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Order Code IB88090
CRS Issue Brief for Congress
Received through the CRS Web
Nuclear Energy Policy
Updated June 4, 2003
Mark Holt and Carl E. Behrens
Resources, Science, and Industry Division
Congressional Research Service
˜ The Library of Congress
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
Domestic Reactor SafetyReactor Safety in the Former Soviet Bloc
Licensing and RegulationReactor SecurityDecommissioning and Life ExtensionNuclear Accident Liability
Nuclear Waste Management
Federal Funding for Nuclear Energy Programs
Nuclear Energy Policy
Nuclear energy policy issues facing
extend Price-Anderson through August 1,
Congress include questions about radioactive
waste management, research and developmentpriorities, power plant safety and regulation,
The September 11, 2001, terrorist attacks
terrorism, and the Price-Anderson Act nuclear
on the United States raised questions about
nuclear power plant security. Reactor securityprovisions are included in H.R. 6. Legislation
The Bush Administration has stressed the
to strengthen reactor security requirements (S.
importance of nuclear power in the nation's
1043) was approved by the Senate Environ-
energy policy. The Administration's FY2004
ment and Public Works Committee on May
budget request includes $35 million for a
Department of Energy (DOE) effort to encour-age deployment of new commercial nuclear
Disposal of highly radioactive waste has
power plants by 2010, about the same as the
been one of the most controversial aspects of
FY2003 appropriation. The Administration is
nuclear power. The Nuclear Waste Policy Act
also seeking $4 million for the Nuclear Hydro-
of 1982 (NWPA, P.L. 97-425), as amended in
gen Initiative, a new DOE program in which
1987, requires DOE to conduct detailed physi-
nuclear reactors would produce hydrogen to
cal characterization of Yucca Mountain in
fuel motor vehicles.
Nevada as a permanent underground reposi-tory for high-level waste. President Bush
Energy legislation under consideration on
recommended approval of the site February
the Senate floor (S. 14) would authorize loan
15, 2002, and Nevada Governor Guinn on
guarantees and other financial assistance for
April 8, 2002, issued a "state veto" of the site,
construction of up to 8,400 megawatts of new
as allowed by NWPA. A resolution to over-
commercial nuclear generating capacity. Also
turn the "state veto" and allow further activity
included in the bill's nuclear title is a $500
at Yucca Mountain to proceed was signed by
million authorization to construct a demon-
the President on July 23, 2002 (P.L. 107-200).
stration reactor in Idaho to produce hydrogen.
Whether progress on nuclear waste
Price-Anderson would be extended
disposal and other congressional action will
permanently by S. 14. The Senate Environ-
revive the U.S. nuclear power industry's
ment and Public Works Committee approved
growth will depend primarily on economic
a bill April 9, 2003 (S. 156) that would extend
considerations. Natural gas- and coal-fired
Price-Anderson coverage for commercial
power plants currently are favored over nu-
nuclear plants through August 1, 2012. A
clear reactors for new generating capacity.
provision in an omnibus energy bill (H.R. 6)
However, some electric utilities are seeking
passed by the House April 11, 2003, would
approval of sites for possible new reactors.
Congressional Research Service
˜ The Library of Congress
MOST RECENT DEVELOPMENTS
The Senate began debate May 6 on omnibus energy legislation (S. 14) that would
authorize loan guarantees and other financial assistance for building as much as 8,400megawatts of new commercial nuclear generating capacity and authorize $500 million toconstruct a demonstration reactor in Idaho to produce hydrogen. The bill also wouldindefinitely extend the Price-Anderson Act nuclear liability system.
Omnibus energy legislation passed by the House on April 11 (H.R. 6) would extend the
Price-Anderson Act through August 1, 2017. The Senate Environment and Public WorksCommittee approved a bill April 9 (S. 156) that would extend Price-Anderson coverage fornew commercial nuclear plants through August 1, 2012. An omnibus FY2003 continuingresolution signed by the President on February 20 (P.L. 108-7) extends Price-Andersoncoverage for new commercial nuclear reactors through December 31, 2003. For DOEcontractors, Price-Anderson coverage was extended for 2 years by the FY2003 DefenseAuthorization Act (P.L. 107-314), signed December 2, 2002. Under Price-Anderson,commercial reactors must pay for any radiological damages to the public through a limitedindustry self-insurance system, and DOE nuclear contractors are indemnified by the federalgovernment.
The Senate Environment and Public Works Committee on May 15 approved a bill (S.
1043) to strengthen security requirements at nuclear power plants. The bill would require theNuclear Regulatory Commission (NRC) to issue regulations updating the "design basisthreat" (DBT) that nuclear plants must be secured against. NRC on April 29 issued ordersto nuclear power plants to meet a stronger DBT, although nuclear power critics charged thatthe new standard was compromised by nuclear industry pressure.
President Bush's FY2004 budget request, submitted February 3, includes $387.6 million
for Department of Energy (DOE) nuclear energy research and development — includingadvanced reactors, fuel cycle technology, and nuclear hydrogen production That request issubstantially higher than the $261.7 million appropriated for FY2003, but about $110 millionof the increase is related to the transfer of primary responsibility for the Idaho NationalEngineering and Environmental Laboratory to the nuclear energy program from DOE'senvironmental management program.
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 long-term future. No nuclear plants have been ordered since1978 and more than 100 reactors have been canceled, including all ordered after 1973. Nounits are currently under active construction; the Tennessee Valley Authority's Watts Bar 1reactor, ordered in 1970 and licensed to operate in 1996, was the most recent U.S. nuclearunit to be completed. The nuclear power industry's troubles include high nuclear power
plant construction costs, public concern about nuclear safety and waste disposal, andregulatory 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 (in1997 dollars). The nuclear industry predicts that new plant designs could be built for lessthan half that amount if many identical plants were built in a series, but such economies ofscale 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 theTennessee Valley Authority's (TVA's) Browns Ferry 1, which has not operated since 1985;the TVA Board decided May 16, 2002, to spend about $1.8 billion to restart the reactor by2007.) 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 ofU.S. electricity generation. Nuclear plants generate more than half the electricity in sixstates. The 772 billion kilowatt-hours of nuclear electricity generated in the United Statesduring 2002 was more than the nation's entire electrical output in 1963, when the first oftoday's 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 reactorsgenerated electricity at a record-high average of more than 89% of their total capacity in2002, according to industry statistics.1
Sixteen commercial reactors have received 20-year license extensions from the Nuclear
Regulatory Commission (NRC), giving them up to 60 years of operation. License extensionsfor 14 more reactors are currently under review, and many others are anticipated, accordingto NRC.
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 saleshave occurred, including the March 2001 sale of the Millstone plant in Connecticut toDominion Energy for a record $1.28 billion. The merger of two of the nation's largestnuclear utilities, PECO Energy and Unicom, completed in October 2000, consolidated theoperation 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 receivedfavorable regulatory treatment of past construction costs, and average nuclear operating costsare currently estimated to be lower than those of competing fossil fuel technologies.2Although eight U.S. nuclear reactors have permanently shut down since 1990, recent reactorsales could indicate greater industry interest in nuclear plants that previously had been
1 "U.S. Units Exceed 89% Average Capacity Factor," Nucleonics Week
, February 13, 2003, p. 1.
2 "Production Costs Made Nuclear Cheapest Fuel in 1999, NEI Says," Nucleonics Week
, January 11,2001, p. 3.
considered marginal. Despite the shutdowns, total U.S. nuclear electrical output increasedby more than one-third from 1990 to 2002, according to the Energy InformationAdministration. The increase resulted primarily from reduced downtime at the remainingplants, the startup of five new units, and reactor modifications to boost capacity.
A spike in fossil fuel prices and shortages of electricity during 2000-2001 helped
encourage at least three nuclear operating companies to consider building new commercialnuclear reactors. Exelon helped form an international consortium that may build ademonstration Pebble Bed Modular Reactor (PBMR) in South Africa, a reactor cooled byhelium that is intended to be highly resistant to accidents. However, Exelon announced inApril 2002 that it would leave the consortium after a feasibility study is completed. Entergy,Dominion Resources, and Exelon have chosen sites in Mississippi, Virginia, and Illinois,respectively, for possible future nuclear units.3 The Department of Energy (DOE) isimplementing a program to encourage construction of new commercial reactors by 2010.
The Senate began debating an omnibus energy bill (S. 14) on May 6, 2003, that would
authorize loan guarantees and other financial assistance for building as much as 8,400megawatts of new commercial nuclear generating capacity — or about six or seven reactors.
Such financial assistance, which would be subject to appropriations, would be limited to halfof eligible project costs. Also included in the nuclear title is a $500 million authorization toconstruct a demonstration reactor in Idaho to produce hydrogen. Omnibus energy legislation(H.R. 6) passed by the House on April 11, 2003, requires the Secretary of Energy to studythe feasibility of locating a commercial nuclear power plant at a DOE site.
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 ofreactors. An air pollution bill introduced April 9, 2003, by Senator Carper (S. 843) wouldprovide potentially valuable emissions allowances to owners of incremental nuclear powercapacity. On May 19, 2003, New Hampshire became the first state to provide emissionscredits for incremental nuclear generating capacity. But the large obstacles noted above muststill 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
Nuclear Power Research and Development
For nuclear energy research and development — including advanced reactors, fuel cycle
technology, and nuclear hydrogen production — the Bush Administration is requesting$387.6 million for FY2004. That request is substantially higher than the $261.7 millionappropriated for FY2003, but about $110 million of the increase is related to the transfer ofprimary responsibility for the Idaho National Engineering and Environmental Laboratory(INEEL) to the nuclear energy program from DOE's environmental management program.
3 Beattie, Jeff. "Entergy Names Mississippi Site for Possible New Reactor," Energy Daily
, April17, 2002. p. 4. Weil, Jenny. "Exelon Selects Clinton Site for Possible New Reactor," NucleonicsWeek
, May 2, 2002. p. 1.
"Nuclear energy, which is already a vital component of our balanced energy portfolio,
presents some of our most promising solutions to the world's long-term energy challenges,"according to DOE's FY2004 budget justification. However, opponents have criticizedDOE's nuclear research program as providing wasteful subsidies to an industry that theybelieve should be phased out as unacceptably hazardous and economically uncompetitive.
Within the nuclear energy budget, the Administration is requesting $48 million for the
nuclear energy technologies program, which focuses on development of new reactors. Thatrequest is $3.0 million above the FY2003 appropriation. The program includes $35.0 millionfor an initiative to encourage construction of new commercial reactors by 2010 ("NuclearPower 2010") and $9.7 million for advanced ("Generation IV") reactor designs that couldbe ready for deployment after 2010.
According to the DOE budget justification, the Nuclear Power 2010 program "will
achieve near-term deployment of new power plants in the United States through cost-shareddemonstration of the new, untested regulatory processes and cost-shared development ofadvanced reactor technologies." The program seeks to deploy both a water-cooled reactor(similar to most existing commercial plants) and a gas-cooled reactor. The current phase ofthe initiative includes site approval, reactor design certification, license applications, detaileddesign work, and development of improved construction techniques. DOE is solicitingproposals for joint DOE/industry teams in which DOE will pay up to half the cost of theseactivities.
DOE's Generation IV program is focusing on six advanced designs that could be
deployed after 2010: two gas-cooled, one water-cooled, two liquid-metal-cooled, and onemolten-salt concept. Some of these reactors would use plutonium recovered throughreprocessing of spent nuclear fuel. The Administration's May 2001 National Energy Policy
report contends that plutonium recovery could reduce the long-term environmental impactof nuclear waste disposal and increase domestic energy supplies. However, opponentscontend that the separation of plutonium from spent fuel poses unacceptable environmentalrisks and, because of plutonium's potential use in nuclear bombs, undermines U.S. policyon nuclear weapons proliferation.
The development of plutonium-fueled reactors in the Generation IV program is closely
related to the nuclear energy program's Advanced Fuel Cycle Initiative (AFCI), for which$63.0 million is requested for FY2004 — about $5 million above the FY2003 appropriation.
According to the budget justification, AFCI will "develop advanced proliferation-resistantfuel treatment and fabrication technologies that could be deployed by 2015," as well astechnologies that could reduce the long-term hazard of spent nuclear fuel. Such technologieswould involve separation of plutonium, uranium, and other long-lived radioactive materialsfrom spent fuel for re-use in a nuclear reactor or for transmutation in a particle accelerator.
AFCI includes a previously funded research program on accelerator transmutation calledAdvanced Accelerator Applications. The program also includes longstanding DOE work onelectrometallurgical treatment of spent fuel from the Experimental Breeder Reactor II (EBR-II) at INEEL.
In support of President Bush's program to develop hydrogen-fueled vehicles, DOE is
requesting $4.0 million in FY2004 for a new "Nuclear Hydrogen Initiative." According toDOE's budget justification, the program would investigate the use of high-temperature
nuclear reactors to make hydrogen from water in a thermo-chemical process. According toDOE, "preliminary estimates indicate that hydrogen produced using nuclear-driven thermo-chemical processes would be only slightly more expensive than gasoline" and result in farless air pollution. Activities planned in FY2004 include development of a "roadmap" fordeveloping nuclear hydrogen technologies and laboratory testing of thermo-chemicalprocesses and related research. Even if the technology is successful, however, DOE officialshave predicted that significant quantities of nuclear-produced hydrogen would not becomeavailable until 2020-2030.4
The Nuclear Energy Research Initiative (NERI) provides grants for research on
innovative nuclear energy technologies. DOE is requesting $12.0 million for NERI inFY2004, about half of the FY2003 appropriation. According to the budget justification, nonew grants will be awarded in FY2003 and FY2004, with new program funding to be usedonly for completing previously initiated projects.
DOE proposes no new funding in FY2004 for the Nuclear Energy Plant Optimization
program (NEPO), which received $5.0 million in FY2003. The program supports cost-shared research by the nuclear power industry on ways to improve the productivity ofexisting nuclear plants.
The omnibus energy bills now under consideration, H.R. 6 and S. 14, include funding
authorizations for DOE nuclear energy programs that are similar to the Administrationfunding request.
Nuclear Power Plant Safety and Regulation
Controversy over safety has dogged nuclear power throughout its development,
particularly following the March 1979 Three Mile Island accident in Pennsylvania and theApril 1986 Chernobyl disaster in the former Soviet Union. In the United States, safety-relat-ed shortcomings have been identified in the construction quality of some plants, plantoperation and maintenance, equipment reliability, emergency planning, and other areas. Ina recent example, it was discovered in March 2002 that leaking boric acid had eaten a largecavity in the top of the reactor vessel in Ohio's Davis-Besse nuclear plant. The corrosion leftonly the vessel's quarter-inch-thick stainless steel inner liner to prevent a potentiallycatastrophic release of reactor cooling water.
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 criticscharge that NRC frequently relaxes safety standards when compliance may prove difficultor 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
4 EnergyWashington.com Daily Updates, February 5, 2003.
technologies has been excellent. In more than 2,250 reactor-years of operation in the UnitedStates, the only incident at a commercial power plant that might lead to any deaths or injuriesto the public has been the Three Mile Island accident, in which more than half the reactorcore melted. Public exposure to radioactive materials released during that accident isexpected to cause fewer than five deaths (and perhaps none) from cancer over the following30 years. A recent study of 32,000 people living within 5 miles of the reactor when theaccident occurred found no significant increase in cancer rates through 1998, although theauthors note that some potential health effects "cannot be definitively excluded."5
The relatively small amounts of radioactivity released by nuclear plants during normal
operation are not generally believed to pose significant hazards, although some groupscontend that routine emissions are risky. There is substantial scientific uncertainty about thelevel of risk posed by low levels of radiation exposure; as with many carcinogens and otherhazardous substances, health effects can be clearly measured only at relatively high exposurelevels. In the case of radiation, the assumed risk of low-level exposure has been extrapolatedmostly 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-yearsof operation. These experts believe that most severe accidents would have small publichealth impacts, and that accidents causing as many as 100 deaths would be much rarer thanonce every 10,000 reactor-years. On the other hand, some experts challenge the complexcalculations that go into predicting such accident frequencies, contending that accidents withserious 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 31persons died quickly from acute radiation exposure or other injuries, and thousands ofadditional cancer deaths among the tens of millions of people exposed to radiation from theaccident 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 beena dramatic increase in childhood thyroid cancer. About 1,000 cases of childhood thyroidcancer were reported in certain regions surrounding the destroyed reactor — a rate that is asmuch as a hundred times the pre-accident level, according to OECD. The death rate foraccident cleanup workers also rose measurably, the organization reported. The OECD reportestimated that about 50,000 square miles of land in Belarus, Ukraine, and Russia weresubstantially contaminated with radioactive cesium from Chernobyl.6
5 Talbott, Evelyn O., et al.
"Long Term Follow-Up of the Residents of the Three Mile IslandAccident Area: 1979-1998." Environmental Health Perspectives. Published online October 30,2002. [http://ehpnet1.niehs.nih.gov/docs/2003/5662/abstract.html]
6 OECD Nuclear Energy Agency. Chernobyl: Assessment of Radiological and Health Impacts.
The United States is providing direct assistance for upgrading the safety of remaining
Soviet-designed reactors, a program being coordinated by DOE, NRC, the Agency forInternational Development (AID), and the Department of State. DOE is seeking $14.1million in FY2004 for improving the operation and physical condition of Soviet-designednuclear power plants, an increase of $2.5 million from FY2003. The General AccountingOffice estimates that $1.93 billion was provided through November 1999 by the UnitedStates and other industrialized nations to improve the safety of Soviet-designed reactors. Ofthat amount, $753 was contributed by the European Union, $532 by the United States, $43million by the International Atomic Energy Agency, and the remainder from 14 othercountries.
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 powerplant, according to the industry, unless licensing became quicker and more predictable, anddesigns were less subject to mid-construction safety-related changes required by NRC. TheEnergy Policy Act of 1992 largely implemented the industry's licensing goals, but no plantshave 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 permitto build a plant, and then, after construction was finished, an operating permit to run it. Eachstage of the licensing process involved complicated proceedings. Environmental impactstatements 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 theconstruction permits and operating licenses and allow completed plants to operate withoutdelay if construction criteria are met. NRC would hold preoperational hearings on theadequacy of plant construction only in specified circumstances. DOE's Nuclear Power 2010initiative proposes to pay up to half the cost of combined construction and operating licensesfor a water-cooled and a gas-cooled reactor.
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 haveregularly complained that unnecessarily stringent and inflexibly enforced nuclear safetyregulations have burdened nuclear utilities and their customers with excessive costs. Butmany environmentalists, nuclear opponents, and other groups charge NRC with being tooclose to the nuclear industry, a situation that they say has resulted in lax oversight of nuclearpower 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 isalso monitored directly by NRC, which maintains at least two resident inspectors at eachnuclear power plant. The resident inspectors routinely examine plant systems, observe theperformance of reactor personnel, and prepare regular inspection reports. For serious safetyviolations, 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," inwhich safety enforcement is guided by the relative risks identified by detailed individualplant studies. NRC began implementing a new reactor oversight system April 2, 2000, thatrelies on a series of performance indicators to determine the level of scrutiny that eachreactor should receive. However, the Union of Concerned Scientists has questioned thevalidity of the individual plant studies on which risk-informed regulation is based.
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 plantoperators to defend against such attacks. All commercial nuclear power plants licensed byNRC have a series of physical barriers to accessing the operating reactor area, and arerequired to maintain a trained security force to protect them. Following the September 11,2001, terrorist attacks NRC activated its Emergency Response Center and advised all plantoperators to go to the highest level of security alert. It also began a "top-to-bottom" reviewof 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 todefend against them. The severity of attacks to be prepared for are specified in the form ofa "design basis threat" (DBT). After more than a year's review, on April 29, 2003, NRCchanged the DBT to "represent the largest reasonable threat against which a regulated privateguard force should be expected to defend under existing law." The details of the revisedDBT were not released to the public.
Several bills were introduced in the 107th Congress to change the way nuclear plants
would be protected from terrorist attack, including proposals to create a federal force toreplace private guards, but none was passed. In the 108th Congress several legislativeproposals have been introduced, and one, the Nuclear Infrastructure Security Act of 2003 (S.
1043) was reported out on May 15, 2003, by the Senate Environment and Public WorksCommittee. (For details see CRS Report RS21131, Nuclear Power Plants: Vulnerabilityto Terrorist Attack.
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 regularcontributions to special trust funds to ensure that money is available to remove all radioactivematerial from reactors after they are closed. Because no full-sized U.S. commercial reactorhas yet been completely decommissioned, which can take several decades, the cost of theprocess 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 in1995 dollars. Disposal of large amounts of low-level waste, consisting of contaminatedreactor components, concrete, and other materials, is expected to account for much of thosecosts.
Consolidation of the nuclear industry has raised questions about the tax treatment of
decommissioning funds when a commercial reactor is sold. H.R. 6 and an energy taxincentives bill (S. 1149) introduced by Senator Grassley on May 23, 2003, specify thatdedicated nuclear decommissioning funds can be transferred to new reactor owners withoutincurring additional tax liabilities.
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 act was up for reauthorization on August 1, 2002, and it was extended forcommercial reactors through December 31, 2003, by the FY2003 omnibus continuingresolution (P.L. 108-7). Even without an extension, existing reactors would continue tooperate under the current Price-Anderson liability system, but new reactors would not becovered.
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 oftheir legal defenses following a severe radioactive release ("extraordinary nuclearoccurrence"). To pay any such damages, each licensed reactor must carry financialprotection in the amount of the maximum liability insurance available, which was increasedby the insurance industry from $200 million to $300 million on January 1, 2003. Anydamages exceeding that amount are to be assessed equally against all operating commercialreactors, up to $83.9 million per reactor. Those assessments — called "retrospectivepremiums" — would be paid at an annual rate of no more than $10 million per reactor, tolimit the potential financial burden on reactor owners following a major accident. Includingthree that are not operating, 106 commercial reactors are currently covered by the Price-Anderson retrospective premium requirement.
For each nuclear incident, therefore, the Price-Anderson liability system currently would
provide up to $9.2 billion in public compensation. That total includes the $300 million ininsurance coverage carried by the reactor that suffered the incident, plus the $83.9 millionin retrospective premiums from each of the 106 currently covered reactors. On top of thosepayments, a 5% surcharge may also be imposed, raising the total per-reactor retrospectivepremium to $88.1 million and total compensation to $9.6 billion. Under Price-Anderson, thenuclear industry's liability for an incident is capped at that amount, which varies dependingon the number of covered reactors, the amount of available insurance, and an inflationadjustment that is made every 5 years. Payment of any damages above that liability limitwould 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 ofcovered reactors. Since 1998, the number of covered commercial reactors has dropped from110 to 106, so the commercial liability limit has dropped from $9.43 billion to $9.19 billion(excluding the 5% surcharge). Under the law, however, the limit for DOE contractors doesnot decline and so remains at $9.43 billion. Price-Anderson authorizes DOE to indemnifyits contractors for the entire amount, so that damage payments for nuclear incidents at DOEfacilities 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 facecriminal penalties for "knowingly and willfully" violating nuclear safety rules.
In the 107th Congress, the House approved a 15-year extension of the Price-Anderson
liability system November 27, 2001 (H.R. 2983). The total retrospective premium for eachreactor would have been raised to $94 million and the limit on per-reactor annual paymentsraised to $15 million, with both to be adjusted for inflation every 5 years. For the purposesof those payment limits, a nuclear plant consisting of multiple small reactors (100-300megawatts, up to a total of 950 megawatts) would have been considered a single reactor.
Therefore, a power plant with six 120-megawatt pebble-bed modular reactors would havebeen liable for retrospective premiums of up to $94 million, rather than $564 million. Theliability limit on DOE contractors would have been set at $10 billion per accident, also to beadjusted for inflation.
The Senate included provisions in H.R. 4 to extend Price-Anderson coverage for new
commercial reactors for 10 years and indefinitely for DOE contractors. The liability limitfor commercial reactors would have remained the same, with a five-year inflationadjustment, and the limit for DOE contractors would have been set at $10 billion with aninflation adjustment. Modular reactors of 100-300 megawatts built together in a plant of upto 1,300 megawatts would have been considered a single reactor under Price-Anderson.
The House-passed Price-Anderson bill would have authorized the federal government
to sue DOE contractors to recover at least some of the compensation that the government hadpaid for any accident caused by intentional DOE contractor management misconduct. Suchcost recovery would have been limited to the amount of the contractor's profit under thecontract 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 exemptsseven non-profit DOE contractors and their subcontractors. Under the same section, DOEautomatically remits any civil penalties imposed on non-profit educational institutionsserving as DOE contractors. H.R. 2983 would have eliminated the civil penalty exemptionfor future contracts by the seven listed non-profit contractors and DOE's authority toautomatically remit penalties imposed on all non-profit educational institutions serving ascontractors. However, the bill would have limited the civil penalties against a non-profitcontractor to the amount of discretionary fees (incentive fees above actual costreimbursement) awarded by DOE under that contract. The Senate's Price-Andersonextension in H.R. 4 included similar provisions.
The House-Senate conference committee on H.R. 4 approved a compromise Price-
Anderson subtitle September 12, 2002. The compromise version would have extended Price-Anderson indemnification authority for both NRC and DOE for 15 years, through August 1,2017. The total retrospective premium per reactor would have been set at $94 million,divided into annual payments of no more than $15 million (with both limits to be adjustedfor inflation every 5 years). The liability limit for DOE contractors would have been set at$10 billion, adjusted for inflation every 5 years. Modular reactors of 100-300 megawattswould have been treated as a single reactor under Price-Anderson, up to a limit of 1,300megawatts. The civil penalty exemption for nonprofit contractors would have been replaced
with a nonprofit penalty limit. However, the 107th Congress adjourned without completingaction on the measure.
In the 108th Congress, the Senate attached last year's Price-Anderson conference
agreement to the FY2003 omnibus continuing resolution, but the enacted measure includedonly a simple extension through the end of this calendar year. Representative HeatherWilson introduced a Price-Anderson extension bill (H.R. 330) January 8, 2003, that alsoincludes all the provisions of the H.R. 4 Price-Anderson conference agreement. Anextension of Price-Anderson coverage for new commercial reactors through August 1, 2012(S. 156) was approved by the Senate Environment and Public Works Committee April 9,2003. H.R. 6, as passed by the House on April 11, 2003, includes provisions nearly identicalto the Price-Anderson extension bill passed by the House in the 107th Congress. On the sameday, the Senate Energy and Natural Resources Committee approved a permanent extensionof Price-Anderson in an unnumbered Chairman's mark of omnibus energy legislation,subsequently introduced as S. 14. Except for the permanent extension, the Price-Andersonlanguage in S. 14 is nearly identical to the H.R. 4 conference agreement in the 107thCongress.
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 thatit has worked well since that time in ensuring that nuclear accident victims would have asecure source of compensation, at little cost to the taxpayer. However, opponents contendthat Price-Anderson subsidizes the nuclear power industry by protecting it from some of thefinancial consequences of the most severe conceivable accidents.
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, any new DOEcontracts signed during Price-Anderson expiration would have to use alternateindemnification authority. To prevent that problem, the National Defense Authorization Actfor FY2003 (P.L. 107-314), signed December 2, 2002, extended Price-Anderson coveragefor DOE contractors through December 31, 2004.
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 producesan annual average of about 20 tons of highly radioactive spent nuclear fuel and 50-200 cubicmeters of low-level radioactive waste. Upon decommissioning, contaminated reactorcomponents 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 stateshave the authority to develop disposal facilities for commercial low-level waste. Spent fueland 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 geologicallyundisturbed 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 February15, 2002, recommended to Congress that DOE submit an application to NRC to constructthe Yucca Mountain repository. As allowed by NWPA, Nevada Governor Guinn submitteda "notice of disapproval" (or "state veto") to Congress April 8, 2002. The state veto wouldhave blocked repository construction at Yucca Mountain if a congressional resolutionapproving the site had not been enacted within 90 days of continuous session. The Housepassed a Yucca Mountain approval resolution (H.J.Res. 87) on May 8, 2002, by a 306-117vote. The Senate approved the resolution by voice vote July 9 (following a 60-39 vote toconsider S.J.Res. 34, the Senate version of the resolution), and the President signed it July24, 2002 (P.L. 107-200).
The Administration is requesting $591 million for the DOE civilian nuclear waste
disposal program for FY2004, a 29% boost over FY2003. The increased budget is intendedprimarily to pay for preparing a construction permit application for a national nuclear wasterepository at Yucca Mountain, Nevada. DOE expects to submit the 10,000-page applicationto the Nuclear Regulatory Commission (NRC) in December 2004. The additional funds arealso needed for detailed repository design work, repository performance studies, andtransportation planning, according to DOE.
DOE contends that it cannot meet its 2010 target date for shipping nuclear waste to
Yucca Mountain without receiving its entire FY2004 budget request for the program.
Between FY2005 and FY2010, funding will have to further increase to an average of $1.3billion per year, according to the budget justification. The Administration is proposing thatdiscretionary spending caps be adjusted to accommodate the program's higher futurefunding.
(For further details, see CRS Issue Brief IB92059, Civilian Nuclear Waste Disposal
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 Administrationbudget requests and committee reports on the Energy and Water DevelopmentAppropriations Acts, which fund all the nuclear programs. President Bush submitted hisFY2004 funding request to Congress February 3, 2003. FY2003 funding was provided bya consolidated appropriations resolution signed February 20, 2003 (P.L. 108-7).
Table 1. Funding for the Nuclear Regulatory Commission
(budget authority* in millions of current dollars)
Nuclear Regulatory Commission
Nuclear Materials Safety
Nuclear Waste Safety
International Nuclear Safety
Management and Support
TOTAL NRC BUDGET
* Additional $36 million for nuclear plant security provided by FY2002 supplemental appropriationsincluded in FY2002 Defense Appropriations Bill (P.L. 107-117), approved by Congress December20, 2001. The FY2002 supplemental security funding is not to be offset by fees. The securityfunding is included in the other NRC programs, so it should not be added to the NRC totalas a separate funding category.
Table 2. DOE Funding for Nuclear Activities
(budget authority in millions of current dollars)
Approp. Approp Request
Nuclear Energy (selected programs)
University Reactor Assistance
Nuclear Energy Plant Optimization
Nuclear Energy Research Initiative
Nuclear Energy Technologies
Nuclear Hydrogen Initiative
Advance Fuel Cycle Initiative
International Nuclear Safety*
Total, Nuclear Energy
Uranium Facilities Maintenance and
Nuclear Waste Activities
Defense Environmental Management
Non-defense Environmental Manag.
Nuclear Waste Fund Activities**
* Funded under "Defense Nuclear Nonproliferation."** Funded by a 1-mill-per-kilowatt-hour fee on nuclear power, plus appropriations for defense wastedisposal.
H.R. 6 (Tauzin)
Includes extension of Price-Anderson Act nuclear liability system and reauthorization
of nuclear R&D programs. Introduced April 7, 2003; referred to multiple committees.
Incorporates H.R. 39, H.R. 238, H.R. 1531, H.R. 1644. Passed by House April 11, 2003, byvote of 247-145.
H.R. 238 (Boehlert)
Energy Research, Development, Demonstration, and Commercial Application Act of
2003. Authorizes appropriations for nuclear energy research programs. Introduced January8, 2003; referred to Committee on Science and Committee on Resources. Incorporated intoH.R. 6.
H.R. 330 (H. Wilson)
Price-Anderson Amendments Act of 2003. Extends Price-Anderson Act nuclear
accident liability system for 15 years and increases liability limits. Introduced January 8,2003; referred to Committee on Energy and Commerce.
H.R. 1644 (Barton)
Energy Policy Act of 2003. Includes extension of Price-Anderson Act nuclear liability
system and reauthorization of nuclear R&D programs. Introduced April 7, 2003; referredto multiple committees. Reported by Committee on Energy and Commerce April 8, 2003(H.Rept. 108-65, Part 1).
S. 6 (Daschle)
Comprehensive Homeland Security Act of 2003. Includes provisions from S. 131 on
nuclear facility security. Introduced January 7, 2003; referred to Committee on Judiciary.
S. 14 (Domenici)
Energy Policy Act of 2003. Provides federal assistance for new nuclear power plants,
authorizes nuclear research funding, and extends Price-Anderson Act indefinitely.
Introduced April 30, 2003; placed on Senate calendar. Identical to S. 1005, reported bySenate Energy and Natural Resources Committee May 6, 2003 (S.Rept. 108-43). Senatedebate began May 6, 2003.
S. 131 (Reid)
Nuclear Security Act of 2003. Requires the federal government to study a wide variety
of security threats to nuclear facilities and determine which threats would come fromenemies of the United States and therefore be the responsibility of the federal governmentand which threats should be guarded against by nuclear power plant owners. NRC would berequired to review the security and emergency response plans at all nuclear power plants andother major nuclear facilities. An NRC employee is to be stationed at each nuclear facilityas a "federal security coordinator." Introduced January 9, 3003; referred to Committee onEnvironment and Public Works.
S. 156 (Voinovich)
Price-Anderson Amendments Act of 2003. Extends Price-Anderson Act nuclear
liability coverage for new commercial nuclear power plants through August 1, 2012.
Introduced January 14, 2003; referred to Committee on Environment and Public Works.
Ordered reported by committee April 9, 2003; amended to include nuclear power plantsecurity provisions.
S. 843 (Carper)
Clean Air Planning Act of 2003. Provides emissions allowances for incremental
nuclear power capacity. Introduced April 9, 2003; referred to Committee on Environmentand Public Works.
S. 1043 (Inhofe)
Nuclear Infrastructure Security Act of 2003. Requires NRC to issue new regulations
for "design basis threat" that nuclear power plant security must be able to defeat. IntroducedMay 12, 2003; referred to Committee on Environment and Public Works. Ordered reportedMay 15, 2003.
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