ML20137L412
| ML20137L412 | |
| Person / Time | |
|---|---|
| Issue date: | 01/16/1997 |
| From: | Rogers K NRC COMMISSION (OCM) |
| To: | Diaz N, Dicus G, Shirley Ann Jackson, Mcgaffigan E, The Chairman NRC COMMISSION (OCM) |
| Shared Package | |
| ML20137L372 | List: |
| References | |
| COMSECY-96-065, COMSECY-96-65, DSI-21, SECY-96-065-C, SECY-96-65-C, NUDOCS 9704070220 | |
| Download: ML20137L412 (9) | |
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OFFICE OF THE COMMISSIONER January 16, 1997 MEMORANDUM TO: Chairman Jackson Commissioner Dicus Commissioner Diaz Commissioner McGaffigan FROM: Commissioner Rc3ers h 10.
SUBJECT:
COMSECY-96-065: FEES - DSI-21 After a review of Phase II of the Stakeholder Interaction Report and after listening to the Steering Committee briefing on January 13, I support the Commission's preliminary views on this DSI with a change in the first sentence of the fifth paragraph on page 3-125 of the Report. That sentence should read as follows:
"The Commission believes that it is required to carry ,
out the intent of Congress by implementing fee policy i within existing law. The Commission has on several l occasions made known its position with respect to OBRA- l 90 and the 100% fee collection."
With respect to a comment made relative to early decommissioning (fifth paragraph, page 3-126 of Report) and the impact on fees by such reduction, I believe it will be necessary for the Commission to adjust expenses in that event and a statement to that effect should be included in the Commissic a's final position. IM?.-
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3.13 FEES (DSI 21) 3.13.1 The Direction-Setting issue and the Options In making decisions about what activities the NRC should perform in support of its mission, to what extent should fees be considered?
Option 1: Continue Existing Approach Option 2: No Consideration of Fees for Mandated Activities Option 3: No Consideration of Fees in Making Decisions ~About Any NRC Activities Option 4: Fee for Service 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
< appropriations with fee recovery, to fund activities that are not required to be funded through appropriations, for example, certain international activities?
e In performing reimbursable work, how should NRC address the full-time equivalent (FTE) constraints that limit the number of NRC staff?
j Funding Mechanism 1 ,
Recover the cost of providing requested services from the requestor, using l 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 continue to pay for approximately 100 1ercent of the appropriated budget authorit). Reimbi'rsable agreenents would be used to fund all non-mandated activities.
Funding Mechanism 3 l i
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. l Funding Mechanism 4 Rescind the Independent Offices Appropriation Act of 1952 (10AA) and OBRA-90 so that the NRC would be fully funded through taxes, as was the case until 1968.
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Page 3423 Phase H Stakeholder Interaction Repois
' ' Summary Analysis of Comments rea 3.13.2 Commission'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 i
Coarnission 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 abuut 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 ciass of licensees.
In OBRA-90 (PL 101-508), Congress stated that any licensee of the Comission cay be required to pay, in addition to the fees for services or thing of value, an annual charge. Congressional history and language in the Conferer.ce 101-508 takes notice and allows that " increasing Report that accompanied PLthe amount of recovery to 100 percent of the NPC's b result in the imposition of fees upon certain licensees for costs that cannot 1 be attributed to those licensees or classes of licensees." (
After review of the policy options, it is the Comission's preliminary view to 4 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.
These types of activities ihe NRC performs two primary types of activities. Mandated activities include are defined as mandated and non-manda;ed. Non-statutes, Executive Orders, treaties, comission decisions, and so on.
mandated activities include those activities that are not required to respond This to mandates but are performed as a ' service' te another organization.
policy option (Option 2) approved by the Comission provides for a responsible decisionmaking process for mandated activities while allowing the NRC to assist other organizations on a reimbursable basis.
In selecting Option 2, the Comission will establish a process for making its programatic decisions b: sed on pubite health and safety considerati mandated activities.
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 Comission'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.
Phase !! Stakeholder interaalon Report Page 3-124
7.._ _ __ _ _ ______ _ _ _ _ _ _ . _
- rear i - se'amary.4-frie g(cornmenu l .*
Two related issues, in addition to the direction-setting issue (DSI), are also ,
r addressed. These two issues address funding mechanisms and personnel full !
i time equivalent (FTE) ceilings. -
t l It is the Comission's preliminary view to support Funding Mechanism 2, which
! continues the agency's current approach. ,
2 e i
! Although the Coumiission believes that its decisions on activities that the NRC should perform in support of its mission and its total budget authority should {
be indeperdent of fee considerations, it also believes that NRC fees should be :
assessed in as fair and as equitable a manner as practicable. l l
l OBRA-90 requires that NRC collect fees equal to approximately 100 percent of the NRC'1 budget. OBRA-90 further states that these fees should be collected l
- l from NRC's licensees and applicants. The Comission has sought to comply with l i l
OBRA-90 and to distribute fees fairly and equitably among its licensees and applicants. The NRC has reexamined its fee policy each year, issued draft fee
- rules for public coment, and made changes to the process to respond to those l
cements whenever possible within the limits of existing statutes. The .
i L 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 on the U.S. Nuclear Regulatory Comission's I.icensee Fee Policy
- Review Issued in February 1994.
5 i The Commission believes that carrying out the intent of Congress by implementing fee policy within existing law is the most effective and
- 1 efficient option. The Comission will, however, consider coments and )
- j. recomendations on specific proposals if they present new approaches to !
improve the process or to accomplish a more equitable distribution of fees.
l
! It is the Comission's preliminary view to support the NRC's identification of i FTEs associated with reimbursable work as business-like activities.
j When the NRC receives a request to conduct an activity that is not necessary for the NRC to meet its mandates but will provide a " service
- to another organization, the NRC must consider the cost of providing the service. This cost consideration includes both dollars and FTEs. The requesting
' organization can enter into a reimbursable agreement with the NRC and i
reimburse the agency for the dollars expended on providing the assistance.
The ngesting organization does not, however, provide FTEs to the NRC.
\
The current FTE ceiling constraints may make it difficult, if not impossible, i for the NRC to provide assistance for non-mandated activities in response to l specific requests. The approach to remove those FTEs used for business-like 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, l
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l Phaw H $akeholder Interaalon Jtqort
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3.13.3 Summary of Comments e A. Significant/Important Coments Directly Affecting the Preliminary Views or the Direction-Setting Issue. l l
In both the written comments and those " ovided at the stakeholder meetings, there was general 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 (NEI) did not support Funding Mechanism 2.
Both the Organization of Agreement States (OAS) and the Conference of Radiation Control Program Directors (CRCPD) support Option 2 and Funding Mechanism 2 indicating that if NRC is mandated to perfom a task, it should do so without the negative influent.e of fees. Five States submitted coments supporting the QAS comments, and five States submitted comments supporting Option 2. 045, CRCPD, and most States comented that because training for Agreement States is a mandated activity, the NRC should not charge 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 resultFunding discussed for under DSI 4 of restoring funding for Agreement State programs.
Agreement States is addressed further in the stakeholder coments on DSI 4.
NEI and Westinghouse supported Option 2, whereby the use of reimbursable agreements would be increased to avoid costs that do not benefit NRC licensees. Two commenters (AB8-CE Nuclear Systems and South Carolina Electric and Gas Company) submitted coments supporting the NEI comments. The National Mining Association (NMA) while supporting Option 2, still has some serious concerns about the underpinnings of the fee structure and indicates that without legislative changes to OBRA-90 there is no way to alleviate completely the major concerns of NMA licensees about the fairness and equity of the NRC 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 licensees elect to decommission early, the NRC will not be able to ignore the i' increasing burdan that fees impose on the shrinking pool of licensees.
Therefore, NRC needs tc prioritize programs ar.d initiatives more than ever, operate in a business-like fashion, and pursue those activities having the most noteworthy benefit to public health and safety. These measures support the Commission'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 (Funding Mechanism 3).
En 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 the fee base for recovery (Funding Mechanism 1) and (2) any new activities that the NRC is required to perfom should be specifically design,ted as to
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Phase R StakehoMer internaion Report nnge31%
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l swrunay Anayss of commenu l how the costs should be recovered. One State (Washington) comented that the [
^ NRC should be proactive in finding ways to get Congress to fund HRC 1 involvement in crucial countries oversees and also work toward finding )
countries willing to pay for NRC expertise. l l
NEI, the Council on Radionuclides and Radiopharmaceuticals, and three other !
comenters (State of Washington, Amersham and Mallinckrodt Medical) disagreed '
with the Comission's preliminary view of supporting NEI statedFunding that it Mechanism 2 and is fundamentally l strongly supported funding Mechanism 1. l 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 I commenters (Amersham and Mallinckrodt Medical) stated that activities thatl serve the collective interest of the public should be funded by general l NEI suggested that the NRC redouble its efforts l revenues raised from taxes.
to ensure that Congress understands and corrects this basic inequity and recomended that NRC submit a legislative packageYankee to Congress that would allow f.tomic Electric less than 100 percent fee recovery from licensees. ;
Company recomended that the NRC take a more proactive and aggressive approach J to solving this issue at the Congressional level.
The NMA supports a mix of Funding Mechanisms 1 and 3, indicating that by l pursing these options, NRC would put into effect the recomendation 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. j acknowledges that the pressure on the Federal Government to achieve a balanced l budget may make this legislative solution difficult to achieve, but it l believes that fairness issues and the impact of the current system NMA points outon that the l competitiveness requires that the attempt be made.
fee problem will be exacerbated in future years as more States become j Agreement States, leaving fewer NRC licensees to bear an even greater share of ,
the burden, and that the number of operating sites can be expected to decline !
if NRC does not find a more equitable means of assessing fees on its licensees. One State (Illinois) supported 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 ser l international agencies.
Two comenters (Yankee Atomic Electric Company and Ken Peveler) supported Funding Mechanism 4 (NRC to be funded through taxes), noting that the current l arrangement of assessing fees to utilities, for example, drives the nuclear industry in a negative direction. That is, the utilities
>ayers, pay who arethetheNRC feesThus, public.
but, in turn, pass the costs on to its rate has the same effect as taxes, the public is paying the price of fees, whic)Mr. Peveler stated that NRC fees assesse that is, the public pays.
applicants and licensees are simply a way of rearranging the funds, In theand such 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, particularly in a deregulated environment in which nuclear utilities are bearing most of the burden of the half billion dollars or so per ABB-CE Nuclear Systems and Yankee Atomic f
year that the NRC receives in fees. Electric Company recomended that 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 3127 Phase !! Stakeholder Interaction Report
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limited to those costs directly associated with the regulatory service j provided, a " fee for service' concept similar tc Option 4.
h C. Comments on Important Omissions i
One commenter (Entergy Operations, Inc.) identified an option not addressed in j the paper. Under this option, the Comis., ion would seek legislation to allow j
i the NRC to supplement its appropriation for mandated activities. Entergy i stated that currently there is no mechanism for the NRC to hire a contractor '
i to perform industry-needed mandated reviews and then bill the requestor for i 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, i noting that "we pay for the reviews that we get, but we can't always get the i
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 i
tender the invoices directly to the requesting utility or organization for i
these reviews above budget and FTE caps. The Council on Radionuclides and l
Radiopharmaceuticals, Amersham, and Mallinckrodt Medical indicated that the i
inability to have an application reviewed and approved in a timely fashion i
affects the public when products cannot be manufactured and distributed
! because an application for a license, amendments, or container approval takes i
several months or years.
D. Comments on Internal / External Factors l 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 l the States to restructure and deregulate the electric power industry.
j 2
Pacific Gas and Electric (Angus) at one of the stakeholders meetings noted i
i that the competitive environment in which utilities must operate is an The commenter stated that
! external factor that should be considered 9f
! currently each operating power reactor pays an annual fee of $2.7 million.
l this amount, approximately $500,000 is for activities that do not benefit the utility. The e. enter indicated that as they begin to look ahead to the turn i j of the century (year 2000 and 2001), the $500,000 could constitute about one- '
half of I percent of the profit of a plant (estimated at $100 million) and, therefore, the $500,000 takes a very significant part of the revenue base for 4
j the power plants; this amount actually "is at the point where it contributes ,
j to the decision whether or not you operate or continue to operate the power l pl ants. " The comenter stated that given the competitive environment faced by i
1 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 I
i benefitting licensees should be removed from the fee base and recovered
' through general tax structures (Funding Mechanism 1).
I j E. In its preliminary views, the Commission did not pose any additional J
questions for public comment.
i I i l
1 l Phase 11 Stakeholder lateraalon Apart Page 3-138
r
. . s kwy. w Sel, y co - ,ur 3.13.4 List of Commenters WRITTEN COMMENTS .
- 1. October 21, 1996, Organization of Agreement States and Conference of Radiation Control Program Directors (Robert Quillin)
- 2. October 21,1996, Organization of Agreement States (Robert Quillin)
- 3. October 23, 1996, State of New York, Department of Labor (Rita Aldrich)
- 4. October 23, 1996, Agreement State /NRC Regulators' meeting summary
- 5. Octcber 25, 1996, Organization of Agreement States (Thomas Hill)
- 6. October 28, 1996, State of Washington, Department of Health (Terry Frazee) 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 Services (Diane Tefft)
- 10. November 7,1996, State of Mississippi, Department of Health (Robert Goff)
- 11. November 7,1996, Organization of Agreement States amended coments (Robert Quillin)
- 12. November 14, 1996, State of Oregon, Department of Human Resources (Ray D. Paris)
- 13. November 14, 1996, State of hth Carolina, Department of Health and Envir:nmental Control (M. K. Batavia)
- 14. November 21,1996, State of Louisiana, Departiient 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)
- 18. November 25, 1996, Westinghouse Electric (N. J. Liparulo)
- 19. November 27,19%, Nuclear Energy Institute (Thomas D. Ryan)
- 20. November 27, 1996, State of Texas, Department of Health (Richard
[ Ratliff) rage .r-no these it swkeholder interaalen Apart
. Ten
- Swmewy Analyrit q(Comment _ _ . _l'
- 21. November 27, 1996, Council of Radiation Control Programs Directors (CRCPD) (William P. Dornsife) (
November 27, 1996, Council on Radionuclides and Radiopharmaceuticals ;
22.
(RoyW. Brown) ,
December 1,1996, Environmental Coalition on Nuclear Power (Judith H. j 23.
Johnsrud)
- 24. December 2,1996, SENTINEL,AmershamCorporation(KateRoughan)
- 25. December 2,1996, State of New Jersey (Jill Lipoti)
- 26. December 2,1996, Yankee Atomic Electric Co. (Jane M. Grant)
- 27. December 2,1996, State of Maryland, Department of the Environment (Roland G. Fletcher) l
- 28. Decer.ter 2,1996, Entergy Operations, Inc. (Michael J. Meisner) i i
- 29. December 2,1996, Mallinckrodt Medical, Inc. (Ashok Dhar)
- 30. December 2,1996, ABB Combustion Engineering Nuclear Systems (Charles Brinkman)
- 31. December 2, 1996, National Mining Association (Richard Lawson)
December 2, 1996, Illinois Department of Nuclear Safety (Thomas W. l 32.
Ortciger)
- 33. December 2, 1996, No Name ORAL COMMENTS Washington, D.C. (October 24-25, 1996) pages 23 - 43
- 1. -OAS and CRCPD (Tom Hill)
- 2. Ken Peveler, IES Utilities, Inc.
Colorado Springs, C0 (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
- 1. Pacific Gas and Electric (Mike Angus) ;
- 2. Washington Public Power Supply Systems (Mr. Swank)
- 3. Commonwealth Edison (Irene Johnson) k
- 4. Commonwealth Edison (Ken Ainger) i l
Phase !! Stakeholder Interaction Repers Poe 3-EJO
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