Order Code IB88090
CRS Issue Brief for Congress
Received through the CRS Web
Nuclear Energy Policy
Updated March 12, 2002
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 and Security
Domestic Reactor Safety
Security and Emergency Planning
Reactor Safety in the Former Soviet Bloc
Licensing and Regulation
Decommissioning and Life Extension
Nuclear Accident Liability
Nuclear Waste Management
Nuclear Weapons Proliferation
Federal Funding for Nuclear Energy Programs
LEGISLATION

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Nuclear Energy Policy
SUMMARY
Nuclear energy policy issues facing Con-
extension bill passed by the House November
gress include questions about radioactive
27, 2001 (H.R. 2983). An extra $36 million
waste management, research and development
for nuclear power plant security was provided
priorities, power plant safety and regulation,
by the FY2002 supplemental appropriations
terrorism, the Price-Anderson Act accident
bill, included in the FY2002 Defense Appro-
liability system, nuclear weapons proliferation,
priations Bill (H.R. 3338), passed by Congress
and technology for producing nuclear fuel.
December 20, 2001.
Federal funding for nuclear energy re-
Disposal of highly radioactive waste has
search and development was substantially
been one of the most controversial aspects of
reduced by the Clinton Administration, and the
nuclear power. The Nuclear Waste Policy Act
Bush Administration proposed further cuts.
of 1982 (P.L. 97-425), as amended in 1987,
However, in the Energy and Water Develop-
requires DOE to begin detailed physical
ment Appropriations for FY2002 (P.L. 107-
characterization of Yucca Mountain in Nevada
66), Congress generally rejected those reduc-
as a permanent underground repository for
tions. President Bush’s FY2003 budget re-
high-level waste. President Bush
quest includes $38.5 million for a Department
recommended approval of the site February
of Energy (DOE) effort to encourage deploy-
15, 2002.
ment of new commercial nuclear power plants
by 2010.
Whether progress on nuclear waste
disposal and other congressional action will
Several bills have been introduced in the
revive the U.S. nuclear power industry’s
107th Congress to encourage the growth of
growth will depend primarily on economic
nuclear power. A number of nuclear provi-
considerations. Natural gas- and coal-fired
sions are included in comprehensive energy
powerplants currently are favored over nuclear
legislation (H.R. 4) passed by the House
reactors for new generating capacity. Howev-
August 2, 2001. Nuclear energy provisions
er, rising energy prices and electricity short-
are also included in omnibus energy legislation
ages have led some utilities to consider build-
introduced by Senator Daschle December 5,
ing new reactors.
2001 (S. 1766). Similar provisions are in a
Daschle amendment (S.Amdt. 2917), which
Concern about the spread, or prolifera-
was offered on the floor to another energy bill,
tion, of nuclear weapons throughout the world
S. 517, on February 15, 2002.
has risen sharply since longtime rivals India
and Pakistan conducted competing nuclear
The September 11, 2001, terrorist attacks
weapons tests in May 1998. Recent height-
on the United States raised questions about
ened tensions in Southeast Asia have focused
nuclear power plant security. The Nuclear
attention on the effectiveness of the interna-
Regulatory Commission (NRC) immediately
tional nuclear nonproliferation regime. In
recommended that U.S. reactors go to the
addition, the September 11 attacks have raised
highest security level and began evaluating
new concerns about the potential for terrorists
plant security requirements. Reactor security
to detonate nuclear explosives or radioactive
provisions were included in a Price-Anderson
“dirty bombs.”
Congressional Research Service ˜ The Library of Congress

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MOST RECENT DEVELOPMENTS
President Bush’s FY2003 budget request, submitted to Congress February 4, would
provide $38.5 million for a Department of Energy (DOE) effort to encourage deployment
of new commercial nuclear power plants by 2010. The overall budget request for nuclear
energy supply programs is $250.7 million, about $50 million below the FY2002
appropriation. A 40% increase is being sought for the DOE nuclear waste disposal
program, to $527 million. According to DOE, the increase is needed for preparation of a
license application to the Nuclear Regulatory Commission (NRC) for a proposed national
nuclear waste repository at Yucca Mountain, Nevada. Funding for cleaning up
contaminated DOE nuclear facilities would rise nearly 15%, to $6.7 billion, including an
$800 million fund to pay for alternative cleanup strategies approved by environmental
regulators. NRC is requesting a 5% spending increase, to $605.6 million.
President Bush recommended to Congress February 15 that a license application be
submitted to NRC to build a nuclear waste repository at Yucca Mountain. Nevada Governor
Guinn announced the same day that he would exercise his right under the Nuclear Waste
Policy Act to send Congress a notice of disapproval for the Yucca Mountain site. That so-
called “state veto” would block further action at the site unless a congressional resolution
to approve the site were enacted into law within 90 days of continuous session after the state
veto had been received.
NRC announced February 14 that it would order nuclear power plants and other key
nuclear facilities to implement enhanced security measures, in light of continued security
threats. Some of the new measures were included in security recommendations issued to
nuclear plants after the September 11, 2001, terrorist attacks on New York and Washington,
D.C. NRC is continuing a “top to bottom” review of nuclear security regulations and
procedures.
In floor action on an omnibus energy bill (S. 517), the Senate on March 7 approved an
amendment to extend the Price-Anderson Act nuclear liability system 10 years for
commercial reactors and indefinitely for DOE nuclear contractors. The amendment would
allow nuclear plants consisting of several small modules to be treated as a single reactor
under the Price-Anderson system. The House approved a 15-year extension of the Price-
Anderson Act on November 27, 2001 (H.R. 2983).
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
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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 more than $3,000 per kilowatt of electric generating capacity (in
1997 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 88% of their total capacity in 2001,
according to industry statistics.1
The Calvert Cliffs nuclear plant received the first 20-year license extension from the
Nuclear Regulatory Commission (NRC) in March 2000; two more extensions have since been
granted, and extensions for 13 additional reactors are under review. 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.
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.2 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.
1 “U.S. Nuclear Record Sustained as 2001 Output nears 800-Million MWH,” Nucleonics Week,
February 14, 2002, p. 1.
2 “Production Costs Made Nuclear Cheapest Fuel in 1999, NEI Says,” Nucleonics Week, January 11,
2001, p. 3.
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A spike in fossil fuel prices and shortages of electricity during 2000-2001 helped
encourage 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.3 The Department of Energy (DOE) included an initiative in its FY2003
budget request to encourage construction of new commercial reactors by 2010.
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.
A nuclear energy bill by Senator Domenici, 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
The Bush Administration’s National Energy Policy, issued in May 2001, calls for “the
expansion of nuclear energy in the United States.” DOE’s FY2003 budget request reflects
that policy with a funding initiative to encourage construction of new commercial reactors by
2010 and additional funding for advanced reactor designs. However, total funding for nuclear
energy supply programs would decline by about $50 million from FY2002, to $250.1 million.
DOE’s “Nuclear Power 2010” initiative would receive $38.5 million in FY2003, an
increase of $30.5 million over FY2002. According to the DOE budget justification, the
program builds on efforts begun in FY2001 to “identify the technical, institutional and
regulatory barriers to the deployment of new nuclear power plants by 2010.” The program
seeks to deploy both a water-cooled reactor (similar to most existing commercial plants) and
a gas-cooled reactor (such as the design proposed by Exelon). DOE would pay up to half the
cost of site approval, reactor design certification, license applications, detailed design work,
and development of improved construction techniques.
DOE is requesting $8.0 million in FY2003 – double the FY2002 level – for advanced
reactor technologies that could be ready for deployment after 2010. A variety of concepts
are under consideration, according to the budget justification, including reactors fueled by
plutonium recovered through reprocessing of spent nuclear fuel.
The Administration’s National Energy Policy report contends that plutonium recovery
could reduce the long-term environmental impact of nuclear waste disposal and increase
3 “Entergy Considers Picking Sites for Potential Plant Construction,” Nucleonics Week, May 3, 2001,
p. 1.
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domestic energy supplies. However, opponents contend that the separation of plutonium
from spent fuel poses unacceptable environmental risks and undermines U.S. policy on
nuclear weapons proliferation.
DOE is requesting $18 million to study pyroprocessing technology and
electrometallurgical treatment of spent fuel from the Experimental Breeder Reactor II in
Idaho, a decrease of about $4.5 million from FY2002. No funding is requested for waste
transmutation, which involves bombarding nuclear waste with neutrons from a fast reactor
or particle accelerator to convert long-lived radioactive isotopes into radioisotopes with
shorter half-lives. Electrometallurgical treatment could be included in the DOE advanced fuel
recycling program authorized by H.R. 4.
A DOE program to support innovative nuclear energy research projects, the “nuclear
energy research initiative” (NERI), would receive $25 million under the FY2003 request, a
$7 million reduction from FY2002. No funding is requested for “nuclear energy plant
optimization” (NEPO), a research program to improve the economic competitiveness of
existing nuclear power plants.
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 Domenici’s nuclear energy bill, S. 472, includes an 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.
“Nuclear energy is the only expandable, large-scale electricity source that avoids air
emissions and meets the energy demands of a growing, modern economy,” according to the
DOE FY2003 budget justification. However, opponents have criticized DOE’s nuclear
research program as providing wasteful subsidies to an industry that they believe should be
phased out as unacceptably hazardous.
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” modular high-
temperature gas-cooled reactor (PBMR) 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.
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Future nuclear plant orders depend primarily on whether the PBMR and other new
designs can cut construction costs by more than half from their average of the past two
decades. It is not yet clear whether that cost goal can be achieved.4 (For more about nuclear
power plant costs, see CRS Report RL31064, Nuclear Power: Prospects for New
Commercial Reactors.)
Nuclear Power Plant Safety and Regulation
Safety and Security
Controversy over safety has dogged nuclear power throughout its development,
particularly following the March 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. 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.
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 in
World War II.
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
4 Weil, Jenny. “Exelon Considering Demo Plant in U.S. to Prove PBMR Concept.” Platts Nucleonics
Week. December 13, 2001. p. 1.
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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.
Security and Emergency Planning. 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.
NRC ordered all commercial reactors on February 26, 2002, to “implement interim
compensatory security measures for the generalized high-level threat environment.” Some
of the required security measures had been included in NRC’s previous security
recommendations. Although most of the detailed security requirements are secret, NRC said
they generally included:
! increase patrols at nuclear power plants;
! augmented security forces and capabilities;
! establishment of additional security posts;
! installation of additional physical barriers;
! vehicle checks at greater distances from vital facilities;
! enhanced plant security coordination with law enforcement and military
authorities; and
! more restrictive controls on personnel access to nuclear plant sites.
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 received $36 million in FY2002 supplemental appropriations to pay for
analyzing the “design basis threats” that nuclear plants must be able to prevent, strengthen
personnel screening procedures for nuclear facilities, and improve emergency preparedness
programs and emergency communication capabilities. The funding was included in the
FY2002 Defense Appropriations bill (H.R. 3338), approved by Congress December 20, 2001.
NRC is seeking an additional $29.3 million for FY2003 to continue its research effort on
security threats.
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. Groups critical of the
nuclear industry contend that such a crash could cause a reactor meltdown, but some industry
officials have expressed confidence that no radioactive release would occur. 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,
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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. A bill to extend the Price-Anderson Act nuclear liability system (H.R.
2983), approved by the House November 27, 2001, 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 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.
NRC would be required to take over the security forces at nuclear power plants under
companion bills introduced November 29, 2001, by Representative Markey and Senator Reid
(H.R. 3382, S. 1746). Supporters of the measure contend that existing guard forces hired by
reactor owners are inadequate, but NRC strongly opposes the provision on the grounds that
directly providing reactor security would interfere with its primary mission as an independent
safety regulator.
The legislation also would require NRC to establish stockpiles of potassium iodide (KI)
tablets within at least 50 miles of nuclear power plants. A separate bill focused specifically
on the KI issue was introduced by Representative Markey on November 13, 2001 (H.R.
3279). If taken quickly enough, the tablets can prevent radioactive iodine released during a
nuclear accident from being absorbed in the thyroid gland. On December 20, 2001, NRC
offered to supply potassium iodide tablets to states in which nuclear power plants are located
or nearby.
(For more information, see CRS Report RS21131, Nuclear Powerplants: Vulnerability
to Terrorist Attack, and CRS Terrorism Electronic Briefing Book fact sheet on Nuclear
Power Plant Emergency Response,
http://www.congress.gov/brbk/html/ebter138.html.)
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 thousands of
additional cancer deaths among the tens of millions of people exposed to radiation from the
accident may occur during the next several decades.
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 were 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 also rose measurably, the organization reported. The OECD report
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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. DOE is seeking $14.6 million in FY2003
for improving the operation and physical condition of Soviet-designed nuclear power plants,
a decrease of $6.5 million from FY2002. 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.
Licensing and 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
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. DOE’s Nuclear Power 2010
initiative proposes to pay up to half the cost of combined construction and operating licenses
for a water-cooled and a gas-cooled reactor. 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
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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
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. Industry officials have predicted that most
currently operating reactors will seek NRC license extensions. Assuming a 40-year lifespan,
without life extension, more than half of today’s 103 licensed reactors could be
decommissioned by the year 2016.
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Nuclear Accident Liability
Liability for damages to the general public from nuclear accidents is addressed 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 awarded to the public by the court system, and they must waive most of
their legal defenses following a severe accident (“extraordinary nuclear occurrence”). To pay
any such damages, each licensed reactor must carry financial protection in the amount of 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 the Price-Anderson retrospective premium
requirement.
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 the 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
covered 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 approval under special procedures in the act.
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 approved a 15-year extension of the Price-Anderson liability system
November 27, 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
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120-megawatt pebble-bed modular reactors would be liable for retrospective premiums of up
to $94 million, rather than $564 million. The liability limit on DOE contractors would be set
at $10 billion per accident, also to be adjusted for inflation.
In the Senate, a provision extending Price-Anderson was included as an amendment to
an omnibus energy bill (S. 517) on March 7, 2002. The Senate amendment, approved 78-21,
would extend Price-Anderson coverage for new commercial reactors for 10 years and
indefinitely for DOE contractors. The liability limit for commercial reactors would remain the
same, with a five-year inflation adjustment, and the limit for DOE contractors would be set
at $10 billion with an inflation adjustment. Modular reactors of 100-300 megawatts built
together in a plant of up to 1,300 megawatts could be considered a single reactor under Price-
Anderson.
The House-passed Price-Anderson bill would authorize the federal government to sue
DOE contractors to recover at least some of the compensation that the government had paid
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. H.R. 2983 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 Senate’s Price-Anderson Amendment to S. 517 includes similar provisions.
In approving an identical measure during the 106th Congress (H.R. 3383, H.Rept. 106-
695, Part 1), the House 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.
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
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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 large network of chambers carved from rock that has remained geologically
undisturbed for hundreds of thousands of years.
The Nuclear Waste Policy Act of 1982 (NWPA, P.L. 97-425) as amended, names
Nevada’s Yucca Mountain as the sole candidate site for a national geologic repository.
Following the recommendation of Energy Secretary Abraham, President Bush on February
15, 2002, recommended to Congress that DOE submit an application to NRC to construct
the Yucca Mountain repository. Under NWPA, the State of Nevada has 60 days after the
President’s recommendation to submit a “notice of disapproval” (or “state veto”) to
Congress. Nevada Governor Guinn announced on the day of the President’s recommendation
that he would veto the site. The state veto would block repository construction at Yucca
Mountain unless a congressional resolution were approved by majority vote within 90 days
and signed into law. (For details about congressional procedures in response to a state veto,
see CRS Report RL31135, Nuclear Waste Repository Siting: Expedited Procedures for
Congressional Approval.)
The Bush Administration is seeking $527 million for the DOE civilian waste disposal
program for FY2003, a 40% boost over FY2002. The increased budget is intended to pay
for preparation of a Yucca Mountain repository construction permit application, which DOE
expects to submit to NRC in FY2004 – a one-year delay from the previous schedule. The
additional funds are also needed for detailed repository design work, repository performance
studies, and transportation planning, according to DOE. Despite the delay in submitting a
construction application, DOE contends that it can still begin receiving waste at the site by
2010 as previously scheduled.
(For further details, see CRS Issue Brief IB92059, Civilian Nuclear Waste Disposal.)
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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 on September 11, 2001, 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 was included in the FY2002 Defense and
Emergency Supplemental Appropriations Act (P.L. 107-117). Increased funding for
nonproliferation programs in both DOE and the State Department was also included in the
Administration’s FY2003 budget request released in February 2002.
(For detailed discussion of nonproliferation policy, see CRS Issue Brief IB10091,
Nuclear Nonproliferation Issues.)
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 FY2003
funding request to Congress February 4, 2002.
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Table 1. Funding for the Nuclear Regulatory Commission
(budget authority* in millions of current dollars)
FY2001
FY2002
FY2003
Approp.
Approp.
Request
Nuclear Regulatory Commission
Reactor Safety
227.6
265.5
286.0
--
--
Nuclear Materials Safety
53.1
63.4
64.2
--
--
Nuclear Waste Safety
64.1
71.6
71.9
--
--
International Nuclear Safety
5.1
5.3
5.4
--
--
Management and Support
149.7
166.2
171.0
--
--
Inspector General
5.8
6.5
7.2
--
--
(Nuclear Plant Security)
(36.0*)
(29.3)
--
--
TOTAL NRC BUDGET
505.5
578.4
605.6
--
--
AUTHORITY
Offsetting fees
453.2
479.5
518.3
--
--
Net appropriation
52.3
99.0
87.3
--
--
* Additional $36 million for nuclear plant security provided by FY2002 supplemental appropriations
included in FY2002 Defense Appropriations Bill (H.R. 3338), approved by Congress December 20,
2001. The supplemental security funding is not to be offset by fees. The security funding is included
in the other NRC programs, so it should not be added to the NRC total as a separate funding
category.
Table 2. DOE Funding for Nuclear Activities
(budget authority in millions of current dollars)
FY2001
FY2002
FY2003
Approp.
Approp. Request
Nuclear Energy (selected programs)
Program Direction
23.8
17.5
24.3
--
--
University Reactor Assistance
12.0
17.5
17.5
--
--
Nuclear Energy Plant Optimization
4.9
7.0
0
--
--
Nuclear Energy Research Initiative
33.9
32.0
25.0
--
--
Nuclear Energy Technologies
7.5
12.0
46.5
--
--
Advanced Nuclear Medicine Initiative
2.5
2.5
0
--
--
Fast Flux Test Facility
38.4
36.4
36.1
--
--
Radiological Facilities Management
88.3
86.7
83.0
--
--
Spent Fuel Pyroprocessing
68.7
77.3
18.2
--
--
International Nuclear Safety*
20.5
21.1
14.6
--
--
Total, Nuclear Energy
277.1
293.9
250.7
--
--
Uranium Facilities Maintenance and
414.1
418.4
382.2
--
--
Remediation
Nuclear Waste Activities
Environmental Management
6,412.5
6,699.6
6,714.2
--
--
Nuclear Waste Fund Activities**
392.6
377.3
527.0
--
--
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* 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.
Passed House August 2, 2001, by vote of 240-189.
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
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; approved by House November 27, 2001.
H.R. 3279 (Markey)
Requires NRC to ensure sufficient stockpiles of potassium iodide tablets for use after
a nuclear accident. Introduced November 13, 2001; referred to Committee on Energy and
Commerce.
H.R. 3382 (Markey)/S. 1746 (Reid)
Requires NRC to take over operation of nuclear power plant security forces and to
ensure sufficient stockpiles of potassium iodide tablets for use after a nuclear accident.
Introduced November 29, 2001. House bill referred to Committee on Energy and Commerce;
Senate bill referred to Committee on Environment and Public Works.
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.
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S. 517, Amendment No. 2917 (Daschle)
Energy Policy Act of 2002. S.Amdt. 2917 substitutes language based on the text of S.
1766, including Price-Anderson provisions. Amendment offered on Senate floor February
15, 2002.
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.
S. 1766 (Daschle)
Energy Policy Act of 2002. Omnibus energy bill that includes Price-Anderson
reauthorization and other nuclear energy provisions. Introduced December 6, 2001. Used as
basis for S.Amdt. 2917, offered February 15, 2002, to S. 517.
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