The nuclear energy “renaissance” that was supposed to begin a decade ago never materialized.
That means the federal agency that regulates nuclear power needs to shrink, and for some members of the Republican-led Congress that isn’t happening fast enough.
Instead of the Nuclear Regulatory Commission doing a reality check, Republican advisers say it is trying to justify a beefier budget with more staff and higher fees despite a diminishing workload.
Meanwhile, staff at the commission put together a plan called Aim 2020 that recommends trimming the agency over the next five years, but it must be approved by commissioners.
Republican lawmakers say any plan to shrink the commission should start sooner than the staff report projects. Republican advisers note that even though the 2020 plan shows agency employees numbering 3,667 in 2015, the commission’s fiscal 2016 budget seeks to add 74 staffers. That’s down from last year’s staffing request, but it is still an increase.
Sen. Jim Inhofe, R-Okla., chairman of the Environment and Public Works Committee, said the commission is an “agency that … faces a shrinking industry” and needs to learn “to do more with less.” He said he recognizes that the commission has proposed making changes by 2020, but that timeline isn’t fast enough.
Inhofe and other lawmakers say the commission is over-optimistic about the amount of work it has budgeted in 2016, prompting it to collect millions of dollars in additional fees from existing reactors to make up for lost licensing revenue. That has lawmakers and utilities nervous about the cost of a growing agency in the midst of a shrinking nuclear power industry.
The fees that the commission collects to augment its budget have soared. Between 2005 and 2015, fees grew from $3.3 million per active reactor to $5.3 million, according to GOP advisers.
The commission’s new budget suggests it can make up for the diminished workload through the certification and licensing of new power plants such as “small modular reactors” and other new projects. But critics say the commission’s work projections are a gamble at best.
Inhofe wants the Obama administration to stop thinking that the Nuclear Regulatory Commission will generate enough work to justify its growth and agree that the agency should be scaled back — and do so rapidly.
The commission’s “mission is a vital one and has to be funded,” but “resources aren’t unlimited,” Inhofe said Wednesday at the first oversight hearing for the nuclear agency in the new Congress.
There is also the risk that by continuing to keep the commission at its current staff level and licensing workload — including all the fees it charges utility companies to complete that work — it will drive up electricity costs for consumers.
“It is the hardworking families that usually pay for these [fees] through higher electric bills,” Inhofe said.
Without enough work, the commission cannot meet its budget goals. Unlike large cabinet agencies such as the State Department or the Environmental Protection Agency, the nuclear commission relies on the fees it charges to generate revenue.
With fewer new power plants needing to be licensed, the pool of would-be fee payers is shrinking. The commission’s remedy is to charge the existing 100 power plants more to make up for the difference, but many argue that is unsustainable and fiscally irresponsible.
Total fees rose in fiscal 2014 by 7.7 percent to more than $930 million from the previous year, according to industry data. The fee for each active reactor jumped 19 percent to $5.2 million from the previous year due to the drop in the workload.
The Nuclear Energy Institute, representing nuclear utilities, called the rising fees “unjustified.”
But the commission says the fees rose because of the closure of two reactors, creating the need for the remaining reactor fleet to make up for the lost revenue. Those fees are expected to rise even higher this year with the closure of Entergy’s Vermont Yankee power plant, a committee brief says.
The commission also charges fees to certify new reactor designs and grant licenses to operate those new power plants. Certifying and licensing a reactor can cost several million dollars, but it depends on the stage of the project and other factors.
Sources say the issue came as a shock to plant owners when they saw their fees soar in the two years. Other senators on the environment committee say the issue is a concern.
Sen. John Barrasso, R-Wyo., appeared perplexed during last week’s hearing. For him the situation is counterintuitive. The fee situation is a “surprise and concern,” exemplifying a “lack of fiscal accountability” on the part of the regulator, he said. He asked the commission’s chairman, “how do you explain [an] increase in fees” when the commission’s workload is receding?
The commission’s relatively new chairman, Stephen Burns, responded, “fewer licensees does have an impact on the fees.”
Despite the fewer licensees, the commission’s fiscal 2016 budget includes funding for nine new reactor license applications, Burns said. It also plans to conduct safety inspections at four reactors that are under construction and anticipates “to begin review of an anticipated small modular reactor application.”
