energy
nuclear weapons development by North Korea
legislation (H.R. 4) passed by the House
and Iran have also recently raised considerable
August 2, 2001. House and Senate compan-
U.S. concern.
ion nuclear energy bills (H.R. 1679, S. 472)
would encourage production from existing
Cleaning up severe environmental prob-
reactors, encourage construction of new
lems at U.S. nuclear weapons production
nuclear plants, and modify licensing proce-
facilities, owned by DOE, is expected to cost
dures. Nuclear energy provisions are also
about $150 billion over the next several de-
included in a chairman’s mark for omnibus
cades. Congress approved about $7.1 billion
energy legislation unveiled by Senator
for the program in FY2002, $170 million
Bingaman September 6, 2001, and in a com-
above the FY2001 level and $800 million more
prehensive energy bill introduced by Senator
than the Bush Administration request.
Murkowski (S. 388).
The enrichment of natural uranium to
Disposal of highly radioactive waste has
make nuclear fuel, formerly a government
been one of the most controversial aspects of
activity, now is carried out by the newly pri-
nuclear power. The Nuclear Waste Policy Act
vatized U.S. Enrichment Corporation (USEC).
of 1982 (P.L. 97-425), as amended in 1987,
USEC was privatized in a $1.9 billion initial
requires DOE to begin detailed physical
public stock offering that was completed July
characterization of Yucca Mountain in Nevada
28, 1998. USEC closed one of its enrichment
as a permanent underground repository for
plants in June 2001.
Congressional Research Service ˜ The Library of Congress

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MOST RECENT DEVELOPMENTS
After the September 11 terrorist attacks on New York and Washington, D.C., nuclear
power plants in the United States went to the highest level of security at the recommendation
of the Nuclear Regulatory Commission (NRC). The NRC Emergency Operations Center was
activated, as well as regional NRC emergency centers, all of which maintained constant
contact with the nation’s 103 operating nuclear power reactors. In light of the
unprecedented attacks, NRC Chairman Richard A. Meserve, with the support of the other
Commissioners, ordered a staff review of NRC’s security regulations and procedures.
The House Energy and Commerce Committee approved a 15-year extension of the
Price-Anderson Act nuclear liability system October 31 (H.R. 2983). The measure would
raise the annual limit on payments to nuclear accident victims from $10 million to $15
million for each commercial reactor and allow nuclear plants consisting of several small
modules to be treated as a single reactor under the Price-Anderson system. A Democratic
amendment approved by the Committee would allow the federal government to recover at
least some of any damages it was forced to pay on behalf of indemnified Department of
Energy (DOE) nuclear contractors for accidents caused by intentional management
misconduct. The Committee also approved an amendment requiring NRC to issue new
security regulations for nuclear power plants and the transportation of nuclear materials.
FY2002 funding for DOE nuclear programs and NRC was approved by Congress
November 1. The conference report on the FY2002 Energy and Water Development
Appropriations Bill (H.R. 2311, H. Rept. 107-258) provides $250 million for DOE nuclear
energy research and related programs, about 10% above the Bush Administration request.
Conferees rejected the Senate’s deep cuts in the DOE nuclear waste disposal program at
Yucca Mountain, Nevada, but the appropriation of $375 million fell short of the
Administration request. NRC’s FY2002 total funding request of $513 million was boosted
by $10 million to prepare for licensing new commercial reactors.
A number of nuclear energy provisions are included in comprehensive energy
legislation (H.R. 4) passed by the House August 2. Section 2321 would authorize the
Department of Energy (DOE) to “conduct an advanced fuel recycling technology research
and development program,” which proponents contend could reduce the long-term toxicity
of spent fuel, but which opponents counter could undermine U.S. nuclear nonproliferation
efforts. The bill also would reauthorize various DOE nuclear energy research programs and
modify the tax treatment of nuclear reactor decommissioning funds. Senate action on
omnibus energy legislation remains uncertain after the Senate Energy and Natural
Resources Committee abruptly cancelled markups scheduled for early October.
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BACKGROUND AND ANALYSIS
Overview of Nuclear Power in the United States
The U.S. nuclear power industry, while currently generating about 20% of the nation’s
electricity, faces an uncertain future. No nuclear plants have been ordered since 1978 and
more than 100 reactors have been canceled, including all ordered after 1973. No units are
currently under active construction; the Tennessee Valley Authority’s Watts Bar 1 reactor,
ordered in 1970 and licensed to operate in 1996, was the most recent U.S. nuclear unit to be
completed. The nuclear power industry’s troubles include high nuclear power plant
construction costs, public concern about nuclear safety and waste disposal, and regulatory
compliance costs.
High construction costs are perhaps the most serious obstacle to nuclear power
expansion. Construction costs for reactors completed since the mid-1980s have ranged from
$2-$6 billion, averaging about $3,000 per kilowatt of electric generating capacity (in 1995
dollars). The nuclear industry predicts that new plant designs could be built for about half
that amount if many identical plants were built in a series, but such economies of scale have
yet to be demonstrated.
Nevertheless, all is not bleak for the U.S. nuclear power industry, which currently
comprises 103 licensed reactors at 65 plant sites in 31 states (excluding one Tennessee Valley
Authority unit that is indefinitely shut down). Electricity production from U.S. nuclear power
plants is greater than that from oil, natural gas, and hydropower, and behind only coal, which
accounts for 55% of U.S. electricity generation. Nuclear plants generate more than half the
electricity in six states.
Average operating costs of U.S. nuclear plants dropped substantially during the 1990s,
and costly downtime has been steadily reduced. Licensed commercial reactors generated
electricity at a record-high average of more than 87% of their total capacity in 2000,
according to industry statistics. Comprehensive energy legislation (S. 388) introduced
February 26, 2001, by Senator Murkowski would provide extra incentives for increased
generation by existing nuclear plants. Nuclear power plants could receive 1 mill (a tenth of
a cent) for each kilowatt-hour generated in any year that exceeded total generation in a
specific base year, up to $2 million per reactor. Nuclear plants could also be reimbursed for
10% of any capital costs incurred in boosting their capacity by at least 1%, up to $1 million
per reactor. A nuclear energy bill (S. 472) introduced by Senator Domenici March 7, 2001,
would reimburse 10% of capital costs incurred in increasing capacity by at least 5%.
The Calvert Cliffs nuclear plant received the first 20-year license extension from the
Nuclear Regulatory Commission (NRC) in March 2000, and more extensions have been
granted or are pending. Industry consolidation could also help existing nuclear power plants,
as larger nuclear operators purchase plants from utilities that run only one or two reactors.
Several such sales have been announced, including the March 2001 sale of the Millstone plant
in Connecticut to Dominion Energy for a record $1.28 billion. The merger of two of the
nation’s largest nuclear utilities, PECO Energy and Unicom, completed in October 2000,
consolidated the operation of 17 reactors under a single corporate entity, Exelon Corporation.
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Existing nuclear power plants appear to hold a strong position in the ongoing
restructuring of the electricity industry. In most cases, nuclear utilities have received
favorable regulatory treatment of past construction costs, and average nuclear operating costs
are currently estimated to be lower than those of competing technologies.1 Although eight
U.S. nuclear reactors have permanently shut down since 1990, recent reactor sales could
indicate greater industry interest in nuclear plants that previously had been considered
marginal. Despite the shutdowns, total U.S. nuclear electrical output increased nearly 25%
from 1990 to 2000, according to the Energy Information Administration. The increase
resulted primarily from reduced downtime at the remaining plants, the startup of five new
units, and reactor modifications to boost capacity.
Recent increases in fossil fuel prices and shortages of electricity have led at least two
nuclear operating companies to consider building new commercial nuclear reactors. Exelon
is participating in an international consortium that may build a demonstration Pebble Bed
Modular Reactor in South Africa, a reactor cooled by helium that is intended to be highly
resistant to accidents. Entergy is considering selecting U.S. sites for future nuclear units.2
Global warming that may be caused by fossil fuels — the “greenhouse effect” — is cited
by nuclear power supporters as an important reason to develop a new generation of reactors.
But the large obstacles noted above must still be overcome before electric generating
companies will risk ordering new nuclear units. The Energy Information Administration
forecasts that no new U.S. reactors will become operational before 2010, at the earliest.
Senator Domenici’s nuclear energy bill, S. 472, is intended to overcome some of the
obstacles to new reactors. Among the bill’s provisions are a demonstration of the approval
process for new reactor sites, the designation of nuclear power as “an environmentally
preferable product” for government procurement purposes and as an “emission-free electricity
source” under the Clean Air Act, the inclusion of nuclear power in any “greenhouse gas”
incentive programs, and changes in nuclear licensing requirements and procedures.
Nuclear Power Research and Development
U.S. development of advanced reactors largely ended under the Clinton Administration,
although some research has continued. In FY1995, Congress accepted the Clinton
Administration’s plan to halt development of the advanced liquid metal reactor (ALMR), also
called the Integral Fast Reactor (IFR). For FY1996, Congress agreed to terminate research
on the gas turbine modular helium reactor (GT-MHR), although $5 million was provided in
FY1999 for a joint U.S.-Russian program to develop the GT-MHR for destruction of surplus
weapons plutonium. Funding for improved versions of today’s light water reactors (LWRs)
ended in FY1998.
1 “Production Costs Made Nuclear Cheapest Fuel in 1999, NEI Says,” Nucleonics Week, January 11,
2001, p. 3.
2 “Entergy Considers Picking Sites for Potential Plant Construction,” Nucleonics Week, May 3, 2001,
p. 1.
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The Bush Administration requested $18.1 million for FY2002 for a program to support
innovative nuclear energy research projects, the “nuclear energy research initiative” (NERI),
only about half the FY2001 level. The Conference Report on the FY2002 Energy and Water
Development Appropriations bill (H.R. 2311, H. Rept. 107-258), approved by Congress
November 1, 2001, 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
Conference Report provides $12 million. The program is designed to produce a “Generation
IV Technology Roadmap” for near-term commercial deployment of advanced nuclear power
plants. Included in the FY2002 funding is $3 million for sharing the nuclear industry’s costs
of applying to NRC for early site permits, combined operating licenses, and design
certifications for new reactors and reactor technology, as well as $2 million for testing new
reactor designs, fuels, and materials at DOE national laboratories. DOE issued an interim
report on new technology deployment in May 2001 under the program.
Another $4.5 million was requested for “nuclear energy plant optimization” (NEPO),
a research program to improve the economic competitiveness of existing nuclear power
plants. That level is $500,000 below the FY2001 appropriation, but the Conference Report
includes $7 million for the program.
Several nuclear research and development provisions are included in comprehensive
energy legislation (H.R. 4) approved by the House August 2. A DOE “advanced fuel
recycling technology research and development program” would be authorized at $10 million
in FY2002. The bill would authorize appropriations of $60 million for NERI, $15 million for
NEPO, and $20 million for the nuclear energy technologies program for FY2002, with “such
sums as are necessary” for the following two fiscal years.
Senator Murkowski’s comprehensive energy bill, S. 388, would authorize $60 million
for NERI, $10 million for NEPO, and $25 million for Nuclear Energy Technology
Development in FY2002, with “such sums as are necessary” authorized for all three programs
in future years.
Senator Domenici’s nuclear energy bill, S. 472, includes similar authorizations for NERI
and NEPO but contains a more extensive section on development of advanced reactor
designs. DOE would be required to give Congress a research and development plan that
would lead toward the selection in 2004 of one or more advanced nuclear energy systems for
demonstration through a public and private partnership. The bill would authorize $50 million
for the program in FY2002 and such sums as necessary through FY2006.
DOE justifies its efforts to encourage the continued operation of commercial U.S.
nuclear plants as an important element in meeting national goals for reducing carbon dioxide
emissions. Because nuclear plants directly emit no carbon dioxide, the continued operation
of existing U.S. reactors avoids more than 620 million tons of carbon dioxide emissions each
year, according to the FY2000 DOE budget justification. Opponents have criticized the
nuclear energy research proposals as providing wasteful subsidies to an industry that they
believe should be phased out.
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Shutting down the ALMR program and its associated research facilities, particularly the
Experimental Breeder Reactor II (EBR-II) in Idaho, is expected to take several years. Some
ALMR facilities are being used for electrometallurgical treatment of EBR-II fuel, for which
$45 million was appropriated in FY1999. Opponents of the program have expressed concern
that such activities could help keep the ALMR/IFR program alive and have called for
Congress to halt further funding. Supporters contend that the technology could convert
unstable fuel elements into safer forms for storage and disposal. DOE issued a Record of
Decision September 19, 2000, to use the electrometallurgical process for full-scale treatment
of spent fuel at the Idaho site. Electrometallurgical treatment could be included in the DOE
advanced fuel recycling program authorized by H.R. 4, and is provided $26 million in the
Conference Report on the FY2002 Energy and Water Development Appropriations bill.
Despite the federal cutbacks in developing new reactors, the recently tightening
electricity supply situation has led to the first serious consideration of new U.S. reactor
construction in many years. Substantial attention has focused on Exelon’s participation in a
consortium that is considering construction of an advanced “pebble bed” high-temperature
gas-cooled reactor in South Africa, which could lead to construction of similar reactors in the
United States. The reactor’s fuel would be encased within tennis-ball-sized spheres that
would be designed to withstand maximum accident temperatures without damage. The
consortium plans to decide whether to proceed with the South Africa project by autumn of
2002.
Nuclear Power Plant Safety and Regulation
Safety
Controversy over safety has dogged nuclear power throughout its development,
particularly following the 1979 Three Mile Island accident in Pennsylvania and the April 1986
Chernobyl disaster in the former Soviet Union. In the United States, safety-related
shortcomings have been identified in the construction quality of some plants, plant operation
and maintenance, equipment reliability, emergency planning, and other areas. In addition,
mishaps have occurred in which key safety systems have been disabled. NRC’s oversight of
the nuclear industry is an ongoing issue; nuclear utilities often complain that they are subject
to overly rigorous and inflexible regulation, but nuclear critics charge that NRC frequently
relaxes safety standards when compliance may prove difficult or costly to the industry. In the
wake of the September 11, 2001, terrorist attacks against the United States, concerns about
nuclear power plant security have received heightened attention.
Domestic Reactor Safety. In terms of public health consequences, the safety record
of the U.S. nuclear power industry in comparison with other major commercial energy
technologies has been excellent. In more than 2,250 reactor-years of operation in the United
States, the only incident at a commercial power plant that might lead to any deaths or injuries
to the public has been the Three Mile Island accident, in which more than half the reactor core
melted. Public exposure to radioactive materials released during that accident is expected to
cause fewer than five deaths (and perhaps none) from cancer over the following 30 years.
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The relatively small amounts of radioactivity released by nuclear plants during normal
operation are not generally believed to pose significant hazards. Documented public exposure
to radioactivity from nuclear power plant waste has also been minimal, although the potential
long-term hazard of waste disposal remains controversial. There is substantial scientific
uncertainty about the level of risk posed by low levels of radiation exposure; as with many
carcinogens and other hazardous substances, health effects can be clearly measured only at
relatively high exposure levels. In the case of radiation, the assumed risk of low-level
exposure has been extrapolated mostly from health effects documented among persons
exposed to high levels of radiation, particularly Japanese survivors of nuclear bombing.
The consensus among most safety experts is that a severe nuclear power plant accident
in the United States is likely to occur less frequently than once every 10,000 reactor-years of
operation. These experts believe that most severe accidents would have small public health
impacts, and that accidents causing as many as 100 deaths would be much rarer than once
every 10,000 reactor-years. On the other hand, some experts challenge the complex
calculations that go into predicting such accident frequencies, contending that accidents with
serious public health consequences may be more frequent.
Nuclear power plant security has been an ongoing issue, but concerns were considerably
increased following the terrorist attacks on New York and Washington, D.C. At NRC’s
recommendation, nuclear power plants in the United States went to the highest level of
security immediately after the attacks. The NRC Emergency Operations Center was
activated, as well as regional NRC emergency centers, all of which maintained constant
contact with the nation’s nuclear power plants. In light of the unprecedented attacks, NRC
Chairman Richard A. Meserve, with the support of the other Commissioners, ordered a staff
review of NRC’s security regulations and procedures.
NRC regulations require nuclear power plants to be designed and operated to prevent
unauthorized intrusion and to withstand external attacks. However, reactor containment
structures are not specifically designed to withstand the types of deliberate air crashes that
were carried out September 11, according to an NRC fact sheet. To prevent internal threats,
background checks are required for unescorted access and computerized security doors
monitor the movement of personnel throughout each reactor building.
Nuclear plant security forces are tested periodically with mock attacks under NRC’s
Operational Safeguards Response Evaluation (OSRE) program. Several power plants are
scheduled to test the industry-initiated Safeguards Performance Assessment (SPA) program,
a security force self-assessment system that would replace the OSRE program.
Implementation of the SPA program has drawn criticism from both the industry and its critics.
Since the September 11 terrorist attacks, a number of groups have intensified their
criticism of NRC’s nuclear plant security requirements as being inadequate against
sophisticated assaults. The House Energy and Commerce Committee included nuclear
security provisions in a bill to extend the Price-Anderson Act nuclear liability system (H.R.
2983), approved by the panel October 31, 2001. The bill would require the federal
government to study a wide variety of security threats to nuclear facilities and to determine
which threats would come from enemies of the United States and therefore be the
responsibility of the federal government and which threats should be guarded against by
nuclear power plant owners. NRC would be required to issue new regulations to ensure that
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nuclear power plants would be prepared for the threats identified as their responsibility.
Other provisions would require that NRC continue designing, implementing, and evaluating
security exercises at nuclear plants, rather than relying on an industry self-assessment
program, and require NRC to issue new security regulations for nuclear materials
transportation.
Reactor Safety in the Former Soviet Bloc. The Chernobyl accident was by far
the worst nuclear power plant accident to have occurred anywhere in the world. At least 31
persons died quickly from acute radiation exposure or other injuries, and between 5,000 and
45,000 fatal cancers may result over the next 40 years from radiation released during the
accident. Those cancers would represent an increase in the cancer rate of about half a percent
among the 75 million people in the western part of the former Soviet Union and a smaller
increase in non-Soviet Europe, with a higher increase possible in the contaminated region
around the plant.
According to a November 1995 report by the Organization for Economic Cooperation
and Development (OECD), the primary observable health consequence of the accident has
been a dramatic increase in childhood thyroid cancer. About 1,000 cases of childhood thyroid
cancer have been reported in certain regions surrounding the destroyed reactor — a rate that
is as much as a hundred times the pre-accident level, according to OECD. The death rate for
accident cleanup workers has also risen measurably, the organization reported. The OECD
report estimated that about 50,000 square miles of land in Belarus, Ukraine, and Russia were
substantially contaminated with radioactive cesium.
World concern in recent years has focused on the safety of 13 other Chernobyl-type
reactors (called RBMKs) that are still operating in the former Soviet Union (the last operating
Chernobyl unit was permanently closed at the end of 2000). Despite safety improvements
made after the Chernobyl disaster, the RBMKs remain inherently unstable and dangerous,
according to many Western experts. Also still operating in the former Soviet bloc are 10
early-model Soviet light water reactors (LWRs), which are similar to most Western reactors
but suffer from major safety deficiencies, such as the lack of Western-style emergency cooling
systems.
The United States is providing direct assistance for upgrading the safety of Soviet-
designed reactors, a program being coordinated by DOE, NRC, the Agency for International
Development (AID), and the Department of State. The Conference Report on the FY2002
Energy and Water Development Appropriations bill provides DOE $10 million for improving
the operation and physical condition of Soviet-designed nuclear power plants. The General
Accounting Office estimates that $1.93 billion had been provided through November 1999
by the United States and other industrialized nations to improve the safety of Soviet-designed
reactors. Of that amount, $753 was contributed by the European Union, $532 by the United
States, $43 million by the International Atomic Energy Agency, and the remainder from 14
other countries.
Regulation
For many years a top priority of the nuclear industry was to modify the process for
licensing new nuclear plants. No electric utility would consider ordering a nuclear power
plant, according to the industry, unless licensing became quicker and more predictable, and
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designs were less subject to mid-construction safety-related changes ordered by NRC. The
Energy Policy Act of 1992 largely implemented the industry’s licensing goals.
Nuclear plant licensing under the Atomic Energy Act of 1954 (P.L. 83-703; U.S.C.
2011-2282) had historically been a two-stage process. NRC first issued a construction permit
to build a plant, and then, after construction was finished, an operating permit to run it. Each
stage of the licensing process involved complicated proceedings. Environmental impact
statements also are required under the National Environmental Policy Act.
Over the vehement objections of nuclear opponents, the Energy Policy Act (P.L. 102-
486) provides a clear statutory basis for one-step nuclear licenses, which would combine the
construction permits and operating licenses and allow completed plants to operate without
delay if construction criteria are met. NRC would hold preoperational hearings on the
adequacy of plant construction only in specified circumstances. H.R. 4 would specify that a
reactor’s 40-year operating period under a combined license would begin when the reactor
is ready to operate, rather than when the license is issued prior to construction.
A fundamental concern in the nuclear regulatory debate is the performance of NRC in
issuing and enforcing nuclear safety regulations. The nuclear industry and its supporters have
regularly complained that unnecessarily stringent and inflexibly enforced nuclear safety
regulations have burdened nuclear utilities and their customers with excessive costs. But
many environmentalists, nuclear opponents, and other groups charge NRC with being too
close to the nuclear industry, a situation that they say has resulted in lax oversight of nuclear
power plants and routine exemptions from safety requirements.
Primary responsibility for nuclear safety compliance lies with nuclear plant owners, who
are required to find any problems with their plants and report them to NRC. Compliance is
also monitored directly by NRC, which maintains at least two resident inspectors at each
nuclear power plant. The resident inspectors routinely examine plant systems, observe the
performance of reactor personnel, and prepare regular inspection reports. For serious safety
violations, NRC often dispatches special inspection teams to plant sites.
In response to congressional criticism, NRC has begun reorganizing and overhauling
many of its procedures. The Commission is moving toward “risk-informed regulation,” in
which safety enforcement is guided by the relative risks identified by detailed individual plant
studies. NRC began implementing a new reactor oversight system April 2, 2000, that relies
on a series of performance indicators to determine the level of scrutiny that each reactor
should receive. However, the Union of Concerned Scientists has questioned the validity of
the individual plant studies on which risk-informed regulation is based.
Senator Domenici’s nuclear energy bill, S. 472, would change a number of licensing
requirements and procedures, including the elimination of foreign ownership restrictions,
authorization of informal licensing hearings in place of adjudicatory proceedings, and
elimination of automatic Justice Department antitrust reviews of license applications.
Decommissioning and Life Extension
When nuclear power plants end their useful lives, they must be safely removed from
service, a process called decommissioning. NRC requires nuclear utilities to make regular
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contributions to special trust funds to ensure that money is available to remove all radioactive
material from reactors after they are closed. Because no full-sized U.S. commercial reactor
has yet been completely decommissioned, which can take several decades, the cost of the
process can only be estimated. Decommissioning cost estimates cited by a 1996 DOE report,
for one full-sized commercial reactor, ranged from about $150 million to $600 million in 1995
dollars. Disposal of large amounts of low-level waste, consisting of contaminated reactor
components, concrete, and other materials, is expected to account for much of those costs.
Consolidation of the nuclear industry has raised questions about the tax treatment of
decommissioning funds when a commercial reactor is sold. H.R. 4 specifies that dedicated
nuclear decommissioning funds can be transferred without incurring additional tax liabilities.
For planning purposes, it is generally assumed that U.S. commercial reactors could be
decommissioned at the end of their 40-year operating licenses, although several plants have
been retired before their licenses expired and others could seek license renewals to operate
longer. NRC rules that took effect June 13, 1992, allow plants to apply for a 20-year license
extension, for a total operating life of 60 years. On March 23, 2000, the Calvert Cliffs nuclear
plant in Maryland became the first U.S. plant to receive a license extension. Two other
extensions have since been granted, several others are pending, and more are expected to be
filed. Assuming a 40-year lifespan, without life extension, more than half of today’s 103
licensed reactors could be decommissioned by the year 2016.
Nuclear Accident Liability
Liability for damages to the general public from nuclear accidents is controlled by the
Price-Anderson Act (primarily Section 170 of the Atomic Energy Act of 1954, 42 U.S.C.
2210). The act is up for reauthorization on August 1, 2002, but existing nuclear plants will
continue to operate under the current Price-Anderson liability system if no extension is
enacted.
Under Price-Anderson, the owners of commercial reactors must assume all liability for
accident damages to the public. To pay any such damages, each licensed reactor must carry
the maximum liability insurance available, currently $200 million. Any damages exceeding
that amount are to be assessed equally against all operating commercial reactors, up to $83.9
million per reactor. Those assessments – called “retrospective premiums” – would be paid
at an annual rate of no more than $10 million per reactor, to limit the potential financial
burden on reactor owners following a major accident. Including three that are not operating,
106 commercial reactors are currently covered by Price-Anderson.
For each accident, therefore, the Price-Anderson liability system currently would provide
up to $9.09 billion in public compensation. That total includes the $200 million in insurance
coverage carried by the reactor that had the accident, plus the $83.9 million in retrospective
premiums from each of the 106 currently covered reactors. On top of those payments, a 5%
surcharge may also be imposed, raising to total per-reactor retrospective premium to $88.1
million and total compensation to $9.5 billion. Under Price-Anderson, the nuclear industry’s
liability for an accident is capped at that amount, which varies depending on the number of
licensed reactors, the amount of available insurance, and an inflation adjustment that is made
every five years. Payment of any damages above that liability limit would require
congressional action.
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The Price-Anderson Act also covers contractors who operate hazardous DOE nuclear
facilities. The liability limit for DOE contractors is the same as for commercial reactors,
except when the limit for commercial reactors drops because of a decline in the number of
covered reactors. Since 1998, the number of covered commercial reactors has dropped from
110 to 106, so the commercial liability limit has dropped from $9.43 billion to $9.09 billion.
Under the law, however, the limit for DOE contractors does not decline and so remains at
$9.43 billion. Price-Anderson authorizes DOE to indemnify its contractors for the entire
amount, so that damage payments for accidents at DOE facilities would ultimately come from
the Treasury. However, the law also allows DOE to fine its contractors for safety violations,
and contractor employees and directors can face criminal penalties for “knowingly and
willfully” violating nuclear safety rules.
The House Energy and Commerce Committee approved a 15-year extension of the
Price-Anderson liability system October 31, 2001 (H.R. 2983). The total retrospective
premium for each reactor would be raised to $94 million and the limit on per-reactor annual
payments raised to $15 million, with both to be adjusted for inflation every five years. For
the purposes of those payment limits, a nuclear plant consisting of multiple small reactors
(100-300 megawatts, up to a total of 950 megawatts) would be considered a single reactor.
Therefore, a power plant with six 120-megawatt pebble-bed modular reactors would be liable
for retrospective premiums of up to $94 million, rather than $584 million. The liability limit
on DOE contractors would be set at $10 billion per accident, also to be adjusted for inflation.
The mechanism for imposing fines on DOE contractors has become controversial since
the 2000 startup of the National Nuclear Security Administration (NNSA) within DOE to
administer the Department’s nuclear defense programs. NNSA has a memorandum of
understanding with DOE’s Office of Environment, Safety, and Health (ESH) to continue
inspecting facilities now administered by NNSA. ESH cannot directly impose penalties for
violations at NNSA facilities but can recommend that they be imposed by the NNSA
administrator.
The House Energy and Commerce Committee Price-Anderson bill (H.R. 2893) would
authorize the federal government to sue DOE contractors to recover at least some of the
compensation that the government would pay for any accident caused by intentional DOE
contractor management misconduct. Such cost recovery would be limited to the amount of
the contractor’s profit under the contract involved, and no recovery would be allowed from
nonprofit contractors.
Although DOE is generally authorized to impose civil penalties on its contractors for
violations of nuclear safety regulations, Atomic Energy Act §234A specifically exempts seven
non-profit DOE contractors and their subcontractors. Under the same section, DOE
automatically remits any civil penalties imposed on non-profit educational institutions serving
as DOE contractors. The Energy and Commerce Price-Anderson bill would for future
contracts eliminate the civil penalty exemption for the seven listed non-profit contractors and
DOE’s authority to automatically remit penalties imposed on all non-profit educational
institutions serving as contractors. However, the bill would limit the civil penalties against
a non-profit contractor to the amount of discretionary fees (incentive fees above actual cost
reimbursement) awarded by DOE under that contract. The same provisions were contained
in H.R. 723, ordered reported by the House Energy and Commerce Committee on February
28, 2001.
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In approving an identical measure during the 106th Congress (H.R. 3383, H.Rept. 106-
695, Part 1), the Commerce Committee contended that elimination of the civil penalty
exemption was necessary to improve nuclear safety enforcement at facilities operated by
exempt contractors. However, DOE warned in its March 1999 Report to Congress on the
Price-Anderson Act [http://www.gc.doe.gov] that elimination of the exemption could
discourage non-profit institutions from operating DOE nuclear facilities.
The Price-Anderson Act’s limits on liability were crucial in establishing the commercial
nuclear power industry in the 1950s. Supporters of the Price-Anderson system contend that
it has worked well since that time in ensuring that nuclear accident victims would have a
secure source of compensation, at little cost to the taxpayer. However, opponents contend
that Price-Anderson subsidizes the nuclear power industry by protecting it from some of the
financial consequences of the most severe conceivable accidents. The 2001 Green Scissors
Report, issued by a coalition of environmental and citizens groups, calls for the Price-
Anderson Act to be repealed and for the nuclear industry to purchase all necessary risk
insurance on the private market.
Senator Bingaman’s chairman’s mark for an omnibus energy bill includes a permanent
extension of Price-Anderson nuclear indemnification authority for DOE contractors. A 10-
year extension of the Price-Anderson indemnification authority for NRC and DOE is included
in Senator Murkowski’s comprehensive energy bill, S. 388, and in Senator Domenici’s
nuclear energy proposal, S. 472. As recommended by NRC in an October 1998 report to
Congress, the annual per-reactor limit on retrospective premiums would be doubled to $20
million under both bills. Both bills and the chairman’s mark would raise the accident liability
limit for DOE nuclear contractors to $10 billion, subject to inflation. All three proposals also
include the provisions of H.R. 723 on DOE contractor penalties.
Without an extension of the law, any commercial nuclear reactor licensed after August
1, 2002, could not be covered by the Price-Anderson system, although existing reactors
would continue to be covered. Because no new U.S. reactors are currently planned, missing
the deadline for extension would have little short-term effect on the nuclear power industry.
However, if Price-Anderson expired, DOE would have to use alternate indemnification
authority for hazardous nuclear contracts signed after that time.
Nuclear Waste Management
One of the most controversial aspects of nuclear power is the disposal of radioactive
waste, which can remain hazardous for thousands of years. Each nuclear reactor produces
an annual average of about 20 tons of highly radioactive spent nuclear fuel and 50-200 cubic
meters of low-level radioactive waste. Upon decommissioning, contaminated reactor
components are also disposed of as low-level waste.
The federal government is responsible for permanent disposal of commercial spent fuel
(paid for with a fee on nuclear power) and federally generated radioactive waste, while states
have the authority to develop disposal facilities for commercial low-level waste. Spent fuel
and other highly radioactive waste is to be isolated in a deep underground repository,
consisting of a vast network of chambers carved from rock that has remained geologically
undisturbed for hundreds of thousands of years.
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DOE is studying Nevada’s Yucca Mountain as the site for such a geologic repository,
as required by the Nuclear Waste Policy Act of 1982 (NWPA, P.L. 97-425) as amended.
DOE issued a “viability assessment” in December 1998 that found no insurmountable
problems with the site, and a final recommendation on the site’s suitability is currently planned
for FY2002, a delay from the previous goal of FY2001. A preliminary site suitability
evaluation released by DOE August 21, 2001, found that the site could meet Environmental
Protection Agency (EPA) standards.
The Bush Administration sought $445 million for the DOE civilian waste disposal
program for FY2002, a 14% boost over FY2001. The increased budget is intended to fund
the Yucca Mountain site recommendation and prepare for a repository construction permit
application to the Nuclear Regulatory Commission (NRC) in FY2003. The House included
all but $2 million of the request in the FY2002 Energy and Water Development bill, but the
Senate voted to cut the program to $275 million. The Conference Report on the measure
provides $375 million for the program.
The Energy and Commerce Committee had included a provision in H.R. 4 to give off-
budget status to the Nuclear Waste Fund, which holds fees collected from nuclear utilities to
pay for the DOE civilian waste program. However, the language was struck by the rule for
considering the bill on the floor. Taking the fund off-budget could have eased the way for
higher appropriations for the Yucca Mountain if the site were approved for repository
construction.
As originally enacted, the 1982 nuclear waste law established procedures and timetables
for DOE to examine candidate sites for at least one deep repository for commercial spent fuel
(with the option of also taking government high-level waste), to begin operating by January
31, 1998. Nuclear utilities were required to sign a contract with DOE for disposal services.
The Nuclear Waste Fund, consisting of revenues from a fee on nuclear power, was created
to pay for the disposal program. However, DOE could not spend money from the fund
without annual congressional appropriations. The waste repository was required to meet
Environmental Protection Agency (EPA) standards and be licensed by NRC.
Controversy over implementation of the waste law led to fundamental revisions included
in the Omnibus Budget Reconciliation Act of 1987 (P.L. 100-203). The revised waste law
singled out Yucca Mountain as the only candidate site for a permanent waste repository.
DOE’s current goal for opening the Yucca Mountain waste repository is 2010 — 12
years later than required by NWPA. With no federal storage or disposal facility available by
the nuclear waste law’s 1998 deadline, nuclear power plants must continue storing their waste
at reactor sites much longer than originally anticipated. Most are expected to build additional
on-site storage facilities, a move that has drawn strong state and local opposition in several
recent cases. A federal appeals court ruled August 31, 2000, that nuclear power plant owners
could sue DOE for damages resulting from the missed 1998 disposal deadline. (For more
background, see CRS Report 96-212, Civilian Nuclear Spent Fuel Temporary Storage
Options.)
H.R. 4 would authorize a DOE research program on spent fuel reprocessing “in support
of evaluation of alternative national strategies for spent nuclear fuel.” S. 388 and S. 472
would establish an Office of Spent Nuclear Fuel Research to conduct such research.
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Supporters of reprocessing research contend that such technology could extract valuable
energy from spent fuel and reduce its long-lived hazardous constituents, such as plutonium.
However, any treatment of spent fuel that involves separating plutonium for re-use is highly
controversial because of plutonium’s potential as a weapons material.
(For further details, see CRS Issue Brief IB92059, Civilian Nuclear Waste Disposal.)
Nuclear Weapons Proliferation
The United States has been a leader of worldwide efforts to prevent the spread of
nuclear weapons. To this end, the international community and many individual states have
agreed to a range of treaties, laws, and agreements, known collectively as the nuclear
nonproliferation regime, aimed at keeping nations that do not have nuclear weapons from
acquiring them.
The nonproliferation regime has also been concerned with preventing terrorists from
obtaining a nuclear weapon or the materials to craft one. The attacks on New York and
Washington September 11 added a new level of reality to the threat that terrorists might
acquire a nuclear weapon and explode it in a populated area.
Other nonproliferation concerns include a number of regional crisis points: the India-
Pakistan arms race, North Korea, and the Middle East, primarily Iraq, Iran, and Israel. There
is concern about China’s actions in expanding its nuclear force, and of Chinese and Russian
activities that may encourage proliferation in the other regions.
Disposing of plutonium and highly enriched uranium from dismantled Russian nuclear
weapons, while preventing it from falling into the hands of terrorists or other proliferators,
is another current focus of nonproliferation activities. In the longer term, the major question
is fulfilling the pledge in the Nuclear Nonproliferation Treaty (NPT) by the nuclear weapons
states, including the United States, to pursue complete nuclear disarmament, in the face of
skepticism about the possibility, or even the wisdom, of achieving that goal.
Numerous U.S. agencies have programs related to nuclear nonproliferation, but the
major activities are carried out by the Departments of State, Defense, and Energy. DOE’s
program is part of the National Nuclear Security Administration, which is responsible for the
management of the U.S. nuclear weapons program.
The attacks of September 11 have increased interest in assuring that Russian nuclear
materials do not fall into terrorists’ hands, and some increase in funding DOE’s non-
proliferation activities in the Former Soviet Union has been promised by House and Senate
appropriators.
For detailed discussion of nonproliferation policy, see CRS Issue Brief IB10091, Nuclear
Nonproliferation Issues.
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Environmental Problems at Nuclear Weapons Facilities
The aging U.S. nuclear weapons production complex, managed by the Department of
Energy, faces long-term problems with environmental contamination, radioactive waste
disposal, and other environmental risks. DOE’s Environmental Management Program, which
is responsible for cleaning up the nuclear weapons complex, has grown into DOE’s largest
activity since its formal establishment in 1989. The Bush Administration sought $5.9 billion
for the program in FY2002, a 5.7% reduction from FY2001. The House-passed Energy and
Water Appropriations bill provides $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
Conference Report provides $7.14 billion for the program.
A DOE proposal for accelerating the cleanup program, issued in June 1998, estimated
that total costs could reach about $150 billion through 2070, with cleanup completed at 41
of 53 major sites by 2006. DOE managers contend that substantial long-term savings can be
gained by focusing on completing work at those sites, allowing the earliest possible
termination of infrastructure costs.
Federal Funding for Nuclear Energy Programs
The following tables summarize current funding for DOE nuclear fission programs and
uranium activities, and for the NRC. The sources for the funding figures are Administration
budget requests and committee reports on the Energy and Water Development
Appropriations Acts, which fund all nuclear programs. President Bush submitted his FY2002
funding request to Congress April 9, 2001. The House approved the FY2002 Energy and
Water Development Appropriations bill June 28, 2001 (H.R. 2311, H.Rept. 107-112), and
the Senate approved its version of the bill July 19, 2001 (S. Rept. 107-39). The Conference
Report on the measure (H. Rept. 107-258) was approved by the House and Senate November
1, 2001.
Table 1. Funding for the Nuclear Regulatory Commission
(budget authority in millions of current dollars)
FY2001
FY2002
FY2002
FY2002
FY2002
Approp.
Request
House
Senate
Conf.
Nuclear Regulatory Commission
Reactor Safety
219.2
231.4
– *
–
–
Nuclear Materials Safety
52.5
55.0
–
–
–
Nuclear Waste Safety
59.3
63.2
–
–
–
International Nuclear Safety
4.8
5.1
–
–
–
Management and Support
146.1
152.2
–
–
–
Inspector General
5.5
6.2
6.2
5.5
6.2
TOTAL NRC BUDGET
523.1
487.3
513.1
523.1
522.4
AUTHORITY*
* Entirely offset by fees on NRC licensees through FY2000, plus payments from the Nuclear Waste
Fund for repository licensing. FY2001 appropriation is offset 98%, FY2002 request and Conference
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Report figure is offset 96%, minus funding from the Nuclear Waste Fund, and offset for Senate
FY2002 appropriation is slightly lower; House and Senate FY2002 subcategories are not specified.
Table 2. DOE Funding for Nuclear Activities
(budget authority in millions of current dollars)
FY2001
FY2002
FY2002
FY2002
FY2002
Approp.
Request
House
Senate
Conf.
Nuclear Energy (selected programs)
Advanced Radioisotope Power Systems
31.8
29.1
28.2
29.1
29.0
Program Direction
23.0
25.1
20.5
25.1
23.0
University Reactor Assistance
12.0
12.0
15.8
19.0
17.5
Nuclear Energy Plant Optimization
5.0
4.5
5.0
9.0
7.0
Nuclear Energy Research Initiative
34.8
18.1
23.1
38.0
32.0
Nuclear Energy Technologies
7.5
4.5
4.5
14.0
12.0
Isotope Support
18.7
18.2
16.2
18.2
17.2
International Nuclear Safety*
19.4
13.8
10.0
19.5
10.0
Total, Nuclear Energy
243.6
223.1
224.1
264.1
250.5
Uranium Facilities Maintenance and
392.5
363.4
393.4
408.7
418.4
Remediation
Nuclear Waste Activities
Environmental Management
6,266.9
5,912.8
7,031.9
7,275.8
7,135.8
Nuclear Waste Fund Activities**
390.4
445.0
443.0
275.0
375.0
* Funded under “Defense Nuclear Nonproliferation.”
** Funded by a 1-mill-per-kilowatt-hour fee on nuclear power, plus appropriations for defense waste
disposal.
LEGISLATION
H.R. 4 (Tauzin)
Securing America’s Future Energy Act of 2001. Comprehensive energy bill that includes
several nuclear energy provisions. Introduced July 27, 2001; referred to multiple committees.
Text based on four reported bills: H.R. 2436 (Resources, H. Rept. 107-160); H.R. 2460
(Science, H. Rept. 107-177); H.R. 2511 (Ways and Means, H. Rept. 107-157); and H.R.
2587 (Energy and Commerce, H. Rept. 107-162, pts. 1-2). Passed House August 2, 2001,
by vote of 240-189.
H.R. 723 (Barton)
Removes an exemption from civil penalties for nuclear safety violations at DOE facilities
by non-profit contractors. Introduced February 26, 2001; referred to Energy and Commerce
Committee. Approved by Committee February 28, 2001.
H.R. 2983 (Wilson)
Price-Anderson Reauthorization Act of 2001. Extends Price-Anderson Act nuclear
accident liability system for 15 years and increases liability limits. Allows nuclear power
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plants consisting of multiple small units to be counted as a single reactor in assessing accident
liability. Authorizes the federal government to recover at least some of any damages it was
forced to pay on behalf of indemnified Department of Energy (DOE) nuclear contractors for
accidents caused by intentional management misconduct. Requires NRC to issue new
security regulations for nuclear power plants and the transportation of nuclear materials.
Introduced October 2, 2001; referred to Committee on Energy and Commerce. Ordered
reported by Committee October 31, 2001.
S. 388 (Murkowski)
National Energy Security Act of 2001. Includes provisions to encourage increased
generation by existing nuclear power plants, authorize nuclear research and development, and
extend the Price-Anderson nuclear liability system. Introduced February 26, 2001; referred
to Energy and Natural Resources Committee.
S. 472 (Domenici)/H.R. 1679 (Graham)
Nuclear Energy Electricity Supply Assurance Act of 2001. Authorizes nuclear energy
research and development programs, provides incentives for increasing capacity at existing
nuclear power plants, modifies nuclear licensing requirements, and extends the Price-
Anderson Act nuclear liability system. Senate bill introduced March 7, 2001; referred to
Energy and Natural Resources Committee. House bill introduced May 2, 2001; referred to
Committees on Energy and Commerce and Science.
S. 597 (Bingaman)
Comprehensive and Balanced Energy Policy Act of 2001. Introduced March 22, 2001;
referred to Committee on Energy and Natural Resources. Includes provisions extending
Price-Anderson liability system for DOE nuclear contractors and authorizing nuclear research
and development. Committee markup began August 2, 2001.
S. 919 (Thurmond)
Requires the Department of Energy to study the feasibility of developing commercial
nuclear power plants at existing DOE nuclear sites. Introduced May 21, 2001; referred to
Committee on Energy and Natural Resources.
S. 1591 (Voinovich)
Nuclear Safety and Promotion Act of 2001. Reauthorizes Price-Anderson Act for 10
years, modifies nuclear power plant licensing requirements, and addresses potential shortages
of skilled nuclear safety personnel at the Nuclear Regulatory Commission. Introduced
October 30, 2001; referred to Committee on Environment and Public Works.
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