3. Institution problems are often cited as the reason why we cannot build nuclear power plants in the United States. Japan and France are often used as examples of taking only four to six years to build a nuclear power plant and put it into operation.

Question: a. Why is this the case in Japan and France? If I am correct these countries rely on a licensing system similar to that in the United States. Would you comment?

Answer: During the 1973 Arab Oil Boycott, France and Japan were affected differently than the U.S., which has very large indigenous coal supplies. France has few indigenous fuel resources and had an electric supply system almost completely dependent upon imported oil. A national decision was made to become less dependent on oil and to massively expand the use of nuclear energy. Nuclear power now provides some 80% of France's total electric generation. In Japan, also with few indigenous energy supplies and also heavily dependent on imported oil, the boycott led to a diversification of energy sources in which nuclear energy now supplies 30% of electrical needs. With a projection of 30 large new nuclear plants in the next two decades, nuclear's share will rise to 40%.

These two nations having few other options established, through their legislative bodies, expansion of nuclear power as a vital national interest and policy. Legislation and institutions were put in place which would enable expedited development in an economic, safe and environmentally sound manner. These countries, in fact, adopted and continue to build light water reactor plants based on technologies licensed from United States companies. The light water reactor technology, which some allege is flawed and should not be utilized for new plants in the U.S., is continuing to be applied very successfully in numerous other countries.

A stark difference between the implementation in this country and others, particularly Japan, is the degree of national consensus surrounding the nuclear programs. Leaders of the national government as well as those from the broad industrial community have steadfastly supported nuclear power as necessary for the general well-being and prosperity of the nation. As noted in my testimony, there was no need in our country for additional power plants so no broad consensus was possible. Difficult choices did not have to be made. Additionally, unlike the others, we are a very litigious society. These two factors resulted in small groups of activists being able to utilize our legal system to prevent or delay (making costs soar) the construction or operation of nuclear power plants.

If nuclear energy is to help the country meet its future energy needs in an environmentally sound manner thereby maintaining our economic strength and standard of living, national leaders must forge a consensus that expanded use of nuclear power is needed. Legislation and institutional reform must be implemented so that prudent investors can once again build nuclear power plants in a stable regulatory and legal environment.

Question: b. Are standardized designs critical to expediting this process?

Answer: Yes, the licensing process is, even in the best of circumstances, necessarily time and resource intensive. The regulatory infrastructure and the nuclear industry cannot support dozens of parallel reviews of different plant designs. The only practical way to achieve a reasonably timely, efficient and certain outcome is by licensing a few standardized plants which can then be built repetitively without further regulatory review of the design. This standardization approach is similar to that taken in France and Japan. For example, Japan, which has multiple utilities and competitive vendors such as the U.S., has standardized on two basic types of light water reactors, the boiling water reactor (BWR) and the pressurized water reactor (PWR). Within each type there has been a series of specific standardization programs, each of which resulted in the construction of up to 10 power plants. The results of the third BWR standardization program, GE's ABWR, is about to begin construction. The licensing documentation and requirements for plants within each standardized series are essentially identical.

When such a process is realized in this country, most resources can be applied to reviewing the construction process via the inspections, tests, analyses and acceptance criteria (ITAACs). This will enable timely construction progress as experienced in other countries.

The nuclear industry as a whole is committed to extensive standardization. Recently, the Nuclear Power Oversight Committee (NPOC), a committee of senior utility and industry executives charged with establishing policy for the nuclear industry in this country, issued a statement outlining the industry's "life-cycle commitment to the uniformity in the design, construction and operation of a family of nuclear power plants"

4. Public confidence in the nuclear power option is essential if it is to play a role in our nation's energy future.

Question: a. Passive safety features are critical to the public's acceptance of nuclear power. Would you agree?

Answer: No, the results of recent public opinion surveys would not lead one to that conclusion. The public responded most favorably to "improved" nuclear power plant rather than "passive", "inherently-safe", etc. I believe the new light water plants now undergoing NRC review for certification will be acceptable to the public, especially after comparing the pro's and con's of alternate sources. These new light water plants have been greatly simplified, employ a combination of active and passive features and represent large improvements relative to current, successfully operating nuclear plants. However, even the so-called "passive" designs depend upon valves, relays, and other electrical or mechanical devices to put the plant into a condition where "passive" systems can take over. Thus, I am concerned that overemphasis on "passive" safety could be interpreted as misleading the public and ultimately cause disillusionment and loss of creditability of the industry.

Question: b. In your judgement, do liquid metal reactors and high-temperature gas cooled reactors have advantages with regard to passive safety features?

Answer: All reactors including advanced reactors have imaginative events of extremely low probabilities which can cause a severe accident. However, all current and planned designs meet, or will meet, the requirements and guidelines set forth by the NRC. These designs compare favorably to alternate (non-nuclear) electricity sources in terms of public protection from adverse effects. When comparing the safety performance of different reactor designs, a more valid comparison is the potential amount of radiation release under the low probability (beyond design basis) events even though the mechanisms for potential release are different. This consideration of imaginatively very low probability sequences which have the potential for a large radioactive release has to be dealt with by the specific characteristics of the coolant and the design response to potential events. Exclusive use of passive systems is not always the best (or only) approach to achieve a desired balance of prevention and mitigation. In most cases, an appropriate combination of prevention (that is low probability of an event achieved through active and/or passive systems) and mitigation (that is containment of a potential release in the event a low probability severe accident occurs) is used to reach acceptable safety performance. For example, while most discussions of passive approaches focus on prevention, an important mitigation approach utilizing a passive system is the containment structure included in current operating plants as well as in advanced ALWR designs, such as ABWR and SBWR, and the ALMR. In these designs, the containment structure mitigates a low probability core disruption event through containment and control of the potential release which might jeopardize public health and safety. The addition of containment in the design of the commercial MHTGR is still an open issue although the NPR (defense) version of the HTGR includes a containment structure. Thus in spite of extremely low probabilities of a core disruption event, inclusion of a containment for the commercial MHTGR would improve its mitigation capability by passive means although it may complicate or make infeasible other passive safety elements and adversely effect nonsafety aspects of the plant, such as its economics.

Question: c. If we are concerned for the future of nuclear power, would you agree that there is a need for a more active Federal support for these technologies in addition to "advanced" light water reactors?

Answer: Yes. The DOE advanced light water reactor budget for fiscal year 92 is consistent with the ABWR and SBWR program plans for successful NRC certification in 1992 and 1995 respectively, and we urge your continued support. However, the revival of nuclear energy in the U.S. and its widespread use throughout the world raises the issue of the long-term future of nuclear energy. The advanced light water reactors (and other thermal reactor systems such as the MHTGR) rely on the economic availability of uranium. Although there appears to be sufficient uranium to supply these reactors for some time, the long-term promise of nuclear energy is an essentially unlimited energy supply through the Advanced Liquid Metal Reactor (ALMR). Since we have learned that it takes several decades to develop, test, correct and improve new reactor concepts, our national energy policy and supporting development programs should include timely and consistent ALMR development and demonstration.

As stated in response to question 2.b the current ALMR program plan is realistic and consistent with a low risk development and demonstration. We agree that active and consistent Federal support, from Congress and DOE, is needed to assure its development, prototype demonstration, NRC certification and readiness for commercial deployment prior to its need in the market place.

5. Would you agree that the future of the nuclear power industry rests in the development of advanced reactor designs and streamlining the regulatory structure to bring on line new, safer generations of nuclear reactor technologies.

Answer: Yes, both of these items are necessary to the reemergence of nuclear power in the United States, however, they are not sufficient.

With respect to the development of advanced reactor designs, as I mentioned in my testimony, I am pleased to report that from a technological standpoint the U.S. nuclear industry will be ready. Because of development work here and abroad and new programs in this country, I believe we will be able to bring much improved technology in advanced nuclear plants to the nation and the world.

As I also indicated in my testimony, the key problems inhibiting the increased use of nuclear power in this country are institutional, not technical. At the forefront of these institutional impediments is our licensing system. Fortunately, there are some initiatives aimed at correcting our nuclear licensing situation. The joint DOE/EPRI/industry program to pre-license standardized plant designs underway with the NRC is very helpful. Additionally, I believe that the licensing provisions of title XII and title XIII are vitally important in that they clarify Congressional intent and will remove grounds for extended litigation.

In addition to these two critical items, there are a number of other items which must also be addressed. They include resolution of issues related to radioactive waste management, state economic regulation, plant ownership and financing, and public acceptance.

NEED FOR TECHNOLOGY DEMONSTRATION

1. In your statement, you spoke mostly about the need for institutional improvements such as licensing -- concluding that the development of technology is sufficient, on course to ensure that designs will be developed and proven when needed. What I hear you saying is that there is no role for a demonstration project at this time.

Questions:

a. Is that your view?

b. Is that because the technology is not ready to demonstrate, or because you just don't believe a demonstration would be helpful?

Answer: My intention was to state that there are two types of demonstration needed depending upon the state of development of the technology.

The first type of demonstration addresses the problem facing us in this country of our 18-year history of delays, escalating requirements and costs, and abandonments during the construction phase of a nuclear project. Whereas abroad nuclear projects are built on firm schedules with firm prices, no sane nuclear plant manufacturer or constructor would today make such an offer in the U.S., and with the past experience no utility is ready to undertake the risk. Thus, we need a means to demonstrate that with the new standardization licensing procedure, plants in the U.S. can be built efficiently in the four to six-year time frame that is achieved abroad. Your title XII addresses this problem and, in particular, provides for Government "insurance" if new regulatory requirements are imposed after the issuance of a license.

We believe this type of demonstration, which I'll call an "institutional demonstration", is covered under title XII in Section 12005. That section identifies a process which will provide government assurance to investors that the project will be protected from new requirements imposed by the Commission after issuance of a license. We believe this Section should be applied to near term application of light water reactor technologies and furthermore the protection provided should be expanded to address other risks associated with construction of the initial units. The investors will accept the internal risks associated with the project cost and schedule, but certain external risks which have crippled nuclear projects in the past cannot be reasonably assumed.

Prior to the commencement of construction, future nuclear power projects must, in addition to NRC licensing, have agreement with state and local authorities in numerous areas. Section 12005 should be expanded to protect investors from changes in the requirements in such areas after commencement of construction. The cost to the government of this approach would be zero if all prior agreements were honored in a timely manner. However, utilization of the protection provided by this Section should not require that the government share in the revenues from operation of the facility since this would effectively dilute the equity of the investors through no fault of their own. Under the current provisions, the investor would ultimately be assuming the risk of new requirements which defeats the purpose of the Section.

The second type of demonstration which we believe is provided for in Section 12006 should be a demonstration of technology, not process. This "technology