Jan. 30–Feb. 5, 2015 A report to members of the Nuclear Energy Institute Sen. Alexander Steps to the Forefront on Nuclear Energy In This Issue Sen. Alexander Steps To the Forefront On Nuclear Energy 1 President’s Budget Emphasizes Fuel Cycle, Used Fuel Programs 2 NRC Says No Technical Showstoppers For Yucca Mountain 5 NRC Staff Recommends COL For Fermi 3 ESBWR 6 Security Experts Urge Flexible Approach On Foreign Ownership 7  Senator urges U.S. to learn lessons from other nations  Warns of rising prices, lower standard of living without nuclear  NEI: Major energy speech comes at “perfect time” Feb. 5, 2015—Sen. Lamar Alexander (R-Tenn.), chairman of the Senate Appropriations Subcommittee on Energy and Water Development, made a major energy policy speech today at the Nuclear Energy Institute. Painting a grim picture of “The United States Without Nuclear Power,” Alexander outlined policy prescriptions to keep nuclear energy a vital element of a diverse U.S. energy portfolio. NEI President and CEO Marvin Fertel and Sen. Lamar Alexander at NEI www.nei.org “A United States without nuclear power—or with very little nuclear power—is a very real possibility. It’s a possibility we should not want, if we want a strong country and a strong economy,” Alexander said. To address the issue, his subcommittee “will begin expanded oversight” of nuclear energy issues with budget hearings in February and March, followed by hearings on “the future of nuclear power in our country.” Jan. 30–Feb. 5, 2015 Page 2 Alexander said the United States should learn from the examples of Japan and Germany, where the shutdown of nuclear power plants has led to soaring electricity costs and reduced energy security. “The cost of generating electricity in Japan has increased 56 percent since they began shutting down their reactors in 2011,” Alexander said. He said three major Japanese business organizations have called for restart of the nuclear power plants so the country can “return to inexpensive and stable supplies of electricity.” NEI’s Cyber Security Implementation Workshop will assist licensees in implementing the Cyber Security Plan and in meeting the milestones in the implementation schedule. The 2015 workshop will focus on 1) the examples included in revised NEI technical report NEI 13-10; 2) the methodology for shared Direct CDA assessments; 3) sharing lessons learned from cyber security program inspections; and 4) moving forward with other elements of full program implementation. For more information and to register visit: http://www.nei.org/ Conferences/Cyber-SecurityImplementation-Workshop. Alexander referred to a Wall Street Journal article that said the electricity austerity in Japan is so severe that the emperor and empress have been seen “wandering around the Imperial Palace at night with flashlights and candles.” He described the situation in Germany as “an energy mess.” Until 2011, nuclear energy generated about 25 percent of the nation’s electricity. Then the government decided to phase out nuclear energy and replace it with wind and solar power, at an estimated cost of $1.2 trillion. Average electricity prices have risen 60 percent in the past five years, he said, and are among the highest in the European Union. Germany is filling the gaps in its own energy supply by importing nuclear electricity from France and natural gas from Russia, which is “a very unreliable partner.” “And in a remarkable turn of events, Germany started building coal plants,” Alexander said. The United States faces the same troubled energy future as Japan and Germany unless it takes steps now to ensure that nuclear energy remains part of the nation’s electricity portfolio, Alexander said. He outlined six key steps, including building more nuclear plants, ending the stalemate over used nuclear fuel and avoiding overregulation. NEI’s Alex Flint, senior vice president for governmental affairs, said the senator “hit it out of the park today. His clarion call for policies to ensure that America can continue to depend on reliable, carbon-free nuclear energy comes at a perfect time.” Alexander “effectively made the point that there is a lot at stake, and that the energy decisions we make today will shape our nation’s future for generations to come,” Flint said. The full text of the senator’s speech is available on NEI’s website, and an archived video recording will be on NEI’s YouTube channel. << NEI Staff, [email protected] President’s Budget Emphasizes Fuel Cycle, Used Fuel Programs  Includes funds for consent-based siting of used fuel storage  Continues support for small reactor development cost-share project  Industry urges congressional oversight of NRC operations Feb. 5, 2015—The Department of Energy’s fiscal 2016 budget proposal seeks to re-impose a multi-billion dollar tax for the cleanup of three DOE-owned uranium enrichment facilities, a move the nuclear energy industry deplores as redundant and unfair. But other aspects of the budget are more in line with industry goals. Jan. 30–Feb. 5, 2015 Page 3 This year marks the sixth time the Obama administration has requested reinstatement of the decontamination and decommissioning tax, even though Congress has consistently turned it back. “We recognize that the federal government has significant budget pressures, but reinstating unjustified taxes on utility rate payers who have met their funding obligation while the government has failed to meet its own is outrageously unfair,” NEI Senior Vice President for Governmental Affairs Alex Flint said. “The uranium enrichment D&D tax proposal should be dead on arrival in Congress.” In other areas, the budget requests $62 million to continue supporting certification and licensing assistance for the small reactor design being developed by NuScale under a cost-share public-private partnership with DOE. The entry period for the Top Industry Practice (TIP) Awards is open until Feb. 6. Since 1994, the TIP Awards have highlighted the nuclear industry's most innovative techniques and ideas. They promote the sharing of fresh ideas and best practices— and consequently improve safety and work processes and the competitive position of the industry as a whole. The TIP Awards recognize excellence in 13 categories, including special recognition with the B. Ralph Sylvia Best of the Best Award. The awards are sponsored by AREVA, GE Hitachi Nuclear Energy, Westinghouse, WestinghouseCombustion Engineering and NEI. For more information about the TIP program and to submit entries, go to: http://www.nei.org/Member -Center/Member-Resources/ NEI-Sponsored-Awards/TopIndustry-Practice-Awards. The overall fiscal 2016 budget proposal for DOE’s Office of Nuclear Energy is $907.5 million. The request is 9 percent higher than the $863 million requested for fiscal 2015 and slightly below the $913.5 million enacted by Congress. The Nuclear Regulatory Commission budget proposal of $1.03 billion is 1.7 percent higher than the enacted budget. Ninety percent of DOE’s budget is recouped via fees from the nuclear energy industry. Flint said the NRC’s oversight priorities merit “close scrutiny” by Congress, given the industry’s strong safety performance and the fact that utilities’ plans for new nuclear generating capacity are still being shaped by the recession’s lingering effects. “We urge Congress to insist upon NRC adherence to its principles of good regulation so that nuclear energy facilities can most safely and effectively meet their customers’ need for reliable, clean air power supplies,” Flint said. The industry’s priority to ensure public safety “is being challenged by the surplus of nonessential regulations and directives the NRC has imposed over the past decade,” he said. Most DOE programs only saw modest changes. However, the administration requested $217.7 million for fuel cycle R&D, a $20.7 million increase from the $197 million enacted for fiscal 2015. The budget also zeroes out DOE and NRC programs to train the next generation of nuclear industry workers and advance nuclear energy education, a move Flint said makes “no sense.” It would eliminate university programs that support scholarships, fellowships and junior faculty at four-year institutions and community colleges. The administration has consistently cut these programs, though Congress has just as consistently provided about $5 million annually. USED NUCLEAR FUEL The administration is requesting $108 million to develop one or more facilities for used fuel and high-level radioactive waste management using consent-based siting as recommended by the Blue Ribbon Commission on America’s Nuclear Future in 2012. This represents a significant boost from the $79 million proposed for fiscal 2015. An additional $3 million is proposed to fund research into disposal options for some of DOE’s high-level waste and used fuel. The administration included no funds to continue the Yucca Mountain licensing process but proposes using $24 million from Page 4 Jan. 30–Feb. 5, 2015 the Nuclear Waste Fund for generic process development and other non-R&D activities related to used fuel storage, transportation and disposal. Co-organized by NEI and World Nuclear Association, World Nuclear Fuel Cycle 2015 provides a top-level international forum for senior industry leaders to discuss the issues affecting the commercial nuclear fuel cycle today, with a focus on enhancing the economic competitiveness of the nuclear fuel cycle and nuclear energy. This year’s conference also features a technical visit to Temelin Nuclear Power Plant. For more information and to register visit: http://www.wnfc.info/. The administration requests $345 million to continue construction of DOE’s Mixed Oxide Fuel Fabrication Facility in South Carolina, a turnabout from the fiscal 2015 proposal to put the facility into cold standby while DOE researched options for disposal of surplus plutonium. Congress last year turned back the idea and funded the facility’s continued construction. The MOX fuel, which would be fabricated from recycled surplus defense-origin plutonium and uranium, is potentially a fuel for the domestic nuclear energy industry. Jan. 30–Feb. 5, 2015 Page 5 LOAN GUARANTEES Funding for DOE’s loan guarantee program remains consistent in this budget request, with $18.5 billion authority. Last year DOE finalized the first nuclear energy-specific loan guarantee of $6.5 billion to Southern Co. and its partners to help finance the construction of two new reactors at the Plant Vogtle site in Georgia. NEI's Nuclear Plant Site Emergency Contacts database facilitates routine communications among industry professionals and effects a ready response to plant events or other developments. It contains basic data on U.S. nuclear energy facilities, joint information centers, emergency planning zone populations and emergency plan contacts for all sites, as well as media and public information contacts. To submit updates for a plant site or for more information, contact NEI’s Jennifer Maloney at [email protected]. Loan guarantees are not an actual appropriation and, therefore, do not represent an outlay of taxpayer dollars when the projects they support are successfully completed. The guarantees aim to boost investor confidence and allow worthy projects to obtain financing on more reasonable terms that ultimately will lower the cost of electricity generated by the projects. For nuclear power projects, recipients must pay a substantial origination fee, negotiations over which delayed final approval for the Southern Co. loan guarantee. The accompanying chart shows DOE’s budget numbers in categories relevant to the nuclear energy industry. It will appear in Nuclear Energy Overview periodically, revised to follow the federal appropriations process through the year. << Mark Flanagan, [email protected] NRC Says No Technical Showstoppers for Yucca Mountain  Issuance of Volumes 2 and 5 of Yucca evaluation completes technical review  Overall conclusion is that NRC safety requirements have been met  Next steps on adjudicatory process will require additional funding Feb. 4, 2015—The U.S. Nuclear Regulatory Commission in late January issued the last two of five volumes of its safety evaluation report on the proposed geologic repository for spent nuclear fuel at Yucca Mountain in Nevada. The action completed the first half of a two-part licensing process to determine whether the repository can be built. “This milestone completes the NRC staff’s technical review of the Department of Energy’s safety analysis of the proposed repository,” NEI Senior Director for Used Fuel and Decommissioning Programs Rodney McCullum said. “The NRC’s independent experts have concluded in these reports that DOE’s proposed repository as designed will be capable of safely isolating used nuclear fuel and high-level radioactive waste for the 1-million-year period specified in the regulations and that the repository design assures operational safety in the period before its permanent closure,” McCullum said. Repository safety before permanent closure, the subject of Volume 2 of the safety evaluation report, concludes that DOE’s license application meets the NRC’s regulatory requirements in that area. Post-closure safety for the 1-million-year period was the subject of Volume 3, which was completed last October. Volume 5, also issued last week, contains the staff’s overall conclusion that, except for the administrative items in Volume 4 noted below, the NRC’s applicable safety and regulatory requirements have been met. Jan. 30–Feb. 5, 2015 Page 6 Volume 4, on administrative and programmatic requirements, was published in December. That report identified land and water access rights that DOE would have to acquire before a construction authorization could be issued. McCullum said that these items could be addressed if Congress and the administration fully funds and reconstitutes a viable project organization for the Yucca Mountain program. Because DOE has not yet acquired these rights, the safety evaluation report stopped short of recommending that a construction authorization be issued. Volume 1 was completed in August 2010 after DOE moved in 2009 to withdraw its 2008 Yucca Mountain license application but before the NRC suspended licensing review in 2011. The remaining volumes were completed after a federal court ordered the agency in 2013 to resume its review using available Nuclear Waste Fund money. NEI’s 62nd Annual Industry Conference and Supplier Expo: Nuclear Energy Assembly is the annual conference of the nuclear technologies industry. The conference draws hundreds of senior executives and policymakers from around the world. Join us May 12-14, 2015 in Washington, D.C.! For more information and to register visit: http://www.nei.org/ Conferences/Annual-Nuclear -Industry-Conference-andNuclear-Sup. Before a final licensing decision can be made, the second step of the licensing process requires that DOE’s safety analysis and the NRC’s safety evaluation undergo adjudicatory scrutiny, where intervening parties are given the opportunity to challenge the conclusions before an NRC Atomic Safety and Licensing Board panel composed of three impartial judges. McCullum noted that this step also will require additional funding. In addition, a supplement to the Department of Energy’s environmental impact statement will need to be completed—the NRC says it “is prepared” to also complete this document, an option allowed in the regulations, since DOE has declined to do so. All five volumes are available on the NRC website as NUREG-1949, Safety Evaluation Report Related to Disposal of High-Level Radioactive Wastes in a Geologic Repository at Yucca Mountain, Nevada. << Chris Charles, [email protected] NRC Staff Recommends COL for Fermi 3 ESBWR  Fermi 3 will be the reference COL for the ESBWR design  DTE Energy will make construction decision at future date  Decision to grant license awaits final NRC vote Feb. 5, 2015—Nuclear Regulatory Commission staff recommended this week that the agency grant a combined construction and operating license (COL) to DTE Energy Co. for an Economic Simplified Boiling Water Reactor (ESBWR) at the Fermi site in Monroe County, Mich. “We [NRC staff] have provided an adequate basis for making the necessary finding … supporting the issuance of the combined license for Fermi 3,” Glenn Tracy, director of the NRC’s Office of New Reactors, said at a Feb. 4 NRC public hearing. “We are similarly confident that … we will be able to confirm that the plant will be built and operated in conformance with the license.” DTE Energy said that while the utility has not made a final decision on whether to move forward with the project, it anticipates a timely decision from the NRC on the license application. Jan. 30–Feb. 5, 2015 Page 7 Follow NEI NEI posts nuclear energy-related blog posts, tweets, videos and more on a variety of social media sites. Connect with NEI here: http://www.nei.org/ contactus/socialmedia/. “We’re looking forward to being the first ESBWR license holder,” said Peter Smith, director of nuclear development at DTE Energy. “We believe our application and the staff’s work provide the basis for you making the statutory findings necessary to approve the license.” Tracy said the NRC has devoted substantial time and resources to reviewing the license application since its 2008 submittal. “The staff has expended approximately 52,000 hours on the safety review and another 17,000 hours on the environmental review, which involved well over 1,000 engineers, scientists and technical specialists, many of them here today.” On the applicant side, Smith noted that DTE and its key contractors have spent “more than a quarter-million man-hours” on the project. GE Hitachi Nuclear Energy’s passive safety design features on the ESBWR—the reactor can safely cool itself with no AC electrical power or human intervention for more than seven days—helped the new plant to meet post-Fukushima safety enhancements, Smith said. NRC staff agreed with DTE Energy’s assessment. “The applicant met all applicable standards in implementation of post-Fukushima near-term task force recommendations,” Tracy said. Smith mentioned the substantial support the Fermi plant has from the local community. “We have really good relations with our local and state officials and we spend time educating them about our company,” Smith said. “We’re a major employer in the local community. The area’s used to having the plant there. ... We work very hard with the relationships and our presence in the community.” The NRC commission must cast a final vote on whether to approve the COL application and DTE Energy has not yet decided whether to go forward with the project, but Smith said that it would be “good to have the option to build.” NRC Chairman Stephen Burns said the NRC would issue a final decision on the COL application for Fermi 3 “promptly with due regard for the complexities before it.” The meeting agenda and slides are available on the NRC website. Security Experts Advise Flexible Approach On Foreign Ownership  NRC gathers feedback from security experts in non-nuclear industries  Globalized technology markets call for updated FOCD regime  Panel cautions against using single criterion to measure risk Feb. 4, 2015—Experts in the security field last week encouraged the U.S. Nuclear Regulatory Commission to modernize the agency’s approach to its Cold War-era rules concerning the foreign ownership, control or domination of U.S. nuclear energy facilities. Jan. 30–Feb. 5, 2015 Page 8 Like NEI NEI has its own Facebook page. Join the conversation: www.facebook.com/ NuclearEnergyInstitute. At a Jan. 29 briefing for NRC commissioners on the issue, known by the acronym FOCD, a panel of government and corporate experts outside the nuclear energy field made several important points that support rationalizing the NRC’s process to recognize the globalization of the nuclear technology marketplace. The panelists each noted that foreign investment, technology and expertise are essential to innovation and national security in their fields and will be crucial in sustaining America’s role as a leader in the global nuclear power industry. “Today we live in a world of global supply chains, international consortia of producers and a world of global and instantaneous communications,” the Center for Strategic and International Studies’ president and CEO, John Hamre, said. “Capital is global, and complex projects are funded on an international basis. The rules appropriate for 1955 are completely inappropriate for 2015.” The Nuclear Energy Institute has asked the NRC to offer clearer, more predictable guidance on FOCD. In November, NEI urged the commission to clarify the criteria used in FOCD reviews, to provide “necessary stability to what is now an unpredictable review process” (see Nuclear Energy Overview, Dec. 4, 2014). “Nuclear technology is no longer limited to the United States and a few select other nations—power reactor technology is now owned and controlled by international companies,” NEI’s letter noted. NEI said the acceptability of foreign participation or investment in a nuclear project should not depend on an arbitrary percentage of ownership by a foreign entity. The panel also said the NRC should not let decades-old concerns regarding nuclear proliferation and technology transfer stand in the way of foreign investment in nuclear plants today. William Lynn III, CEO of Finmeccanica North America, said Cold War-era regulations to prevent the loss of technology to a potential adversary may no longer be relevant. Today, he said, companies investing in U.S. projects are from nations that already have the technology to be deployed. The panelists suggested that excessive or unacceptable control or domination could be mitigated by using a graded, flexible approach that is limited to the specific matter of concern. This is consistent with the graded approach to FOCD assessments that NEI has advocated. Slide presentations and an archived webcast of the Jan. 29 briefing are available on the NRC website. << Thaddeus Swanek, [email protected] Milestones Sizewell B Approved to Operate Until 2025 Sizewell B, the United Kingdom’s only pressurized water reactor, has been cleared by the U.K. Office for Nuclear Regulation to continue generating electricity until 2025. Nuclear power plants in the U.K. are required to undergo a periodic safety review (PSR) every 10 years. The reviews look at the previous 10 years of a plant’s operating history and consider processes to ensure safe operation for the next decade. Jan. 30–Feb. 5, 2015 Page 9 The current PSR said that ONR had identified “no issues of nuclear safety significance that could impact generation at Sizewell B to the next date of review (2025).” ONR said it will publish the assessment “in due course.” Plant operator EDF Energy said that the review had highlighted “opportunities for improvement,” which will be carried out during the plant’s refueling outages every 18 months. The plant’s current stated lifetime is until 2035, although EDF is aiming for a 20-year life extension, to 2055. Ringhals 4 Gets 18 Percent Power Uprate Sweden’s Radiation Safety Authority (SSM) has approved a power increase for the Ringhals 4 pressurized water reactor. The uprate, partly achieved by replacing one of the reactor’s three steam generators, will increase the reactor’s thermal output by 18 percent, from 2,783 megawatts-thermal to 3,300 MWt. The resulting increase in generating capacity will be 175 megawatts-electric. The reactor is one of four on the Ringhals site, 35 miles from Göteborg, and is owned by Vattenfall and E.On. The plant will be operated at the higher output on a trial basis, until it passes an audit by SSM. << Chris Charles, [email protected] Contracts France, China Sign More Cooperation Agreements During a meeting of French Prime Minister Manuel Valls and Chinese premier Li Keqiang last week, French and Chinese energy companies signed bilateral nuclear cooperation agreements. French utility EDF and China General Nuclear Power Group signed an agreement to share expertise in plant operation and engineering support for existing nuclear power plants. The aim of the agreement is to preserve the highest safety levels and “maintain consistency between French and Chinese procedures and standards.” AREVA Group and China National Nuclear Corp. signed a memorandum of understanding for a joint venture that will supply used nuclear fuel transportation and logistics services in China, “by road, train and sea.” The agreement extends the “strategic partnership” announced in March 2014 between the two companies to advance cooperation to the entire fuel cycle, beyond reactors and services. Argentina, China to Build Fourth Reactor Argentina and China have ratified a 2014 agreement to work jointly on building a fourth nuclear power reactor. The 800-megawatt CANDU will be built at the existing Atucha site near Buenos Aires. The accord was signed by Argentinian federal planning minister Julio De Vido and Nur Bekri, president of China's National Energy Administration and vice president of China National Nuclear Co. Plant operator Nucleoeléctrica Argentina S.A., which has rights to CANDU technology, will be designer, architect-engineer, builder and operator of the new reactor. CNNC, which operates two CANDU 6 reactors at Qinshan in Zhejiang province, will provide equipment, goods and services. << Chris Charles, [email protected] Jan. 30–Feb. 5, 2015 Page 10 Transitions International The U.K.’s Office for Nuclear Regulation, or ONR, has named Deputy Chief Executive Officer Les Philpott as the agency’s interim CEO effective March 1. The current CEO, John Jenkins, announced he would be leaving the post after having accomplished his mission to “successfully set up the ONR as a public corporation.” ONR was previously an internal agency of the Health and Safety Executive—Jenkins was tasked by HSE in 2012 to help ONR become an independent nuclear regulator.