it was never ratified. that contract was never ratified. it was a draft. it says that on your specific -- >> right. the sourcing. this is what we're putting into the record with the diamondbaoc. >> as you know, we've litigated that and you've overruled it. >> with that, the hearing is adjourned and i thank our witnesses.

the service win's action network holds a discussion at 1 p.m. eastern here at c-span3. >> senator ted cruz campaigns in indiana today. we'll have live coverage of a rally he's holding at the johnson county fair grounds in indianapolis. that starts at 6:30 p.m. on c-span. indiana holds its presidential primary on may 3rd. c-span's road to the white house coverage continues later today as ohio governor john kasich campaigns in the washington, d.c. suburb of rockville, maryland ahead of the primary. live rof kaj starts at 2:00 eastern time on c-span and the campaigns for governor kasich and senator ted cruz announced last week they're teaming up to try to deny donald trump to try

to deny the necessary delegates for the nomination. >> madam secretary, woo proudly give 72 of our delegate votes to the next president of the united states. tonight the safety and security

of the u.s. electric grid, "lights out, a cyber attack, a nation unprepared, surviving the aftermath" examines the potential for cyber attacks on the u.s. electric grid, how vulnerable the sus to attacks and the degrees to which government agencies and electric companies are are equipped to deal with an attack. >> there was a bill passed last fall in the senate after years of wrangling that now has private industry willing to pass on information to the government. but only after they have sanitized it. >> watch "the correctors"

tonight on 8 p.m. eastern. the senate environment and subcommittee held a meeting on nuclear energy regulation. this is two hours. well, i'd like to welcome all of our witnesses today and particular welcome to alumnus of the economy, mr. merryfield, who told me he began here in 1986 i think. as each witness knows, you have five minutes for an oral statement and then we're going to take questions. we're here today to i think examine an exciting topic and that's advanced nuclear reactors. i'd like to thank senator carper because i know he has a great interest in this. while nuclear issues are somewhat new to me, i'm learning

these technologies have the potential to make great describe in advancing nuclear tops. they've made valuable contributions to our energy security for years and we look forward to what comes next. advanced reactors have the potential to be cleaner, safer and more secure. so one purpose for this hearing is to better understand these technologies and the barrier to the development. the other purpose is to examine the nuclear modernization act, which was introduced last week. s 29-75 directs the nrc to develop a regulatory framework under which licensed applications for a variety of

technologies can be reviewed. in keeping with the nrc's safety and security mission. existing regulations were designed around one technology and are not well suited for the innovations under way. this is clearly an issue our committee needs to address and i'm glad my colleagues have come forward with a solution. efficient and timely decision making at the nrc is crucial for existing plants and emerging technologies. the bill modernizes the nrc budget and fee structures, the existing industry needs to remain economically competitive and allow emerging technologies to grow. it must be accomplished efficiently and with fiscal discipline. according to the nrc's principles of good regulation, the american taxpayer, the rate paying customer and licensees are all entitled to the best possible management and administration of regulatory

activities. this bill aligns with this principle and i thank my colleagues for their hard work and bipartisanship to advantage innovative energy technologies. only by leading can we hope to advance our nonproliferation goals. with that i'm anxious to hear senator carper's remarks and those of our witness. senator carper. >> thank you, madam chairman. thanks for letting me be your wing man. it's good to be here with all our colleague, particular will with senator inhofe, who has a lot of expertise in these issues. it's nice to see one of you again and to have the chance to welcome others back and meet others for the first time. when our country first began exploring nuclear power, i think it was 60 years ago, i don't

know that people had any idea of how important this could be. serious incidence at chernobyl caused many around the world to question this. congress has an important role to play in ensuring our nation insists wising in nuclear while maintaining our focus on safety. many americans may be unaware nuclear technology was invented in the united states. the jobs and the economic benefit of this growth stayed here at home for the most part. and unfortunately this is no longer the case. many nuclear components are now only available from our international economic competitors, include the french,

south koreans, japanese, now the chinese. while the united states continues to have more nuclear power plants than any other country, other nations, china in particular, are gaining quickly. at the same time our country's nuclear reactors are getting older and many will need to be replaced in the years to come. some believe our nuclear's success story will be winding down but i believe like a distance runner, nuclear power in america is just getting its second wind. albert einstein used to say with adversity lies opportunity. if we're smart, we'll seize the day and begin to replace our aging nuclear reactors with new ones in the years ahead that are safer. if we're smart about it, i foresee an opportunity to develop and build the next generation of nuclear reactors

on american soil. i foresee a chance to at some of our closed manufacturing plants reopen, construction crews will be called back to work and colleges will face a renewed demand from industry from skilled nuclear technicians. i foresee an opportunity for the united states to once again lead the world in nuclear technology. today's hearing is about how we seize this opportunity. decisions we make today will impact what types of nuclear reactors we'll be operating in this country, 10, 20, even 50 years from now. fortunately there's been good progress of late and we're beginning to deploy new nuclear technology. several years ago the nrc approved construction to build four new reactors in georgia and south carolina. construction is creating thousands of new jobs for those economies in those states. it's becoming increasingly lightly that small modular reactors will become a reality in this nation with the first

reactors expected to become operational within the next decade. this is an encouraging start but i know we can and need to do better. i've also heard from u.s. businesses who believe we can do better. over 50 companies are investing in next generations nuclear technologies. today we're going to hear from a company who is making investments in those advancements. we need to make sure our regulatory framework can keep pace. the nrc is considered the world's gold standard of nuclear regulatory agencies. in closing, i believe that government in this country has a number of roles to play, i'm sure you agree. among them, though, few are as important as helping to create a nurturing environment for job creation and job pregser vags, including making sure we have

affordable energy and diminish the threat of climate change rather than increase it. it can provide a more promising future four our nation, for its people and for our planet. i hope we'll learn about the roles that the nrc needs to play if that promising future is to be realized. >> thank you. with that the chairman has requested -- >> it's just that i put my statement in the record. thank you. >> without objection. so ordered. again, i'd like to thank the witnesses and welcome you. you can give a five-minute statement. your full testimony has been submitted for the record and then we'll go through a round of questioning. senator booker, i understand you'd like to make a comment about the bill in advance of the testimony? >> i'm very grateful, chairman, for this opportunity and thank you for giving me a chance to say a few words. i'm the senator with no name today, i want you to recognize that or the senator whose name

shall not be mentioned. but, again, thank you chair capito. i seem to be doing this often but thanks senators inhofe and crapo on this bill. there are ambitious targets. scientists agree that even if all countries meet their commitments under there pac, we're not on track to meet these ambitious targets, not even close. it prevent sents a very difficu target. it would require us to cut emissions up to 70% while producing 70% more electricity. that's an incredibly difficult thing to do, to produce 70% more

electricity than we do today, while at the same time emitting 70% less carbon. i'm a big believer in energy efficiency and renewable energy. i fought to expand the tax credits last year for renewables. but in order to avert the worst effects of climate change, we do not see any way around the idea we must increase our nuclear energy capacity in the coming decades. we have no choice but to increase nuclear capacity. nuclear energy currently comprises more than 60% of our nation's free electricity -- carbon free electricity generation and right now in the united states we have five new reactors under construction. the first new commercial units in 30 years but certainly existing reactors have been shut down prematurely and many more

are at risk. we need to make sure we see dozens of more private sector companies beginning to move into this area and help to produce the environment where they're making their billion dollars of investment. we desperately need long, sound government policies to support our existing fleet and advance nuclear reactors that can be commercialized in the future. this bill s-2795 takes several positive bipartisan steps in that direction. first, a bill would direct nrc to direct new staged licensing processes for nuclear reactors. the bill would put in place new technology, inclusive regulatory framework and make licensing of advanced nuclear more efficient, flexible -- third, the bill would authorize a new cost sharing grant program at the

department of energy that would help the first advanced reactor projects that moved forward to pay for some of the licensing costs at nrc. this bill would place a cap on the annual feels that existing nuclear reactors pay to the nrc, while this cap may never be hit, putting it in place will provide certainty and protection for existing fleets. this is a critical challenge we have in our nation right now, making sure we're meeting our energy needs, dealing with the reality of climate change. thank you, chairman, for providing me this opportunity and making an introduction to the bill. i look forward to hearing from all of our witnesses. >> let me ensure you while we enjoy this bill and are co-sponsors the bill, it has nothing to do with global

warming and this -- disaster tomorrow and the president isn't even going up on it. >> senator crapo would like to make a comment. >> senator booker and i have introduced legislation. we have undertaken a deep dive into the inner workings of the commission. through hearings and discussions with officials and stake holders, we have developed a plan that will help modernize the commission and enable it to stay abreast of reactor design advancements in the nuclear industry. our bill, the nuclear industry administration and moderation act or nema, increases

transparency through modern sizing reforms that are based on years of ecw oversight efforts. the measure directs the agency to develop a technology inclusive regulatory framework to enable the commission. nema's improvements bring a great deal of transparency and accountability to the nrc. we want the commission to make changes that allow stake holders of various backgrounds and moat vagtss to look at the commission's actions and understand what it's doing. in particular the agency must be more transparent in its budgeting and fee process. this is especially true regarding the commission overhead costs. when the nrc talks about overhead costs, it refers to activities that may be categorized as corporate support, office support and mission indirect. at this point our bill only captures one portion of these overhead costs, the corporate support costs because that is

the only portion of the overhead costs that we can get the nrc to clearly label and define. the nrc must endeavor to make its budgeting information more transparent and accessible. some amount of overhead is necessary for all organizations. nonetheless, the nrc needs to be able to clearly account for its overhead cost and for the way it uses fees from licenses to support these costs. clear and transparent budget processes are required for effective oversight. this is something i look forward to working with my fellow colleagues on both on this bill and beyond. finally, it imperative that the licensing process for advanced reactors is transparent and tabs into account past lessons learned. nem oa enables the nrc to creata technology framework, we can review any reactor design that

it considers safe and secure. we aren't forcing the nrc to pick winners or losers on one time of reactor or design. nema improves the communication between various stake holder groups and the agency. enabling better transparency, accountability and communication are critical to ensuring the nrc remains the world's preeminent safety and security regulator. such improvements also provide more stability and predictability in the industry and among stake holder groups will increase its ability to perform its safety mission and share information with all stakes holder groups. thank you very much, madam chairman. >> we'd like to go to the witnesses. i understand the original sponsor would like to, senator

white house, has some comments. >> thank you very much, chairman. let me first thank chairman inhofe and senator crepo and senator booker for the work we have done together to try to streamline this process. the sense that i have and that brought me to this conversation is that the approval process is an obstacle course for a technical technology but not suited for those that aren't that technology. the relevancy is two plus two equals cheese. it just doesn't fit or make sense at all. we do have new technologies that are emerging. they have enormous promise for a carbon-con strained world. we have done in america a lot of the leadership design for them,

but if we can't get them through a process to where they're actually creating electrons, then we haven't done ourselves any good. so i look forward to pursuing this. i would add two brief points: one is that it should remain, i think, a very high priority goal of this committee and this process to continue to point towards ways to use -- reuse, i should say, spent nuclear fuel. some of these technologies hold out at least the promise of taking the enormous stockpile of what is now dangerous nuclear waste for which we have no means of disposal and which will be very expensive to deal with and

repurpose that into what a person told me trillions dollars of free power. that needs to be a significant subordinate role as we go into this process. i think it is a tragedy we are losing some of our nuclear facilities to an economic problem that there is no payment for their carbon-free power. if a nuclear plant is not safe, then i'm the first person to want to shut it down yesterday, but if the only reason that it's being shut down is because it can't compete kmkically with a natural gas plant and the only reason it can't compete with a natural gas plant is because it gets no benefit throughout the corporate world and our government, we recognize there is value to being carbon free, we are artificially damaging an industry that should be doing better. and we need to figure out a way

to make sure that there is, in fact, a payment a payment to the carbon-free value and the electrons they produce. with at that i close my comments and thank you for your leadership on this bill. independent delighted to be working with them. >> we'll proceed with the witnesses. i'm going to start with dr. christina bach. welcome. >> thank you very much. >> i would like to thank chairman capito, and ranking member carper for holding this hearing, senators inhofe.

g.a. is a privately held company with over 60 years of experience in nuclear energy and one where we continuously push the technological envelope. i was asked to describe what may be appropriate issues to consider when developing public policy for encouraging the development of new reactors. we believe advanced reactors are variety owe to making nuclear power, economically competitive and vital to reversing the current decline of the nuclear industry. in order to be helpful to the committee's effort, i would like to start by noting the term advanced reactors is somewhat loosely used. some people consider them to be non-light water reactors while others mean new light water reactors. we believe an advanced reactor concept is one whose design is guided by the four core principles that help ensure economic success.

these principles are to produce significantly cheaper electricity, to be safer, to produce significantly less waste and reduce proliferation risk. we believe every worthy reactor concept must address these four core principles jointly, if it is to be an advanced reactor. it is not sufficient to excel in just one with disregard to the others. now i would like to discuss g.a.'s reactor concept. this someone of the many advanced reactor concepts referred to before. g.a. has a concept which is the energy multiplier module or em squared and is a way of illustrating what advance can mean, i'd like to discuss this reactor. g.a. chose to employ innovative design and engineer materials to

meet the four core principles. what makes it come peming to think about nuclear reactors and advanced nuclear reactors now is that in the past 30 years scientists have made unprecedented advances in understanding materials. we at g.a. know how to manipulate these materials and we're trying to revitalize the nuclear industry with them. so now let's consider each of the principles i mentioned. the first is cost. the drive to make a cheaper reactor led us to design a much smaller reactor, one that would produce up to 60% more power than today's reactor from the same amount of heat. second is safety. for a radical imt improvement in safety, em-squared uses engineered ceramic materials that hold the fuel that work in intense radiation and withstand more than two times higher temperatures than current reactor materials today. they would not be subjective

failure like those in puck sheem a. third is waste. em-squared will reduce the amount of waste by at least 08% the reactor can also use spent like water reactor waste as fuel, thus turning this waste into energy. fourth is nonproliferation. it keeps the fuel in the reactor for 30 years, without the need for refueling or repositions the fuel rods. this manse we access the core once, much less than the 20 times than the current reactors need for existing refueling. we calling late that em-2 will produce power at approximately 40% lower cost than today's reactors and be passively safe. as for any new reactor design, this one will require extensive interactions with the nrc and we think involving the nrc early in this process is important to envelope the design for a safer

reactor. radically new concepts require up front investments involving risk. some of these investments may not pay off and even those that are successful could take up to ten years to produce revenue. while ga has already invested 40 million in em-squared, it is hard to divert dollars to considerations at this early point in time. if this committee's objective is to stimulate the development of enough advanced reactors, hope flip as we've defined and outlined here, we suggest that it would be relatively inexpensive to involve the nrc early in the consultations with potentially very high impact. we suggest the committee consider authorizes the appropriation of 5 million at first to advance development of reactors and a relatively low cost share of 3%. the nrc is important and necessary for ensuring nuclear

power is safe, therefore it play as critical role in nuclear power innovation. m closing i'd just like to say this is a very exciting time in nuclear energy right now. i love that i get to put science in practice and engage the next generation of scientists and engineers and help meet the nation's energy needs by creating a new innovative way to produce clean and safe power. thank you for the efforts of this committee and thank you for the opportunity to speak to you. i'd be pleased to answer questions. >> thank you. our next witness is dr. ashley finn, the clean air task force of energy systems. >> thank you for holding this hearing and for giving me the opportunity to testify. my name is ashley finan. i am policy director to the nuclear innovation alliance, a nonprofit organization dedicated

to leading nuclear energy innovation. the nia was established by a cross cutting group who believed advanced nuclearin energy is needed to ensure a better future. this includes innovators, academic, environmental organizations, industry groups and other experts and stake holders. the world will double or trip many its energy demand in the next 30 years. this is driven by a growing middle class and the developing world and the need to bring electricity to 1 nt.4 billion people who lack it today. at the same time many analyses point to the pressing need to reduce global carbon emissions by 80% or more by 2050 if we are to avoid the worst impacts of climate chang. a more rafd expansion of nuclear power is an essential part of the solution. in the united states and elsewhere, dozens of stake holders are -- the transition

from design to commercialization and deployment both in the u.s. and globally has been slow. current nrc regulation confronts the licensing of advanced technologies will two major challenges. first, nrc designed certification or approval calls for enormous front loading and investment. without a stage structure to provide applicants with clear early feedback on an agreed schedule. second, current regulation primarily involved oversea light water reactor technologies. it must be adapted to the features and characteristics of advanced reactors, which rely on substantially different fuels, cooling and safety systems and require nofel operating strategies. over the past two years, the nia has been developing strategies for the efficient and cost effective licensing in the united states.

we compiled the results of our work into a report, which was issued on april 12th. the report has been provided to the committee and is available to the public on the nia web site. it discusses in much greater detail the topics i'm touching on today. to address the lwr sen trick nationier of the regulations, a different approach is needed. it will allow the nrc to review a diverse set of reactor technologies. as 72095 provides work to do in this area without impacting the cost to existing plants. to illustrate the investment challenge, i'd like to direct your attention to figure 1.

this shows the risk investment pro freestyle relatively to the licensing process today and the large hurdle of obtaining design approval. figure 2ily struts a staged approach that provide interim feedback and opportunity for risk reduction. it aligns better by using a topical report and other mechanisms this approach maintains the rigor and high standards of the nrc and facilitates the development of advanced nuclear technology that produces less waste or even consumes it. s-2795 authorizes the nrc to do the crucial work to develop and implement this stage licensing process with dedicated funding. this is important for two reasons, it helps the nrc develop a rg ris technology

inclusive structure to support the review of technologies. it does this without diluting funds to regulate operating plants. it also allows for immediate adjustments that will provide a more efficient, predictable and effect of process. thank you for this opportunity to testify. s-2795 is needed to enable progress and advance and enable nuclear energy. >> thank you. our next witness is maria corsnick. welcome. >> thank you very much. on behalf of the commercial nuclear energy industry, i want to thank the committee for considering 2795. introduction of this bill is particularly well timed. nuclear energy makes a significant contribution to our clean air quality, the reliability of our electricity supply and our national security. yet regulatory inefficiency and

cost are constraining our use of this valuable national resource. if not addressed in the very near term, those issues will impede deployment of even more innovative reactor technologies here and around the world. despite nrc's efforts to reduce its budget and right size the agency, fees continue to be excessive and the limitations of the mandated 90% fee rule create fundamental structural problems. the nrc's budget continues to hover at approximately $1 billion a year, despite significant declines in its workload as plants have shut down. in particular, according to ernst and young, the nrc spends 37% of its budget on support costs. that's more than 10% higher than some of its peer agencies. because the nrc must collect 90% of its budget from licensees and the nrc budget has not declined,

remaining licensees are responsible for paying these high are annual fees. with several recent premature shutdowns and additional reactors decommissioning in the coming years, the coming fee structure virtually guerin feeities remaining license sees will continue to bear higher license fees. the cost continues to advance well beyond the cost of living. since 2000, the nrc review fees and license renewals have been an eight-fold increase in review cost. objectively, one would expect a decrease based on efficiencies gained in the review process. now this is particularly notable as we look ahead and want second license renewal for some of our plants. these illustrate a fundamental change to the nrc fee recovery structure in fact needed. s 2795 repeals the 90% fee

recovery requirement and replaces it with much more rational approach. it requires the nrc to expressly identify annual expenditures anticipated for licensing and other activities requested by applicants. the legislation would also help drive greater efficiency in the nrc's operation. in turn, it would drive down annual fees by limiting corporate support percentages, although we do recommend that the cap be lower than the 28% level proposed by this legislation. complementing the limit on corporate support, the bill would cap annual fees for operating power reactors at the fiscal year 2015 level. we also recommend that it apply to all licensees, so nonreactor licensees as well. s-2795 also affirms congress's view that this country can and in fact should be a leader in advanced reactor technology. the bill effectively directs the

nrc to think differently about reactor licensing. it requires that the nrc's regulatory regime accommodate large light water reactors as it does today, small light water modular reactors and advanced nonlight water reactors. in short, an all of the above approach. the bills call for a technology inclusive licensing framework, use of a risk informed performance based licensing technique and a staged licensing process, will in fact be a good, helpful step forward. developers are be able to demonstrate progress to investors in this first of a kind project, thus obtaining capital resources as they achieve milestones. too often we hear from our michael phelps that regulatory uncertainty is the greatest impediment.

in sum, we must be thoughtful and deliberate in the way what we plan for advanced reactor technologies, but we must also begin today if we are to me the potentially enormous demand by 2030 for u.s. technology not on here but in the international market. senators inhofe, crappo, white house and booker, on behalf of the industry, i want to thank you very much for taking a strong leadership role. nai supports the bill and look forward to working with and your staff as it's presented through congress and hope it's enacted expeditionly. >> our next guest is dr. lyman. welcome. >> thank you chairman kapito and other ranking members of the

subcommittee. a i'm a senior scientist at the organization of concerned scientists. i would like to thank you for the opportunity to provide testimony on this subject of nuclear energy and innovation and effective regulation to secure nuclear safety and kmurt. we are a nuclear safety watch dog and we work to ensure that u.s. reactors are adequately safe both from accidents and secure from terrorist attacks. our position on nuclear power is not ideological but pragmatic. we believe nuclear power could have a role to play in helping to mitt grate the threat of climate change but it can only happen if nuclear power is sufficiently safe and secure. if nuclear power is to grow, there must be a corresponding increase in safety and security. otherwise the risk to public health and the environment will increase. and nuclear power could take sfl out of the running if there is another event like the march 20

fukushima disaster. japan was a leader in nuclear energy and had over 50 operating nuclear power plants. today on two reactors are running and a battle is raging in the courts to restart just two others. the u.s. needs to do everything it can to avoid repeating japan's mistakes and congress must ensure that the nrc continues to serve as a thorough and rigorous regulator overseeing existing plants and licensing new ones. we believe the most efficient and cost effective way to enhance reactor security is through evolutionary improvements and current designs and strengthening oversight but we do acknowledge new and novel ek jis have the opportunity to reach these in the longer term.

although each new type has advocates who claim that their preferred designs have benefits for safety, proliferation resistance or economic competitiveness, search assertions stand up to scrutiny. reality is a lot messier. given the proliferation of new reactor designs and the mass investors needed to commercialize a single one of them, development should be focused on concepts that meet the greatest goals of economic viability and cutting through the hype and identifying the best prospects is a major challenge. for this reason we do need a thorough technical peer review process to be part of any government program that's going to provide supports for nuclear projects, whether at the national labs or private sector. i'd like to focus on s-2795. we believe nrc's regulations are not strong enough today to

achieve the level of safety and security we need in the post fukushima era. we correspondingly doesn't agree that the licensing processing of advanced reactors are too stringent and need to be weakened. some argue it is competing u.s. competitive initial, allowing countries like china to get ahead of us but we think the opposite is true. the reputation nrc for being a gold standard is a good brand. and so the nrc's reputation for rigorous safety review on enhances that brand. we don't think we should be engaged with china and other countries in a regulatory race to the bottom just to secure customers. >> we believe the focus of the bill on nrc licensing is misplaced and will do little to facilitate the deployment of advanced reactors in the u.s. licenses process may be a convenient target but we think

the nrc is being scapegoated. these include a lack of support for government funded energy r & d, the long-time cost for commercializing a reactor, the lack of ult interests in making those investments and the failure of the so-called nuclear power entrepreneurs to put any significant money into the projects that they espouse. we don't think the nrc's licensing process is a signature process in inhibiting employment. as a result, we don't think that the prescriptions in 2795 are the problem. the problem is the cost and difficulty of obtaining the analyses and experimental data sufficient to satisfy regularry requirements. this is the fundamental issue we think congress needs to address. so in summary, we think the legislation is premature. we would offer that the national academy of sciences first review the systemic okay als to

licensing and deployment of advanced reactors, including all the issues we mentioned and l the specific p-- we think congr reject any attempt to short circuit nrc safety reviews and help ensure that oversight and licensing will result in clear improvements and safe and secure operation. thank you foroy attention. >> our next witness is victor mccree, director of operations at the nuclear regulatory commission. . welcome. >> thank you and good morning. i appreciate the opportunity to testify this morning. i appear before you today representing the technical staff of the u.s. nuclear regulatory commission. i plan to briefly discussion

and -- and to offer nrc staff views on senate bill 2795, the unusual clear energy innovation and modernization act. a number of advanced nonlight reactor that employ innovative design features are under development. the nrc has the licensing and is red toe work with potential applicants to prepare for and review applications for these reactors. the nrc is lds considering the extent to which enhancements to existing licensing framework could influence efficiency, timeliness and safety of our environmental reviews. objectives today are to strategically prepare for nonlight water reactor applications commensurate with the development of vendor and have i plans. our overall goal is to create a

more effect i, efficient clear and predictable licensing process for advanced reactor safety reviews. with this in mind, the nrc staff is pursuing a multi-part strategy to prepare for our review of nonlight water reactor technologies the president's fiscal year 2017 budget request includes $5 million in nonfee recoverable activities to execute the strategy. if congress appropriates this funding, it will be used to facilitate the nrc's preparation to undertake efficient and effective safety reviews of advanced reactor technologies. we plan to pursue activities in three primary areas. licensing infrastructure, technical preparation and stake holder outreach. first, with licensing infrastructure activities, we'll optimize the regulatory framework and licensing process for advanced reactor safety reviews. second, our technical preparation activities will

evaluate, clarify and resolve critical policy issues that need to be address for effective efficient advanced reactor safety reviews. finally, we will expand upon our outreach activities to pro actively engage key stake holders to ensure all parties will be ready to proceed in the development and review of new reactor designs. our strategy reflects insights we've gained from many years of interaction with the department of energy and nonlight water reactor community. we believe this strategy will enable the resolution of novel policy issues and lead to the development of a design criteria, regulatory guidance and industry codes and standard for nonlight water reactor designs. by enhancing the efficiency and effectiveness of nonlight water reactor rear views, this strategy will reduce uncertainty and business risk. the nrc's advanced reactor programs is one of several topics addressed in the senate bill. consistent in my role, my

comments represent the. in rc staff's assessment of factual issues social securitied with a draft version of the bill. based on our preliminary review, the bill would require the nrc to undertake a number of activities related to developing plans, strategy and rule making social securitied with the licensing of advanced reactor and of research and test reactors and report on those to congress. significant time and resources would be required over several years to implement the full range of additional activities described in the bill, particularly with regard to the rule making required by the bill. another area covered by the bill is performance and reporting. these provisions would require the nrc to develop performance metrics and milestone schedules for nip activity requested by a licensee or applicant and to report to congress for certain delays. this would require nrc to rel performance metrics and milestone schedules for many

activities beyond those for which metrics and milestones are currently prepared. we believe we have appropriate met tribs to provide the desired outcome. these mesh yeshs recognize the need to adapt to schedule change it is that may arise to an am can applicant's performance. i welcome -- i thank you for the opportunity to prepare before you and would be pleased to respond to your question. >> thank you. our finl witness is the honorable jeffrey s.merrifield chairman, advanced reactor task force chairman. >> it's indeed a pleasure to be here today before a committee on

which i used to work as a counsel and testified on many occasions as an nrc commissioner. today i'm appearing in my role as chair, though my full-time occupation is an attorney and partner with the pillsbury law firm. in addition to my full testimony, i would ask that letters from seven advanced reactor developments supporting this legislation be included in the record. my testimony in s-2795 will focus on how the nrc conducts its business as well as mixed reviews regarding the bill. we applaud the elements supporting the development and deploupt of advanced reactor technologies. on february 22nd of this year, nic issued a framework for advanced reactor monetization light reactor. while we will suggest a few

additional areas for areas of nonimprovement, we are committed to working the committee and its staff to promptly move the regulation forward. when i became a commissioner, senator inhofe led the way to oversee the nrc. consistent with the mission of protecting people and the environment, the commission with full support of this committee worked to right size the agency. at that time the agency had approximately 3,400 employees and within the next few years we were able to reduce it down to about 2,800, principally through attrition yet not with any sacrifice to the safety mission of the agency. today the agency faces the same challenge. i understand and surprise with the concerns voiced by the committee regarding the size of the agency, the increase in licensing review time and growth in overhead activities at the agency, which is inconsistent with the number current nrc

licensees. while the nrc has made great strides, i believe further reductions can be accomplished while at the same time effectively maintaining safety and inspection activities and improving the time limits of licensing actions. i support the provisions of s-2795 which would limit the overhead of the nrc and place appropriate caps on the growth of agent fees. as was the case when i eye period before this committee over 15 years ago, i believe the amount of fees placed on individual licensees is not appropriate and should not cover inherently governmental functions in overhead. i believe that the fee provision of s-2795 appropriately balance the important nonlicensee activities which should be born by general revenues and those licensee activities that should be born by user fees. during the past decade the u.s. has maintained its technology leadership through progressive light water reactor designs

including passive generation three-plus reactors deployed in georgia and south carolina, as well as small module light nuclear reactors headed toward deemployment. flt u.s. is to be successful in maintaining its lead in developing and deploying a new newreactor fleet, congress must consider significant new policy changes. in addition to funding and infrastructure, a modern licenses framework is needed to enable development and employment of advanced reactor technologies. currently the licensing process of the agency is perceived as one of the largest risk factors confronting private developers of advanced reactors. the proposed licensing process changes envisioned by s-2795 will help to address this gap. additionally congress should provide additional resources to both nrc and due as well as direct them to focus and mobilize their resources and expertise to enable the deployment of advanced reactors. we believe section 7 will allow

the agency risk-informed development to enable regulations without passing costs to existing utilities or advanced reactor developments. criteria are krit cliff required to finalize criteria as well as source term emergency planning and similar requests. weep believe there are two areas where further enhancement are warranted. while the nrc is not a promoter, it is appropriate to engage in advance discussion with developers. as members of the reactor community are early stage and

entrepreneurly driven companies, they lack the resources necessary to finance these activities. nic supports section 9 involving the cost share grant program. we believe this is an appropriate development. weep would say we think it could be further enhanced by allowing for early stage engagement with the advanced reactor community at no cost with perhaps a 50/50 share in later stages of the licensing progresses. collectively we believe this will allow the free market to create winners and losers rather than the d.u.e. and nrc. while section 7 b calls to establish stages in the advanced nuclear reactor process, we believe it is generally consistent with our white paper that the bill should be strengthened by incorporating specific language requiring the nrc to present prelicensing review to clearly and prop ptly

articulate where advanced reactor designs do and do not need additional work, would enable investors to have a clearer picture in where they stand in meeting we support the elimination of the mandatory hearing requirements contained in section 8 and please discuss my views on this during the question and answer portion. we believe it's time to make appropriate reforms to the nrc overhead and reform process as well as modernize the agency's licensing program to spur innovation in advanced reactor technologies to achieve full promise. achieving that goal and we're committed to working with this committee to its passage. thank you for your allowing me to testify today. >> thank you. thank you all very much. and i will begin the questioning with asking mr. mccree, a lot of what we've heard in the testimony and certainly what's contained in the bill has to do with right sizing the agency in

terms of license fees and support. so in 2006, the nrc spent $208 million on corporate support spending which amounts to 28%. you can see it on the chart -- of the budgetary authority. this was at a time the nrc was regulating more reactors and materials with fewer people and resources. so, mr. mccree, do you recall any impairment of the nrc's safety and security mission in 2006 as a result of this level of corporate support? >> chairman, thank you for your question. and to your question about impairment of any of our safety and security mission, i would indication that answer is no. >> thank you. so what i would say is if corporate support spending equal to 28% of the nrc's budget, the amount would be $275 million

which is only $30 million less than what the nrc is expecting in corporate support. in light of there's more work and more licenses in 2006 with this 28%, do you have any reason to believe this amount of corporate spending at the top part, which would be $30 million less than what you would expect, could impair the nrc's ability, again, on safety and security? >> senator, again, comparing nrc now to 2006, we're certainly a different agency. while there are about 100 operating reactors than there were in 2006 there is, of course, additional work that we have now that we didn't have then with the four ap-1,000s that we're overseeing as well as completion of oversight of unit two. so the work load is different than 2006.

certainly our staff size is different as well. >> so are you saying that you think that if it were to be right sized to the 28% there could be some concerns over safety and security? >> that's not what i'm saying, senator. i'm simply saying that we're comparing different agency now in 2016 to 2006. as far as right sizing we are taking under projects, significant steps to right size for the work that we have and the work that we anticipate in the future. and that right sizing includes right sizing our corporate support area where we have taken significant reductions, about $30 million in reductions this year, in 2016, and, additionally, a number of recommendations under project baselining that will result in additional in 2017. several weeks ago the chief

financial officer and i assigned a tasking for several of our larger corporate support offices to look at additional reductions we would plan to submit to the commission in planning for our it fiscal '18 budget. as the chairman noted yesterday in the house hearing, we're not done. the project right sizing continues. i do believe that the corporate support portion of our budget will continue to go down. >> ms. korsnick, you spent a lot of your testimony addressing this issue. do you have a reaction to what the gentleman's it testified to my question? >> yeah, i think i included in my testimony, in fact that when we looked at the peer agencies to the nuclear regul. >> reggie:tory commission, they appear to be effective with the corporate support level even less than 28%.

the other thing that we're interested in in the fee structure is the way that the current bill is structured. it not only asks for the nrc to allocate for certain licensee requests but the money needs to be spent on that and that alone whereas right now there's the ability to move money around, if you will, in fact, move it to corporate support. and we would like a stronger fiscal responsibility on that. >> thank you. do dr. back, you mentioned safety, less waste and reducing a proliferation risk as your four corners of developing an advanced reactor. what i think i'm hearing is the nrc would get in on the front end, maybe raise red flags in the beginning of the licensing procedure rather than the back end where the time lines are leaking and maybe incurring more expense would be more helpful to you in order to reach these four

benchmarks. is that a correct assumption? >> yes, although it's not at the point where the creigh actor is not performing well. we're looking for input early because the technologies are different so the way you evaluate it, the metrics you assess the safety and cost competitiveness and other factors of the reactor are different. >> at this point in your development you've had no internal conversations on your advanced reactor? >> we've had one conversation because we're allowed one conversation which is free, so to speak, before the hourly rates come up. and in our development of the reabbor reactor it's not well suited to our particular technologies so when we look at where we were investing our research dollars versus funds to try and get input from the nrc because we know it's a long path, there has been a history with many white papers without a clear decision.

there's an uncertainty that is very difficult to manage at this early, early stage. that's why a very small investment from nrc funds in the beginning would be very helpful. >> thank you. senator? >> i would be happy to yield to those who have urgent business to attend to. anybody in a tight squeeze? who would be next? senator crapo. >> thank you very much, senator carp carper. we've received at this point 19 letters of support for this legislation, can i ask these be included in the record? >> those will be included in the record without objection. >> i would like to direct my first question to you, mr.

mccree. we've been working hard to understand the budget of the nrc and its inner workings. and there is, i review the nrc budget process is very opaque. in addition to fee structure i'm concerned about lack of clarity on how the nrc budgets for its overhead functions. will you commit to working with my staff and the staff of other members to provide timely your overhead functions and budget requests? >> thank you, senator, yes, absolute ly. we need a commitment about how the nrc allocates and spends its resources so we can understand how the budget works more effectively. i want to use the rest of my time to talk to the whole panel and i know that will be hard in four minutes. the point i want to get at is

dr. lyman in his testimony has two points he raised. one of them was we should not weaken the nrc structure, it's the gold standard and we need it to continue to be the gold standard. i don't view this as weakening the structure in any way. i view it as increasing transparency and efficiency and maybe i'll turn to you first, mr. merrifield. what is your view of that issue? >> thank you very much, senator. i fundamentally disagree with mr. lyman in that regard. what we are really asking for, and i think what this legislation will accomplish is risk informing the regulatory activities and tailoring those activities to be appropriate for the licensinlicensing. this will in no way reduce the level of safety. in fact, arguably it will allow

the agency to appropriately tailor resources to be regulated in the right way and hopefully will have the successful accomplishment of doing it at a lower cost which is important as well. >> the earlier the agency is involved in the development of the technologies and the understanding of it, the more efficient and effective the regulation can be? >> that's exactly right. i think it would allow much better utilization resources. a couple things i would say real quick. one, what the staff, mr. mccree's staff needs to do is elevate as quickly as possible many of the generic policymaking decisions that can be made to the commission and by the commission to reduce the uncertainty for advanced reactor technologies. secondly, we talked about the fee process. it is very important to provide fee relief in the early stages of the program to allow active discussion between the developers and the nrc. as was discussed by one of the

other witnesses, there is a concern right now -- there is a lack of engagement because once you start talking to the nrc, besides your initial meeting, the fee, $268 an hour fee is going to start triggering, and that's not good. we really should be encouraging very active discussion between the developers and the nrc right now. >> i probably only have time for one of the other witnesses and i'm going to turn to dr. finan on this because of your charts. the other issue i focused on is the problem isn't really the regulatory system but the fact we can't get investment at the early stages of the development of these new technologies but, to me, that seems to be exactly the point that we can't -- because of our regulatory structure, at least a big part of that issue is that if you don't have the staged development or something like that, this bill contemplates a situation which is very hard to

get early investment in these expensive technologies. could you address that? >> thank you, senator. that's right. i think there are a lot of other challenges to deploying advanced reactors as for renewables and kcar bonn capture and other energy options but the investors and innovators have made it very clear their most immediate and pressing concern is regulatory uncertainty. so i don't think we need to have another study. i'd be happy to provide a list of references. the climate change is urgent. the private sector is engaged and eager and the time to fix this is really right now. >> all right. thank you very much. my time has expired and it looks to me like i'm now chairing the hearing. >> and i think you're doing a great job. [ laughter ] >> i think maybe cory is next. >> i would turn to senator booker next. >> thank you, mr. chairman, for that. my staff and i were just talk ing about how incredible your

staff has been not just in working on the bill but reaching out to all these groups and the letters you submitted is really a testimony to the kind of inclusion that you've been going about in this process, so thank you very much. and, by the way, i felt your power descend because senator inhofe is back in the room. >> i will gladly yield that power. >> now i don't have to be so nice to you. so moving on -- >> duly noted. [ laughter ] >> ms. korsnick, in your testimony you make the point the reduction increases the fee burden on the remaining licensees. i think we hope we don't see this rash of premature closings within our nuclear fleet. that would be bad for the overall energy picture in the united states. that said if we did, could you explain how that would impact the reactors that remain and whether this bill would alleviate that scenario? >> yes, in fact, the current bill is structured to alleviate that very concern. as the current structure is in place with the obligation to collect 90% of the budget, it's

90% of whoever is there to pay. so if the plants that close down and are no longer part of that fee structure, then the plants that are remaining, the operating reactors that are remaining have to pay that 90% bill. and our experience has been based on the chart you just saw and our experience with the nrc budget historically has not reduced commensurate with the operating reactors shutting down. >> thank you very much. so, dr. finan, besides the fact you mentioned those two terrible words, climate change, i'll forgive you for that, the reality is i'm into innovation and i've had a problem since i've been two years in the senate with the faa to the patent office. we do a lot to constrict innovation. in this space, innovation is, i think, critically important. and so you, actually the gao

last year did this incredible report that looked at the challenges facing companies attempting to deploy new reactor concepts. in this report the gao noted a first of its kind technologies of the design review costs for these folks can be exceptionally higher than subsequent projects. do you believe this is a real problem as is noted in this report? and do you think the doe matching report program can solve the problem? >> i think that's a critical problem for innovators. there's a need not only to make sure the costs are under control but to make them more control so investors and innovators can plan accordingly. i think the matching program could certainly assist them in that immensely. >> that's great. these are really critical in terms of the safety, in terms of being able to better deal with

challenges like waste from current light water reactors as well as deal with problems that we have including proliferation of the material. is that correct? >> that's correct. in the past nuclear was developed really initially for the navy, for submarines be a th and then adapted for land. key values, safety, proliferation, cost and all of the other things that nuclear can provide and so i think these new designers and innovators will bring that to the table and we need to help them move forward. >> and create a government regulatory climate where the folks can flourish and not putting undue cost burdens on them, correct? >> absolutely. >> can you expand a bit on your testimony in the little bit of time i have left as to why the existing nuclear framework is problematic for reactors, just a little bit more like specifically what's so problematic about the framework?

>> sure. just as an analogy if we looked at emissions standards for vehicles, they are performance base d. they set maximum emissions levels. instead if they required particular catalytic converter, they have to seek exemptions it to the technology requirements. for a nuclear reactor that's much more complex and has a lot more regulation, those would be multiplied and have a lot of issues where you need to come in and seek different treatment. and that's something that's a big barrier for new technologies because every time they have do that that's an uncertain process that has not been done before. that creates a great problem for investors and innovators. >> i really appreciate that. in the one minute i have left, obviously senator crapo and inhofe come at this differently than we do. senator whitehouse and i come at this with real concerns and fears about overall climate change. and there's a massively expanding demand for energy

globally, expanding rapidly, as i said in my opening remarks, at a rate that people, like i do, have visions for solar, visions for wind, visions for battery storage. there's no way that renewable pace will keep up with the demands that we're having. and right now 60% of our clean energy is being produced by nuclear. and so do you believe this is a pace -- a place where we have to actually expand innovation if we're going to really deal with the overall problem that senator whitehouse and i see of climate change? >> absolutely. and i think that's really important because this isn't just a political issue. it's not just about -- it's not even just about climate change or just about energy security. this is a humanitarian issue. there are a billion plus people on this earth who don't have electricity and we need to provide that energy. we need to have all the tools on the table and that has to include nuclear. so i think this is critical work. >> thank you very much, dr.

finan. >> thank you very much, senator booker. it looks like i still have the gavel. >> with your mighty hammer. >> senator inhofe? >> well, confession is good for the soul, and i confess that you did a much better job of pointing out something than i did. but the interesting thing about this is those are on your side who are driven -- whose lives are driven by climate change and those on this side who are realists. [ laughter ] we still agree on this bill and we know this is going to serve everyone's best interests, and i believe that. i'm not sure what all was covered. i had to go down to armed services which is the problem on this committee, we have nine members both on this committee and armed services. somehow i've never been able to convince john mccain that we're a committee, too. i have a chart. where is that chart?

do you want to put that up? now as you can see, ms. korsnick, i want to you look at this, the fees on reactors increased substantially over the last few years. in this bill we capped the annual fee for operating reactors at the 2015 level base ed on the most recent fee recovery rule. this level is very near the all-time highest amount that reflects the post fukushima work load. that work load is now declining. we also provide for inflation adjustment. now, ms. korsnick, do you believe this amount is an appropriate ceiling to ensure the nrc is adequately resourced to execute this safety and security mission? >> thank you, senator. yes. in fact, as you've just described we think fiscal year 2015 is the high water mark, quite frankly, for the agency.

we feel, in fact, that it shouldn't need to approach that ceiling. as you describe some of that work load, in fact, is declining from post-fukushima and we feel that a more efficient agency should, in fact, be able to operate with a corporate spending more in line with their peer agencies. >> but whether or not you would want to reach that cap, it is adequate? >> it is adequate, yes, senator. >> now under the amount of a annual fees that the nrc collects would increase when newly operating plants begin to pay their fees or would decrease when reactors close, do you believe that's an appropriate way to account for increases and decreases? >> yes, senator, we do. that obviously speaks direct ly to work load and we think that's a fair process. >> i would agree with that. when companies decide to close nuclear reactors, do they give the nrc adequate notice such as the nrc can account for the decrease in fees in their budget

process? >> we believe so, senator. the individual plants also need to go through a planning p process. they need to inform the regional transmission operator. for example, in advance it's typically a 12 to 18 month type time frame you're making these types of announcements. >> that's good. well, mr. merrifield, i think back when you first started -- actually when i first chaired this committee, you were then the attorney, i guess, on here. you were not a commissioner yet at the time. >> no, i was a counsel on this committee. >> a counsel, yes. you might remember at that time this committee had no oversight for four years. >> that's true. you did a very good job of correcting that problem. >> well, we did correct it. we got busy and we set goals. we set priorities as to when we would be coming in and what we were supposed to be doing. and i think that did work. >> it did, senator. >> during your tenure as commissioner, you led an effort to improve the efficiency of new

plant licensing. one of your recommendations was to eliminate the mandatory hearing. isn't that true? >> that's true, senator. >> and would you kind of explain what that was all about? >> well, the hearing process the agency has right now dates back to the early days of the atomic energy commission. and when you look at the legislative history, the reason for its imposition is several reactors were approved with no public involvement whatsoever. and the outcry caused congress to impose a mandatory hearing requirement, which was appropriate at the time. over the years with the changes under the administrative procedure act and the wide number of opportunities for the public to be involved in the many steps of the licensinging process, in my view then as it is now is that is an antiquated notion and is no longer necessary. if there are specific issues, those can be brought up in a contested proceeding that the

commission can go over. i believe mandatory hearing is not necessary and, indecember, frankly, the requirement right now causes significant staff resources ultimately which must be born by a combination of the federal government and the licensees to deal with the mandatory hearing. it would be a significant reduction of fees if that was eliminated. >> okay. getting back to one last question, my time has expired, but for a short answer. i described the lax situation there, having gone four years, oversight is important. do you think since that time we've slipped a little bit back and need to become a little bit more forceful overseeing the nrc? >> as a commissioner, i welcomed involvement. >> i know you did. >> with the committee. and it was helpful to us to have our feet held to the fire. it gave us the discipline to make sure we oversaw the agency and its mission. the commissioners have the spontd to oversee what victor

mccree and his staff does. i think further reductions of the staffing are appropriate, and i think the involvement of this committee in overseeing is welcome. >> thank you, mr. merrifield. >> thank you, senator inhofe. senator whitehouse? >> let me say first how happy i am that the chairman had a twinkle in his eye when he made that comment about senator booker and myself. let me, second, say to dr. lyman that it is very much not our intention in this bill to short circuit the safety review of any nuclear facility. the concern that i have is that the review process of the nrc has become so reactive, getting through that obstacle course is facing hazards that have nothing to do with short-circuited or long circuitedness but simply not being appropriate to the

technology in the same way that if you had to pass a test for how solid the canvas was on the wings of your proposed aircraft when you are actually proposing an aluminum winged aircraft or where the pilot's goggles needed to be and what they needed to be made of when, in fact, you are proposing a closed cockpit aircraft, it's an issue of relevancy not of shortcuts. what i would invite you to do and any other member of the panel who wishes to do is to put in writing some benchmarks for us that you think would indicate the departure from moving the regulatory process more towards relevance to new technologies and into simply short-circuiting safety because i don't think there's a person who supports this bill who wants to short circuit safety and it would be helpful to have this conversation in a more specific

way about what the, you know, red flags might be rather than just speaking very generally about that. i worry that we have it technologies that he care effectively smothered in the crib because they can't figure out what their regulatory process is going to look like and, therefore, they can't raise capital and they can't proceed and there's a big x factor, a big question around the process. that's how i think of the problem and i'd be interested in not only yours but everybody's response in writing if you would care to make that. the last point i'll make goes back to something i said in my opening remarks and that is i think it's a tragedy and a carbon constrained environment to have nuclear plants closing that are producing carbon-free

power for no other reason than that nobody has figured out how to pay them for what we all agree, almost all agree, is the value of the carbon freeness of their power. we have an administration that has an office of management and budget that has $42.50 per ton, social cost of carbon. if somebody has a suggestion as to how we can figure out a way to pay the existing nuclear fleet $42.50 per equivalent ton of carbon, i'm down for that. we need to find the revenues. i don't think it's a good thing to run up the deficit, but i do think there ought to be a way to provide that revenue stream to the facility so that artificially driven economic decisions that are, in fact, wrong from both an environmental

and economic perspective aren't being driven across this industry by this market failure. so i know that's beyond the scope of this particular bill, but i would encourage if any of you have ideas on that to please go ahead and offer them and i would offer that solicitation to my colleagues as well. so, again, chairman, thank you very much. >> senator? if you may, on the first point that you made -- and -- >> the one about chairman inhofe? >> not that one. >> you saw the twinkle in his eye, into? >> i did see the twinkle in his eye. >> actually, i would like the opportunity to respond. >> as it relates, if i may finish my thought first, as it relates to the first point -- >> you'll have the opportunity to respond, i would just love to have it in writing because i think it's going to be a long response. this isn't a continuing conversation that i think we need to have. >> i think on your first point you were entirely correct.

i think the process does need to be tailored for these advanced reactor technologies. as a country we've had a lead r leadership role historically in the nuclear energy field. it is a different world today. there are lots of opportunities for advanced reactor developers to work with regulators around the world. if we don't maintain our lead in having them come before the nrc for review, they may well decide that there are other countries for which they are better suited to have those licensed. >> i've been to china and heard the reports on the facilities that were designed in the united states that are being constructed over there. my time has expired. >> if i could just have -- >> senator fischer needs to go next. i have one more question and i'll give you a chance, dr. lyman, to respond at that point. >> and i do look forward to work with you. i'm trying to open a conversation that i think

separates a good point that you've indicated for us, thank you. >> i appreciate that, thank you. >> thank you, mr. chairman. nebraska hosts two nuclear reactors that provide that clean, affordable, reliable energy to our rate pairs and also to our families. and this important legislation that we are discussing today will provide our nuclear innovators the transparent framework that is necessary to launch this nuclear fleet into the future. it will also enable our utilities to continue to provide affordable and reliable energy. so i am appreciative of the discussion that we are having today and also that we are recognizinging the outstanding job that our nuclear reactor u utilities perform every single day. mr. mccree, the legislation that we're considering today creates an advanced nuclear energy cost share grant program that enables the department of energy to

establish a grant program. and i understand that there has been criticisms regarding the d.o.e. grant programs that share the costs of nrc licensing as picking winners and losers. so in your experience, do you believe it would be appropriate for the nrc to manage such a grant program to reduce review fees for applicants or would the nrc consider that promotional and in conflict with its role as regulator? >> senator, thank you for the question. as we -- again, i want to reiterate the commission has not expressed its view on the bill, but i would note that as written the nrc would not manage the grant program but that the d.o.e. would. and in that sense it's not too dissimilar from a grant that the d.o.e. made available for the

combined operating license holders for the ap-1,000s for georgia and south carolina. to that extent it has worked well and it has not impacted our fundamental safety and security mission nor our independence principle the chairman referred to earlier. >> you would not be supportive of the nrc becoming involved in the grant program in any kind of promotional way, and you do recognize there's a conflict there? >> yes, ma'am, i do. and, again, although the commission has not weighed in on this, it would appear, i believe, to represent a conflict. i would feel confident that the commission would weigh in on that with a similar view. >> thank you. and mrs. korsnick, you stated in your testimony that the cost and duration of reviews for license renewals on new plants have dramatically increased rather

than decreased as the nrc and the industry gains experience with processes. s-2795 directs the nrc to ensure funds are available to complete reviews that the industry needs and the bill also has provisions, as you know, requiring performance metrics and reporting. so do you believe this two-pronged approach will improve the efficiency and the timeliness of these reviews? >> yes, senator, we do. the licensing requests of the industry will help provide the necessary focus and attention on those. we do think the bill will be helpful in the area. >> do you believe it will also help lay the groundwork so we can have more predictable reviews in the future? >> i think so. the challenge is when we say

performance metrics and reporting, the devil is in the detail on that in terms of what performance metrics are developed but absolutely in concept i think having metrics and reporting is absolutely helpful in demonstrating the success, quite frankly, if the nrc is so successful, it's an opportunity to share that. >> as we look at developing those metrics, how important is it that we have all the stakeholders at the table on that? you said it's very important and the devil's in the details, can you give me an example maybe where you would be representing a view that might not be available that other stakeholders would present? >> i think stakeholder engagement would be very helpful in that way as with any perfe performance metric, you get what you measure. and so you can perform in a way that you say, well, making the metric look good but it's not satisfying, if you will, you know, the greater good. and i think the way to avoid that is to get stakeholder engagement and review what the

metrics would be to make sure that all of the stakeholders' concerns would be reflected appropriately in the metric. >> thank you. and mr. merrifield, during your service as a commissioner you helped prepare the nrc to review new plant applications. and this bill directs the nrc to develop a regulatory framework and to review the application. is the scope of this work too ambitious or do you think it's feasible? >> i think it's absolutely feasible. credit to the nrc staff. i think they will throw themselves at makingi inthis wo. victor mccree is a talented gentleman. it is very achievable for the agency to do this. i think they can come up with a process that is transparent and done in such a way to allow the technologies to move forward. the bill encourages that. one point on the earlier issue i

would like to mention having been on the commission, i do think the oversight that this committee provides on the timing of various activities of the agency, license renewals, new license applications, those are important metrics to take a look at. the timing of those has increased since i left the commission. that is an area that needs attention. >> thank you, mr. chairman. >> thank you, senator fischer. senator markey? >> thank you so much. mr. mccree, sequestration and the early closure of a number of nuclear plants have already put the nrc in a declining budget environment. at the same time the revelation that isis recorded video at the home of a belgian nuclear official underscores the need for additional resources for security and safety at u.s. nuclear power plants.

it's at the top of the terrorist target list for isis. instead, the bill under consideration in this committee would constrain the nrc's resources by imposing a blanket cap on fees for operating reactor licensees. do you agree there's a possibility that such a cap could adversely impact safety and security by reducing resources and support for nrc staff working to protect reactors against insider threats or physical attacks? >> senator, thank you for your question. i would reiterate the commission has not weighed in on the proposed bill including the caps that are described in the bill. if they would become law, of course the nrc would abide by those -- >> fewer resources are not good for the agency in protecting against a potential terrorist attack. is that true? >> and, quite frankly, senator, we are in a declining budgetary

environment and we are doing our due diligence to assure that our resources are appropriately allocated. >> no, i appreciate that. now you're pulling it away from other nuclear safety issues in order to deal with the terrorist attack when both are very real in our country. so i just think that we have to be realistic, that the belgian warning, that they were looking at a nuclear power plant, that they were trying to attack it, is clearly something we have to take into account here in the united states. and when we're talking about the nuclear regulatory commission's budget, yeah, we might want to do a favor for utilities and reduce their fees, but where is the money going to come from then in order to produce the level of safety which we're going to need in our country? now the findings in this bill state that nuclear energy provides for just short of 20% of electrical generation in the united states. there are currently 99 reactors producing electricity in our country. at least three are closing very soon.

fitzpatrick, oyster creek, and pilgrim. according to the department of energy data for nuclear energy to stay at 20% of total energy generation by 2025, we need to bring 13 large reactors online in the next nine years. we are currently building four and one more is scheduled to produce electricity this year. that leaves us eight reactors short of what the goal is. do any of you disagree that there is little or no possibility that eight additional new reactors that we have not even begun to build will come online by 2025? do any of you disagree with that, there there aren't going to be eight new plants operating between now and 2025? >> no, sir. >> okay. so let the record reflect that no one disagreed with that and, remember, eight new nuclear

reactors are what we need to maintain nuclear share of electricity generation in our country. there would be a need to replace even more of that to replace fossil fuel generation as coal plants go off line. we need even more capacity. the two reactors under construction have experienced years long delay, billions of dollars in cost overruns and it took 43 years is to complete construction. do any of you disagree that problems that caused the cost and schedule overruns at vogel would need to be solved before any significant number of new reactors could be built in the next 10, 15, or 20 years? do any of you disagree with that? let the record reflect that no one disagrees n. recent years the price of renewable energy sources has declined considerably. here's the big number.

since 2010, the price of solar panels has declined by 80%. we're talking five years. 80% decline. the cost of constructing nuclear plants has remained stubbornly high. in light of these facts, it simply is not relalistic to expect nuclear power will continue to provide the majority of emissions free electricity in the united states let alone be part of a solution for climate change. in 2005 in the united states, there were 79 new mega watts of solar installed this year it's 16,000 new mega watts of solar in one year. so you can see where the trend lines are. increased solar and wind deployment as the price of both decline radically in total costs where stubborn regulatory issues in terms of safety and design still plague the nuclear industry.

dr. lyman, this bill would scrap the requirement that the nuclear regulatory commission hold a mandatory hearing on each application for a construction permit or operating license. instead, such hearings would only occur if they are requested by a person whose interests might be affected. is there any evidence that mandatory hearings have uncovered weaknesses in nrc staff evaluations of construction permit or operating license applications that otherwise would never have come to public view? >> senator markey, thank you for the question. in our view of the mandatory hearing does establish a unique and important role in filling a gap in the event that a contested hearing does not occur and even if a contested hearing does occur, the mandatory hearing, the scope examines other issues including the adequacy of the staff's review. and a colleague of mine it diane

kern, has compiled a number of instances where the mandatory hearings have uncovered significant inadequacies in the nrc staff's review. i would offer that list to you for your inspection. so we believe that the mandatory hearing process is important. it's also important for transparency. we heard a lot about the need to maintain transparency in the nrc review process and the public doesn't always have the resources to be able to contest the hearing. even if there are very important safety issues that need adjudication. for those reasons we think mandatory hearings should be preserved. >> and i agree with you. there are mandatory hearings if you want to build a new house next door to somebody else's house. it's a public hearing not a town hall. here we're building a nuclear power plant and mandatory hearings for a construction permit, for an operating permit would no longer be mandatory? that just makes no sense whatsoever. that's an inherently dangerous

technology that needs all kinds of tough questions to be asked about it. so i understand the wish list the industry would say no more hearings, no more questions asked by the union, scientists and public hearings questioning the underlying premise of building a nuclear power plant in somebody's neighborhood. i don't think the public will be happy they're told no hearings on this dangerous technology. again, it still needs insurance protection from the federal government. that's how inherently dangerous it is. the private sector still isn't willing to provide the insurance. you need the government to intervene, to provide that insurance coverage. i thank you for your indulgence. mr. chairman? >> thank you. senator carper. >> if i were the chairman, you never would have gotten those extra three minutes and six seconds. mr. chairman, i would say it's probably safe to assume that senator markey is probably not going to co-sponsor this legislation. >> i got that figured out. >> anytime soon. one of our colleagues is not

here today. he and ted kennedy used to lead the committee on pensions for a number of years, very conservative republican, kennedy very liberal democrat. somehow or other they managed to get a huge amount done. i used to say to mike, how are you and ted kennedy able to bridge the divide and get so much done? he always talked about the 80/20 rule. i said, what is that? he said, ted and i agree on 80% of the stuff. we disagree on 20%. and what we decide to do is focus on the 80% on which we agree. good enough. jim inhofe and i co-sponsored legislation on diesel emission reduction and making great progress on that front. we decided to focus on what we agree. i want to ask this panel in the spirit of the 80/20 rule to tell us -- and we'll start with you, dr. back -- where is the 80%

where you agree or maybe it's 70% or even 60%? where is the agreement on this panel on some of the important issues? and just take a minute. no more than a minute. >> i'm sorry. i'm not quite sure -- >> where are the points of consensus on this panel? where do you think you agree? >> i believe we agree that early interaction with the nrc is h p helpful for new technologies for advanced reactors. i believe a staged approach is also very helpful. and i believe some kind of cost share to help with the fees or to change the burden of having all fees do the design certification or licensing application is not apropropriat. >> all right. thank you. dr. finan? >> thank you, senator. i think there's a really important area where we all agree, even senator markey laid out some of the challenges faced by nuclear. this is an industry that

desperately needs innovation to address those challenges. and solar and wind have done really well and benefitted from a great deal of innovation in that space. and nuclear energy is ready. there are innovators and investors ready to take on that innovation challenge. and i think that we really need to have a more efficient and transparent regulatory framework to enable that work that we need to do to address those challenges that senator markey outlined. >> all right, thank you. please? >> i think we all agree that nuclear power is very important and very necessary for a base load carbon-free future for how we generate electricity. i think we also agree we need a strong, effective regulator. i think the industry feels we used earlier the term a gold standard. i think we don't want the nrc to be a weak ened regulator. i don't think that's helpful for the industry. we do feel we can have an efficient and strong regulator and a regulator that is more transparent from a cost perspective. >> all right, thank you. dr. lyman, where is the

consensus here? >> well, i would hope the consensus is that there needs to be a structured process to ensure that nrc safety reviews of new reactors are not spent. those resources are actually used to end up with a product that generates electricity and aren't just academic exercises and so that's one concern we have with the bill that we hope this panel would all agree with. i also would point out that we don't agree that the stage process outline the bill necessarily would be helpful. >> dr. lyman, i was just looking for points of agreement. we'll come back to the 20% some other hearing, all right? [ laughter ] commander mccree, navy captain -- navy commander, ri t right?

>> yes. thank you for the question. >> naval academy? my favorite rank in the navy. >> let me first agree with my fellow panel member, ms. korsnick, nrc remaining a strong, credible regulator is essential and we are committed to our efficiency principle of regulation and are making strides to become more efficient in this important area. again, the most important thing we do is assure the safety and security of the operating nuclear power plants and the materials license holders. but within that, i alluded to the three pronged strategy earlier, the multipart strategy. i believe that is in perfect alignment. the nrc needs to make the reviews of advanced nonlight water reactors more effective, more clear and predictable. we're committed to build that framework to have it in place by 2019 so if, and, or when an application is submitted for the reactors that we can conduct those reviews in a timely,

efficient and effective manner. we're on path to do that including conducting additional outreach with folks at this table as well as other stakeholders both domestically and internationally to make sure we're ready. >> all right, thanks. thank you very much, commander. mr. merrifield? >> i think -- [ inaudible ]. i think there's a consensus we can build safer -- >> you still have to be reminded to turn on your mike. >> going forward i did want to mention there are small reactors in the pipeline that are contemplated to be built by 2023. as a country we have the capability of building more nuclear reactors by 2025. we can have savings in the building of new reactors if we replicate and learn from the experiences, and i would make a comment, you know, obviously we

need to make sure the nrc has the resources in he is to protect public health, safety and security. ultimately it is the nuclear power plants that physically have to defend against potential isis threats. i would say from my view as a former commissioner those are the safest industrial facilities in the united states from a security standpoint and would well be able to defend against the kind of threats we have from that particular adversary. >> i yield back to you and then maybe you can give me some more time later. senator markey, i didn't take my earlier time so i'm catching up. >> we'll give you an extra three minut minutes. >> do you have any more questions? >> if i may. just a comment, mr. chairman. dr. lyman, do you agree that granting safety exemptions to advanced reactor licenseees could lead to a net reduction in overall safety?

>> yes. just to elaborate on that concern, the industry is pressing for generic decisions to be made on certain policy issues including the size of emergency planning zones for advanced reactors or small modular reactors, the level of security that's needed, whether or not the containment needs to be robust against large pressure increases. and whether the number of operators needed to staff nuclear reactor complex should be reduced. and they want these decisions to be made based on the expectation or the assertion that advanced reactors are so much safer than current reactors that we don't need these extra levels of protection. our concern is that that assertion is not always based on full enough body of evidence and

experimental data to justify making those decisions. so the net reduction -- so there could be a net reduction safety if exemptions and other relaxations and safety procedures are granted based on a presumption that a new reactor is safer without a full examination of that claim. >> so, mr. chairman, laced throughout the bill as it's drafted is an assumption that there are inherent safety features built into advanced design reactors that make it safer automatically. and that's a nice assumption to make, a nice assertion to make, but that's got to be tested. we have to make sure any one additional potentially successful safety feature interacts with the totality of the rest of the nuclear power plant in terms of them assuming

the plant is safe, and we don't know that. it's an assumption built into the language of the bill. and so this just goes to the question, and it is an 80/20 question, what are the big issues that we have to deal with here? and 80% of it's going to remain is there enough money for the nrc to do their job, have enough personnel asking all the right questions, having the right supervision? the fees will be reduced. are these new technologies actually inherently safer? we have to have the capacity to determine that. will the public be able to ask questions? the industry has always tried to get the public out, you know. but after three mile island, chernobyl, any number of other incidents, the people don't trust the experts anymore. they want to be able to ask questions, too. these power plants are going into their neighborhoods. you can't wall out whole areas of the country from these questions. these have always been the

historically big questions. always been the historically big questions. from my perspective, the public input is vital and should actually be strengthened, that the new reactors should not be exempted from important safety requirements that historically have been required and that the nrc budget should not be capped. so these are the central areas. the big questions that we're going to have to answer in this legislation and it's going to keep coming back to the same questions we've been asking for the last 70 years on technology. the questions don't change. i thank you, mr. chairman, for having this very important hearing and we know one thing that these power plants are 20, 30, 40 years old. to say that you need less health -- you have to go to the doctor more the older you get. there are more things that could go wrong, the older you get, and to reduce the budget of these

aging power plants in densely populated areas all across the country and say at the same time we're going to have lower numbers of personnel, lower amounts of fees and revenue that is are going in, it's totally contrary to how we think about it. issues like nuclear power plants that are the same as cholesterol going through the veins of older americans. they cause issues that require a lot of additional attention. and to say that's not accurate for technology as it is for humans just belies the reality of what we have learned about nuclear power plants in our country. i thank you for the courtesy, mr. chairman, of the additional time to question. >> thank you, senator markey. i'll take my last round right now and then you'll be able to finish up, senator carper. i just want to make the comment this legislation does not make assumptions. it sets forward a new process of more transparent and i think effective process for the decisions that you're talking

about to be made. and it definitely does not give any exemptions to any technology. it puts the nrc directly in charge of improving and stre strengthening our safety. i'd actually just like to use my time to ask mr. merrifield and mrs. korsnick to respond to that very issue. >> i think the nrc will be able to continue to meet its mission of appropriately looking at these technologies and ensuring that they are assured that they are safe. i think it will do so in a way that is risk informed such that it will be able to judge is there a need for a large emergency planning zone where the amount of radiation that is in that reactor may be much less. >> and this legislation does not choose technologies -- >> it does not. >> it does not define standards? >> it does not. those tools remain with the nrc. the other point i would make it

is not as if these technologies are entirely new. indeed most of the advanced reactor technologies that are being brought forward today were originally developed by the atomic energy commission and d.o.e. during the 1950s and 1960s so there is a significant amount of research information available to demonstrate the safety of these reactors today and justify the nrc making changes which would more appropriately tailor their regulations for advanced reactor technologies fully consistent with public health and safety. >> thank you. mrs. korsnick? >> yes, thank you, senator. a couple of comments. clearly the industry and the folks representing advanced reactors, none of us are interested in reducing safety margins. the conversation and the structure in this bill that provides a licensing process really informs that licensing process that these safety margins might, in fact, be met in a new and different way with this innovative technology and that needs to be acknowledged through the licensing process. so we're not in any way lowering

the bar, lowering the standard. quite frankly, we're meeting, maybe even exceeding the standard just in a new way. the other item i wanted to mention, and i appreciate senator markey is not here, but the mandatory markey is not here. the mandatory hearings that we mentioned earlier, these are uncontested hearings. that means they do not participate. these are held between the commission and the staff on construction permit and combined license application. it's not cutting the public out, if you will, of any conversation. we are very interested in the public being involved and dialogue. >> if there's any public interest, there can be a -- the bill allows for a hearing to be held in that -- >> absolutely. there's many ways that the public can request a hearing on an application and be involved. this doesn't take away any of the public engagement involvement. i just wanted to make clear. i felt like a different impression was left, in fact, with the committee. >> thank you very much. senatorle carver?

>> thank you. you're doing a great job. >> thank you. >> look forward to the day when you chair this more often. >> thank you, of course. >> unless, of course, i could be the chairman. then we could -- >> we may have to negotiate. >> in the meantime i'll be your wing man, happily. i have an old car. in 2001 i stepped down as governor and became a senator, my older son wanted to buy a new car. we drove mustangs and corvettes. we now drive a town and chrysler mini van. we took the train back last night in my 2001 chrysler mini van. along the way the odometer went across 419,000 miles. now when i first got my mini van there was a warranty cost, things that needed to be fixed from the factory. we had a warranty that paid for that stuff. for a long period of time, man,

we almost spent no money on it. i would watch it every two weeks and change the oil. in recent years, to be honest with you, i spent more and more money on my mini van. we have all of these old nuclear power plants that are out there. my guess is when they first came online there were some problems, sort of like the warranty stuff. we dealt with them like ed markey says, you get old and you spend more money. i will say this about my mini van, i went out and started it in southern delaware after a meeting. it wouldn't start. battery wouldn't so the guy came from aaa. he said, you need a new battery. i said, okay. he said, we have a three year and a six year. which would you prefer? i said the six year. some people say that is confidence. that is optimism. i'm mr. glass half full. i'm trying to figure out if i'm a utility and i'm paying 90% of

the costs running nrc and i'm seeing the nrc having fewer reactors to monitor, we're not adding, building four new ones but not a huge increase, why do you continue -- why does the nrc continue to need all of this money? you've knocked your budget down some. that's not a whole lot. monitoring it, you have, as i understand it, closures. sometimes you think -- if i went to a ford explorer, i was going to retire it, decommission it. in one minute they squashed my car, my explorer. that was it. they gave me a check. it doesn't work that way with these nuclear power plants. it's an expensive process to

decommission them. i guess that's a cost for you. fukushima, all of these recommendations from fukushima that we're implementing. we're making some progress there. we had a hearing a week or two ago that said we're not there yet. we also have a lot of ideas. my sense is what you're asking for in the budget is not unreasonable, but i'm sitting here realizing how do we get better results and save some money. i say you have to sharper your pencils a little bit more. react to that for me if you will. >> senator, thank you for that. i appreciate the analogy to your mini van, of course. >> don't ever tell my wife i bought a six year battery. she'd die. >> a nuclear power plant is much more complex, but to your point, the nrc is reducing its costs.

we're committed to do so. if you look at the trend from 2014, we're reducing our costs. we have a baselining and that will allow us to reduce '17 by another 30. lowering our costs will translate to user fes to this industry that we regulate. while there may be a delay or reaction, if you would, there is a commitment to reducing our fees. it is tangible. i believe the industry will recognize those reduced costs. >> one more last quick question. talking about work force and that sort of thing.

the budget is reduced in the future to reduce the workload. just take a minute to talk about the ramification of cutting nuclear engineers today who might arguably be needed for tomorrow's nuclear -- advanced nuclear applications. >> senator, thank you. one more significant challenge is i think any organization experiences, one that's human capital dependent, dependent on people to get work done. that's certainly nrc. is to manage cost reductions, reductions in staffing that you maintain your core capability to fulfill your mission. ours is the safety and security. we're working very closely as a leadership team using a strategic work force plan to make sure that the work that we have now, the work that we predict in the future will have the right people and the right place at the right time with the right skills. and, again, that's what our commitment is and we're working very closely to get that done, including nuclear engineers who

are just one capability, one competence that we need within the nrc. >> all right. thanks. >> senator, can i make a comment about -- >> real short because we're out of time. >> 73 of the nuclear power plants in the you states have sought and received an extension to run for 60 years. that has allowed the utilities to invest large amounts of money to make sure that those plants are up to date and fully meet the safety requirements. like your mini van, they have been making a lot of investments along the way to make sure those are useful similar the way the u.s. air force with the 1950s b-52s currently deployed in the middle east are in shape to do their mission, nuclear power plants are here in the u.s. >> i want to make sure i get my six year's worth out of that battery. >> for the battery, that would be 83 licenses. >> thank you. >> 11 under review, 6 expected to come in. nrc's a bit more success flg

than that with -- >> thank you for that qualification. thank you all for being with us today. let's continue to look at that 80% and see if we can build on that. >> thank you, senator carper and i do appreciate your constant focus on trying to find solutions and get to that 80%. i agree with it. dr. lyman, i indicated i'd give you a chance. i think you got your chance to make your comments. do you feel you have not fully had that opportunity. >> i think we've heard enough from him. >> go ahead. >> very short time to explain why we think some of the language in the bill could potentially be interpreted as a reduction in safe at this standards. that primarily has to do with the language, risk in foreign performance base. my experience with the nrc and its attempts to perform what's called risk informed regulations often implies trying to justify

what's called a reduction of unnecessary conservatism. and unnecessary conservatism means different things to different people. so our concern is that this bill would put pressure on the nrc to develop processes that would essentially force them to accept lesser standards for the experimental data for the analytical work that's needed to support an advanced reactor application. in particular, if you have designs that are based just on paper studies of the risk analyses, do not have operational data to support the -- to actually validate those studies, so there's a concern that over reliance on -- or over confidence in paper studies that are insufficiently validated to meet, let's say, a less restricted safety criteria could lead to an overall reduction in safety.

that's our concern. on the question of innovation, now that it came up, mr. merry field just pointed out that many of the reactor types that have been -- that are currently being considered were developed by the atomic energy commission decades ago. we agree with that. actually, there's less of an organization today than meets the eye. i would submit that that argument could also be used. nrc has considerable expertise and experience in the reactor types. we think the concern that the nrc is not ready to license the reactors is somewhat he exaggerated for that reason. for the most part these are all technologies. >> if i may respond quickly. when i was on the commission we did create a -- 5 million in funding to better understand the bed reactors, but the salt