Order Code IB88090
CRS Issue Brief for Congress
Received through the CRS Web
Nuclear Energy Policy
Updated March 15, 2006
Mark Holt
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
Licensing and Regulation
Reactor Security
Decommissioning
Nuclear Accident Liability
Nuclear Waste Management
Federal Funding for Nuclear Energy Programs
LEGISLATION

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Nuclear Energy Policy
SUMMARY
Nuclear energy policy issues facing
nuclear power plant security. The new Energy
Congress include the implementation of fed-
Policy Act includes several reactor security
eral incentives for new commercial reactors,
provisions, including requirements to revise
radioactive waste management policy, re-
the security threats that nuclear plant guard
search and development priorities, power
forces must be able to defeat, regular force-on-
plant safety and regulation, and security
force security exercises at nuclear power
against terrorist attacks.
plants, and the fingerprinting of nuclear facil-
ity workers.
The Bush Administration has called for
an expansion of nuclear power. For Depart-
Disposal of highly radioactive waste has
ment of Energy (DOE) nuclear energy re-
been one of the most controversial aspects of
search and development, the Administration is
nuclear power. The Nuclear Waste Policy Act
seeking $632.7 million for FY2007, an 18.1%
of 1982 (NWPA, P.L. 97-425), as amended in
increase from the FY2006 appropriation. The
1987, requires DOE to conduct a detailed
request would boost funding for the Advanced
physical characterization of Yucca Mountain
Fuel Cycle Initiative (AFCI) from $79.2
in Nevada as a permanent underground reposi-
million in FY2006 to $243.0 million in
tory for high-level waste. The opening of the
FY2007. The higher AFCI funding would
Yucca Mountain repository has been delayed
allow DOE to begin developing an
from the previous goal of 2010, and DOE
engineering-scale facility to demonstrate new
currently has no announced schedule for the
technology for separating plutonium and
project. The Administration is requesting
uranium in spent nuclear fuel, as part of the
$544.5 million for the civilian nuclear waste
Administration’s Global Nuclear Energy
program in FY2007, $50 million above the
Partnership (GNEP).
FY2006 level.
Significant incentives for new commer-
Whether progress on nuclear waste
cial reactors are included in the Energy Policy
disposal and other congressional action will
Act of 2005 (P.L. 109-58), signed by the
revive the U.S. nuclear power industry’s
President August 8, 2005. These include
growth will depend primarily on economic
production tax credits, loan guarantees, insur-
considerations. Natural gas- and coal-fired
ance against regulatory delays, and extension
power plants are currently favored over nu-
of the Price-Anderson Act nuclear liability
clear reactors for new generating capacity.
system. The act also authorizes $1.25 billion
However, some electric utilities are seeking
for the design and construction of a nu-
approval of sites for new reactors, and nuclear
clear-hydrogen cogeneration plant at Idaho
industry officials have predicted that the
National Laboratory.
incentives in the Energy Policy Act of 2005
will lead to the first new U.S. reactor orders
The September 11, 2001, terrorist attacks
since 1978.
on the United States raised concern about
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MOST RECENT DEVELOPMENTS
The Bush Administration’s February 6 budget request for FY2007 includes $632.7
million for Department of Energy (DOE) nuclear energy research and development, an
18.1% increase from the FY2006 appropriation. The request would boost funding for the
Advanced Fuel Cycle Initiative (AFCI) from $79.2 million in FY2006 to $243.0 million in
FY2007. The higher AFCI funding would allow DOE to begin developing an engineering-
scale facility to demonstrate new technology for separating plutonium and uranium in spent
nuclear fuel, as part of the Administration’s Global Nuclear Energy Partnership (GNEP). The
Administration is requesting $544.5 million for the civilian nuclear waste program in
FY2007, $50 million above the FY2006 level. The Energy and Water Development
Appropriations Act for FY2006 (P.L. 109-103, H.Rept. 109-275), funding DOE nuclear
programs, was signed by the President on November 19.
President Bush on August 8 signed the Energy Policy Act of 2005 (P.L. 109-58), which
provides strong incentives for the construction of new nuclear power plants. These include
production tax credits, loan guarantees, insurance against regulatory delays, and extension
of the Price-Anderson Act nuclear liability system.
The tax credit is available for up to 6,000 megawatts of new nuclear capacity for the
first eight years of operation, up to $125 million annually per 1,000 megawatts. That
capacity limit could accommodate five or six new commercial reactors, or it could be
allocated among a greater number of reactors (with the tax credit prorated accordingly) by
the Secretary of Energy. Nuclear power plants would also be eligible for federal loan
guarantees for up to 80% of construction costs.
Because the nuclear industry has often blamed past nuclear reactor construction cost
overruns on licensing delays, the energy act authorizes the Secretary of Energy to pay for up
to $500 million in costs resulting from Nuclear Regulatory Commission (NRC) delays for
the first two new reactors and up to $250 million for the next four.
The Energy Policy Act includes several provisions dealing with security at nuclear
power plants. NRC is required to conduct “force on force” security exercises at each nuclear
power plant at least once every three years (as is its current policy), and is required to revise
the “design basis threat” that nuclear plant security forces must be able to defeat. NRC’s
proposed revision was published in the Federal Register on November 7.
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 unclear long-term future. No nuclear plants have been ordered in the
United States 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 (TVA’s) Watts Bar 1 reactor, ordered in 1970 and licensed to operate in 1996,
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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 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 less than 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. (That number excludes TVA’s
Browns Ferry 1, which has not operated since 1985; TVA is spending about $1.8 billion to
restart the reactor by 2007.) 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
more than half of U.S. electricity generation. Nuclear plants generate more than half the
electricity in six states. The near-record 818 billion kilowatt-hours of nuclear electricity
generated in the United States during 20051 was more than the nation’s entire electrical
output in the early 1960s, when the first large-scale commercial reactors were being ordered.
Average operating costs of U.S. nuclear plants dropped substantially during the past
decade, and costly downtime has been steadily reduced. Licensed commercial reactors
generated electricity at an average of 89.4% of their total capacity in 2005, according to
industry statistics.2
Thirty-nine commercial reactors have received 20-year license extensions from the
Nuclear Regulatory Commission (NRC), giving them up to 60 years of operation. License
extensions for 12 more reactors are currently under review, and many others are anticipated,
according to NRC (see website at [http://www.nrc.gov/reactors/operating/licensing/renewal/
applications.html]).
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 occurred, 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, headquartered
in Chicago. Exelon and New Jersey-based Public Service Enterprise Group announced a
merger on December 20, 2004, that would boost the combined firm’s reactor fleet to 20.
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
1 “World’s Nuclear Performance in 2005 Close to 2004’s,” Nucleonics Week, Feb. 9, 2006, p. 1.
2 Ibid.
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are currently estimated to be competitive with those of fossil fuel technologies.3 Although
eight U.S. nuclear reactors were permanently shut down during the 1990s, none has been
closed since 1998, and recent reactor sales could indicate greater industry interest in nuclear
plants that previously had been considered marginal. Despite the shutdowns, annual U.S.
nuclear electrical output increased by more than one-third from 1990 to 2005, according to
the Energy Information Administration and industry statistics. The increase resulted
primarily from reduced downtime at the remaining plants, the startup of five new units, and
reactor modifications to boost capacity.
The good performance of existing reactors and the relatively high cost of natural gas —
the favored fuel for new power plants for the past 15 years — have prompted renewed utility
consideration of the feasibility of building new reactors. During 2005, electric utilities
announced plans to apply for combined construction permits and operating licenses (COLs)
for 11 reactors; however, no commitments have been made to build them if the COLs are
issued. The Department of Energy (DOE) is assisting with some of the COL applications
and site-selection efforts as part of a program to encourage new commercial reactor orders
by 2010, as discussed in the next section.
Strong incentives for building new nuclear power plants are included in the Energy
Policy Act of 2005 (P.L. 109-58), signed by the President on August 8. Particularly
significant is a tax credit for up to 6,000 megawatts of new nuclear capacity for the first eight
years of operation, up to $125 million annually per 1,000 megawatts. That capacity limit
could make five or six new commercial reactors eligible for the 1.8-cents/kilowatt-hour tax
credit, or the capacity could be allocated among a greater number of reactors (with the tax
credit prorated accordingly) by the Secretary of Energy.
Because the nuclear industry has often blamed licensing delays for past nuclear reactor
construction cost overruns, the new law would authorize the Secretary of Energy to pay for
up to $500 million in costs resulting from NRC delays for the first two new reactors and up
to $250 million for the next four. Nuclear power plants would also be eligible for federal
loan guarantees for up to 80% of construction costs. The Energy Information Administration
(EIA) has previously concluded that the nuclear energy tax credit would stimulate
construction of new commercial reactors,4 and nuclear industry officials recently predicted
that the tax credits and other incentives would prove effective.5 Without such assistance,
EIA has projected that no new reactors would be built by 2025.6
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
3 Energy Information Administration, Nuclear Power: 12 percent of America’s Generating Capacity,
20 percent of the Electricity, July 17, 2003, at [http://www.eia.doe.gov/cneaf/nuclear/page/analysis/
nuclearpower.html].
4 Energy Information Administration, Analysis of Five Selected Tax Provisions of the Conference
Energy Bill of 2003, February 2004.
5 Fialka, John J., “Energy Bill May Revive Nuclear Power in U.S.” Wall Street Journal, July 28,
2005, p. A4.
6 Energy Information Administration, Annual Energy Outlook 2005, DOE/EIA-0383(2005), February
2005, p. 6.
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reactors. On May 19, 2003, New Hampshire became the first state to provide emissions
credits for incremental nuclear generating capacity. But the large obstacles noted above must
still be overcome before electric generating companies will risk ordering new nuclear units.
(For more on the outlook for nuclear power, see CRS Report RL31064, Nuclear Power:
Prospects for New Commercial Reactors, by Larry Parker and Mark Holt.)
Nuclear Power Research and Development
For nuclear energy research and development — including advanced reactors, fuel cycle
technology, nuclear hydrogen production, and infrastructure support — DOE is requesting
$632.7 million for FY2007, an 18.1% increase from the FY2006 appropriation. The request
would boost funding for the Advanced Fuel Cycle Initiative (AFCI) from $79.2 million in
FY2006 to $243.0 million in FY2007. The higher AFCI funding would allow DOE to begin
developing an engineering-scale facility to demonstrate new technology for separating
plutonium and uranium in spent nuclear fuel, as part of the Administration’s Global Nuclear
Energy Partnership (GNEP). The nuclear energy program is run by DOE’s Office of Nuclear
Energy, Science, and Technology.
According to DOE’s budget justification, the nuclear energy R&D program is intended
“to enable nuclear energy to fulfill its promise as a safe, advanced, inexpensive and
environmentally benign approach to providing reliable energy to all of the world’s people.”
Under the Administration’s GNEP initiative, plutonium partially separated from spent
nuclear fuel would be recycled into new fuel to expand the future supply of nuclear fuel and
potentially reduce waste. The United States and other advanced nuclear nations would lease
new fuel to other nations that agreed to forgo uranium enrichment, spent fuel recycling (also
called reprocessing), and other fuel cycle facilities that could be used to produce nuclear
weapons materials; see [http://www.gnep.energy.gov/.]. The leased fuel would then be
returned to supplier nations for reprocessing. Solidified high-level reprocessing waste would
be sent back to the nation that had used the leased fuel, along with supplies of fresh nuclear
fuel, according to the GNEP concept.
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 and economically uncompetitive. Opponents are particularly concerned about
GNEP’s emphasis on spent fuel reprocessing, which they see as a weapons proliferation risk,
even if weapons-useable plutonium is not completely separated from other spent fuel
elements, as envisioned by the Administration.
Nuclear Power 2010. President Bush’s specific mention of “clean, safe nuclear
energy” in his 2006 State of the Union Address reiterated the Administration’s interest in
encouraging construction of new commercial reactors — for which there have been no U.S.
orders since 1978. DOE’s efforts to restart the nuclear construction pipeline are focused on
the Nuclear Power 2010 Program, which will pay up to half of the nuclear industry’s costs
of seeking regulatory approval for new reactor sites, applying for new reactor licenses, and
preparing detailed plant designs. The program is intended to provide assistance for advanced
versions of existing commercial nuclear plants that could be ordered within the next few
years.
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The Nuclear Power 2010 Program is helping three utilities seek NRC approval for
potential nuclear reactor sites in Illinois, Mississippi, and Virginia. In addition, two industry
consortia are receiving DOE assistance over the next several years to design and license new
nuclear power plants. DOE awarded the first funding to the consortia in 2004. The FY2006
Energy and Water appropriation included $65.3 million for the program, a $15.7 million
boost over FY2005. DOE’s FY2007 budget request includes $52.3 million for Nuclear
Power 2010. DOE assistance under the program, including the early site permits, is planned
to reach a multiyear total of $550 million.
The nuclear license applications under the Nuclear Power 2010 program are intended
to test the “one step” licensing process established by the Energy Policy Act of 1992 (P.L.
102-486). Even if the licenses are granted by NRC, the industry consortia funded by DOE
have not committed to building new reactors. Loan guarantees and tax credits to encourage
construction of new reactors are included in the Energy Policy Act of 2005 (P.L. 109-58).
The 2005 act also authorizes DOE to provide compensation to the first six new reactors for
regulatory delays beyond their control; the FY2007 budget request for the Nuclear Power
2010 Program includes $1.8 million to develop criteria for such assistance. The two
consortia receiving COL assistance under the Nuclear Power 2010 program are
! A consortium led by Dominion Resources that is preparing a COL for an
advanced General Electric reactor (after originally considering a Canadian
design). The proposed reactor would be located at Dominion’s existing
North Anna plant in Virginia, where the company is seeking an NRC early
site permit with DOE assistance.
! A consortium called NuStart Energy Development, which includes Exelon
and several other major nuclear utilities, announced on September 22, 2005,
that it would seek a COL for a Westinghouse design at the site of TVA’s
uncompleted Bellefonte nuclear plant in Alabama and for a General Electric
design at the Grand Gulf plant in Mississippi. DOE has agreed to provide
assistance to one of the two NuStart projects.
The advanced Westinghouse reactor selected by NuStart, the AP-1000, is also
competing for a contract in China. If Westinghouse were to prevail over designs being
offered by France and Russia, the four-reactor contract could help demonstrate the
commercial viability of the new design, which received final design approval from NRC in
September 2004. A preliminary commitment to provide almost $5 billion in financial
support for the proposed China reactor sale was approved February 18, 2005, by the Export-
Import Bank of the United States. Critics contend that the tentative Ex-Im financing could
provide unwarranted subsidies to the nuclear power industry and unwisely transfer U.S.
nuclear technology to China.
Generation IV. Advanced commercial reactor technologies that are not yet close to
deployment are the focus of DOE’s Generation IV Nuclear Energy Systems Initiative, for
which $31.4 million is being requested for FY2007 — 30% less than the FY2006 request and
more than 40% below the final appropriation of $54.5 million. Most of the proposed
reduction would come from the Next Generation Nuclear Plant (discussed below), which
would drop from $40 million to $23.4 million.
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The Generation IV program is focusing on six advanced designs that could be
commercially available around 2020-2030: two gas-cooled, one water-cooled, two liquid-
metal-cooled, and one molten-salt concept. Some of these reactors would use plutonium
recovered through reprocessing of spent nuclear fuel, using technologies being developed by
the Advanced Fuel Cycle Initiative.
Advanced Fuel Cycle Initiative. The nuclear energy program’s Advanced Fuel
Cycle Initiative (AFCI) is the primary component of GNEP. DOE’s $243 million budget
request for AFCI for FY2007 makes up nearly all of the $250 million GNEP program (with
the remaining $7 million requested for program direction). The FY2007 AFCI budget
request is more than triple the FY2006 appropriation of $79.2 million.
According to the budget justification, AFCI will develop and demonstrate nuclear fuel
cycles that could reduce the long-term hazard of spent nuclear fuel and recover additional
energy. Such technologies would involve separation of plutonium, uranium, and other long-
lived radioactive materials from spent fuel for re-use in a nuclear reactor or for transmutation
in a particle accelerator. Most of the proposed AFCI funding ($155 million) would be for
an engineering-scale demonstration of a separations technology called UREX+, in which
uranium and other elements are chemically removed from dissolved spent fuel, leaving a
mixture of plutonium and other highly radioactive elements. Proponents believe the process
is proliferation-resistant, because further purification would be required to make the
plutonium useable for weapons.
Removing uranium from spent fuel would eliminate most of the volume of spent
nuclear fuel that would otherwise require disposal in a deep geologic repository, which DOE
is developing at Yucca Mountain, Nevada. The UREX+ process also would reduce the heat
generated by nuclear waste — the major limit on the repository’s capacity — by removing
cesium and strontium for separate storage and decay over several hundred years. Plutonium
and other long-lived elements would be destroyed in accelerators or fast reactors (such as the
type under development by the Generation IV program) to reduce the long-term hazard of
nuclear waste. Even if technically feasible, however, the economic viability of such waste
processing has yet to be determined, and it still faces significant opposition on nuclear
nonproliferation grounds, as noted above.
Nuclear Hydrogen Initiative. In support of President Bush’s program to develop
hydrogen-fueled vehicles, DOE is requesting $18.1 million in FY2007 for the Nuclear
Hydrogen Initiative, a 25% reduction from the FY2006 level. According to DOE’s FY2005
budget justification, “preliminary estimates ... indicate that hydrogen produced using nuclear-
driven thermochemical or high-temperature electrolysis processes would be only slightly
more expensive than gasoline” and result in far less air pollution.
Nuclear Power Plant Safety and Regulation
Safety
Controversy over safety has dogged nuclear power throughout its development,
particularly following the March 1979 Three Mile Island accident in Pennsylvania and the
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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 a relatively recent example, it was discovered in March 2002 that leaking boric acid had
eaten a large cavity in the top of the reactor vessel in Ohio’s Davis-Besse nuclear plant. The
corrosion left only the vessel’s quarter-inch-thick stainless steel inner liner to prevent a
potentially catastrophic loss of reactor cooling water. Davis-Besse remained closed for
repairs and other safety improvements until NRC allowed the reactor to restart in March
2004.
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.
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. During approximately 2,000 reactor-years of operation in
the United States,7 the only incident at a commercial nuclear 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. A study of 32,000 people living within 5 miles of the reactor when
the accident occurred found no significant increase in cancer rates through 1998, although
the authors note that some potential health effects “cannot be definitively excluded.”8
The relatively small amounts of radioactivity released by nuclear plants during normal
operation are not generally believed to pose significant hazards, although some groups
contend that routine emissions are risky. 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. (For the current U.S. fleet of about 100 reactors, that rate would yield an
average of one severe accident every 100 years.) 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
7 Nuclear Engineering International, “Country averages as at end September 2004,” January 2005,
p. 37.
8 Evelyn O. Talbott et al., “Long Term Follow-Up of the Residents of the Three Mile Island Accident
Area: 1979-1998,” Environmental Health Perspectives, published online October 30, 2002, at
[http://ehp.niehs.nih.gov/docs/2003/5662/abstract.html].
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experts challenge the complex calculations that go into predicting such accident frequencies,
contending that accidents with serious public health consequences may be more frequent.
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 2002 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
estimated that about 50,000 square miles of land in Belarus, Ukraine, and Russia were
substantially contaminated with radioactive cesium from Chernobyl.9
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 required by NRC. The
Energy Policy Act of 1992 (P.L. 102-486) largely implemented the industry’s licensing goals,
but no plants have been ordered.
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 of 1992
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 were met. NRC would hold preoperational hearings on the
adequacy of plant construction only in specified circumstances. DOE’s Nuclear Power 2010
initiative (discussed above) proposes to pay up to half the cost of combined construction and
operating licenses for two advanced reactors. The Energy Policy Act of 2005 authorizes
federal payments to the owner of a completed reactor whose operation is delayed by
regulatory action.
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
9 OECD Nuclear Energy Agency, Chernobyl: Assessment of Radiological and Health Impacts, 2002.
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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 been 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’s risk-informed reactor oversight system, inaugurated April 2, 2000,
relies on a series of performance indicators to determine the level of scrutiny that each
reactor should receive.
Reactor Security
Nuclear power plants have long been recognized as potential targets of terrorist attacks,
and critics have long questioned the adequacy of the measures required of nuclear plant
operators to defend against such attacks. All commercial nuclear power plants licensed by
NRC have a series of physical barriers to accessing the operating reactor area, and are
required to maintain a trained security force to protect them. Following the terrorist attacks
of September 11, 2001, NRC began a “top-to-bottom” review of its security requirements.
A key element in protecting nuclear plants is the requirement that simulated terrorist
attack exercises, monitored by NRC, be carried out to test the ability of the plant operator to
defend against them. The severity of attacks to be prepared for are specified in the form of
a “design basis threat” (DBT). After more than a year’s review, on April 29, 2003, NRC
changed the DBT to “represent the largest reasonable threat against which a regulated private
guard force should be expected to defend under existing law.” The details of the revised
DBT were not released to the public.
The Energy Policy Act of 2005 requires NRC to revise the DBT based on an assessment
of terrorist threats, the potential for multiple coordinated attacks, possible suicide attacks,
and other criteria. NRC’s proposed DBT revision was published in the Federal Register on
November 7, 2005. The new energy law also requires NRC to conduct force-on-force
security exercises at nuclear power plants every three years (which was NRC’s previous
policy), authorizes firearms use by nuclear security personnel (preempting some state
restrictions), establishes federal security coordinators, and requires fingerprinting of nuclear
facility workers.
(For background on security issues, see CRS Report RS21131, Nuclear Power Plants:
Vulnerability to Terrorist Attack, by Carl Behrens and Mark Holt.)
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Decommissioning
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 radioactive
material and contamination from reactor sites after they are closed. The first full-sized U.S.
commercial reactors to be decommissioned were the Trojan plant in Oregon, whose
decommissioning received NRC approval on May 23, 2005, and Maine Yankee, for which
NRC approved most of the site cleanup on October 3, 2005. The Trojan decommissioning
cost $429 million, according to reactor owner Portland General Electric, and the Maine
Yankee decommissioning cost about $500 million.10 Those costs are within the range
estimated by a 1996 DOE report of about $150 million to $600 million in 1995 dollars.
The tax treatment of decommissioning funds has been a continuing issue. The Energy
Policy Act of 2005 provides favorable tax treatment to nuclear decommissioning funds,
subject to certain restrictions.
Nuclear Accident Liability
Liability for damages to the general public from nuclear incidents is addressed by the
Price-Anderson Act (primarily Section 170 of the Atomic Energy Act of 1954, 42 U.S.C.
2210). The Energy Policy Act of 2005 extends Price-Anderson coverage for new reactors
and new DOE nuclear contracts through the end of 2025.
Under Price-Anderson, the owners of commercial reactors must assume all liability for
nuclear damages awarded to the public by the court system, and they must waive most of
their legal defenses following a severe radioactive release (“extraordinary nuclear
occurrence”). To pay any such damages, each licensed reactor must carry financial
protection in the amount of the maximum liability insurance available, which was increased
by the insurance industry from $200 million to $300 million on January 1, 2003. Any
damages exceeding that amount are to be assessed equally against all covered commercial
reactors, up to $95.8 million per reactor (most recently adjusted for inflation on August 20,
2003). 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. According to NRC, 103 commercial reactors are
currently covered by the Price-Anderson retrospective premium requirement.
For each nuclear incident, the Price-Anderson liability system currently would provide
up to $10.9 billion in public compensation. That total includes the $300 million in insurance
coverage carried by the reactor that suffered the incident, plus the $95.8 million in
retrospective premiums from each of the 103 currently covered reactors, totaling $10.2
billion. On top of those payments, a 5% surcharge may also be imposed, raising the total
per-reactor retrospective premium to $100.6 million and the total available compensation to
about $10.7 billion. Under Price-Anderson, the nuclear industry’s liability for an incident
is capped at that amount, which varies depending on the number of covered reactors, the
10 Sharp, David, “NRC Signs Off On Maine Yankee’s Decommissioning,” Associated Press, October
3, 2005.
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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 had been the same as for commercial
reactors, excluding the 5% surcharge, except when the limit for commercial reactors drops
because of a decline in the number of covered reactors. Price-Anderson authorizes DOE to
indemnify its contractors for the entire amount, so that damage payments for nuclear
incidents 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.
Under the Price-Anderson extension in the Energy Policy Act of 2005, the total
retrospective premium for each reactor is set at the current level of $95.8 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 1,300 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 $95.8
million, rather than $574.8 million. The liability limit on DOE contractors is set at $10
billion per accident, also to be adjusted for inflation.
Although DOE is generally authorized to impose civil penalties on its contractors for
violations of nuclear safety regulations, Atomic Energy Act §234A specifically exempted
seven non-profit DOE contractors and their subcontractors. Under the same section, DOE
automatically remitted any civil penalties imposed on non-profit educational institutions
serving as DOE contractors. The Price-Anderson extension eliminates the civil penalty
exemption for future contracts by 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 new law limits the civil penalties against a non-profit
contractor to the amount of management fees paid under that contract.
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. Extension of the act was widely
considered a prerequisite for new nuclear reactor construction in the United States.
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.
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
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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 tunnels carved from rock that has remained geologically
undisturbed for hundreds of thousands of years. Under the Nuclear Waste Policy Act (42
U.S.C. 10101 et seq.), Yucca Mountain in Nevada is the only candidate site for the national
repository.
Energy Secretary Samuel Bodman told the House Appropriations Committee’s Energy
and Water Development Subcommittee on March 8, 2006, that construction of a repository
at Yucca Mountain would probably not begin for at least five years. That scenario would
push the opening of the repository well past DOE’s previous goal of 2010.
Delays in the Yucca Mountain project prompted the House Appropriations Committee
to include language in its report on the FY2006 Energy and Water appropriations bill
directing DOE “to begin the movement of spent fuel to centralized interim storage at one or
more DOE sites within FY2006.”11 The interim storage requirement was not included in the
enacted Energy and Water bill, but the measure does provide $50 million for DOE to develop
a spent nuclear fuel recycling plan. The detailed program plan is to be submitted by March
31, 2006, and a “site selection competition” for an integrated reprocessing facility is to begin
by June 30, 2006. A reprocessing site is to be selected in FY2007, with construction to begin
in FY2010. “The site competition should not be limited to DOE sites, but should be open
to a wide range of other possible federal and non-federal sites on a strictly voluntary basis,”
according to the conference report. Applicants for a reprocessing facility can receive up to
$5 million per site, up to a total of $20 million, to prepare detailed proposals.
In submitting its FY2007 budget request, the Administration announced that it was
preparing draft legislation to address problems in the civilian nuclear waste program,
possibly including provisions for interim storage. The Administration is requesting $544.5
million for the waste program in FY2007, $50 million above the FY2006 level. The waste
program is run by DOE’s Office of Civilian Radioactive Waste Management (OCRWM).
The delays in the Yucca Mountain program follow a July 9, 2004, ruling by the U.S.
Court of Appeals for the District of Columbia Circuit that overturned a key aspect of the
Environmental Protection Agency’s (EPA’s) regulations for the planned repository. The
three-judge panel ruled that the 10,000-year compliance period was too short, but it rejected
several other challenges to the rules. EPA proposed a new standard on August 9, 2005, that
would allow higher radiation exposure from the repository after 10,000 years.
The quality of scientific work at Yucca Mountain was called into question by DOE’s
March 16, 2005, disclosure of e-mails from geologists indicating that some quality assurance
documentation had been falsified. DOE currently is determining whether the problems affect
11 H.Rept. 109-86, May 18, 2005.
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the completeness and accuracy of information submitted to NRC in support of the planned
Yucca Mountain license application.
Further delays in the nuclear waste program could prove costly under a settlement
announced August 10, 2004, between the Department of Justice and Exelon Corporation,
which had filed a breach-of-contract suit over DOE’s failure to begin accepting spent fuel
by 1998 as required by NWPA. Under the settlement, Exelon is to be reimbursed from the
federal Judgment Fund for its spent fuel storage costs caused by the waste program delays.
Exelon estimates that it will receive up to $600 million if waste acceptance does not begin
until 2015. Several other utilities have also negotiated settlements, and the Tennessee Valley
Authority on January 31, 2006, won a $34.9 million judgment from the U.S. Court of Federal
Claims for waste storage costs incurred through September 2004. Numerous other utility
claims are pending.12
(For further details, see CRS Issue Brief IB92059, Civilian Nuclear Waste Disposal, by
Mark Holt.)
Federal Funding for Nuclear Energy Programs
The following tables summarize current funding for DOE nuclear fission programs and
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 the
nuclear programs. President Bush submitted his FY2007 funding request February 6, 2006.
The FY2006 energy and water conference report was approved by Congress on November
14, 2005, and signed into law on November 19, 2005 (H.Rept 109-275, P.L. 109-103).
Table 1. Funding for the Nuclear Regulatory Commission
(budget authority in millions of current dollars)
FY2006
FY2007
Approp.
Request
Nuclear Regulatory Commission
— Reactor Licensing
302.8
341.3
— Reactor Inspection
212.4
222.0
— Fuel Facility Licensing and Inspection
40.1
37.6
— Nuclear Materials
80.1
74.3
— High-Level Waste Repository
45.7
41.0
— Decommission. and Low-Level Waste
27.4
25.7
— Spent Fuel Storage and Transportation
24.8
26.5
— Inspector General
8.3
8.1
Total NRC budget Authority
741.5
776.6
— Offsetting fees
624.7
627.7
Net appropriation
116.8
148.9
12 Hiruo, Elaine, and Tom Harrison. “TVA, Negotiated Settlements Add to Taxpayers’ Yucca Mt.
Bill.” NuclearFuel. March 13, 2006. p. 11.
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Table 2. DOE Funding for Nuclear Activities
(budget authority in millions of current dollars)
FY2005
FY2006
FY2007
Approp.
Approp.
Request
Nuclear Energy (selected programs)
University Reactor Assistance
23.8
26.7
0
Nuclear Power 2010
49.6
65.3
54.0
Generation IV Nuclear Systems
38.8
54.5
31.4
Nuclear Hydrogen Initiative
8.7
24.8
18.7
Advanced Fuel Cycle Initiative
66.4
79.2
243.0
Nuclear R&D Infrastructurea
249.0
241.1
220.9
Program Direction
60.1
60.5
67.6
Total, Nuclear Energy
503.8
535.7
632.7
Civilian Nuclear Waste Disposalb
572.4
495.0
544.5
a. Funded under “other defense activities” and naval reactors until FY2007. In FY2007 request, all
infrastructure except $75.9 million for Idaho Sitewide Safeguards and Security is transferred to the
Energy Supply and Conservation account.
b. Funded by a 1-mill-per-kilowatt-hour fee on nuclear power, plus appropriations for defense waste disposal
and homeland security.
LEGISLATION
H.R. 6 (Barton)
Energy Policy Act of 2005. Omnibus energy legislation that provides incentives for
new nuclear power plants, extends Price-Anderson nuclear liability system, authorizes
nuclear R&D programs, and requires security measures at nuclear facilities. Introduced April
18, 2005; referred to multiple committees. Passed House April 21, 2005, by vote of 249-183.
Passed Senate June 28, 2005, by vote of 85-12. Conference report (H.Rept. 109-90) passed
House July 28, 2005, by vote of 275-156; passed Senate July 29 by vote of 74-26. Signed by
President August 8, 2005 (P.L. 109-58).
H.R. 526 (Berkley)
Redirect the Nuclear Waste Fund established under the Nuclear Waste Policy Act of
1982 into research, development, and utilization of risk-decreasing technologies for the
onsite storage and eventual reduction of radiation levels of nuclear waste, and for other
purposes. Introduced February 2, 2005; referred to Committees on Energy and Commerce;
Science; Ways and Means.
H.R. 966 (Saxton)
Require the Nuclear Regulatory Commission to consider certain criteria in relicensing
nuclear facilities, and to provide for an independent assessment of the Oyster Creek Nuclear
Generating Station by the National Academy of Sciences prior to any relicensing of that
facility. Introduced February 17, 2005; referred to Committee on Energy and Commerce.
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H.R. 2419 (Hobson)
Energy and Water Development Appropriations for FY2006. Includes funding for DOE
nuclear programs. Introduced and reported as an original measure by the House
Appropriations Committee May 18, 2005 (H.Rept. 109-86). Passed House May 24, 2005,
by vote of 416-13. Passed Senate July 1, 2005, by vote of 92-3 (S.Rept. 109-84). Signed by
President November 19, 2005 (P.L. 109-103).
H.R. 4538 (Matheson)/S. 2099 (Reid)
Spent Nuclear Fuel On-Site Storage Security Act of 2005. Requires commercial nuclear
power plants to transfer spent fuel from pools to dry storage casks and then convey title to
the Secretary of Energy. Introduced December 14, 2005. House bill referred to Committee
on Energy and Commerce; Senate bill referred to Committee on Environment and Public
Works.
H.R. 4825 (Weller)/S. 2348 (Obama)
Nuclear Release Notice Act of 2006. Requires notification of federal and state agencies
about releases of radioactive materials above allowable limits. Introduced March 1, 2006;
referred to House Committee on Energy and Commerce and Senate Committee on
Environment and Public Works.
S. 10 (Domenici)
Energy Policy Act of 2005. Includes provisions on electricity regulation and reliability,
energy research and development, alternative fuels, and energy access to public lands.
Introduced as an original bill and reported June 9, 2005, by the Committee on Energy and
Natural Resources (S.Rept. 109-78). Ordered reported May 26 by a vote of 21-1. Text
substituted for H.R. 6.
S. 387 (Hagel)
Amend the Internal Revenue Code of 1986 to provide tax incentives for investment in
greenhouse gas intensity reduction projects, including a production tax credit for nuclear-
generated electricity. Introduced February 15, 2005; referred to Committee on Finance.
S. 388 (Hagel)
Amend the Energy Policy Act of 1992 to direct the Secretary of Energy to carry out
activities that promote the adoption of technologies that reduce greenhouse gas intensity,
including advanced nuclear power plants, and to provide credit-based financial assistance and
investment protection for projects that employ advanced climate technologies or systems.
Introduced February 15, 2005; referred to Committee on Energy and Natural Resources.
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