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Thursday, December 31, 2009

Nuclear Energy Policy

Mark Holt
Specialist in Energy Policy

Nuclear energy issues facing Congress include federal incentives for new commercial reactors, radioactive waste management policy, research and development priorities, power plant safety and regulation, nuclear weapons proliferation, and security against terrorist attacks.

Significant incentives for new commercial reactors were included in the Energy Policy Act of 2005 (EPACT05, P.L. 109-58). These include production tax credits, loan guarantees, insurance against regulatory delays, and extension of the Price-Anderson Act nuclear liability system. Together with higher fossil fuel prices and the possibility of greenhouse gas controls, the federal incentives for nuclear power have helped spur renewed interest by utilities and other potential reactor developers. Plans for as many as 31 reactor license applications have been announced, although it is unclear how many of those projects will move forward.

The EPACT05 Title XVII loan guarantees, administered by the Department of Energy (DOE), are widely considered crucial by the nuclear industry to obtain financing for new reactors. However, opponents contend that nuclear loan guarantees would provide an unjustifiable subsidy to a mature industry and shift investment away from environmentally preferable energy technologies. The total amount of loan guarantees to be provided to nuclear power projects has been a continuing congressional issue. Nuclear power plants are currently allocated $18.5 billion in loan guarantees, enough for two or three reactors.

DOE’s nuclear energy research and development program includes advanced reactors, fuel cycle technology and facilities, and infrastructure support. The FY2010 Energy and Water Development Appropriations Act (P.L. 111-8) provides $786.6 million for those activities, $10 million above the Obama Administration request and about $5 million below the FY2009 level.

Disposal of highly radioactive waste has been one of the most controversial aspects of nuclear power. The Nuclear Waste Policy Act of 1982 (P.L. 97-425), as amended in 1987, requires DOE to conduct a detailed physical characterization of Yucca Mountain in Nevada as a permanent underground repository for high-level waste. DOE submitted a license application for the Yucca Mountain repository to the Nuclear Regulatory Commission (NRC) on June 3, 2008, with the repository to open by 2020 at the earliest.

The Obama Administration has decided to “terminate the Yucca Mountain program while developing nuclear waste disposal alternatives,” according to the DOE FY2010 budget justification. Alternatives to Yucca Mountain are to be evaluated by a “blue ribbon” panel of experts convened by the Administration.

The FY2010 budget request of $198.6 million for DOE’s Office of Civilian Radioactive Waste Management provides only enough funding to continue the Yucca Mountain licensing process and to evaluate alternative policies, according to DOE. The request is about $90 million below the FY2009 funding level, which was nearly $100 million below the FY2008 level. All work related solely to preparing for construction and operation of the Yucca Mountain repository is being halted, according to the DOE budget justification. The FY2010 Energy and Water Development Appropriations Act includes the requested cuts in the waste program and provides $5 million for the blue ribbon panel. A draft of the DOE FY2011 budget request indicates that Yucca Mountain licensing is to be halted by the end of 2010.

Date of Report: December 10, 2009
Number of Pages: 28
Order Number: RL33558
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