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Hearing Before the Subcommittee on Clean Air, Wetlands, Private Property and Nuclear Safety

Committee on Environment and Public Works

Authorization/Oversight

March 9, 2000

Mr. Chairman and Members of the Subcommittee:

It is a pleasure to appear before you today with my fellow Commissioners to discuss the Nuclear Regulatory Commission's accomplishments, the challenges before us, our budget submittal, and our legislative program. Let me first introduce my fellow Commissioners, Greta Joy Dicus, Nils J. Diaz, Edward McGaffigan, Jr., and Jeffrey S. Merrifield. All of us appreciate the interest of this Subcommittee and the series of hearings that you have held over the past two years.

I last appeared before the Environment and Public Works Committee for my confirmation hearing. I told the Committee at that time that, in my view, the NRC was generally on the right track. My experience over the past four months has confirmed that view. During the 105th Congress the Commission began sending a monthly report on our activities to this Subcommittee and other Congressional oversight and appropriations committees. We believe that these monthly reports depict an agency that is successfully managing a host of important initiatives. Our testimony today will briefly summarize some of the accomplishments that we have described in greater detail in our reports.

We also believe that our programs have benefitted from Congressional scrutiny and from the scrutiny of other outside stakeholders, both in industry and in the public interest community. I would like to make specific note of the report issued by the Center for Strategic and International Studies (CSIS) since the Commission last met with you. The ranking minority member of this Subcommittee, Senator Graham, was one of the Congressional participants in that study. This was an excellent study that told us that the NRC was on the right track, but that the agency had much more to do. We agree.

Accomplishments

Let me highlight just a few of the major areas that I know are of concern to this Subcommittee. Mr. Chairman, I understand that you have a continuing interest in the status of license renewal applications. It should be noted that we have met or exceeded every milestone in our review of the Calvert Cliffs and Oconee licensee renewal applications. The Calvert Cliffs license renewal is currently pending before the full Commission. The staff has recommended, based on its review of the safety and environmental issues, that the Commission approve the license renewal application. The Commission was briefed by the staff on its recommendation on March 3. In addition, the Advisory Committee on Reactor Safeguards has advised us to approve the license based on its independent review of the safety issues. I should note that the U.S. Court of Appeals for the District of Columbia heard oral argument on March 2, 2000, on an appeal by the National Whistleblower Center of the Commission decision to deny the Center an adjudicatory hearing in this case. Unless the Court orders otherwise, the Commission intends to reach a decision on the Calvert Cliffs renewal by April, within 24 months after the application was received. The Oconee license renewal is similarly on track for a Commission decision by this July. Although we have processed these first renewal applications expeditiously, we have a major effort underway to look at the generic lessons learned from license renewal and to make improvements in our process for future applicants. We now have a large number of future applicants who are queuing up to renew their reactor licenses -- a reflection, we believe, of our success in responsibly handling these first applications.

We also know that you are very interested in our ability to process license transfers expeditiously. I believe the NRC has an exemplary record in dealing with the complex license transfer cases that are coming before us. We were among the first regulators to analyze and act on the transfer of the Pilgrim operating license to Entergy Corporation from Boston Edison. We were among the first to approve the Three Mile Island Unit 1 transfer from GPU to Amergen, and we promptly acted on the Clinton transfer from Illinois Power to Amergen. There are several other complex licensing transfer cases before us that arise from the restructuring of the industry. These cases sometimes require a significant expenditure of energy by our staff, but we will make continuing efforts to assure timely resolution of those matters.

We are also very proud of the new reactor oversight process, the process that we plan to use to inspect, assess and enforce regulations at nuclear reactors. Last year we launched a pilot program that involved 13 reactors at nine sites, and we learned a great deal from that effort. The results of the pilot program were recently presented to the Commission with a staff recommendation that we extend the new approach to the oversight of all our operating nuclear reactors. The revised oversight process focuses inspection efforts on those aspects that present the greatest risk. Moreover, performance indicators covering a range of areas will be available to the public, which should better enable the public to understand our assessment of the plants. The new approach also uses a significance determination process to classify inspection findings, thereby better allowing the NRC and the licensee to focus attention on the most important safety matters identified by the inspection. The new approach has been endorsed by a broad spectrum of stakeholders, and, as I indicated, the NRC intends to extend the new process to the entire industry. The initial implementation is to begin at all nuclear power plants in April 2000. We recognize, however, that this is a work in progress and we will have to make continuous adjustments.

As the January GAO report to this Subcommittee recommended, we are communicating with our own staff about the new oversight process and about our risk-informed regulatory initiatives more broadly. Intensive discussion of how staff concerns with the new oversight process are to be resolved and intensive training on the new oversight process are now underway. We believe that the new reactor oversight approach is a significant improvement over our previous regulatory oversight process, and the Commission is committed to making these regulatory revisions work.

I also want to highlight our nuclear materials program for you. We have a very large number of materials-related initiatives underway. As with our reactor program, we are working on making our nuclear materials regulation more risk-informed and flexible. For example, we are in the final steps of totally revising our regulations governing the medical use of byproduct material using risk insights, together with other factors, to establish requirements that better focus licensee and regulatory attention on issues commensurate with their importance to health and safety. We are also revising our regulations governing the licensing of fuel cycle facilities to introduce the use of an integrated safety assessment, thereby incorporating risk insights into the regulation of these facilities. We are also working with the international community to learn about problems associated with facilities and materials programs abroad, most recently illustrated by events in Japan and Thailand.

We continue to prepare for a possible Department of Energy application for a high-level waste repository at Yucca Mountain and, in this endeavor, we have proposed implementing regulations that we believe will serve to protect public health, safety and the environment. We have recently provided our comments to DOE on its Viability Assessment, Draft Environmental Impact Statement, and Draft Siting Guidelines for Yucca Mountain.

We are implementing by rule a new registration program for the control of generally-licensed devices that have the potential to expose members of the public if such devices are disposed of improperly. Additionally, we are working with other Federal agencies and States to address protection of public health and safety from sources found in the public domain without a responsible owner, often referred to as "orphan sources." Our interest in orphan sources also extends internationally, and the NRC has been assisting the International Atomic Energy Agency (IAEA) with its program of identifying and securing orphan sources in member countries. Finally, we have engaged many different stakeholders in considering the need for a rulemaking to establish criteria for the release of certain types of slightly contaminated solid material, the so-called "clearance rule."

We are also continuing our efforts in decommissioning various sites around the country, licensing of Independent Spent Fuel Storage Facility Installations, certification of dry casks, and issues associated with the transportation of spent fuel and radioactive material.

Stakeholder Involvement

Almost all of our initiatives, whether in the reactor or materials or waste programs, raise difficult issues on which our stakeholders have widely differing views. In recent years, the Commission has broadened the scope and the depth of our interaction with all stakeholders, whether from industry or public interest groups, whether from the Congress or the States. The Commission has sought stakeholder involvement at both staff and Commission levels in redesigning the oversight process for reactors, in re-writing our rules on use of radioactive materials in medicine, in revising our rules on fuel cycle facilities, and in establishing the decommissioning requirements for the West Valley Demonstration Project.

In the case of the reactor oversight process that I mentioned earlier, we formed a formal advisory committee on which representatives from our various stakeholder groups met with NRC's staff. That body has helped us to shape the new oversight process and has helped bring a very broad constituency of support for the new oversight process.

In the case of the West Valley Demonstration Project, the Commission interacted personally with members of the public at a Commission meeting in January 1999. Input received from that meeting was considered when the Commission prepared a draft West Valley decommissioning criteria policy statement which was published in the Federal Register in December 1999. We anticipate a final policy statement by the end of this year.

Thus, we have sought to increase our interaction with the public at all levels. I hasten to add that we do not expect everyone to agree with all of our decisions. But we do believe that our decisions are best when they are made with as much transparency as possible. We no doubt can further enhance stakeholder interaction, but I can tell you that we are all deeply committed to improving the scope and the depth of stakeholder interaction. By doing so we hope to build public confidence in the Commission and its decisions.

Budget and Proposed Legislation

To stay the course on the various initiatives that we have underway, we obviously need resources to do our job. The Commission has proposed a Fiscal Year 2001 budget of $488.1 million. This budget request represents approximately a 3.9% percent ($18 million) increase over the Fiscal Year 2000 budget, but it is still the second lowest budget in the history of the agency in real terms. The number of employees at the agency continues to decline and our budget reflects almost a 20% reduction in staff since Fiscal Year 1993. The $18 million increase over our Fiscal Year 2000 budget is primarily for the pay raise that the President has authorized for Federal employees. Two charts reflecting a summary of our budget since Fiscal Year 1993 are attached to this testimony.

This budget requires us to be very careful in judging priorities so that we can provide adequate resources in important areas, such as license renewal and license transfers and the needed preparations for a potential DOE application for the Yucca Mountain repository. Given the range of initiatives, we are stretched thin.

The NRC has recently submitted a proposed bill for authorization of appropriations for Fiscal Year 2001. We respectfully request the Committee's support for our budget request in any managers' amendment to S. 1627, the authorization bill which your Committee reported last November. S. 1627 currently includes authorization at the requested level for our Fiscal Year 2000 budget.

There is one feature of our budget submission that I know is of great interest to the Subcommittee. As you know, the Commission has for years acknowledged that there is a legitimate fairness concern about the fees that are charged to our licensees. NRC licensees should not be charged fees for activities that are important to the Agency's mission but which do not directly benefit them. Such activities constitute about 10% of our budget. To address this concern, OMB has approved a graduated reduction of the percentage of our budget that must come from user fees. In Fiscal Year 2001, 98% of our budget, excluding funds from the Nuclear Waste Fund, will be recovered from user fees. This percentage will decrease at a rate of 2% per year to 90% in Fiscal Year 2005. We know we have your support for this approach because this Committee has a very similar approach in S. 1627.

I would like to conclude by touching briefly on our legislative program. S. 1627, as reported by the Committee, included many of the provisions that we recommended to the Committee last year. We deeply appreciate your support for those provisions. There are a few additional provisions that we would respectfully request you to consider.

First, I would like to mention a provision that is an outgrowth of the CSIS report that Senator Graham helped prepare. It would clarify that the NRC has the necessary authority to deal with non-licensees who retain control over decommissioning funds. This relates to an issue that arises in connection with various license transfers. We believe we have authority over non-licensees who retain control over decommissioning funds, but the CSIS report recommended that this authority be made crystal clear. We agree that legislation would be helpful to avoid disputes over the issue and we support a provision to clarify the point.

Last year we suggested that the foreign ownership and control provisions in the Atomic Energy Act with regard to nuclear reactors were no longer necessary. These provisions are not needed because the law will still retain clear language barring a license to any person if, in the Commission's opinion, the issuance of a license to such person would be inimical to the common defense and security or to public health and safety. We are confident, Mr. Chairman, that no inappropriate foreign entity, such as a State that supports terrorism or a State that is a proliferation threat, would ever pass muster under the revised statute, even if the prohibition on foreign ownership and control were to be lifted.

Another provision involves Senator Domenici's proposed clarification of our authority under Section 189a. of the Atomic Energy Act to conduct informal hearings rather than formal trial-type hearings. We very much support public involvement in our licensing process, but we often find that informal hearings are the appropriate way to engage the public. For example, we are using informal hearings in license transfer cases under a rule that we promulgated in 1998. We firmly believe that we have the flexibility to determine whether to use formalized trial-type procedures or other, less formal hearing procedures and are considering revisions to our administrative hearing process. Nevertheless, this is another area in which the CSIS report recommends that our statute be clarified. Clarification could eliminate needless disputes over our authority to fashion appropriate hearing procedures, and we would support Congressional clarification on this matter.

There is also a provision in our Fiscal Year 2001 authorization bill that will allow us to provide grants to Agreement States who need to oversee "formerly licensed sites" and to ensure that these sites are adequately decontaminated. Formerly licensed sites are sites for which the licenses were terminated, in many cases by the Atomic Energy Commission prior to NRC's creation, and which were never issued Agreement States licenses. Some Agreement States that have formerly licensed sites within their borders have argued that these sites remain the responsibility of the Federal government. Some States have expressed a willingness to take responsibility for site decontamination, but they have requested Federal funding. We believe that it would be efficient, fair, and in the interest of protecting health and safety for the Federal government to bear the costs of decontaminating these sites, but legislative authorization is required for that program. I believe our initiative has strong support in the States. We estimate the total cost of this proposal for FY 2001 would be $1.4 million.

Finally, Mr. Chairman, I would note that the Commission included a provision in last year's request to clarify the status of NRC's licensees who decommission their sites pursuant to our license termination rule or who terminate Agreement State licenses pursuant to an Agreement State's version of our license termination rule. This is a matter on which we and the Environmental Protection Agency (EPA) have had a long disagreement. In 1997, after many years of effort, the Commission promulgated a license termination rule which set what we believe to be a protective standard for public health and safety and the environment -- namely, a standard establishing an annual dose limit of 25 mrem for all pathways to the public. The EPA has issued guidance to its Regions to the effect that our rule is not sufficiently protective. We strongly disagree with EPA's assertion. Our rule was promulgated using a public process, the rule is consistent with international standards, and is based on sound scientific research. The rule ensures adequate protection of groundwater. The provision which we suggest for your consideration would clarify that licensees who clean up to our standard are not subject to CERLCA except in the rare event in which we or the Agreement State invite the EPA into the decommissioning to take advantage of CERCLA remedies. The Appropriations Committees have asked us to try and solve this issue through a Memorandum of Understanding (MOU) with EPA and we are now seeking to negotiate such an MOU. But if we fail, legislation would be the cleanest way to resolve this issue.

Conclusion

Mr. Chairman, I have tried to present some of our pressing issues and accomplishments, and have requested your support for our budget and for our legislative programs. Let me conclude by once again thanking you for your interest in our activities. We will best be able to continue to make progress with continued interest and oversight on your part, and with your help on budget matters and on legislative initiatives. We stand ready to continue to make further changes to improve our regulatory programs, and we look forward to your support in our efforts to reach that goal.

Thank you Mr. Chairman. We would be pleased to answer any questions you may have.

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