ML23093A188
| ML23093A188 | |
| Person / Time | |
|---|---|
| Site: | Nuclear Energy Institute |
| Issue date: | 03/31/2023 |
| From: | Uhle J Nuclear Energy Institute |
| To: | Brooke Clark NRC/SECY/RAS |
| References | |
| NRC-2021-0024, PR-170, PR-171, 88FR13357 00003 | |
| Download: ML23093A188 (1) | |
Text
4/3/23, 9:54 AM blob:https://www.fdms.gov/c846875a-d65f-4c35-9691-b0d25c2ebe53 As of: 4/3/23, 9:54 AM Received: March 31, 2023 PUBLIC SUBMISSION Status: Pending_Post Tracking No. lfw-ty53-pk62 Comments Due: April 03, 2023 Submission Type: Web Docket: NRC-2021-0024 Revision of Fee Schedules: Fee Recovery for FY 2023 Comment On: NRC-2021-0024-0001 Revision of Fee Schedules; Fee Recovery for Fiscal Year 2023 Document: NRC-2021-0024-DRAFT-0001 Comment on FR Doc # 2023-03940 Submitter Information Email: atb@nei.org Organization: Nuclear Energy Institute General Comment See attached file(s)
Attachments 03-31-23 NEI Comments on FY23 Proposed Fee Rule blob:https://www.fdms.gov/c846875a-d65f-4c35-9691-b0d25c2ebe53 1/1
DR. JENNIFER L. UHLE Vice President, Generation and Suppliers 1201 F Street, NW, Suite 1100 Washington, DC 20004 P: 202.739.8164 jlu@nei.org nei.org March 31, 2023 Brooke P. Clark Secretary U.S. Nuclear Regulatory Commission Washington, DC 20555-0001 ATTN: Rulemaking and Adjudications Staff Submitted via Regulations.Gov
Subject:
Industry Comments on Fiscal Year 2023 Proposed Fee Rule (NRC Docket ID NRC-2021-0024)
Project Number: 689
Dear Ms. Clark:
On behalf of the Nuclear Energy Institutes (NEI) 1 members, we provide the following comments for the U.S.
Nuclear Regulatory Commission (NRC) staffs consideration as it finalizes the fiscal year 2023 fee rule.
We appreciated the public webinar meeting held by the NRC staff on March 21 to discuss the FY2023 proposed fee rule and its underlying basis and assumptions. These meetings are always informative, and we request that they be continued.
The proposed fee rule reflects a total budget authority of $927.2 million, an increase of $39.5 million or 4.4% over FY2022. After accounting for excluded activities and net billing adjustments, the NRC must recover approximately $791.4 million in fees in FY2023; an increase of 5.0% over FY2022. Of this amount, the NRC estimates that $195.4 million will be recovered through 10 CFR Part 170 service fees. This is a decrease of $3.4 million compared to FY2022. The remaining $596.0 million would be recovered through the Part 171 annual fees in FY2023. This is an increase of $42.1 million when compared to FY2022.
Use of Fee-Based Carryover Funds In our March 24, 2022, comments on the FY2022 proposed fee rule, NEI urged the NRC to use its available discretionary authority to apply fee-based carryover funds for the purpose of reducing licensee fees. While carryover funds were not used for this purpose in the FY2022 final fee rule, we renew our request that carryover funds be applied in the FY2023 fee rule for the purpose of reducing licensee fees. The NRCs 1
The Nuclear Energy Institute (NEI) is the organization responsible for establishing unified industry policy on matters affecting the nuclear energy industry, including the regulatory aspects of generic operational and technical issues. NEI's members include entities licensed to operate commercial nuclear power plants in the United States, nuclear plant designers, major architect/engineering firms, fuel cycle facilities, nuclear materials licensees, and other organizations and entities involved in the nuclear energy industry.
Ms. Brooke P. Clark March 31, 2023 Page 2 ability to utilize carryover funds in this manner is demonstrated by the FY2024 Presidents budget that includes the use of $27.1 million in carryover to offset the Nuclear Reactor Safety budget.
UNLP Should be Excluded from Fee Base The FY2023 authorized budget currently includes $16 million appropriated for the University Nuclear Leadership Program (UNLP) that is currently being addressed by fee-based carryover funds. This is contrary to the Nuclear Energy Innovation and Modernization Act (NEIMA) of 2018, where UNLP is one of the activities excluded from recovery. The FY2023 payment, combined with similar payments in FY2022 and FY2021, totals $48 million in payments by licensees that should have been excluded from the fee base.
Licensee Fees Should Not Subsidize Other Federal Agencies The FY2023 budget includes $5.65 million to subsidize rent for the Food and Drug Administration (FDA) and the National Institutes of Health (NIH). In its October 12, 2021, letter to Congress on NEIMA, NRC identified that over the course of this lease the nuclear industry will pay approximately $48 million to subsidize rent for the Food and Drug Administration (FDA) and the National Institutes of Health (NIH) in the 3WFN building. These payments do nothing to support the agencys mission and should not be addressed with funding collected from NRC licensees and, ultimately, electricity rate payers. We encourage the NRC to continue its discussions with Congress to remove these payments from the fee base.
Corporate Support Budget We appreciate the staff efforts to manage and reduce NRC Corporate Support costs. These efforts enabled NRC in FY2022 to meet the limit established by NEIMA of 30% Total Budget Authority (TBA). The Corporate Support budget for FY2023 is 30.8% of TBA compared to the FY2023 NEIMA limit of 29%. As the NEIMA limit will continue to decrease, reaching 28% in FY2025, we encourage NRC to continue efforts to reduce Corporate Support costs.
Ms. Brooke P. Clark March 31, 2023 Page 3 Future Workload Necessitates Increased Efficiency of Licensing Operations A recent survey of NEI member companies identifies that greater than 90% of the 80 units surveyed anticipate applying for and receiving approval to operate to 80 years through the Subsequent License Renewal process. The survey also shows that greater than 50% of sites have a level of interest/planning for power uprates at their site units. These activities will require review and approval by the NRC. The survey indicates that over the next 10 years, the NRC could see a significant increase in licensing applications compared to the previous 10 years.
Licensing Applications to NRC 50 Initial License Renewal Subsequent License Renewal 40 MUR Uprates Stretch Uprates Extended Power Uprates 30 90% Increase in Power Uprate Applications 20 60% Increase in 10 License Renewal Applications 0
2013-2022 Est. 2023-2032 While an increase in staffing to address increased workload is planned, NRC cannot rely solely on staffing changes and must actively seek changes to increase the efficiency of its licensing operations. In accordance with the NRCs Strategic Plan, the agency must Enable the workforce to carry out the agencys mission by leveraging modern technology, innovation, and knowledge management to support data-driven decisions.
The workforce challenges being experienced by the NRC, coupled with the industrys new interest in license renewals, power uprates, fuel cycle extensions, plant modernization efforts and new nuclear, make efficiency the only viable pathway to NRC success. Safety will always come first but delivering safe nuclear power to support our nations decarbonization efforts and meet our energy needs will require a sharp focus on efficiency that appears to be lacking in this and previous budgets.
Proposed Policy to Include Non-Light Water Reactors The NRCs proposed policy to expand 10 CFR 171.15 to be technology-inclusive and create an additional minimum fee and variable rate for non-light water reactors (non-LWRs) reflects significant stakeholder outreach and input which we appreciate. It appears that much of the input from NEIs members was incorporated, particularly with respect to the use of a variable rate to scale between power levels and avoid step changes in fees. We expect that the proposed policy will be fairer and more equitable than the status quo for non-LWRs, but note that future adjustment, particularly for micro-reactors, may be necessary to avoid disproportionate impacts on such licensees and their customers. Micro-reactors will need to offset regulatory costs through revenues without placing undue burdens on customers. If the policy in the FY2023 proposed fee rule places undue economic burden on micro-reactors through annual fees that do not reflect
Ms. Brooke P. Clark March 31, 2023 Page 4 lower oversight costs due to their simplicity and very small radionuclide inventories, the policy should be revisited without delay.
Budget Trend Operating Plants Approximately 85% of the fee class budget for FY2023 is from the power reactor fee class. Over the past five years the Part 170 fee-for-service collections have decreased by 33%, meaning that the NRCs fee-for-service workload has decreased by roughly 39% 2. Yet, over this same period, the budget for operating reactors has decreased less than 1%. Consequently, a greater percentage of the operating budget is required to be recovered through annual fees. As shown in the Figure below, the percentage of the operating plant budget that is derived from annual fees (currently at 76.6%) continues to increase; up from 64% in FY 2018. This growing disparity between fee-for-service collections and overhead, combined with the increasing levels of carryover, point to a need to reevaluate the NRC budget and fee collection model.
Research and Test Reactors The FY2023 proposed fee rule outlines a 9.8% increase in annual fees for non-power production or utilization facilities (NPUFs). Historically, and justifiably, the annual fee for NPUFs has remained relatively stable, with fluctuations of around 1%. However, that stable trend was drastically reversed in FY22 when NPUFs received a 12.6% increase in annual fees (which was the largest increase among all fee classes for that fiscal year). NRC justified this increase primarily by the fact that the number of NPUF licensees subject to fees went from 4 to 3. We assumed the hike of FY2022 would allow for a stabilization in FY2023. Yet, for 2
Hourly rate in FY2023 of $300/hr compared to hourly rate in FY2018 of $275/hr
Ms. Brooke P. Clark March 31, 2023 Page 5 FY2023, the NRC is proposing another 9.8% annual fee increase, for which the basis is not clear. The NRCs statement in the FRN describes the NPUF increase due to the following:
Furthermore, the proposed annual fee is increasing as a result of an increase in the 10 CFR part 171 billing adjustment (moving from a credit to a surcharge) due to the timing of invoices issued in FY 2022.
Timing of invoices as the sole justification for a 9.8% increase seems inadequate. In addition, we urge the NRC to consider the unique role of these facilities, and how fee increases have a direct impact upon resources available for research and development. This role is outlined under the Atomic Energy Act, Section 104(c), and 10 CFR 50.41(b), which directs the Commission to regulate and license class 104(c) licensees in a manner that will permit the conduct of widespread and diverse research and development.
Fuel Cycle Facilities The FY2023 proposed fee rule describes an 18.5% annual fee increase for all operating fuel cycle facilities, except for the approximate 203% increase proposed for the uranium conversion plant which is expected to restart operations later this year. For background, the fuel cycle business line budget and annual fees decreased each of the prior four fiscal years (FY2019-2022) to more accurately reflect the reduced number of operating facilities, and corresponding reduction in workload. The budget decrease was the result of considerable public dialogue and information exchange between the industry and the NRC (FY2015-19); and we appreciated the NRCs efforts to right size the business line at that time. However, despite the number of operating facilities remaining steady at 8 in FY2023, NRC proposes a significant annual fee increase. This fact combined with a review of NRCs FY24 Congressional Budget Justification for this business line indicate an inflating budget trend (further increases of $4.5 million and 9 FTE) that is not based on quantitative workload data or effort factors and does not reflect the relatively low risk profile of the existing and predicted fuel cycle facility fleet.
Based on discussions during NRCs March 21, 2023, public meeting and review of the FRN, we have several concerns with this very unexpected outcome: 1) while the NRC states that increased salaries and benefits are the primary cause for annual fee increases across the agency, this generic factor is not yielding significant annual fee increases for any other business line; 2) the proposed annual fee for Category 1 fuel facilities is almost equal to (once again) that of operating nuclear power plants which cannot be justified from a risk perspective (e.g., public health and safety or common defense and security); 3) the effort factors for each licensee category remain qualitative and void of licensing and inspection data; and 4) equally important, the specific bases for the 18.5% annual fee increase articulated in the FRN is not adequate or clear. Specifically, the discussion on page 13364 identifies several contributing factors; almost all of which are licensing or inspection activities that would be billable under Part 170 (not Part 171) to specific applicants or licensees. Therefore, based on the FRN and public meeting, NRC licensees do not currently understand the basis for the proposed 18.5% annual fee increase. As entities who pay for the agencys services, the fuel cycle facility licensees deserve a further reevaluation and explanation by the NRC as to the basis for this increase prior to finalizing the FY2023 fee rule.
It is also important to consider, as is true with other licensees, facility or corporate budgets are finalized prior to the operating calendar year. Thus, funding an 18.5% FY2023 fee is not currently budgeted and can only be fulfilled by making potentially difficult resource decisions while maintaining operational safety and security. The impact of such NRC decisions on its licensees should not be casually dismissed.
Ms. Brooke P. Clark March 31, 2023 Page 6 Notification of Significant Changes in Advance of Final Rule Most licensees must estimate and budget their NRC fees well in advance of the proposed fee rule and typically use recent NRC fee history in making their estimates. The lack of directed carryover to offset current fiscal year funding is a significant departure from this recent fee history and is the cause of budget challenges for licensees. We strongly encourage the NRC to re-examine the remaining available carryover and use whatever discretion exists to reallocate this carryover to offset current year funding needs, consistent with past NRC budgets. Further, we also strongly encourage the NRC to use any means available to notify licensees of any substantial changes made during the crafting of the final rule, e.g., the use of carryover and the number of operating power reactors assumed. This would allow licensees additional time needed to realign their own budgets.
Please contact me if you have any questions regarding these comments.
Sincerely, Jennifer Uhle c: Mr. James Corbett, NRC/CFO Mr. Anthony Rossi, NRC/OCFO