ML20137L368
| ML20137L368 | |
| Person / Time | |
|---|---|
| Issue date: | 04/03/1997 |
| From: | Hoyle J NRC OFFICE OF THE SECRETARY (SECY) |
| To: | NRC OFFICE OF THE SECRETARY (SECY) |
| Shared Package | |
| ML20137L372 | List: |
| References | |
| COMSECY-96-065, COMSECY-96-65, COMSECY-96-965, DSI-21, SECY-96-065-C, SECY-96-65-C, NUDOCS 9704070209 | |
| Download: ML20137L368 (10) | |
Text
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0 April 3, 1997 SECY NOTE:
The following documents are being released to the public at this time:
1.
Text of DSI 21 (Fees) 2.
Staff Requirements Memorandum dated March 27, 1997.
3.
Views of Chairman Jackson dated January 30, 1997.
]
4.
Views of Commissioner Rogers dated January 16, 199*/
5.
Views of Commissioner Dicus dated January 24, 1997.
1 6.
Views of Commissioner Diaz dated January 28, 1997.
7.
Views of Commissioner McGaffigan dated February 18, 1997.
John C. Hoyle Secretary of the Commission I
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,j rees W'.W <com enes COMSECY-96-065 3.13 FEES (DSI 21)
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I 3.13.1 The Direction-Setting issue and the Options e
c Inmakingdecisionsaboutwhatacti.itiestheNRCshouldperforminsuppor(@ M *!
l 5
its mission, to what extent should fees be considered?
- y Option 1
Continue Existing Approach
.o Option 2:
No Consideration of Fees for Mandated Activities
- y Option 3
No Consideration of Fees in Making Decisions About Any NRC h
af Activities g
6 i
Option 4:
Fee for Service
- e....!
l Related Issues To Be Addressed How should the NRC recover its costs in a fair and equitable manner?
What funding mechanisms should the NRC pursue, in addition to annual j
appropriations with fee recovery, to fund activities that are not required to be funded through appropriations, for example, certain l
international activities?
In performing reimbursable work, how should NRC address the full-time equivalent (FTE) constraints that limit the number of NRC staff?
Funding Mechanisa 1 Recover the cost of providing requested services from the requestor, using fees and reimbursable agreements. The cost of activities that serve the collective interest of the general public would be recovered from general revenues raised from taxes.
Funding Mechanism 2 (Current Approach)
NRC applicants and licensees would continua to pay for approximately 100 percent of the appropriated budget authority. Reimbursable agreements would be used to fund all non-mandated activities.
Funding Mechanism 3 Amend the Omnibus Budget Reconciliation Act of 1990 (OBRA-90) and the Atomic Energy Act of 1954 (AEA) to give the NRC maximum flexibility to assess fees.
Funding Mechanism 4 Rescind the Independent Offices Appropriation Act of 1952 (10AA) 2nd OBRA-90 so that the NRC would be fully funded through taxes, as was the case until 1968.
Page 3-123 Phase 11 Stakeholder interaction Report
1 Fees Summary Analysis of Comments 3.13.2 ammission's Preliminary Views
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The Comission believes that the NRC's public health and safety mission must be the foundation for making decisions about what activities the agency should perform.
In making decisions on the work that the NRC will perform, the Comission does, and will continue to, consider the cost of its activities and consistently examine ways to accomplish its mission within a responsible budget.
Whether the NRC's budget is funded by the public through taxes paid to the Treasury or by licensees through fees paid to the Treasury, the NRC's decisions about its programs should be the same.
The Comission believes that fees should not be a primary factor in determining the work to be performed in response to the NRC's health and safety mission.
It is the Comission's position that programatic decisions should not be fee driven and should be based on their contribution to public health and safety.
The Comission does not believe that it was Congress's intent to limit the NRC's activities to those that are directly attributable to a specific regulatory action for a specific licensee or class of licensees.
In OBRA-90 (PL 101-508), Congress stated that any licensee of the Comission may be required to pay, in addition to the fees for services or thing of value, an annual charge.
Congressional history and language in the Conference Report that accompanied PL 101-508 takes notice and allows that " increasing the amount of recovery to 100 percent of the NRC's budget authority will result in the imposition of fees upon certain licensees for costs that cannot be attributed to those licensees or classes of licensees."
After review of the policy options, it is the Commission's preliminary view to approve Option 2.
Programatic decisions in response to NRC mandates will not be driven by fees. Specific activities conducted by the NRC will be evaluated for efficiency and effectiveness.
The NRC performs two primary types of activities. These types of activities are defined as mandated and non-mandated.
Handated activities include statutes, Executive Orders, treaties, Comission decisions, and so on. Non-mandated activities include those activities that are not required to respond to mandates but are performed as a ' service' to another organization.
This policy optinn (Option 2) approved by the Commission provides for a responsible decisionmaking process for mandated activities while allowing the NRC to assist other organizations on a reimbursable basis.
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In selecting Option 2, the Comission will establish a process for making its programatic decisions based on public health and safety considerations for mandated activities. When the Comission is requested to perform non-mandated activities, the requestor will reimburse the NRC for the cost of performing them.
In order to implement Option 2, the staff will develop, for the Commission's review and approval, a set of criteria for defining mandated and non-mandated activities.
These criteria will allow for a clear framework within which to consistently determine funding of NRC activities.
Pege 3-124 Phase 11 Stakeholder interaction Report L
Fees S= 'y Analysis of Ce;; =nts Two related issues, in addition to the direction-setting issue (DSI), are also These two issues address funding mechanisms and personnel full addressed.
time equivalent (FTE) ceilings.
It is the Comission's preliminary view to support Funding Mechanism 2, which continues the agency's current approach.
Although the Comission believes that its decisions on activities that the NRC should perform in support of its mission and its total budget authority should be independent of fee considerations, it also believes that NRC fees should be assessed in as fair and as equitable a manner as practicable.
OBRA-90 requires that NRC collect fees equal to approximately 100 percent of OBRA-90 further states that these fees should be collected the NRC's budget.
from NRC's licensees and applicants.
The Commission has sought to comply with OBRA-90 and to distribute fees fairly and equitably among its licensees and The NRC has reexamined its fee policy each year, issued draft fee applicants.
rules for public comment, and made ci anges to the process to respond to those The i
coments whenever possible within the limits of existing statutes.
Comission has also addressed those concerns raised by the public and licensees about the limitations of applying fees within OBRA-90 in its Report to Congress en the U.S. Nuclear Regulatory Comission's Licensee fee Policy Review Issued in February 1994.
The Comission believes that carrying out the intent of Congress by implementing fee policy within existing law is the most effective and The Comission will, however, consider coments and efficient option.
recomendations on specific proposals if they present new approaches to l
improve the procen or to accomplish a more equitable distribution of fees.
It is the Commission's preliminary view to support the NRC's identification of l
l FTEs associated with reimbursable work as business-like activities.
sequest to conduct an activity that is not necessary When the NRC receives 2
for the NRC to meet its mandates but will provide a " service" to anotherThis organization, the NRC must consider the cost of providing the service.
cost consideration includes both dollars and FTEs. The requesting organization can enter into a reimbursable agreement with the NRC and reimburse the agency for the dollars expended on providing the assistance.
The requesting organization does not, however, provide FTEs to the NRC.
The current FTE ceiling constraints may make it difficult, if not impossible, for the NRC to provide assistance for non-mandated activities in response to The approach to remove those FTEs used for business-like specific requests.
activities from the NRC's ceiling would allow the NRC to provide assistance to other Government agencies and organizations that might otherwise be turned down.
1 Page 3-125 Phase 11 Stakeholder Interaction Repo"
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3.13.3 Summary of Comments
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1 A.
Significant/Important Comments Directly Affecting the Preliminary Views or the Direction-Setting Issue.
In both the written coments and those provided at the stakeholder meetings, there was gerteral support for the preliminary view of adopting Option 2, Funding Mechanism 2, and the NRC's identification of FTEs associated with reimbursable work as business-like activities. The Nuclear Energy Institute-j (NEI) did not sepport Funding Mechanism 2.
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Both the Organiz.11on of Agreement States (OAS) and the Conference of i
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Radiation Control Program Directors (CRCPD) support Option 2 and Funding
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Mechanism 2 indicating that if NRC is mandated to perform a task, it should do i
so without the negative influence of fees.
Five States submitted consents o
supporting the OAS coments, and five States submitted comments supporting l
Option 2.
0AS, CRCPD, and most States commented that because training for Agreement States is a mandated activity, the NRC should not charoe Agreement States for training or for other services provided to the Agreement States, such as technical assistance. One State (Illinois) endorsed Option 3 as they perceived it as the option most likely to achieve the result discussed under j
DSI 4 of restoring funding for Agreement State programs.
Funding for.
Agreement States is addressed further in the stakeholder comments on DSI 4.
i 5
NEI and Westinghouse supported Option 2, whereby the use of reimbursable i
agreements would be increased to avoid costs that do not benefit NRC i
licensees. Two commenters (ABB-CE Nuclear Systems and South Carolina Electric and Gas Company) submitted comments supporting the NEI comments. The National Mining Association (NMA) while supporting Option 2, still has some serious i
concerns about the underpinnings of the fee structure and indicates that i
without legislative changes to OBRA-90 there is no way to alleviate completely l
the major concerns of NMA licensees about the fairness and equity of the NRC i
j fee schedule.
One commenter (Richard Barkley), while supporting the preliminary views of the Commission, pointed out that, in the future, if substantial numbers of reactor i
licensees elect to decomission early, the NRC will teot be able to ignore the l
increasing burden that fees impose on the shrinking pool of licensees.
i Therefore, NRC needs to prioritize programs and initiatives more than ever, i
operate in a business-like fashion, and pursue those activities having the i
most noteworthy benefit to public health and safety. These measures support the Conaission's preliminary view that the Comission will consider the cost of its activities and consistently examine ways to accomplish its mission within a responsible budget.
B.
Comments on Other Options Although supporting Funding Mechanism 2, the OAS commented that NRC should be charging other Federal agencies for specific services provided to them i
(Funding Mechanism 3).
In addition, although individual States endorsed the comments made by the OAS, they indicated that NRC should advise the Congress that (1) activities that do not benefit licensees (e.g., international program, research, the Agreement States program, etc.) should be excluded from i
the fee base for recovery (Funding Mechanism 1) and (2) any new activities that the NRC is required to perform should be specifically designated as to Page 3126 Phase 11 Stakeholder Interaaion Report
Fees Summary Analysis of Conunents
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f how the costs should be recovered. One State (Washington) commented that the NRC should be proactive in finding ways to get Congress to fund NRC involvement in crucial countries oversees and also work toward finding countries willing to pay for NRC expertise.
NEI, the Council on Radionuclides and Radiopharmaceuticals, and three other commenters (State of Washington, Amersham and Mallinckrodt Medical) disagreed with the Commission's preliminary view of supporting Funding Mechanism 2 and strongly supported Funding Mechanism 1.
NEI stated that it is fundamentally unfair to impose fees on NRC licensees, thereby increasing their costs and adversely offsetting their competitive position, for which they derive no benefit. The Council on Radionuclides and Radiopharmaceuticals and two other commenters (Amersham and Mallinckrodt Medical) stated that activities that serve the collective interest of the public should be funded by general revenues raised from taxes. NEI suggested that the NRC redouble its efforts to ensure that Congress understands and corrects this basic inequity and recommended that NRC submit a legislative package to Congress that would allow less than 100 percent fee recovery from licensees.
Yankee Atomic Electric Company recommended that the NRC take a more proactive and aggressive approach to solving this issue at the Congressional level.
The NMA supports a mix of Funding Mechanisms 1 and 3 indicating that by pursing these options, NRC would put into effect the recommendation made by the Commission in its February 1994 Report to Congress that OBRA-90 be modified to relax the 100-percent budget recovery requirement, thereby NMA eliminating many of the inequitable burdens imposed on NRC licensees.
acknowledges that the pressure on the Federal Government to achieve a balanced budget may make this legislative solution difficult to achieve, but it believes that fairness issues and the impacf. of tise current system on competitiveness requires that the attempt t>e made. NMA points out that the fee problem will be exacerbated in future years as more States become Agreement States, leaving fewer NRC licensees to bear an even greater share of
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the burden, and that the number of operatir sites can be expected to decline if NRC does not find a more equitable means of assessing fees on its licensees. One State (Illinois) sunnorted Funding Mechanism 3 stating that they supported any necessary statutory changes to allow general funding of the Agreement State program, the assessment of fees for services to Federal agencies and aither direct funding for international activities or billing to international agencies.
Two commenters (Yankee Atomic Electric Company and Ken Peveler) supported Funding Mechanism 4 (NRC to be funded through taxes), noting that the current arrangement of assessing fees to utilities, for example, drives the nuclear industry in a negative direction. That is, the utilities pay the NRC fees but, in turn, pass the costs on to its rate payers, who are the public. Thus, the public is paying the price of fees, which has the same effect as taxes, Mr. Peveler stated that NRC fees assessed to that is, the public pays.
applicants and licensees are simply a way of rearranging the funds, and such In the an arrangement puts the nuclear industry at an economic disadvantage.
same vein, ABB-CE Nuclear Systems stated that fees are onerous and a contentious issue, t erticularly in a deregulated environment in which nuclear utilities are beari.ig most of the burden of the half billion dollars or so per ABB-CE Nuclear Systems and Yankee Atomic year that the NRC receives in fees.
Electric Company recommended that until such time as legislative relief can be provided,10 CFR Part 171 annual fees be rescinded and NRC establish a process of recovering the agency's budget from fees imposed on the industry that are Page 3-127 Phase 11 Stakeholder Interaaion Report
' hmmary ME%w1rmf% man Fees limited to those costs directly associateo with the requ atory service i
provided, a " fee for service
- concept simu r to Optwr. 4.
C.
Comments on Important omissitm One commenter (Entergy Operations, Inc ') 1dentif wd ar opthn not addressed in j
Under this option.. the Carambston vould Seek Jegislation to allow the NRC to supplement its appropriatior for mar. dated utivities.
Entergy the paper.
stated that currently there is no mechanum for the NRC in fire a contractor to perform industry-needed mandated reviews and then bOl the requestor for the review.
Entergy cited the example of the full-scope probabilistic risk assessment being submitted to NRC that has not been acted on in 3 years, noting that 'we pay for the reviews that we get, but we can't always get the reviews that we want." Entergy would support changes in the legislation that would permit the NRC, at the utility's request, to select the contractor of the utility's choice to perform technical reviews of licensing requests and tender the invoices directly to the requesting utility or organization for these reviews above budget and FTE caps. The Council on Radionuclides and Radiopharmaceuticals, Amersham, and Mallinckrodt Medical indicated that the inability to have an application reviewed and approved in a timely fashion affects the public when products cannot be manufactured and distributed because an application for a license, amendments, or container approval takes several months or year:.
D.
Comments on Internal / External Factors Yankee Atomic Electric Company stated that although the paper accurately describes the history of and the equity issues associated with fees, it completely fails to note and address the fact that the entire electric power industry is in an era of sweeping change through initiatives in Congress and the States to restructure and deregulate the electric power industry.
Pacific Gas and Electric (Angus) at one of the stakeholders meetings noted that the competitive environment in which utilities must operate is an external factor that should be considered. The commenter stated that Of currently each operating power reactor pays an annual fee of $2.7 million.
this amount, approximately $500,000 is for activities that do not benefit the utility. The commenter indicated that as they begin to look ahead to the turn of the centur;, (year 2000 and 2001), the 590,000 could constitute about one-half of 1 percent of tne profit of a plant testimated at $100 million) and, takes a very significant part of the revenue base for therefore, the $500,000 the power plants; this amount actually "is at the point where it contributes to the decision whether or not you operate or continue to operate the power The commenter stated that given the competitive environment faced by pl ants. "
operating power reactors at the turn of the century, this external factor would support the position that the $50 million identified by the NRC as not benefitting licensees should be removed from the fee base and recovered through general tax structures (Funding Mechanism 1).
E.
In its preliminary views, the Commission did not pose any additional questions for public comment.
Phase 11 Stakeholder interaction Report Page 3-128
.F L% Analpis of Conements Fees 3.13.4 List of Commentbrs i
WRITTEN COMENTS i
J 1.
October 21, 1996, Organization of Agreement States and Conference of i
Radiation Control Program Directors (Robert Quillin) 2.
October 21, 1996, Organization of Agreement States (Robert Quillin)
I 3.
October 23, 1996, State of New York, Department of Labor (Rita Aldrich) 4.
October 23, 1996, Agreement State /NRC Regulators' meeting summary 5.
October 25, 1996, Organization of Agreement States (Thomas Hill) i 6.
October 28, 1996, State of Washington, Department of Health ('igrry Frazee) t 7.
October 29, 1996, Richard Barkley, NRC 8.
November 3, 1996, Marvin Lewis 9.
November 4, 1996, State of New Hampshire, Department of Health and Human l
Services (Diane Tefft) 10.
November 7,1996, State of Mississippi, Department of Health (Robert Coff) i i
11.
November 7, 1996, Organization of Agreement States amended comments (Robert Quillin)
)
12.
November 14, 1996, State of Oregon, Department of Human Resources (Ray D. Paris) 13.
November 14, 1996, State of South Carolina, Department of Health and Environmental Control (M K. Batavia) 14.
November 21, 1996, State of Louisiana, Department of Environmental Quality (Ronald Wascom) 15.
November 21, 1996, State of Georgia, Department of Natural Resources (Thomas E. Hill) 16.
November 21, 1996, State of Utah, Department of Environmental Quality (William J. Sinclair) 17.
November 22, 1996, South Carolina Electric & Gas Co. (Gary Taylor) i 18.
November 25, 1996, Westinghouse Electric (N. J. Liparulo)
-19.
November 27, 1996, Nuclear Energy Institute (Thomas D. Ryan) 20.
Nove 27, 1996, State of Texas, Department of Health (Richard Ratlht Phase !! Stakeholder interaaion Repon Page 3-129
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Fees Summary Analysts of Commehts 21.
November 27, 1996, Council of Radiation Control Programs Directors (CRCPD) (William P. Dornsife) 22.
November 27, 1996, Council on Radionucliues and Radiopharmaceuticals (Roy W. Brown) 23.
December 1, 1996, Environmental Coalition on Nuclear Power (Judith H.
)
Johnsrud) d 24.
December 2, 1996, SENTINEL, Amersham Corporation (Kate Roughan) 25.
December 2, 1996, State of New J 1ey (Jill Lipoti) 26.
December 2, 1996, Yankee Atomic Electric Co. (Jane M. Grant) j 27.
December 2,1996, State of Maryland, Department of the Environment (Roland G. Fletcher) l 28.
December 2, 1996, Entergy Operations, Inc. (Michael J. Meisner) 29.
December 2,1996, Mallinckrodt Medical, Inc. (Ashok Dhar)
J 30.
December 2,1996, ABB Combustion Engineering Nuclear Systems (Charles Brinkman) 31.
December 2,1996, National Mining Association (Richard Lawson) 32.
December 2, 1996, Illinois Departme..t of Nuclear Safety (Thomas W.
Ortciger) 33.
December 2, 1996, No Name ORAL COMMENTE Washington, D.C. (October 24-25, 1996) pages 23 - 43 1.
0AS and CRCPD (Tom Hill) 2.
Ken Pcveler, IES Utilities, Inc.
Colorado Springs, CO (October 31 - November 1, 1996) pages 449 - 463 1.
Entergy Operations, Inc. (Mr. England) 2.
ABB Combustion Engineering Nuclear Systems (Charles Brinkman)
Chicago, IL (November 7-8, 1996) pages 17 - 39 j
1.
Pacific Gas and Electric (Mike Angus) 2.
Washington Public Power Supply Systems (Mr. Swank) 3.
Commonwealth Edison (Irene Johnson) 4.
Commonwealth Edison (Ken Ainger)
Page 3-130 Phase 11 Stakeholder interaction Repon