ML23256A162

Incoming NEI Letter Dated August 1, 2023 Regarding Increase in Fees 2023-2025

ML23256A162
Person / Time
Site:	Nuclear Energy Institute
Issue date:	08/01/2023
From:	Schlueter J Nuclear Energy Institute
To:	John Lubinski Office of Nuclear Material Safety and Safeguards
References
Download: ML23256A162 (1)

Text

JANET R. SCHLUETER Sr. Advisor, Fuel and Radiation Safety 1201 F Street, NW, Suite 1100 Washington, DC 20004 P: 202.739.8098 jrs@nei.org nei.org August 1, 2023 John Lubinski Director Office of Nuclear Material Safety and Safeguards U.S. Nuclear Regulatory Commission Washington, DC 20555-0001

Subject:

Comments on NRC Fuel Cycle Business Line Budget and Fees for Fiscal Years 2023-2025 Project Number: 689

Dear Mr. Lubinski,

On behalf of the Nuclear Energy Institutes (NEI) 1 fuel cycle facility members, we provide the following comments for the U.S. Nuclear Regulatory Commissions (NRC) consideration as it proceeds to finalize the fiscal year (FY) 2025 Congressional Budget Justification (CBJ) and execute the current and FY 2024 fuel cycle business line budgets. Our comments highlight specific concerns from operating fuel cycle licensees and applicants and are intended to provide constructive input to help rectify the current untenable situation.

First, we commend NRCs efforts during FY 2016-2020 to reduce the Fuel Cycle Business Line budget based on the then dwindling number of operating facilities (from 11 to 7), and significant industry input regarding relative risk, operational performance, and other factors. This effort was complemented by NRCs Smarter Program initiative conducted during FY 2019-2020 where the NRC identified areas ripe for further NRC resource reallocation based on safety or security risk, inspection data, operational experience and other public, industry, and staff input.

In contrast, in FY 2023, operating fuel cycle licensees are now subject to an unexpected and, hence, unbudgeted annual fee increase of 19% 2 above FY 2022 levels. Such a significant fee increase is difficult to absorb within existing facility operating budgets which are often finalized approximately 6 to 9 months prior to January 1 of each calendar year. While we acknowledge that NRC is required by law to recover 90% of its Congressionally appropriated budget, the staff is challenged to develop accurate budget planning assumptions 18 months prior to commencement of the fiscal year. Further, the constrained budget 1

The Nuclear Energy Institute (NEI) is responsible for establishing unified policy on behalf of its members relating to matters affecting the nuclear energy industry, including the regulatory aspects of generic operational and technical issues. NEIs members include entities licensed to operate commercial nuclear power plants in the United States, nuclear plant designers, major architect and engineering firms, fuel cycle facilities, nuclear materials licensees, and other organizations involved in the nuclear energy industry.

2 The single uranium conversion facility is subject to an approximate 150% annual fee increase in FY23 due to its operational re-start.

John Lubinski August 1, 2023 Page 2 execution process is, once again, challenged by market realities, regulatory process unpredictability and other factors which result in unexpected and unfair fee increases for fuel cycle licensees. This very small yet diverse group of operating licensees are critical to the maintenance and growth of the domestic nuclear industry and, hence, would benefit greatly from a more stable and predictable NRC fee structure.

Further, as you are aware, NRCs business line budgets are composed of two elements. Specifically, billable hour fees charged for licensing, inspection, and oversight activities (10 CFR Part 170) and annual fees charged for generic regulatory activities such as rulemaking and guidance development (10 CFR Part 171).

If fees are not collected in one category, they must be collected in the other to ensure that NRC collects 90% of its appropriated budget. It seems logical to assume that based on NRCs comprehensive licensing, inspection, and oversight programs, the percentage of billable hours in any one fiscal year should be a relatively high percentage of the total fees collected (e.g., 50-65%), with the remaining portion (e.g., 35-50%) recovered from annual fees. However, NRCs own data shows otherwise. For example, during FY 2018-2022 the billable hour fee collections ranged from 21-36% of the total fees collected. Thus, annual fee collections were as high as 79% of the total fees collected. We would note that the tangible benefit to NRC and its licensees from this relatively high and wholly inappropriate annual fee program cost is not self-evident. Thus, we respectfully request that the NRC staff critically evaluate the historical and present-day distribution between Parts 170 and 171 collected fees and the use of effort factors unique to fuel cycle licensees. Such an evaluation would help ensure that NRC management measures are developed and implemented to avoid, whenever possible, unanticipated and significant annual fee increases such as those experienced by fuel cycle licenses in FY2023 and, potentially, in FY2024-2025.

In that regard, NRCs FY 2024 CBJ requested an additional $4.5M (including 9 full-time-equivalent staff) above FY 2023 levels for the fuel cycle business line. While we acknowledge and fully support domestic fuel industry growth, the NRC staff must ensure it applies increased rigor across the budget planning and execution process to ensure all resource increases are fully justified, managed efficiently and effectively, and reflect the regulatory activities of the current fleet. For example, in July 2023, one licensee informed the NRC staff that a major licensing action will be delayed by two years, impacting the FY 2024 and FY 2025 CBJs. This licensing case is a perfect example of how NRCs budget should be revised now to reflect these evolving market realities. The FY 2023 budget and FY 2024 CBJ raise legitimate industry concerns as we anticipate the FY 2025 CBJ for the fuel cycle business line. Hence, we share our concerns and trust this information further informs the budget development and execution processes.

Sincerely, Janet R. Schlueter c: Howard Osborne, CFO Catherine Haney, DEDMRS Brooke Clark, SECY Shana Helton, NMSS/DFM Anthony Masters, RII/DFFI