for this type of legislation and the implications once it is enacted. in regards to the nuclear utilization of keynote energy policies act, i also look forward to engaging the witnesses on this legislation. mr. chairman, finally, if nuclear energy is going to continue to play a constructive role in a reduced common energy portfolio, we must ensure that we have policies in place that appropriately reflect the contributions of the industry and current reality that it faces. so i commend my colleagues from illinois, mr. kizinger, for introducing a bill forecadraft very least a conversation toward reaching this goal.

of course, mr. chairman, today's bill is simply a discussion draft and we will need to hear from the nrc commissioners, themselves, before moving into a legislative process. but i look forward to today's hearing and i look forward to testimony from today's experts of mostly need for the changes outlined in the bill as well as the practical implications if these changes were, indeed, enacted. thank you, mr. chairman. i yield back the balance of my time. >> gentleman yields back. this time i recognize mr. kizinger for five minutes and if some others want some of your time, you might consider yielding. >> this will be fairly quick. mr. chairman, i want to taunk you for holding the hearing. i want to thank each of the witnesses for being here today. it's an important topic. as we've heard, nuclear power generates about 20% of electricity in the united states and in illinois it's over 50%, including 60% of the nation's carbon-free electricity. these plants are high performing, consistently having

the highest capacity factors by far in the electricity industry and sedding the gold standard for commercial nuclear safety worldwide. we have to recognize, however, that while our nuclear fleet is strong today, the demand for clean, reliable and affordable energies only increasing. we have an obligation to safely maintain our existing fleet of 99 units and to ensure the nrc continues to regulate efficiently and effectively so investment in plants can continue. the regulatory inefficiency and uncertainty we often see today does nothing to help our existing fleet, does nothing to foster investment in new plants or most importantly to ensure safety and protect public health. i want to thank nrc for providing me with technical feedback on this draft which we're currently reviewing. i look forward to continuing to work with them throughout this process. furthermore, i appreciate the interest in my colleagues on this issue addressed in my discussion draft including establishing fair and more equitable nrc fees, streamlining the licensing process and

improving the current regulatory framework for decommissioning plants. these are all important conversations so that nuclear power can continue to provide clean, reliable and affordable energy to rate payers in the united states. again, i welcome this opportunity to discuss how we can maintain our nation's position as the global leader in civilian nuclear power and nrc's position as to the gold standard of safety. i think all of us in this room recognize if we cede the position, it will have serious consequences not only for our economy but also for our national security. with that, mr. chairman, i'm happy to yield to anybody who wants my time. >> anybody on our side seek additional time? >> i yield back. >> okay. yields back. this time i recognize the gentleman of california and thank him very much for co-sponsoring this legislation as well for five minutes. >> thank you, mr. chair. our nation will by necessity diminish our dependence on fossil fuels in order to fight climate change and as we do so,

we'll need to turn more and more to nuclear power. hr-4979, the bill my colleague, mr. latta and i introduced allows the nrc to provide the needed technical expertise for emerging technologies. this legislation provides a pathway for the nrc and the d.o.e. to continue collaborating and establishes a regulatory framework for consideration of licensing advanced reactors. this will help ensure that as newer, safer technologies are developed that the nrc has the framework in place to review new applications. mr. chairman, with unanimous consent, i'd like to submit three letters. one from the berkeley nuclear energying department, one from thirdway, and one from clean air task force into the record. >> white house objection. >> and i'll yield the balance of my time to my colleague from pennsylvania. >> and i thank my colleague. i want to thank the chairman and the ranking member for holding this important hearing today.

to me, nuclear is a critical component of our energy future. we need to work here at this committee to ensure that it remains feasible and safe for our constituents back home by investing in this incredible energy source and its technology and making sure its value as carbon free reliable base load power is properly appreciated. i believe advanced nuclear is key component for maintaining nuclear power in the future and will be an integral part of our energy portfolio here in the united states. my colleague's congressman and latta and mcnerney's bill takes important steps in that direction. i also want to applaud our colleague, mr. kizinger, for his discussion draft. i think we share many similar concerns regarding the nuclear industry and i'm optimistic that we'll be able to find some common ground on solutions. though i couldn't help but notice the acronym for your bill is nucpa which i find somewhat

distressing but i'm certainly encouraged by bringing attention to these issues the punuclear industry is facing and i do hope we can work together on solutions and by coming up with a different acronym than the one you've chosen. thank you, i yield back. >> gentle lman yields back so that concludes the opening statements. and i'm going to introduce the witnesses individually before they speak, so first of all we have mr. marvin fertel. president, chief executive officer for the nuclear energy institute. thanks for being with us. we look forward to your testimo testimony. you're recognized for five minutes. >> thank you, mr. chairman. ranking member rush and members of the subcommittee. on behalf of the commercial nuclear energy industry, i want to thank the committee for considering the advanced nuclear technology development act, hr-79 4979 and discussion draft of the nuclear utilization

of keynote energy policies act. i am pleased to represent the broad nuclear industry, including the owners and operators of nuclear power plants and the supplier community today. as congressman kizinger said, the nuclear energy is the largest and most efficient sources of carbon-free electricity in the united states. our 99 reactors produced nearly 20% of our nation's electricity and approximately 63% of our carbon-free electricity. nuclear energy facilities demonstrate unmatched reliability by operating with an average capacity factor of 92%. higher than all other electricity sources. and importantly, they're senchs to t essential to the country's economy and the communities in which they operate. despite the significant environmental economic and national security benefits that nuclear energy provides, the current regulatory requirements and licensing processes challenge the industry's ability to build new technologically advanced reactors. the prospect of developing advanced reactors has become both attractive and necessary in the u.s. and abroad.

in this country, approximately 126,000 megawatts of generation will be retired over the next 15 years. u.s. energy information administration forecasts the need for 287,000 megawatts of new electric capacity by 2040. in addition to the electric capacity that will be needed to replace the retired power plants. many other countries are looking to a rapid expansion of nuclear energy to address their growing electricity and environmental needs. advanced nuclear reactor designs or for many technological advances for the u.s. and are also well suited to developing economies. however, without strong federal leadership and direction, the u.s. industry runs the risk falling behind its international competitors. hr-4979 affirms congress' commitment to u.s. leadership in nuclear technology and safety. the industry supports provisions in the bill that effectively direct the nrc to think differently about licensing reactors.

the bill calls for an efficient, risk informed, technology neutral framework for advanced reactor licensing and a phase review process that could effectively facilitate private financing for advanced reactors. developers will be able to demonstrate progress to investors and other participants in the first of a kind projects and obtain necessary capital investments as they achieve mild milestones. the nrc imposes stringent safety requirements that all nuclear facilities must meet to maintain public health and safety. as we look at the details of. >> reporter:. it is is important for the nrc's regulatory framework to acknowledge there will be a variety of effective ways to meet their safety requirements. is a government function to develop the regulatory infrastructure, license advanced reactor technologies and, therefore, authorize federal funding to support those activities.

congress should reform the nrc's fee recovery structure to make fees more equitable and transparent. despite to reduce its budget and right size the agency, fees continue to be excessive and limitations of the mandated 90% fee rule create fundamental structural problems. the nrcs budget is approximately $1 billion per year despite significant decleines in its workload. in particular, according to ernsten young study performed for the nrc, the nrc spends 37% of its budget on mission support act costs, more than 10% higher than some peer agencies. because the nrc must collect 90% of its budget from licensees and the nrc budget has not correspondently declined, remaining licensees are responsible for paying higher annual fees. with recent premature shutdowns and additional l reactor decommissionings in the coming

years current fee structure, the remaining licensees will bear higher fees. the keynote energy policy acts adopts a straightforward approach to making nrc fees more equitable. it would continue to require the licensee to pay for all agency activities attributable to a licensee, or class of licensees is but disallow collections of fees with the agency's corporate support while there are federal budget questions that arise with this approach, it would require the nrc to justify corporate support cost to congress in order to receive appropriations and in turn prompt the nrc to control its budget or reduce or eliminate wasteful spending. the value of allowing international investments in u.s. nuclear plants by removing outdated restriction on foreign ownership that ignore the multiple protections to our nation's security and the reality of today's global nuclear energy markets. the draft bill also eliminates

the uncontested mandatory nrc hearing on construction permits and combined license applications. this would not limit public participation since the public does not participate in a mandatory hearing and multiple other formal opportunities are available for public participation. the draft bill would require that the nrc improve the regulatory framework for decommissioning nuclear power reactors. it is in the best interest of all parties. the nrc licensees and other stakeholders to have a more efficient regulatory framework for plants entering the decommissioning process. the significant reduction and risk that result when a power reactor ceases operations, defuels and decommissions. in closing on behalf of nei and its members, i wish to thank congressman latta, mcnerney for introducing the important reactor legislation. we support passage of this bill. we also appreciate congressman kizinger's work to reform nrc fees in the regulatory process.

we look forward to working with members of the committee and their staff to advance these reforms. again, thank you for the opportunity to testify today. >> and our next witness is mr. jeffrey merrifield, partner of the hillsberry law firm and chairman of the advanced reactors task force, nuclear infrastructure council. welcome. you're recognized for five minutes. [ inaudible ] >> mr. merifield, would you move your microphone a little closer? >> sorry. i got it. mr. chairman, again, thank you very much. thank you, ranking member rush. as a former member of the the nuclear commission, the testified before this committee. again, it's an honor to be here this morning. today i'm appearing in my role

as chair of the u.s. nuclear infrastructure council advanced reactors task force, although as mentioned i'm a partner in the hillsbury law firm. my testimony will discuss the provisions in hr-4979 on advanced reactors and proposed changes to nrc procedures subject to the draft offered by kizinger. salutes the subcommittee's focus and support for advanced reactors as well as the nrc budget reform provisions that provide funding for the nrc to develop a modernized nuclear licensing framework for advanced nuclear technologies. nick issued a framework for advanced reactor licensing modernization white paper on february 22nd, 2016, which embraces many of the elements contained in the legislation. when i first became a commissioner in 1998, the nrc with the support of congress worked to right size the agency consistent with the level of licensing and inspection activities. at that time, the agency had approximately 3,400 employees

and within the next now years, we were able to reduce that down to about 2,800. principally through attrition, yet without any sacrifice to its mission of protecting people and the environment. today, the agency faces the same challenges to reduce its staff and to become more efficient and timely in its licensing activities. while the nrc has made great strides in right sizing the agency through project aim, we believe further efficiencies can be realized while at the same time maintaining safety and inspection activities and improving the timeliness of licensing. during the past decade, the u.s. has maintained its technology leadership by building new passive generation 3 reactors in georgia, in south carolina. as well as modular light water nuclear reactors headed toward deployment. nic has seen significant growth and support for generation 3

reactors that will provide expanded options for economical, carbon-free electricity. if the united states is to be successful in maintaining its lead in developing and deploying these reactors in the 2020s and 2030s, congress must consider significant policy changes. we believe the language in section 6 of hr-4979 will allow the agency to create a modern, risk-informed, technology neutral framework enable development of advance the regulations without passing costs on to the developers or the utilities. section 6a6 calls for nrc to evaluate options to allow applicants to use fees-review processes, we believe the language should be strengthened to require the nrc to establish specific stages in the advanced nuclear reactor licensing process including a pre-licensing vendor design review modeled after the canadian nuclear safety

commission vendor design process that was recommended by the nick white paper. such a process would allow advanced reactor developers and investors to have a clearer picture of where they stand in the nrc process in meeting nrc safety requirements and allow them to achieve further investment in their technologies. we emphasize a need to establish risk informed performance criteria applicable for advanced reactors. while licensing process reforms are needed, for non-light water reactors, quickly required for twoers to proceed with advanced reactor designs and the nrc must move forward to finalize advanced generic design criteria, source term, emergency planning requirements, among others. we strongly support section 2 of the discussion draft which places fair and equitable provisions on the agency's fee-based programs. by eliminating current fee base to non fee base ratio and articulating the specific areas that will be borne by general

revenues, the draft provides the appropriate balance between the fees borne by individual companies and those overhead activities covered by the federal government. nick believes the discussion draft will be strengthened by providing early-stage engagement between advanced reactor develops and nrc should be conducted at no or limited cost with appropriate cost share, promi perhaps 50/50 for later stages of the process. either way, it should avoid the d.o.e. and nrc picking advanced reactor winners and losers. we believe the private sector is better placed to identify and promote innovation and the nrc licensee fees should not have a chilling effect on entrepreneurial efforts. finally, i strongly support the elimination of the foreign ownership requirements of section 3 and the mandatory hearing requirements contained in section 4 and i'm pleased to discuss my views with the subcommittee. i would ask some additional letters of support including

that of x-energy be included in the hearing record. with that, i again thank you very much for allowing me to testify today. >> thank you, mr. merrifield. our next witness, mr. todd allen, senior fellow, the clean energy program for the third way. dr. allen, thanks for being with us. you're recognized for five minutes. and please get the microphone up close. >> absolutely. good morning. chairman whitfield, ranking member rush, other distinguished member of the subcommittee. on behalf of third way, i greatly appreciate the opportunity to provide testimony on the importance of nuclear energy innovation. my perspective on nuclear energy comes from a diverse career. my first job after college i lived on a floating nuclear reactor as an officer in the uk nuclear submarine fleet. i've seen firsthand a generation that believes in nuclear technology as a critical component for providing clean energy. i've worked in the national laboratory system. as deputy for science and technology at idaho national

laboratory, working to open up the facilities to university and industry users across the country. now i'm at a think tank where i think. third way creates and brings to market at vanced nuclear technologies. currently, nuclear energy is provided as a single product offering, specifically large gigawatt scale electricity production machines. the national energy system is changing rapidly, opening up the possibility of nuclear energy supporting a wider range of functions, if new ideas can get from conception to commercialization. a 2015 third way report identified 50 companies backed by $1.3 billion in private. capital, developing plans for new nuclear plants in the u.s. and canada. these companies are creating a growing number of product options of varying sizes and capabilities intending to build upon the continued success of our current light water reactor fleet which provides over 60% of the carbon-free electricity in the united states.

private/public partnerships will be key to the story. similar to the way hydraulic fracking and internet were developed and how space-x is currently teaming with nasa to send unmanned vehicles to mars. how can federal investments nurture this emerging culture of nuclear innovation? i'll use as an example a hypothetical graduate nuclear engineering student named carla who wants to provide clean energy to the world and make money at the same time. what's her path to success in transitioning a good idea on paper to a marketable product and a thriving company and where can partnerships with the federal government be useful? first step. carla would benefit from early interactions with financiers and business developers. we suggest carla could be helped through the creation of private/public partnerships, and early innovation, a proposal we called innovation centers. innovation centers would benefit the department of energy, providing the agency with valuable information on investment trends that could inform out d.o.e. directs

research dollars to solve problems that support multiple companies. step two, securing investments. at the innovation center, carla has opportunities to troubleshoot and mature her concept. she's also introduced to financial terms which ultimately helps her secure a small investment to fund her company. carla could leverage private investment to receive d.o.e. cost share allowing her to move quickly and signal to investors that her design is especially promising. the department of agency already engages in cost share programs like the ones currently supporting project agreements with tera power and x-energy and further use of these is encouraged. her third step, specialized testing. here's where the federal programs become uniquely valuable. through access to national test bits. some development requires access to specialized capabilities. for instance, test reactors, facilities to test radioactive materials or high performance computing. fortunately, a number of the department of energy pl

laboratories have these types of facilities and expertise that carla needs. the department of energy created gateway for accelerated innovation in nuclear or gain program to facilitate private/public interactions. step four, beginning regulatory process. as she develops her technology, carla would like to get signals from the regulator short of licensing that her technical solutions are reasonable. this will help her gain additional funding increments as she develops her designs. she needs a regulator who is staffed and funded in a manner that allows it to be ready to respond to emerging light water reactor technologies, ideally the pace of regulatory review would support new products for an energy system that is changing rapidly, all while maintaining the traditional exemplary safety record. step five, demonstration reactor. as typical with many new and capital intensive technologies carla may need to build a demonstration of reactor before moving on to a full-scale

commercial reactor. to address this, the department of energy should allow innovators like carla the chance to build their demonstrations at one of their laboratories that already have experiences running nuclear facilities. allowing her to run her reactor at idaho or oak ridge, for example, could help her test her design and make changes to commercialize her product. final step, nrc licensing of her demonstration reactor. because carla's hoping her design will be commercialized which would require her to go through the nrc licensing process, it would benefit her if the nrc were involved in the licensing and construction of her demonstration reactor. when her demonstration reactor works, she's ready to work with her investment in the nuclear regulatory commission to get final approvement. where can congress help? early no innovation. support the creation of the multiple private/public centers that facilitate creation of

entrepreneurs done through report languages in the appropriation process. test beds, support the game program as national nuclear innovation center, ensuring modern infrastructure with world-leading staff that serve as nation's test bed, ensure programs are structured to maximize value through well-structured private/public partnerships. finally regulation, ensure the commission is staffed, structured and funded to support pace of regulatory review that would support new products for an energy system that is changing rapidly. house resolution 479 asks nrc and d.o.e. to look broadly at their functions and report back on how they can better serve this emerging nuclear innovation community. we're supportive of this national approach and suggested some specific ideas. we hope d.o.e. and nrc have additional useful ideas. we also appreciate the intent discussion draft from mr. kizinger and are ready and willing to interact, optimize our ability to move nuclear technology forward. thank you for inviting me to testify. >> thank you. our next witness is mr. geoffrey fettus, senior attorney for the

national resources defense council. thanks for being with us. you're recognized for five minutes. >> thank you, chairman whitfield and ranking member rush. >> pull it up close. >> i'm -- >> pull it closer to you. >> is it working? thank you. thank you, chairman whitfield, rush, distinguished members of the committee. it's a great honor to be here. i'll highlight a few points here. first, with respect to hr 4979 which requires d.o.e. and nrc to work together to work to develop plan with public input for advanced reactor licensing systems, such a charge has merit in that it asks two of the relevant federal agencies to work together. but some cautions are in order. 270 days is far too short a time to both gather and analyze the necessary technical and regulatory information and provide for public comment with respect to such a complicated set of economic, security, and environmental challenges as those faced by the licensing of advanced reactors. further, both epa and the president's council on environmental quality should be

part of any such enterprise. epa for its standard-setting authority. even though many advanced reactor concepts have been around for decades, none of the current spate have demonstrated the security, environmental and safety improvements necessary to make them viable in the near term and more pertinent to the reality of a carbon-constrained future. none have demonstrated any likelihood they'll be able to compete in competitive energy markets and the licensing process effectively k lly desig industry and streamlined by the nrc many times over the last two decades has little to do with that. thus, our concern is real, the practical nuclear engineering and economic hurdles inherit to the technologies may serve as distraction to the rapid continued scaleup of existing economically viable and proven solutions to the threat of climate change from wind, solar, and energy efficiencies. second, we found the discussion drafts substantially more

problematic. i'll hill just a few of the sections. section 2 on why shift substantial costs to the taxpayers rath e than collecting them as has been done historically via licensing fees. section 3 requires a study on implications of repealing foreign ownership restrictions. while it's wise to study a matter and collect information before legislating, we urge requirement for wide public input on a matter this complicated especially from the security terms. zx 4 section 4 does away with mandatory hearing provision which would do much harm to public confidence that all technical issues have been considered by the nrc. the matter to hearing plays a crucial role in supplementing the contested hearing process in which few issues, sometimes no issues, survive the gauntlet of nrc's arduous procedural requirement for admission of issues to a hearing. the mandatory hearing process has a proven track record of highlighting weaknesses in the nrc staff's review. for example, in the case of the

clinton esp, atomic safety alliancing board found the staff's review, i quote, did not provide adequate technical information or flow of logic to permit a judgment as to whether the staff had a reasonable basis for its conclusions. 64 nrc at 460. section 5 is equally trouble system as it's a codification of agency drift to informal less rigorous hearing process that has already been under way for a long time. rather than ensuring the hearing process continues to become yet more expedient process and restricted venue for states and public, congress should be directing nrc to submit a substantially redie designed adjudicatory process that will provide regulatory certainty but also simplify the hearing requirements to allow substantive technical issues of environmental concern come to the fore rather than entertain joint industry staff efforts to curtail or have dismissed

literally every contention that has ever been filed before the atomic safety and licensing board. section 6 is also problematic in that it weakens the hearing for opportunity for hearings on inspections, tests, analyses and test criteria prior to operation. the perception of the hearings caused delays in licensing has no basis in fact. the industry's long structured the hearing process and nrc staff requests for additional information are at the heart of the timing and that's simply evidence of the regulator doing its job. but even more to the point, docking the application before it is complete when it often contains substantial areas that are promised to be addressed later or leaves out significant details creates false impression that the time between when the application is docketed and when the final decision is rendered is attributable to the hearing process and public participation. this delay should not be used to justify even further

restrictions. section 7 would do grave harm to nepa and likely bar any meaningful nepa review by staff. the current nepa process as it's practiced by the nrc is already problematic. i detail that in my testimony. finally, with respect to section 8 we recommend striking text in section "b" factors entirely from the draft legislation as this language can prejudice and distort the final decommissioning rule making that's just commenced at the commission. thank you again for this opportunity. and i'm happy to take any questions. >> thank you. thank all of you for your testimony. at this time, we'll recognize members for questions. mr. latta, you're recognized for five minutes. >> well, thanks, mr. chairman. again, thanks for holding today's hearing. gentlemen, thanks for your testimony today. it's very much appreciated. mr. merrifield, if i could start with a first question to you, my legislation requires the development of phased licensing

process, provides certainty insurances to the licensing, license applicants. what do you see as the primary advantages of structuring the licensing process in this manner and how would you recommend the nrc develop such a process? >> well, i think right now one of the disadvantages of the current system is it's sort of all or nothing. you have to put in your license application and wait a very long period of time to determine whether the nrc is going to find that to be acceptable. for the advanced reactor mmunity, having a stepwise process envisioned by your bill would allow -- allow early interaction with the nrc and an early indication of whether that design may be licenseable. if, indeed, the nrc finds that's the case, that developer can identify additional areas of funding to continue to process that application and that design. if for some reason, we hope it is not the case, the nrc were to find that would be something that would be difficult or not able to be licensed, then that

applicant can then make a logical business decision whether they want to continue to move forward or not. we think that's a real benefit to innovation. >> thank you. your testimony also suggests the model used by the canadian nuclear regulators should be pursued. what do you think makes their structure more unique and constructive? >> well, it's very -- it has some very specific steps to it. it does have this pre-application vendor design review. it's got some specific deliverables that are expected by the canadian regulator that are well spelled out. it has a specific timing for when that review should occur and, indeed, they even have limitations in terms of what the cost is going to be for the applicant. it makes a very clear program for everyone involved to understand what is expected in that first step and it allows the technology both to be evaluated as well as to move forward. >> thank you. doctor, following up on that, any additional thoughts regarding benefit of the phased

licensing process? >> just one small thing. i agree with commissioner that it's a very important early signal for someone who's trying to take an early idea to commercialization to be able to get that feedback from the regulator. the other thing by getting those, parallel to this we have the department of energy doing research programs in similar technical areas. the more we can get early signals we can use to feedback and guide how we spend federal dollars on research in way that helps those companies is also very useful. >> thank you. if i could ask mr. fertel a question of you in your testimo testimony, you talk about the country is going to lose in nexts 15 years 126 gigawatts of generation and we're going to need 287 gigawatts by 2040. i represent a district with 60,000 manufacturing jobs. we have to have a base load capacity out there. can you give me an overview of what -- how many power plants we're talking about when you're talking about 126 gigawatts and what we're going to need when you look at 287?

>> yeah. i think -- i think congressman, in general, you could think about them whether they're gas plants which is what we're building now, they're probably on the order of 400 to 500 megawatts each. so if we need 100,000 of them, we're going to be building, you know, 2,500 megawatt -- i'm sorry -- 1,000, yeah. we'd be building those to get to 240 plus -- it's about 500,000, almost 500,000 megawatts so you'd be building 1,000 plants at 500 megawatts each. >> thank you. mr. merrifield, advanced nuclear technology development act requires nrc to develop a risked informed regulatory framework. given your experience as a commissioner, would you please provide your interpretation of what a risk informed framework means and what the primary inputs are in such a framework? >> well, a risk informed

performance-based approach uses combination of risk analysis and performance history to identify what are the most significant areas to focus your inspection and your regulatory activities. it recognizes that in any system, whether nuclear power plant, petrochemical refinery or interplanetary space vehicle, every system not equally important to safety. using risk informed performance based approach allows you to prioritize one of the most critical components and focus your regulatory process toward those. >> thank you very much. mr. chairman, i see my time's about ready to expire. i yield back. >> gentleman yields back. this time i recognize the gentle map from illinois, mr. rush, for five minutes. [ inaudible ] >> subcommittee examined the agencies request of almost $20

million less this year than what wases enacted if last year's budget. these cuts were said to be in line with the agency's project aim initiative designed to streamline operations and better reflect the commission's decreased workload. however, in your statement, you said that those reductions are not sufficient and that industry continues to see regulatory inefficiencies. can you discuss why the new fee structure as outlined in the discussion draft is necessary? however, the changes outlined in the bill impact safety standards and protocols at these nuclear facilities? and if there's any other witnesses who would like to address any of questions i've

asked, please chime in. mr. fertel? >> thank you. first, we never want to see nrc's effectiveness as regulate or credibility undermined. we think they're the best regulator in the world. it's very important for us from a commercial industry standpoint for them to be very effective and credible in what they do. they have project aim going. we think project aim is a very significant and sincerest effo on their part to look at re-baselining what they're doing. their scope as responsibilities has dramatically decreased. they staffed up for 20-plus new plants. they were operating as though they had 107 existing reactors. we're moving forward with four new reactors. we currently have 99 and a number of those are going to be shutting down soon. their material licensees have significantly decreased in how

many they are regulating. >> so they have, and they recognize this, a significant opportunity to re-base plooline they're trying to do with the basically scope of safety that they have to look at. they also, as commissioner mentioned, before are looking at getting much more safety focused. they were looking at on the order of greater than 60 new rule makings which the commission is saying are not going to do all of them. for an industry that's is performing exceptionally well and an industry they've been regulating now for 50-plus years. so we see a significant opportunity for them to continue to do what they're doing and we think that as they do what the industry is doing, as you deal with turnover due to retirements, you deal with a lot of this through attrition. and basically you have an opportunity to hire critical resources but probably not replace all resources. that's what we're doing on our side really religiously right now, unfortunately, because of

challenges that our plants face. on the corporate overhead, and the approach in the bill that congressman kinzinger proposed what we see is tremendous benefit of having congress provide accountable and oversight to the corporate overhead. their corporate overhead, based upon the studty they commissioned with ernst and young is higher than peer agencies they looked at. i don't think they're evil for doing that but there's not a lot of accountability for them to do less because we pay for it. it's not appropriated money. there's not a lot of oversight put to it and little transparency from our side to seeing what we're paying for and why. so we see a significant opportunity, but to your point, we do not want to hurt the credibility of their effecti effectiveness, but we think they can continue going down their path. we may push harder because we know they won't go as fast, but

we think that that helps them go in the right direction. >> congressman, to that point, i was proud to serve as commissioner of the nrc. i agree with the characterization. it contains and extraordinary group of hard, dedicated individuals. having said that, as i related in my testimony, we went through a similar process when i was a commissioner to the process that they're undergoing today. there was a decreasing workload and a need to appropriately align the size of the workforce and the task and make it more risk informed. we were able to do that. i think it resulted from a couple of things. one, we had a significant amount of oversight from congress. we had to provide monthly reports to congress on the progress of the licensing activities that we had under way. and that drove the commission in its budget process, in what it presented to congress, to conduct a line-by-line preview of how it was spending money, what the priorities were, and to make sure it was doing the most important stuff in recognizing

that some things just simply didn't need to be done. i think the commission certainly needs to have that level of engagement. i trust they should right now. the one thing i would mention on corporate overhead support, we didn't have this term when i was a commissioner. i think there's been a lot of growth in things like i.t. and other things which may drive some of this. there is one program i think this committee needs to be aware is important that is an overhead and that is international programs. there are countries around the world that look to the nrc to help them craft their regulatory programs. it very important as congress looks to oversee programs that that one in particular is not hurt. those are important investments and should come from general revenues but it's assistance that that agency provides around the world that's critical. >> the industry would support commissioner merrifield, recommends on them helping internationally for a safety standpoint. >> recognize the gentleman from west virginia for five minutes, mr. mckinley.

>> i'll try to keep this short. i'll limit to one or two questions. mr. fertel, with you, with nei, we understand with the new nuclear technologies that will come as a result of legislation like this, we know there are going to be developments that will probably reduce the amount of waste product that comes from spent fuel rods. but nevertheless, that -- the whole process of making nuclear energy is going to develop a waste product. maybe less than we're currently doing, but nevertheless, there still will be a waste product. so does nei have a position, do you support the yucca mountain as a permanent site for the disposal of nuclear fuel waste as required by law? >> congressman, we have always supported going forward, finishing the licensing on yucca mountain to determine if its license, which we think it would be, and to move forward with yucca mountain.

we support in parallel the necessity of having centralized interim storage. because we don't think you can get to yucca and do everything fast enough for the fact that we have plants that are shutting down. and our support also goes to making sure that there's access to the nuclear waste fund. there's over $30 billion in it. we don't have access right now. >> with 99, i guess, reactors we have functioning, i'm curious about what's being done currently to safeguard those spent fuel rods in those water baths? we know the potential with all the fear of terrorism and other activity for national security, is there something being done on this nuclear waste management that an give us a greater comfort than the way we're doing it now? if we're not using yucca mountain yet, how safe should we feel? >> i'm sure commissioner

merrifield will add to this. >> i will. >> the nrc heavily regulates what we do with used nuclear fuel both in the used pool and dry cast storage on site. we obviously have stringent security plan to make sure that not just the used fuel is protected but the active fuel and other things at our plants and based upon the fukushima lessons learned, there's even been enhancements to what we do with used fuel at our sites because of what we learned from what went on in japan. so i think to some degree, the problem with used fuel is that it's managed well on sites which doesn't create the crisis to cause our country to try and implement the nuclear waste policy act or any other law related to it. so the good news is we manage it very well and it's regulated very well. the bad news, it doesn't move it quickly to where you want it to go. >> congressman, on the issue of security, i was a commissioner during 9/11, in front of the committee talking about things that needed to be accomplished

to protect the u.s. fleet of nuclear units. i can say, without reservation, and i have been on nuclear sites within the last week, looking at security issues. i can assure you, these are the safest industrial facilities in the united states. the level of security we have at the nuclear power plants in the united states is well beyond what is needed to protect that fuel from the adversaries that we face today. >> thank you. and chairman, i yield back the balance of my time. >> you know, we have two votes on the floor. we've got 10 or 11 minutes left. so if you all would be in agreement, we'll recognize you for three minutes and we'll get as far as we can, and if somebody wants to come back, we can talk about that. so mr. mcnerney, you're recognized for three minutes. >> thank you, mr. chairman. mr. fertel, do you believe we need to include fusion specifically in the hr-4979 framework? >> was the question about fusion? >> yes.

>> to be honest, i hadn't thought about that, but my reaction is, i think it's a whole different regulatory regime that we'd have to look at for fusion. and the availability of fusion is still far enough off that i wouldn't rush it in and distract the nrc from paying attention to being able to put a regulatory process in place for the other technologies that are deemployable sooner than that. i wouldn't eliminate it as something you should look at for the longer term. congressman. >> thank you. mr. allen, the third way report that identified 50 companies developing plans for new nuclear plants in the u.s. and canada, how soon are some of these technologies going to be available? and is the nrc ready for that? >> i think they're on a big spectrum, depending how much technology development has been done in the past. i'd say the quickest, assuming that we do the types of things we need in regulatory space would be on the order of 10 to 15 years.

some of them are much further out than that. and i think that nrc has a strong regulatory function but as we've talked about could do some things to be better receptive to companies and to build staff depth in areas that they're not used to regulating. >> mr. merrifield, do you think there's a risk of agency bucking heads against each other, nrc and d.o.e. with respect to the new technology? >> well, i think -- there was a lot of discussions between the d.o.e. and nrc on earlier advanced reactor-like programs. that did not get as far as we hoped it would have gotten. i think with the focus that this committee and your counterparts in the senate have on advanced reactor technologies, the legislation you have before you will give the framework and the encouragement for the nrc to move forward. they are an agency which when focused on a mission do a great

job of accomplishing it. i sometimes refer to them as the boy scouts of federal agencies. they need the focus, they need the encouragement of this committee but i think they can't accomplish the mission to appropriately and safely license and regulate advanced reactors in a timely and effective way. >> mou would be sufficient to cause that? >> i believe so, yes. >> thank you, mr. chairman. >> mr. kizinger, you're recognized three minutes. the nrc has previously informed congress that it believes amending the atomic energy act to eliminate the mandatory uncontested hearing on combined license and early site permit politics could enhance efficiency of nrc operations. section 4 in my draft allows the commission if a hearing isn't requested to issue a permit, operating license or amendment to such permit and licenses with holding a hearing. mr. fertel, in your view how would this provision improve

regulatory efficiency at the nrc? >> what it would do is allow both licensee and the nrc staff to move forward on issues while a hearing is being done, which is, to be honest, similar to situation for the operating plants. for the operating plant. so it would not delay the start-up of a facility that might be critical to electricity but certainly would not be making any revenue while it is sitting there. if it was a true safety issue that it shouldn't start up, they won't allow it to do that. so it doesn't allow you to do something that would provide unsafe conditions. >> and what kind of regulatory and economic burdens are associated with a mandatory hearing requirement. how much could a hearing delay the process? >> there is not great data. we've looked at that based upon the vogel experience and some of the other projects and it's hard to decipher exactly because

there was the design cert going through at the same time but it could have been an 80 to 120 day delay. to be honest, not significant value added by that because of the other reviews. >> if i could pursue for a second on that one. there are two issues associated with mandatory hearings. one of them is an issue of the extra time it takes, the other portion is the amount of staff activity that ultimately has to be bourne by the applicant and the distraction it gives to getting to the ultimate decision. the staff in preparing for those hearings wants to make sure that everything they send up to the commission is in a certain way, that eats up a huge amount of time. as a commissioner, i recognize that there was extraordinary opportunities for the public to comment on the process that even led to the ultimate licensing and indeed the mandatory hearing was an antiquated legacy of the 1950s that was not needed.

>> thank you. and a lot more to ask but duty calls and i'll yield back. >> we recognize the gentleman from texas, mr. green for three minutes. >> thank you, mr. chairman. i'm a supporter of nuclear power and to get to a carbon free environment that is where we need to get to. i believed increase cooperation between dough and nrc would expedite the prose of new reactors with the president's regain i think we could revitalize our sector and secure base load power. i do have concerns about the nuclear utilization of keystone -- keystone on my mind, energy policies act. and i would like to ask some questions. in your testimony, you made reference to a 2016 white paper released by the organization that discusses framework for licensing modernization, and it listed five recommendations for congress. proactive oversight of the design and review and licensee

process and providing sufficient resources and i guess that means money, encouraging it to meet the 36 month deadline for review and directing nrc to identify road blocks to expedite approvals and submitting annual updates. in your opinion, does the legislation for the sub-committee today adequately address these recommendations? >> in the main, i think it does. we actually -- we focused on a couple of things we would ask for improvement in the two bills you are looking at today. one is to be really specific in requiring a pre-application vendor and design review process. the other one was to providing a greater opportunity for engagement between the developers of advanced reactor technologies and the nrc at no cost, early stanley cuges in th process to enhance the process. >> and do you recall how many

licensed the nrc completed. >> how many licensing reviews? i would have to go back and do research on that. >> if you could get that, i would appreciate it. with respect to the reviews, do you have a sense of how many hearings did the commission grant upon request under section 189 of the atomic energy act? >> i would have to go back and review that one. >> if you could get that to us. and also under section 189 are farmer adjudicatory procedures that required a commissioner or do they have discretionary authority. are they required to have those procedures or is it discretionary with the commission? >> i'm sorry, i didn't hear that question. >> under section 189, are the formal adjudicatory procedures required of the commission or do they have discretionary authority? >> congressman -- >> i can answer that. >> i would like to have the opportunity to review those procedures and find an

appropriate response to the committee. >> mr. chairman, i'll be glad to submit the questions and if you could get back to us, so if we could move the process along, and a coordination between agencies is never bad. thank you, mr. chairman. >> thank you. and we appreciate you all being with us today. i am going to ask just a couple of questions and then we've got -- we still have three minutes before we have to vote. so there is no rush. new scale power has stated their plans to submit its design certification application to the nrc by the end of 2016 for a so-called small modular reactor. and mr. maryfield, i would ask you, what is your outlook for the nrc readiness to accept a high quality application and review it in a timely manner? >> congressman, i think the nrc has been preparing, as far as i could tell, i believe the nrc has been preparing itself to receive that application and it

is a light water reactor technology. it is something that the nrc is familiar with and i think they will do their level best to accept it and review in due course. >> do you agree with that, mr. fertel? >> yeah, i think the way jeff maryfield answered is probably accurate. i think the division director there is a very competent young woman who i think is making sure that there is prepared -- they are as prepared as they can be so we expect they'll do as good as a job as they can. >> agree with that. mr. furtel references jennifer you'lly, the director of the office of new reactors. she is a talented young woman and i think will do an exceptional job for that team. >> well, we hear a lot of discussion about small and nuclear modular reactors and great hope for them. and some are sodium cooled and lead cooled and light water. how many of the so-called small modular reactors are there

operating today around the world? does anybody have any idea? >> i don't think that from a commercial standpoint there is hardly any. but all of the submarines are using small modular reactors and our aircraft carriers so there is experience with them. they are different. but there is a lot of experience. and in our country, right now, mr. chairman, electricity growth, thanks to really very good efficiency in things like that and also probably being hurt by our economy a bit, but our electricity growth is really very small. so small modular reactors are becoming more important domestically. we thought they were important internationally. but even domestically, they are becoming very important. particularly as you replace older small coal plants and oofbly gas plants -- and eventually gas plants. >> one thing to remember about advance reactor technology, we talk about traditional utility uses for generating electricity and what is important to remember is these technologies

provide very high sources of heat. so the new users of these technologies may not necessarily be just our traditional utilities, it may be also for other industrial processes that could utilize that heat and power. >> anybody else have any comment? okay. >> i would just agree that they are looking at a large number of different commercial products than just gigawatts. >> so when we talk about small, are we talking about below 300 meg watts or so? >> some of them that are conceptualized could be as small as three to ten megawatts, some are in the range of 80 to 100. others are in the verge of 300. so there is a range of the potential reactors being prepared. >> there is one caution that many of the -- the only ones that we've seen that have had any indication of any economic viability have been coupled together and the several hundred megawatt range to allow for some economy of scale to actually be

able to compete in a market. and none of these are built around the world. the numbers is actually zero. and the question of whether or not they'll have any chance in a competitive market place in ten, 12, 15 years, no one has a crystal ball here. >> no one has a crystal ball, but at the end the market is going to resolve that and that's what we're asking for. a predictable regulatory regime that does reactors and they can be licensed through. if they can't come up with the economics that the market will bear those reactors will not go forward. >> thank you all very much. we look forward to working with you as we consider these two pieces of legislation and other issues as well. we'll keep the record open for ten days and once again, thank you and that concludes today's hearing. [ hearing concluded ]

c-span's washington journal live every day with issues that impact you. on thursday morning, bebby vaughn addiction services vice president for the counsel for behavioral health will join us to discuss the organization and others to lobby congress, specifically the house to pass opioid legislation. they are pushing for changes to the house legislation that would plaque it similar to what the senate has passed. and then david bossy president of citizens united will discuss campaign 2016 and the influence