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) UNITED STATES GENERAL ACCOUNTING OFFICE 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 SUBCOMMITTEE ON ENERGY AND THE ENVIRONMENT HOUSE COMMITTEE ON INTERIOR AND INSULAR AFFAIRS ON 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 NUCLEAR POWERPLANT LEADTIME 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). 2 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 approvals. 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 3 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. COMMISSION ACTIONS TO REDUCE NUCLEAR POWERPLANT LEADTIMES To reduce nuclear powerplant leadtimes, the Commission has begun to 4 -- 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 5 they could not obtain timely State approvals which they needed before beginning construction. Several factors have prevented the Commission from 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 regula- 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 until 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 are to be made to approved designs unless they offer "significant" 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 design modifications. Commission officials believe, however, that these benefits will not be realized for some time. 6 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 standardization. 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 7 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" projections. 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. 8 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. 9 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. OBSERVATIONS ON THE PROSPECTS FOR REDUCING NUCLEAR POWERPLANT LEADTIME,3 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, pre- vent the Commission from realizing a general reduction in leadtimes to its 7-to-8-year goal under existing licensing legislation and the 6-year goal with changes in its licensing 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 years. 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 10 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 proceeding. 11 -- 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 12 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 time. 13
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)