Obstacles to Reducing Nuclear Powerplant Leadtimes

Published by the Government Accountability Office on 1977-06-13.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                           DOCUMENT SESU ME
02461 -   A1752770

Obstacles to   educing N   lear Powerplant Leadtimes.   June 13,
1977. 13 pp.
Testimony before te House Committee on Interior and Insular
Affairs: Energy and the Environment Subcommittee; by onte
Canfield, Jr., Director, Energy and Minerals Div.

Issue Area: Energy: Making Nuclear Fission a Substantial Energy
    Souirce (1608).
Contact: Energy aud inerals Div.
Budget Function: Natural Resources, Environment, and Energy:
    Energy (305).
Organization Concerned: Nuclear Regulatory Commission.
Congressional Relevance: House Committee on Interior and Insular
    Affairs: Energy and the Environment Subcommittee.

          Long leadtimes in completing nuclear powerplants have
contributed to high capital costs and sometimes to cancellation
of units. Currently, 10 or more years of leadtime consists of
about 2 years of planning, 2 or more years of construction
permit review by the Nuclear Regulatory Commission (NRC), and 6
or more years of construction. The NRZ operating license review
parallels part of construction. To reduce leadtimes, the NRC has
tbgun to (1) authorize limited construction following ompletion
of the environmental and site suitability portions of reviews;
 (2) encourage development and use of standard nuclear powerplant
designs: and (3) accept applications for site approvals up to 5
years before utilities apply to begin construction. Times have
not been reduced as expected because of: delays in State
approval; time consumed for environmental statements and public
hearings; the fact that benefits from standard designs will take
time; and because some issues, such as environmental factors,,
cannot be decided at an early stage. AO concluded that Lany
factors will continue to prevent reduction of leadtimes,
including growing State and local requirements, public concern,
court decisions, and technological changes. It was recommended
that the NRC should work jointly with states to identify and
compare legal and procedural requirements. (HTW)
                          WASHINGTON, D.C. 20548

i4                                           FOR RELEASE ON DELIVERY
Ard                                          Expected at 11:30 a.m.
                                             Monday, June 13, 1977

                                STATEMENT OF
                        MONTE CANFIELD, JR., DIRECTOR
                        ENERGY AND MINERALS DIVISION
                                 BEFORE THE
                        OBSTACLES TO REDUCING NUCLEAR
                            POWERPLANT LEADTIMES

      Mr. Chairman ani Members of the Subcommittee:

           We welcome the opportunity to    e here today to discuss

      reforming the nuclear powerplant licensing process.
           Currently, it takes utilities 10 or more years to plan,

      obtain necessary governmental licenses and approvals for, and

      construct nuclear powerplants.    This long leadtime contributes

      greatly to the high capital costs of these plants, which in

      turn has contributed to utilities' decisions to defer or can-

      cel planned units.    Thus, the leadtime for constructing these

      plants is an important factor in the economics of nuclear

      power.    Reductions in the present 10-year cycle would both

      reduce capital costs and enable utilities to more quickly

      begin recovering the costs of the plants as well as potentially
      reducing the cost of electricity to consumers.

           ii recent years, the Nuclear Regulatory Commission has

      made changes in its licensing procedures in an attempt to

      reduce leadtimes to 7 or 8 years.    The Commission proposed
licensing reform legislation in the last session of the

Congress which was intended to shorten the leadtime to as

little as 6 years, while at the same time maintaining the

quality of its safety and environmental reviews and preserving

opportunities for public participation.

     On March 2, 1977, we issued a report 1/ to the Congress

discussing the many obstacles which we believe may prevent

the Commission from achieving its stated goals for reducing

powerplant leadtimes.   The purpose of my testimony toe'y is
to describe for the Suhconi ittee these obstacles and their

effect on the Commission's efforts to reduce leadtimes.

     We will describe the major processes comprising the
nuclear powerplant ladt:ime, the Commission's efforts to reduce

it, the obstacles limiting the success of these efforts, and

we will conclude with our observations on the prospects for

future   eadtime ructions.

     The 10 or more years of leadtime for constructing nuclear
powerplants--which we define as starting on the date a utility

decides to construct a plant and ending when i   is licensed
to operate--consists of about 2 years of utility planning,

2 or mre years of Commission construction permit review, and

6 or more years for construction.   The Commis3ion's operating

1/"Reducing Nuclear Powerplant Leadtimes: Many Obstacles
  Remain" (EMD-77-15, dated March 2, 1977).

license review parallels the final 2 to 3 years of construction.

Also, parallel with these steps, utilities must obtain other

required Federal, State, or local government approvals.

     In the planning phase, a the utility selects a site and

contractors, prepares an environmental report based on at

least 1 year of collected environmental data, and prepares a

safety report describing the plant's design and how it complies

with Commission rules, regulations, and other safety require-

ments.   Utilities may also have to gather data and prepare

applications for other Federal, State, and local government


     At the construction permit review phase, the Commission

staff reviews the utility's safety and environmental reports,

the Advisory Committee on Reactor Safeguards conducts its own

safety review, the Commission and the Department of Juscice

assess the utility's compliance with antitrust laws, and the

Commission's Atomic Safety and Licensing Board holds a public

hearing on the application to consider both safety and environ-

mental issues.   If affirmative decisions follow each of the
above reviews and hearings, the Commission issues a construc-

tion permit.

     Construction permit reviews took an average of 2 years
for 17 applications to construct 32 powerplants accepted

during cale dar years 1971 to 1975.   Many of these applica-
tions were for more than 1 powerplant.   Issuance of construc-
tion permits on the 17 applications were not contested in the

in the Commission's public hearings.   In contrast, during
the same period it took the Commission an average of 5 months

longer to issue construction permits on 24 applications to

construct 44 powerplants which were contested on safety and/or
environmental grounds in the public hearings.     The 5 months
is somewhat significant in the context of the 2-year construc-

tion permit review but is not a long time in the context of

the total time nreded--10 years--to bring powerplants on line.

     The powerplant construction and operating license review

phase takes 6 or more years during which the utility completes

detailed design work, construction, preoperational testing,

and applies for a Commission operating license.    Design
changes often occur at this time to ehance methods of power-

plant operation or maintenance, incorporate new or revised

regulations or other Commission safety requirements.    These
changes may affect utilities' construction schedules.

     Other factors which may affect construction schedules

include project financing, utility and construction contractor

management abilities, procurement and delivery of materials,

availability of labor skills, labor producti ity, labor

strikes, and the weather.


     To reduce nuclear powerplant leadtimes, the Commission

has begun to

     -- authorize utilities to begin limited construction
         work following completion of the environmental

         and site suitability prtions of its construction
         permit reviews;
     -- encourage the development and use of standard
         nuclear powerplant designs; and
     -- accept applications for site approvals up to
         5 years before utilities apply t   begin con-
         struction at the sites.
     Only the limited construction work and standardization
programs have been in effect long enough to have affected
powerplant leadtimes--primarily at the construction permit
stage.    To date, construction permit review times have not
been reduced as expected.    I will now discuss some of the
reasons why they have not.
Lim ted work authorization

     In April 1974, the Atomic Energy Commission--the present
Commission's predecessor--began authorizing limited construc-
tion work as soon as staff reviews and public hearings on envi-
ronmental and site suitability were completed.     It expected
that construction could begin in about 10 months--or about 14
months before staff reviews and public hearings on design
safety were usuaily completed.
     Nonetheless, it has taken an average of over 18 months
for the 22 authorizations issued to date.     Furthermore, three
utilities withdrew limited work authorization requests because

 they could not obtain timely State approvals which
                                                    they needed
 before beginning construction.

      Several factors have prevented the Commission
achieving its 10-mor:th goal.  Project environmental statements
and several contested public hearings have taken
                                                  longer to
complete than expected. A major change in Commission
tions aimed at reducing radioactivity levels to
                                                 "as low as
reasonably achievable" affected other projects.
                                                  Other factors
were outside of the Commission's control. For
                                                example, the
Commission had to defer five limited work authorizations
the utilities obtained State water quality certifiiates--a

requirement of the Federal Water Pollution Control
                                                   Act Amend-
ments of 1972.

Standard nuclear powerplant designs

     Under the standardization policy initiated by
                                                    the Atomic
Energy Commission in 1973, the Commission's staff
                                                   reviews and
approves standard powerplant designs. No modifications
to be made to approved designs unless they offer
safety improvements, or are directed by the Atomic
                                                   Safety and
Licensing Board or the Commissioners.

     The Commission expects that standard designs
                                                    can shorten
leadtimes by at 1 ast 1 year because less time
                                                would be needed
for utility planning and Commission licensing
                                               reviews, and
there would be fewer time-consuming construction-stage
modifications. Commission officials believe,
                                               however, that
these benefits will not be realized for some

    The Commission has received 7 applications to construct

21 nuclear powerplants using standard designs and has issued

construction permits on 3 of them.    Its construction permit

reviews of the 7 applications either took or will take from

18 to 39 months--as long as its reviews take without


     It i   important at this point to explain the concept of

standard designs.     The Commission intends that eentually the

entire powerplant design can be standardized.    For the 7 appli-

cations, however, the only portions of plant designs that were

standardized were the reactor vessels.    In addition, the unique

characteristics associated with each site also affected the

total powerplant design.    For these reasons the Commission has

had to review the 7 applications using "standard designs" in

the same manner as other plant designs.

Early site approval

     Effective June 6, 1977, the Commission changed its regu-

lations to allow utilities to seek site suitability reviews

up to 5 years before they planned to construct powerplants at

these sites.   The Commission believes that most site suit-

ability issues (environmental and safety) can be resolved at

this early stage.     By referencing a previously reviewed site

in its construction permit application, the Commission expects

that a utility could begin construction work almost immediately

-- if all of the environmental and site suitability issues, such

 as need for power, are conclusively resol
                                           ed at the early site
 review stage.

      We question the Commission's optimism
                                             in the amount of
 leadtime reductions attainable from early
                                            site reviews. Some
 environmental factors--such as need for
                                         power--which are fre-
 quently contested in its public hearings,
                                            are subject to change
 over relatively short time periods. It
                                         may not be possible
 to conclusively decide these issues at
                                         the early site review
 stage. Deciding them after utilities
                                        apply to begin construc-
 tion may limit early starts on construction.
                                                Indeed, in three
recent cases, the Atomic Safety and Licensing
                                               Board either
reopened or held up the public hearings
                                         in order to consider
changes in utilities' "need for power"
      Furthermore, increasing stringent State
                                                dnd local govern-
 ment requirements may prevent many utilities
                                                from even seeking
 early site approvals, or from starting
                                         construction. Since
 1970, 23 States have enacted legislation.
                                             These laws often
conflict with the Commission's early site
                                            approval concept
because they do not authorize complete
                                        State reviews at this
earlier time. Under New York State law,
                                           for exam.ple, the
State may not begin its 2 years of more
                                          of review until a
utility applies to construct a specific
                                          powerplant at a
selected site. This requirement prezludes
                                             early site review
by the State.

In-house actions to streamline
licensing process
     The Commission has taken steps which, while not speci-

fically designed to shorten leadtimes, are intended to reduce

chances for delay in utility     lanning, Commission licensing,

and powerplant construction phases.     These include (1) adding

predictability to its process of applying new safety require-

ments to powerplant projects in various stages of development,

(2) requiring utilities to submit antitrust information at

at least 9 montns in advance of construction permit applica-
tions, and (3) encouraging joint State-Commission public
hearings in construction permit applications.

     The Commission's efforts to make its safety reviews
more predictable have not been entirely successful.     We found

examples wherein the Commission staff imposed certain safety

requirements which had not yet been approved by the Commission.

Since they are unpredictalbe, these changes adversely affect

the utilities' plans since they may call for redesign, work

stoppage, or costly construction modifications.

     Early submission of antitrust information should preclude

this problem from holding up Commission construction permits.
For one project, however, the contested antitrust proceeding

took 42 months tc complete.

     Joint State-Commission hearirn       'e intended to expedite

Commission and State decisionmakin      rLccesses while reducing

the total time, effort, and expenditures of all parties.

However, in one of the two joint hearings held to date, major
differences in Commission and State procedural requirements

will atually lengthen the time       t takes the Commission to
 issue a construction permit.

     We commend the Commission's attempts to reduce nuclear
powerplant leadtimes while maintaining the quality
                                                    of its
reviews and opportunities for public participation.
                                                      We rec-
ognize that some of the measures taken are long tern
                                                      and have
not been fully implemented.  In our opinion, however, there
are simply too many other factors involved--many
                                                  beyond the
Commission's control--that limit the Commission's
                                                   ability to
reduce the leadtime. These factors will, we believe,
vent the Commission from realizing a general reduction
leadtimes to its 7-to-8-year goal under existing
legislation and the 6-year goal with changes in its
legislation.  In fact, with the present licensing process, we
believe that both the Commission and the industry
                                                   will have
difficulty in maintaining current timeframes of 10
    These factors include:

     -- Growing State and local government requirements

      which may prevent many utilities fom taking

       full advantage of the Commission's actions to

      shorten powerplant leadtimes.     In six recent
      licensing actions, State rather than Commission

  requirements have precluded utilities from

 getting earlier construction starts.

-- Public concern about nuclear power as shown

  by recent State nuclear moratorium initiatives.

  Expressions of the concern through widespread

  intervention in Commission nuclear powerplant

  licensing proceedings have added about 5 months

  to the 2-year construction permit review period.

  The added 5 months is almost insignificant when

  viewed in the context of the 10-year timeframe.

-- Changes resulting from court decisions invali-

  dating Commission regulations.   A July 1976 Federal

  Court of Appeals decision invalidated portions of

  an existing Commission regulation for considering

  the environmental effects of waste management and

  reprocessing operations in the nuclear fuel cycle

  in construction and operating license proceedings.
  As a result of this decision, the Commission stopped

  issuing limited work authorizations, construction

  rermits, and full-power operating licenses until it

  completed an internal study and prepared a
  proposed interim rule.    On November 5, 1976,

  the Commission resumed licensing activities

  conditioned on the outcome of the rulemaking


     -- Changes resulting from technological advances

       and nuclear powerplant operating experience.

       For example, new emergency core cooling system

       regulations and fire protection standards were

       developed as a result of the     rown's Ferry
       Nuclear Statiln fire.    Because of   ts over-
       riding responsibility to protect the public

       health and safety, the Commission will continue
       so apply new regulations and other safety require-

       ments in its construction and operating license

       reviews as solutions to outstanding safety issues
       are developed.   Since December 1I72, the Advisory
       Commictee on Reactor Safeguards has identified 72

       safety issues applicable to all, or a large number

       of, nuclear powerplants.     To date, 41 of these
       issues have been completely resolved through addi-

       tional regulations or other safety requirements.

       Applying important new safety requirements to power-

       pldnt projects in various stages of completion

       contributes to leadtimes, and will continue to limit
       the success of the Commissio;'s efforts to add

       predictability to its safety reviews.

     In our report, we concluded that the effectiveness of

the Commission's proposals will depend on their compatibility

with State and local governments' legal and procedural require-

ments, which vary among the States.    Clearly, many States

 intend to actively participate--from land    se planning and
environmental perspectives--in regulating nuclear powerplants.

We recommended that the Commission should work jointly with all

the States to identify and compare the various legal and pro-

cedural requirements as a first step in developing some common-

ality in the licensing process and in reducing the timeframe

for getting nuclear powerplants on line.

        The Commission has taken some positive actions.   For
example, it established an Office of State Programs to

strengthen its relations with the States in powerplant siting
and licensing.     In addition, the Commission is completing a
study to identify areas where new legislation may be needed

to shorten nuclear powerplant leadtime.     Whether or not the
Commission can reduce licensing leadtimes will depend to a

large extent on (1) how effectively the recently established

office carries out its responsibilities and (2) how quickly

the Commission acts on the ')roposals developed by the study.

        Mr. Chairman, this concludes my prepared statement.     We
would be glad to answer any questions you may have at this