activities, most of which were coiiducted out of the glare of the public scrutiny that now
surrounds cleanup activities. Stakeholder groups, environmental organizations, state and
local agencies, labor unions, media sources, and others now have ahnost unlimited access to
927
information about site activities. Thus, the Task Force questions the need for multiple
federal organizations with similar jurisdictions.
12) Decision Making Authority. The Task Force recommends shifting the decision making
authority for most site cleanup decisions to a Presidentially appointed site manager, similar to
provisions included in Sec. 5 of H.R. 2110.
Simply put, many in Congress have lost confidence in DOE's ability to efficiently
manage activities at cleanup sites from its Washington, D.C. headquarters. Three, four, and
five month delays in approval of even the most basic decisions contribute immeasurably to
higher costs and longer delays. In addition, the House National Security and Appropriations
Committee's have recommended dramatic reductions in DOE headquarters budgets, including
a reduction in support service contractor employees. And efforts continue to eliminate the
Department altogether, transferring EM functions to another agency. Redirecting time
critical decisions to the DOE site manager will ensure that even if the above changes occur,
cleanup decisions will be able to be made expeditiously.
As previously mentioned. Secretary O'Leary appears to have recognized this problem,
and on August 3rd proposed that "employees close to the work will be empowered to execute
day-to-day operational responsibilities." This decision making strucuire should be
instinitionalized and strengthened pursuant to H.R. 2110.
13) Department Orders. The Task Force recommends that beginning in 1996, site
managers be granted authority to streamline or revoke unnecessary orders, or impose those
orders which are deemed essential for human health or the environment, or for administrative
functions. Site manager decisions could be reviewed and revised by the President.
The power to impose orders is currently vested primarily in DOE headquarters. But
the inability of headquarters to react rapidly to emerging threats to health or safety, or to
remove burdensome orders which slow cleanup efforts is well documented. The Task Force
commends the Department for its current efforts to address this problem. There appears to
have been significant progress made in this area over the past few months. Over the long
term, however, there is no guarantee that the cimibersome order system won't reappear.
Thus, the Task Force believes that while DOE headquarters should be able to recommend
orders to site managers, the site manager should have greater authority to ensure that he
imposes those orders necessary to protect health and safety, as well as to perform other
critical functions in an efficient and cost-effect manner.
14) Indemnification. The Task Force recommends that Congress consider enacting
significant reforms in federal indemnification programs.
Critics of these efforts frequently charge that providing indemnification to contractors
only encourages private companies to ignore safe waste handling practices, threatens the lives
of workers and community members, and puts the environment at risk.
928
They fail to recognize that the current lack of adequate indemnification provisions has
actually led to greater risk by discouraging innovative and aggressive private participation in
cleanup activities. How many tens of millions of gallons of waste, or millions of cubic yards
of contaminated soil, or metric tons of plutonium might have been cleaned had the very latest
cutting edge technology been employed at DOE sites? Our current situation has resulted in a
defense-minded, risk-averse approach to remediation technologies.
Several members of the Task Force have suggested that Congress enact reforms
similar to those included in section 408 of H.R. 3800, as passed last year by the former
Public Works and Transportation Committee.
In addition to providing indemnification for pre-existing conditions, a uniform
standard of liability based on negligence could be established under federal and state law for
cleanup activities. A uniform sutute of repose might also be adopted, similar to those
adopted by over 40 states.
15) Expedite Opening of WEPP. The Task Force recommends that the opening of the
Waste Isolation Pilot Plant in Carlsbad, NM be expedited.
WIPP is a world-class facility designed specifically for the management of transuranic
waste. Unfortunately, it presently sits idle. The facility costs American taxpayers millions
of dollars to maintain, while related testing and regulatory hurdles are ongoing. Failure to
open WIPP also costs taxpayers millions in related storage, inspections, and monitoring for
waste destined for shipment to the WIPP, but which currently remain stored at numerous
sites around the country. It's time to open this critical facility, and legislation introduced by
Congressman Joe Skeen-H.R. 1663-would do just that. As a result, the Task Force
supports the Commerce Committee's decision to move forward with this legislation.
16) Eliminate Metric System Requirements. The Task Force recommends eliminating the
statutory requirement that all site activities conform to the metric system.
At the same time that federal resources are becoming increasingly limited, it makes
no sense whatsoever for the Department to spend millions of dollars at each site to comply
with a system that few Americans understand or support. At Hanford, workers have
indicated that compiling metric drawings for a single backup tank pump may cost upwards of
$1 million. Another several hundred thousand dollars is being spent to ensure that the
Hanford tool shop is able to handle metric, as well as standard, equipment. These resources
should instead be spent on cleanup.
929
17) Privatization. The Task Force strongly recommends that Congress pass legislation
granting long-term privatization authority to the Department. The Task Force also strongly
encourages the Department to make maximum use of incentive and performance based
contracting.
A recent DOE conference on privatization concluded that several factors have
hindered the expansion of private sector involvement in specific cleanup activities. In order,
these were:
o The unavailability of affordable private insurance and related liability and
indemnification issues.
The inability to attract private sector fuiancing.
o The lack of incentives for contractors.
o The uncertainty on long-term contracting, regulatory issues, and potential
premanire termination of contracts.
o And concerns about workforce partnerships.
Each of these issues is addressed by legislation introduced in the 104th Congress.
Privatization should be a fundamental element of our nation's cleanup efforts.
18 ) Funding/Budget Flexibility. The Task Force recommends stable funding at nuclear
sites covered by the demonstration provisions of this proposal.
Much media attention has been directed at the House reductions in the Department's
Environmental Management account. However, the House noted the excessive support
service contractor levels at DOE headquarters, the fact that site activities have already been
reduced by 20-35 % , and that the General Accounting Office has expressed concerns with the
large uncosted balances account built up by the Department over the past several years.
The Task Force wants to make clear, however, that allowing state assumption of
CERCLA regulatory authority should not be viewed as an excuse to insist on so-called
"Cadillac" cleanup standards. State regulators must work together with site managers and
Congress to ensure that in these difficult budget times, cleanup remedies are chosen which
are cost-efficient, as well as effective.
The Task Force also recommends that reprogramming thresholds at demonstration
site(s) be reviewed. Additional flexibility should be granted in transferring funding between
important cleanup projects. This would speed cleanup, and allow the use of appropriated
funds in the most efficient manner possible.
930
Because of the level of specificity required by the OMB and Congress in approving
DOE'S Environmental Management budget, it is virtually impossible for a field manager or
contractor to make management decisions to transfer funds for necessary operational
purposes. The problem is compounded by the $1 million reprogramming threshold required
by Congress (for reference sake, $1 million is 1/1, 500th of Hanford's cleanup budget Few,
if any, significant Hanford projects fall below this threshold).
The consequeiKe of this process is twofold. First, there is relatively little integration
between different fiinding activities on the sites. Second, when fiinding must be transferred
for critical purposes, the decision is delayed, often by months (one recent reprogramming
request took nearly four months to work its way through DOE headquarters and to Capitol
Hill). Duplication and redundancies are often the result.
19) Acquisition/Procurement Reform. The Task Force endorses efforts by the House
Committees on Government Reform and Oversight, and National Security, to make further
reforms of the federal acquisition process. The Task Force encourages expeditious action on
legislation which will speed the procurement process.
20) Demonstration Project(s). The Task Force would prefer to enact the majority of these
proposals to apply to all sites nationwide. Many could be passed during consideration of
Superfund reform. However, others, especially the management reforms could be passed on
a demonstration or test basis.
Conclusion;
The current cleanup system is broken. It must be fixed. Congress has a perfect
opportunity to enact significant reforms that will not only lead to significant budgetary
efficiencies, but also speed environmental cleanup at our nation's major Department of
Energy sites.
The Task Force wants to reiterate the need to pass these reforms this year.
Commerce, Transportation and National Infrastructure, National Security, Appropriations,
and other relevant House Committees must act now to ensure that our tax dollars can be used
efficiently at the nation's nuclear sites. The Task Force commits itself to working to see that
these reforms are enacted forthwith.
Additional copies of this report can be obtained from the office of Congressman Doc
Hastings (R-WA). Please call 202/225-5816.
Mr. Myers. Your suggestions here on how to improve the effi-
ciency are good, even though we don't have the authority to do
these things. As we discussed last year, when we were trying to de-
velop our budget, these are problems we have and we appreciate
your efforts and wish you good luck with that.
Mr. Hastings. Thank you very much.
Mr. Myers. Appreciate your testimony.
Thursday, February 29, 1996.
NUCLEAR WASTE PROGRAMS
WITNESS
KRIS SANDA, COMMISSIONER, MINNESOTA DEPARTMENT OF PUBLIC
SERVICE
Mr. Myers. Next is Ms. Sanda, Commissioner of the Department
of Public Service in the State of Minnesota. Welcome back. Your
prepared statement will be placed in the record and you may pro-
ceed for the next 5 minutes as you like.
Ms. Sanda. Thank you. Thank you. Chairman Myers, and mem-
bers of the subcommittee. I really appreciate this opportunity to
testify today, and I urge Congress to reform and to fund the civil-
ian nuclear waste program.
I am here as the Commissioner of the Minnesota Department of
Public Service, and also as one of the founding members of the Nu-
clear Waste Strategy Coalition, which you are familiar with. That
does include the Alabama Public Service Commission, it does in-
clude the Indiana-Michigan Power Supply Company, and the clos-
est thing I could find in New Jersey is the Niagara, Mohawk, New
York State Electric & Gas Corporation and Consolidated Edison
Company of New York.
Last year, I testified before this committee on the need to fund
a reformed civilian nuclear waste program. I explained how Amer-
ican consumers all pay into the nuclear waste fund in every month-
ly electric utility bill. All told, American consumers have paid over
$11 billion, billion, so far into this fund, and continue to pay at a
rate of about $600 million every year. This money is given to you,
the Federal Government, by our electric utilities to make good on
the individual contracts that they have signed with DOE. Congress
is supposed to appropriate this money from the fund for safe and
timely storage and disposal of waste from our nuclear power
plants. They produce 20 percent of our Nation's electricity.
We, the consumers, have kept our end of the bargain, but not the
Federal Government. By failing to appropriate more than a fraction
of our annual payments, some in Congress have effectively di-
verted, stolen, if you will, up to two-thirds of consumers' annual
payments for other spending. Collecting money for one purpose, for
the nuclear waste fund, but using it for another, and flat-out DOE
program failure, has created the worst of all situations for Amer-
ican consumers.
This year Congress has severely cut funding for the DOE waste
program, expressing legitimate concern over falling 2 years further
behind every single year it operates. So what do our friends at
DOE do? First, they raise the percent of program overhead, they
932
raise cost estimates, and then they extend the repository comple-
tion, the date, out yet another 5 years to the year 2015.
Since then some in Congress have threatened to cut all funding,
while still taking our money. If Congress slashes our funds, con-
sumers cannot be expected to continue paying and paying and pay-
ing hundreds of millions of dollars for services that we do not get.
Any progress will slip even further, creating billions of dollars in
unnecessary costs, up to $10 billion, I figure. And that is what I
am here to talk about today: Avoided costs.
Failure of the DOE program is reason for reform, but it is not
an excuse for Congress to take $4.2 billion of consumer payments
over the next 7 years for other purposes, creating expenses three
to four times higher for us as consumers, for you as regulators and
Congresspersons, and for taxpayers. Both reforming and funding
the program is the only honest policy, the only sound policy, and
the only acceptable policy.
We believe immediate action is necessary. Yes, in 1996. Failure
of the Federal Government to meet its obligations in 1998 means
radioactive waste will remain at 110 reactors in 73 locations in 34
States and at a tremendous additional cost. These costs include the
building and prolonged operation of many sites instead of just one,
potential early shutdown of nuclear power plants, and higher de-
commissioning costs.
Dela5dng program reform for even 1 or 2 years means real and
substantial costs for our Nation. If Congress fails to authorize cen-
tralized temporary storage in 1998, as H.R. 1020 provides, it is un-
likely to be addressed before 1997 or even 1998. By 1998, the Con-
gressional Quarterly estimates that 26 of our Nation's 110 reactors'
leadership have spent money for on-site storage, and from there it
really gets expensive, billions of dollars will be spent, and the
chance to avoid huge, unnecessary costs will be lost.
Mr. Chairman, this is leap year. I have been taught as a home
ec teacher that women can propose in leap year. Therefore, I am
proposing that the nuclear waste fund be used for the intention for
which it was created. American consumers have put almost $11 bil-
lion into the fund. You are the trustees of the fund, our nuclear
waste fund piggybank, as 60 Minutes calls it. We have kept our
end of the deal: We have paid. Now our Congress must use our
money for what it is for, nuclear waste storage and disposal, not
for other good Federal programs. It is leap year, Mr. Chairman and
I am asking.
[The statement of Ms. Sanda follows:!
MINNESOTA
DEPARTMENT OF
PUBLIC SERVICE
OFFICE OF THE COMMISSIONER
Testimony of
Krista Sanda
Commissioner, Minnesota Department of Public Service, and
Founding Memt>er, Nuclear Waste Strategy Coalition
Presented to the
Subcommittee on Energy and Water Development
Appropriations Committee
U.S. House of Representatives
February 29, 1996
INTRODUCTION
Chairman Myers, members of the Subcommittee, I appreciate this opportunity to testify
today and to alert you to the urgent need for Congress to reform, and fund , the U.S. civilian
nuclear waste program.
This coming year's appropriations will have a major impact on how this country deals with
nuclear waste for decades to come. Congress's action, or inaction, will detemnine whether
the United States will fund an effective civilian nuclear waste program, or continue to
squander billions of dollars to create a relatively small, temporary infusion of trust fund
money into the present budget process. Failure to reform and fund the U.S. civilian nuclear
waste program will create a tremendous financial burden for electricity consumers and
taxpayers. Relying solely on the Federal Courts to address this has powerful, and painful,
implications for the Federal budget and appropriations process.
We must take immediate steps to provide centralized, temporary storage of high-level
nuclear waste. We also must reform and fund a program leading to safe, timely, and cost-
effective permanent disposal of nuclear waste from our power plants.
Electricity consumers will not continue to quietly pay their money into the Nuclear Waste
Fund and get nothing in return. There is a growing realization by this country's consumers,
regulators, elected officials and representatives of the electric industry that we must act to
change the bumbling manner in which this program has been managed over the past 25
years. New initiatives are attempting to address the management problems but it will be
difficult to succeed without the commitment of this subcommittee to support the reform
process with adequate funding.
Suite 20<) » 121 7th Place East » St Paul. Minnes;
934
Consumer rip-off
One year ago I presented testimony to this committee on the need to fund a reformed
civilian nuclear waste program. I explained how electricity consumers all pay into the
Nuclear Waste Fund in every monthly electric bill. All told, American electricity consumers
have paid over $1 1 billion dollars to date and continue to pay at a rate of about $600 million
each year. This money is passed through to the Federal Government by our electric
utilities for safe keeping as specified in individual contracts they signed with the U.S.-
Department of Energy.
Congress is supposed to appropriate our money from the Fund to provide safe and timely
storage and disposal of civilian radioactive waste from nuclear power plants which produce
over 20 percent of our nation's electricity. Consumers have kept their end of the bargain,
but not the federal govemment. By failing to appropriate more than a fraction of our annual
payments, some in Congress have effectively diverted - stolen if you will - up to two-thirds
of consumer's annual contractual payments to camouflage other spending in the budget
process.
The desire to collect money for one purpose but use it for another, plus the widespread
recognition of DOE program failure has created the worst of all situations. This year
Congress has severely curtailed appropriations to the DOE civilian radioactive waste
program, expressing legitimate concem over its falling two years further behind for each
year it operates. In response, DOE raised the percent of program overhead, raised life-
cycle cost estimates, and extended its target completion date for a repository another 5
years to the year 2015 or beyond. Since then, some in Congress have threatened to cut all
funding ~ while still taking consumers money.
If Congress simply slashes or ends appropriations for civilian high-level nuclear waste
storage and disposal, it is foolhardy to expect electricity consumers to continue paying
hundreds of millions of dollars under Federal contracts for services they do not get.
Progress toward receiving those services would slip even further from DOE's already
dismal rate, creating billions of dollars in unnecessary costs.
Failure of the DOE program is reason for reform. It is not an excuse to take $4.2 billion of
consumer payments over the next 7 years for other purposes - creating expenses three or
four times higher for American consumers and taxpayers. No course of action other than
both reforming and funding the program is the only honest policy, the only sound policy,
and the only acceptable policy.
ENOUGH IS ENOUGH
Nuclear Waste Strategy Coalition
Two years ago consumers, states and utilities finally realized that enough is enough. They
cleariy saw the nature and magnitude of the unfolding debacle in the Federal nuclear waste
program. Together with Michigan and Florida, Minnesota then founded the Nuclear Waste
Strategy Coalition, a group of state regulators, state attorneys general, and utilities working
together to push the civilian nuclear waste program toward a safe, timely, and cost-effective
conclusion. A year later we had member organizations in 13 states. Today our growing
935
coalition has 33 member organizations in 19 states, with additional members and our 20th
state anticipated within days.
The Nuclear Waste Strategy Coalition is following a three-pronged action plan to bring
about changes needed in the nuclear waste program. These actions include: holding the
Federal govemment accountable for its nuclear waste disposal obligations for by initiating a
lawsuit against DOE; supporting and encouraging development of private storage facilities
to meet pressing immediate needs for away-from-reactor storage; and developing and
proposing solutions to the problems in the current program.
DOE Lawsuit
Members of our Coalition play leading roles in the lawsuit pending in Federal Court against
DOE by the states and nuclear utilities. The purpose of this suit is to hold the Federal
government responsible for contracts signed by DOE promising to begin taking waste in
1998. Forty state agencies in 29 states, 25 investor owned utilities, and 8 municipal utilities
have joined in this suit, demonstrating broad and deep concern with the DOE program.
After two years of DOE maneuvering, oral arguments in this case were presented before
the U.S. Court of Appeals in the D.C. Circuit on January 17, 1996.
It was a good day for consumers, and a bad day for DOE. At one point Judge Ginsberg
asked DOE's attorney,
"So what did they get for their money? Or is this just a giant swindle from the
outset? ... They were to pay you money and you were to do nothing that you
didn't want to? There is an old expression in Yiddish that translates in English
to "here's air, give me money'. That's what it sounds like."
There are widespread expectations that the Court's decision, periiaps coupled with
subsequent actions, will fix responsibility for nuclear waste, including fiscal responsibility,
firmly on the Federal govemment.
Private initiatives
IVIembers of the Nuclear Waste Strategy Coalition have repeatedly pointed out the wisdom
of having another, private volunteer program for temporary nuclear waste storage in
addition to a govemment program. A non-govemment project will provide valuable
technical and managerial innovation to both challenge the govemment program and
provide it with examples to emulate. This is especially important to promoting overall cost-
effectiveness.
Let me cite one example. Coalition members have been instrumental in bringing together
the Mescalero Apache Nation, Northern States Power Company, and several other utilities
to explore development of a private storage facility for nuclear waste. That project
continues to advance and has now formed a corporate entity. Before March, 1 995, DOE
estimated its interim storage facility costs as being $1 .042 billion. Then, after meeting with
members of the Mescalero Private Fuel Storage Project and reviewing their $139 million
cost estimate, DOE cut its own cost estimate neariy in half to $567 million.
In addition, if the Federal government's program fails to be timely, safe, or cost-effective, a
second, volunteer site may provide a short term option, providing valuable time to form and
implement a contingency plan. Such a site lowers the risk of overall program failure caused
by impediments of nature, law. technology, or other factors that may be unique to a single