Appropriations for FY2001: Energy and Water Development

Congressional research reportNov 20, 2000

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CRS Report for Congress

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Appropriations for FY2001:

Energy and Water Development

Updated October 13, 2000

Coordinated by (name redacted) and Carl Behrens

Resources, Science, and Industry Division

Congressional Research Service ˜ The Library of Congress

Appropriations are one part of a complex federal budget process that includes budget

resolutions, appropriations (regular, supplemental, and continuing) bills, rescissions, and

budget reconciliation bills. The process begins with the President’s budget request and is

bounded by the rules of the House and Senate, the Congressional Budget and Impoundment

Control Act of 1974 (as amended), the Budget Enforcement Act of 1990, and current program

authorizations.

This report is a guide to one of the 13 regular appropriations bills that Congress passes each

year. It is designed to supplement the information provided by the House and Senate

Subcommittees on Energy and Water Development Appropriations. It summarizes the current

legislative status of the bill, its scope, major issues, funding levels, and related legislative

activity. The report lists the key CRS staff relevant to the issues covered and related CRS

products.

Updates of this report are prepared as soon as possible after major legislative developments,

especially following legislative action in the committees and on the floor of the House and

Senate.

NOTE: A Web version of this document with active links is available to

congressional staff at [http://www.loc.gov/crs/products/apppage.html]

Appropriations for FY2001: Energy and Water Development

Summary

The Energy and Water Development appropriations bill includes funding for civil

projects of the Army Corps of Engineers, the Department of the Interior’s Bureau of

Reclamation (BuRec), most of the Department of Energy (DOE), and a number of

independent agencies. The Administration requested $22.7 billion for these programs

for FY2001 compared with $21.2 billion appropriated in FY2000. The House Bill,

(H.R. 4733), passed on June 28, 2000, allocated $21.74 billion. The Senate passed

its version of the bill September 7, appropriating $22.5 billion. The conference bill,

reported September 27, appropriated a total of $23.3 billion. That bill was vetoed,

largely for non-fiscal reasons, and the Senate October 12 added a new version of the

conference bill to the VA/HUD appropriations measure, H.R. 4635.

Key issues involving Energy and Water Development appropriations programs

include:

! authorization of appropriations for major water/ecosystem restoration

initiatives for the Florida Everglades and California “Bay-Delta”;

! reform or review of Corps’ study procedures and agency management

practices;

! executive branch investigations or reviews of Corps study procedures and

agency management practices that could lead to congressional action,

depending upon what reviews reveal and when they are completed;

! spending for solar and renewable energy to address global climate change

issues;

! a pending decision by DOE on the electrometallurgical treatment of nuclear

spent fuel for storage and disposal, a process that opponents contend raises

nuclear proliferation concerns;

! implementation of the new National Nuclear Security Administration (NNSA);

! an expanded Threat Reduction Initiative aimed at ending Russia’s production

of plutonium that can be used to make nuclear weapons;

! DOE management of its Spallation Neutron Source Project (SNS);

! Nuclear Regulatory Commission's (NRC) plans to overhaul its regulatory

system for nuclear power plant safety, as urged by the House and Senate

Appropriations Committees.

Key Policy Staff

Area of Expertise

Name

CRS

Division

Corps/Bureau of Reclamation

Steve Hughes

Betsy Cody

RSI

7-....

7-7229

General

Carl Behrens

RSI

7-....

Nuclear Energy

(name redacted)

RSI

7-....

R&D Programs

Dick Rowberg

(name redacted)

RSI

7-....

7-7039

Nonproliferation

Carl Behrens

RSI

7-....

TVA & PMA’s

Rob Bamberger

RSI

7-....

Division abbreviation: RSI = Resources, Science, and Industry.

Telephone

Contents

Most Recent Developments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Status . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

Title I: Corps of Engineers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

Key Policy Issues — Corps of Engineers . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Title II: Department of the Interior . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Background on Reclamation Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Key Policy Issues — Bureau of Reclamation . . . . . . . . . . . . . . . . . . . . . . . 6

Title III: Department of Energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

Key Policy Issues — Department of Energy . . . . . . . . . . . . . . . . . . . . . . . 10

Renewable Energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

Nuclear Energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

Science . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

Nuclear Weapons Stewardship R&D . . . . . . . . . . . . . . . . . . . . . . . . 13

Nonproliferation and National Security Programs . . . . . . . . . . . . . . . 15

Environmental Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

Civilian Nuclear Waste . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

Power Marketing Administrations . . . . . . . . . . . . . . . . . . . . . . . . . . 19

Title IV: Independent Agencies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

Key Policy Issues — Independent Agencies . . . . . . . . . . . . . . . . . . . . . . 20

Tennessee Valley Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

Nuclear Regulatory Commission . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

For Additional Reading . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

List of Tables

Table 1. Status of Energy and Water Appropriations, FY2001 . . . . . . . . . . . . . 1

Table 2. Energy and Water Development Appropriations,

FY1994 to FY2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

Table 3. Energy and Water Development Appropriations

Title I: Corps of Engineers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Table 4. Energy and Water Development Appropriations

Title II: Central Utah Project Completion Account . . . . . . . . . . . . . . . . . . . 5

Table 5. Energy and Water Development Appropriations

Title II: Bureau of Reclamation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Table 6. Energy and Water Development Appropriations

Title III: Department of Energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

Table 7. Energy and Water Development Appropriations

Title IV: Independent Agencies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

Appropriations for FY2001:

Energy and Water Development

Most Recent Developments

A rare veto of the Energy and Water appropriations bill led to late-session

maneuvering for FY2001 funding. Floor consideration of H.R. 4733 (as reported

from the Senate Appropriations Committee) was delayed July 21, over a provision

(§103) prohibiting, under certain circumstances, the use of funds to revise the Corps’

Missouri River Master Water Control Manual. Before passing the bill on September

7 with a number of amendments, the Senate rejected an amendment to strike §103

by a vote of 45-52. (See below, p. 4, Title I.) The measure was included in the bill

reported by the conference September 27. It passed the House September 28, and,

despite a veto threat by President Clinton, passed by the Senate October 2 by a vote

of 57-37. The President vetoed the bill October 7, and the House voted 315-98 to

override the veto on October 11. On October 12, the Senate attached the Energy

and Water conference bill, minus §103 and with a few other water provisions, to

H.R. 4635, the appropriations bill for Veterans Affairs and Housing and Urban

Development, and then passed that bill by a vote of 87-8.

Included in the version reported out by the House Appropriations Committee

was a provision extending for one year the President's authority to sell oil from the

Strategic Petroleum Reserve. In passing H.R. 4733 on June 27, the House agreed

to an amendment by Representative Sherwood extending the authorization to 3 years,

authorizing the Department of Energy to buy oil from small or marginal wells when

oil prices fall below $15 per barrel, and authorizing establishment of a new regional

home heating oil reserve in the Northeast. These measures were not included in the

conference bill passed by the House September 28, but the initiatives are still being

actively pursued via other legislative vehicles. For details see CRS Issue Brief

IB87050, The Strategic Petroleum Reserve.

Status

Table 1. Status of Energy and Water Appropriations, FY2001

Subcommittee

Markup

House

Report

House

Passage

Senate

Report

Senate

Passage

Conf.

Report

Senate

6/12/00 7/13/00

6/20/00

8/30/00

6/28/00

H.Rept.

S.Rept.

H.R. 4733

106-693

106-395

9/7/00

9/27/00

H.Rept.

106-907

Conference Report

Approval

House

Senate

9/28/00*

10/2/00

Public

Law

CRS-2

*H.R. 4733 was vetoed October 7. The House voted 315-98 October 11 to override the veto, but the Senate

attached the conference bill, minus the provision provoking the veto, to H.R. 4635, funding VA/HUD, and

passed that bill October 12.

Overview

The Energy and Water Development appropriations bill includes funding for civil

projects of the Army Corps of Engineers, the Department of the Interior’s Bureau of

Reclamation (BuRec), most of the Department of Energy (DOE), and a number of

independent agencies, including the Nuclear Regulatory Commission (NRC) and the

Appalachian Regional Commission (ARC). The Administration requested $22.7

billion for these programs for FY2001, compared with $21.2 billion appropriated for

FY2000.

For the Corps of Engineers, the Administration had sought $4.06 billion in

FY2001, about $78 million less than the amount appropriated for FY2000. The

Administration requested $841 million for FY2001 for the Bureau of Reclamation -an increase of $32.3 million. DOE programs would rise about 8% to $18.1 billion.

The major activities in the DOE budget are energy research and development, general

science, environmental cleanup, and nuclear weapons programs. An additional $865

million of DOE’s FY2001 net appropriations request (for fossil fuels programs,

energy efficiency, and energy statistics) is included in the Interior and Related

Agencies appropriations bill.

Table 2. Energy and Water Development Appropriations,

FY1994 to FY2001

(budget authority in billions of current dollars)*

FY94

FY95

FY96

FY97

FY98

FY99

FY00

FY01

22.3

20.7

19.3

20.0

21.2

22.7

*These figures represent current dollars, exclude permanent budget authorities, and reflect

rescissions.

Table 2 includes FY2001 budget request figures and budget totals for energy and

water appropriations enacted for FY1994 to FY2000. Tables 3-7 provide budget

details for Title I (Corps of Engineers), Title II (Department of the Interior), Title III

(Department of Energy) and Title IV (independent agencies) for FY2000 - FY2001.

Title I: Corps of Engineers

The Senate on October 12 attached the Energy and Water conference bill, with

some modifications, to H.R. 4635, the VA/HUD appropriations bill. This latest

version of the bill includes approximately $4.5 billion for the civil projects of the U.S.

Army Corps of Engineers (Corps) for FY2001 – approximately $481 million more

than requested by the Administration and approximately $403 more than enacted for

FY2000. The Administration requested $4.06 billion for FY2001, slightly less (2%)

than the $4.14 billion enacted for FY2000. The House-passed bill included $4.12

CRS-3

billion; the Senate-passed version included $4.11 billion; the earlier conference version

had included $4.52 billion.

Table 3. Energy and Water Development Appropriations

Title I: Corps of Engineers

(in millions of dollars)

FY2001

Request

H.R. 4733

Senate

Bill

Conf.

Bill

162.0

137.7

153.3

139.2

161.0

1,400.7

1,346.0

1,378.4

1,361.5

1,717.2

Flood Control,

Mississippi River

309.4

309.0

323.4

334.5

347.7

Operation and

Maintenance

1,853.6

1,854.0

1,862.5

1,902.0

Regulatory

117.0

125.0

120.0

125.0

General

Expenses

149.5

152.0

149.5

152.0

FUSRAP

150.0

140.0

4,142.2

4,063.7

4,123.6

4,109.7

4,544.9

Program

Investigations &

Planning

Construction

Total

2000

Key Policy Issues — Corps of Engineers

Funding for Corps of Engineers civil programs is often a contentious issue

between the White House and the Congress, with final appropriations bills typically

providing more funding than requested. For FY1998, for example, the Congress

added $270 million (7%) to the $3.63 billion requested by the Administration.

Similarly, the FY1999 bill as passed included a total of $3.86 billion for the Corps,

$638 million more (20%) than requested, and for FY2000, Congress provided

approximately $250 million more (6%) than requested. The FY2001 conference

report for FY2001 (H.R. 4733) included nearly $460 million more (11.3%) than

requested. The latest version includes approximately $481 million more than

requested.

Corps Management Reforms. The House Appropriations Committee noted

in report language concerns about the Corps’ project review process and indicated its

desire for a more streamlined process. The Committee also mentioned recent

allegations that agency officials have improperly manipulated a study of navigation

improvements on the upper Mississippi River and Illinois Waterway; however, the

Committee noted that because these allegations are still under investigation, it is

recommending no specific action to address the alleged behavior. On a related

CRS-4

matter, the Committee addressed accusations of the Corps’ efforts toward

“improperly trying to ‘grow’ its Civil Works program.” It noted that while pressure

on planners and engineers to “inappropriately justify projects” is clearly unacceptable,

it viewed it the “proper role of the Chief of Engineers to advise the Administration,

the Congress, and the Nation of the level of investment in water resources

infrastructure ... needed to support the economy and improve the quality of life for

our citizens.” The Senate Appropriations Committee report also noted criticisms of

the Corps’ operations and the Committee’s dissatisfaction with the Administration’s

proposed management reforms. While the Committee initially did not include

language prohibiting such reforms, it put the Administration on notice that it would

continue to “assess the need for such language as the process moves forward.” No

mention of such language was included in the conference bill or the statement of

conference managers. Language was included, however, in the Senate-passed Water

Resources Development Act for 2000, which would direct the Corps to contract with

the National Academy of Sciences to study the feasibility of establishing an

independent review panel for Corps project studies (H.R. 2796, Section 220).

Missouri River Water Flows. The latest version of the Energy and Water

Development appropriations bill deletes Section 103 of the conference bill. Section

103 would have prohibited, under certain circumstances, the use of funds to revise the

Corps’ Missouri River Master Water Control Manual. The Administration has said

it would veto the bill if such language remained. Floor consideration of H.R. 4733

stalled in the Senate on July 21 over the language, and a Senate amendment to strike

the provision was defeated 45-52 during floor consideration September 7.

The issue involves the controversial subject of how to operate mainstem dams

along the Missouri River, given the diverse statutes potentially affecting the Corps’

river management activities. Upper basin states generally contend that the current

master manual, which has been under review for many years, does not reflect changes

in demand along the river. This is especially true, they argue, of increased demand for

water and water releases to meet fish and wildlife and recreational uses, particularly

water to support the pallid sturgeon, and other threatened and endangered species.

Downstream states generally fear that changes in the operations manual to

accommodate upstream concerns may result in an inadequate supply of water to meet

full season navigational uses. Downstream states have also noted fears of increased

flooding below Gavins Point dam if higher water releases are made in the spring

months.

CRS-5

Title II: Department of the Interior

For the Department of the Interior, the Energy and Water Development bill

provides funding for the Bureau of Reclamation (BuRec) and the Central Utah Project

Completion Account. The conference agreement includes $39.9 million for the

Central Utah Project Completion Account, the same as enacted for FY2000. The

conference agreement also includes $776.4 million for BuRec for FY2001, which is

approximately $10 million more than enacted for FY2000.

Table 4. Energy and Water Development Appropriations

Title II: Central Utah Project Completion Account

(in millions of dollars)

FY2000

FY2001

Request

Central Utah project

construction and

oversight

23.9

20.8

Mitigation and

conservation activities*

15.5

19.1

Program

H.R.

4733

Sen. Bill

Conf.

Rpt.

Total, Central Utah

39.4

39.9

Project

* Includes funds available for Utah Reclamation Mitigation and Conservation Commission

activities and $5 million for the contribution authorized by §402(b)(2) of the Central Utah

Project Completion Act (P.L. 102-575).

Table 5. Energy and Water Development Appropriations

Title II: Bureau of Reclamation

(in millions of dollars)

FY2001

Request*

H.R.

4733

Sen.

Bill

Conf.

Rpt.

606.01

643.0

635.8

655.2

678.45

California Bay-Delta

(CALFED)

60.0

Loan program account

11.6

9.4

9.37

Program

Water and related resources

FY2000

Does not include $980,000 transferred from the U.S. Geological Survey to the Bureau of

Reclamation for support of the Department of the Interior National Business Center.

CRS-6

Program

FY2000

FY2001

Request*

H.R.

4733

Sen.

Bill

Conf.

Rpt.

Policy & Admin.

47.02

50.2

47.0

50.2

50.22

Central Valley Project

(CVP) Restoration Fund

42.0

38.4

38.38

Gross Current Authority

766.6

801.0

730.6 752.7 776.42

* Does not reflect appropriations derived from transfer of $25.8 million from the Working

Capital Fund, but does include $1.5 million in supplemental appropriations (P.L. 106-31).

Background on Reclamation Policy

Most of the large dams and water diversion structures in the West were built by,

or with the assistance of, the Bureau of Reclamation (Bureau). Whereas the Corps

built hundreds of flood control and navigation projects, the Bureau’s mission was to

develop water supplies and to reclaim arid lands in the West, primarily for irrigation.

Today, the Bureau manages more than 600 dams in 17 western states, providing

water to approximately 10 million acres of farmland and 31 million people.

The Bureau has undergone many changes in the last 15 years, turning from

largely a dam construction agency to a self-described water resource management

agency. The agency describes the “intent” of its programs and projects as follows:

! to operate and maintain all facilities in a safe, efficient, economical, and reliable

manner;

! to sustain the health and integrity of ecosystems while addressing the water

demands of a growing west; and

! to assist states, tribal governments, and local communities in solving

contemporary and future water and related resource problems in an

environmentally, socially, and fiscally sound manner.

In practice, however, the agency is limited in how it can address new demands

and new priorities because of numerous federal, state and local statutes, compacts,

and existing contracts, which together govern the delivery of water to project users.

Consequently, any proposal to change Bureau water allocation or water management

policies often becomes difficult to implement and extremely controversial.

Key Policy Issues — Bureau of Reclamation

The conference agreement for H.R. 4733 includes $776.42 million for FY2001

for the Bureau of Reclamation, which is approximately $10 million more than enacted

for FY2000. Funding for the Bureau was not affected by modifications to the

conference bill as included in H.R. 4635. The House-passed bill included

Does not include $424,000 transferred from the U.S. Geological Survey.

CRS-7

approximately $730 million for the Bureau of Reclamation for FY2001; the Senatepassed version included $752.7. The Administration requested an appropriation of

approximately $801.03 million – approximately $33 million more than enacted for

FY2000.

Both the House and Senate Appropriations Committees stated they would not

fund the Administration’s request of $60 million for the California Bay-Delta

Restoration Program (Bay-Delta, or CALFED), the same amount as was enacted for

FY2000, until the program received an authorization for such appropriations.

(Funding for Bay-Delta is requested in the Bureau’s budget, but the appropriation

would be allocated among several federal agencies.) A proposal to include $20

million in CALFED funding for FY2001 was dropped in conference, as was a

proposal to adopt authorizing language similar to that recently reported from the

House Resources Committee (H.R. 5130). The Administration submitted language

to extend the Bay-Delta appropriations authorization through FY2003, for an

additional total of $429.9 million (averaging $143.3 million per year, but not

requested by year). The FY2001 request of $60 million for Bay-Delta activities

included $30 million for ecosystem restoration activities, $5 million (maximum) for

planning and management, and $24 million for “other activities.”

The FY2001 request also includes $71.8 million for Dam Safety Program

activities ($1.7 million of which is for the Department of the Interior Dam Safety

Program). The Administration has also submitted language to increase the

appropriations ceiling under the Safety of Dams Act. The agency notes that a

sufficient appropriations ceiling exists for the FY2001 request; however, without an

increase in the ceiling “outyear commitments created ... in FY2001 will be managed

to remain within the existing ceiling.” It appears that actual work on high priority

dams (dam modifications) is made under the Initiate Safety of Dams Corrective

Action program (ISCA), which, unlike dam safety evaluations, is subject to the

appropriations ceiling.

CRS-8

Title III: Department of Energy

The Energy and Water Development bill includes all but $865 million of DOE’s

$18.94 billion FY2001 net appropriations request. Major DOE activities in the bill

include research and development on renewable energy and nuclear power, general

science, environmental cleanup, and nuclear weapons programs. The Administration’s

FY2001 request would boost DOE programs in the bill by about 8% to $18.1 billion.

The House approved $17.3 billion for DOE programs. The Senate bill contains

$17.95 billion. The remainder of DOE’s FY2001 budget request — for fossil fuels

programs, energy efficiency, and energy statistics — is included in the Interior and

Related Agencies appropriations bill.

Table 6. Energy and Water Development Appropriations

Title III: Department of Energy

(in millions of dollars)

Program

FY2000

FY2001

Request

H.R. 4733

Senate

Bill

Conf.

Energy Supply R&D

Solar and Renewable

362.2

454.8

390.5

441.1

422.1

Nuclear Energy

288.7

288.3

231.8

262.0

259.9

Fusion Energy (see General Science, below)

Other

48.6

49.0

41.3

46.8

44.6

Subtotal

699.5

792.1

665.9

753.0

726.7

Adjustments

(60.4)

(61.4)

(49.4)

(61.4)

(66.0)

Subtotal

639.1

730.7

616.5

691.5

660.6

249.2

294.6

297.8

Uranium Enrichment

Decontamination

&Decommissioning

Uranium Facilities

Maintenance and

Remediation (new account)

301.4

393.4

General Science

High Energy Physics

699.0

709.3

714.7

677.0

726.1

Nuclear Physics

349.0

365.1

369.9

350.3

369.9

Basic Energy

Sciences

774.0

1,003.9

791.0

914.6

1,013.4

Bio. & Env. R&D

456.0

438.4

404.0

444.0

500.3

Fusion

245.0

243.9

255.0

227.3

255.0

CRS-9

Program

FY2000

FY2001

Request

H.R. 4733

Senate

Bill

Conf.

Advanced Sci Computing

132.0

179.8

137.0

140.0

170.0

Other

133.4

178.3

164.3

167.6

223.9

(13.6)

(50.7

(72.3)

2,800.8

3,162.6

2,830.9

2,870.1

3,186.3

333.6

282.8

281.0

309.1

277.8

Defense Environmental Restoration and Waste Management

4,484.3

4,562.1

4,522.7

4,635.8

4974.5

Defense Facilities Closure

Projects

1,064.5

1,082.7

Environmental Restoration

Privatization

188.3

515.0

259.0

324.0

65.0

National Security (Weapons)

4,443.9

4,594.0

4,579.7

4,883.3

5,015.2

Nuclear Nonproliferation

729.1

865.6

861.5

909.0

874.2

Naval Reactors

677.6

673.1

677.6

694.6

690.2

Other National Security

1,722.4

575.6

592.2

579.5

585.8

Departmental Admin. (net)

99.5

85.6

42.5

81.4

78.1

Office of Inspector General

29.5

33.0

31.5

29.0

31.5

(309.5)

(331.2)

Southeastern

(prior year balance for

FY2000)

39.6

3.9

Southwestern

28.8

28.1

28.3

Western

193.4

164.9

160.9

164.9

165.8

Colorado River Basin (net)

Falcon & Armistad O&M

1.3

2.67

FERC

(revenues)

175.0

(175.0)

175.2

(175.2)

175.2

(175.2)

175.5

(175.5)

175.2

(175.2)

Nuclear Waste

352.5

437.5

413.0

351.2

391.1

Total, Title III

16,670.5

18,064.7

17,293.4

17,950.0

18,341.8

Adjustments

Subtotal

Environ. Res. & Waste

Mgmt., non-defense

Power Marketing Admin.

Alaska

Bonneville

(non-add, capital obligations)

CRS-10

Key Policy Issues — Department of Energy

Renewable Energy. “The solar and renewable energy program is a major

component of the Administration’s activities to address global climate change,”

according to the Appendix to the U.S. Government’s FY2001 Budget (p. 403). In

accordance with that policy, DOE proposed to boost solar and renewables funding

to $454.8 million (net, including $47.1 million for programs under the Office of

Science) — an increase of $92.6 million (26%) over the FY2000 level. This includes

$407.8 million for DOE’s Office of Energy Efficiency and Renewable Energy

(EERE), an increase of $92.6 million, and $47.1 million for the Office of Science,

which is the same as for FY2000. The EERE amount includes $29.9 million more for

biofuels, $17.1 million more for wind, $14.5 million more for photovoltaics, $9.5

million more for electric and storage programs, and $7.5 million more for international

renewable energy programs.

For Biofuels, DOE proposes an Integrated Bioenergy Technology Research and

Technology Initiative, prompted by President Clinton’s Executive Order 13134,

Developing and Promoting Biobased Products and Bioenergy, and ethanol

production from agricultural and forestry residues.

Wind initiatives would accelerate deployment, address regional barriers, and

enhance wind energy use in developing countries. Photovoltaic initiatives support

cost reductions, “Million Solar Roofs,” and private sector “clean energy” projects and

national action plans in developing countries. Electric/Storage initiatives focus on

power system security and reliability, power electronics technology, and distributed

power systems.

The House Appropriations Committee recommended $352.8 million (including

$47.1 million for programs under the Office of Science) for the DOE Renewable

Energy Program.

However, voice vote approval of the

Salmon/Udall/Boehlert/Kaptur amendment (H.Amdt.920, A006) added $37.7 million,

bringing the House-passed total to $390.5 million. In contrast, the Senate approved

$444.1 million (including $47.1 million for programs under the Office of Science) for

the DOE Renewable Energy Program. Seven Senate floor amendments created

earmarks for various renewable energy programs, but none of the amendments

modified the level of appropriations.

Relative to the FY2000 appropriation, the conference level of $422.1 million

(including $47.1 million for programs under the Office of Science) would provide an

increase of $59.9 million, or 17%, in current dollar terms. This includes $13.6 million

more for Electric/Storage, $8.8 million more for Photovoltaics, $7.5 million more for

Biofuels-Power, $7.0 million more for Wind, $6.7 million more for BiofuelsTransportation, and $3.0 million more for Geothermal.

However, relative to the request, the conference level would provide $32.8

million (7%) less for the Renewable Energy Program. This includes $10.1 million less

for Wind, $8.0 million less for Biofuels-Transportation, $7.8 million less for BiofuelsPower, $6.5 million less for International Renewables, $5.7 million less for

Photovoltaics, and $3.0 million less for Departmental Energy Management programs.

CRS-11

Nuclear Energy. For nuclear energy programs — including reactor research

and development, space power systems, and closing of surplus facilities — the

Conference Committee approved $259.9 million for FY2001. This amount is about

$30 million below the Administration budget request, but the conferees transferred

$53.4 million of the request for uranium management programs into a new Uranium

Facilities Maintenance and Remediation account and added $9 million more for

treatment of depleted uranium stockpiles. The Senate version of H.R. 4733 had $262

million for nuclear energy, plus $62.4 million for the uranium management programs.

The House had approved $231.8 million, plus $53.4 million for uranium management.

The conferees approved the Administration’s $35 million request for a program

to support innovative nuclear energy research projects, the “nuclear energy research

initiative” (NERI). The House had voted to leave NERI at the FY2000 funding level

of $22.5 million, while the Senate had approved $41.5 million. The conferees

provided an additional $7.5 million for a separate program on nuclear energy

technologies, which the Senate had proposed to include in NERI. Of that amount,

$4.5 million is to be spent on a “road map for the commercial deployment of a nextgeneration power reactor;” $1 million is earmarked to analyze potential improvements

in advanced versions of today’s commercial light water reactors; $1 million is for

initiatives supporting an advanced gas-cooled reactor; and the final $1 million is for

a feasibility study for deploying small modular reactors.

The conferees went along with the House and the Senate in supporting the

Administration’s full request of $5 million — nearly the same as the FY2000

appropriation — for “nuclear energy plant optimization” (NEPO), a research program

to improve the economic competitiveness of existing nuclear power plants. The

conferees specified that non-federal partners share at least half the costs of NEPO

projects.

Funding for NEPO is part of the Administration’s Climate Change Technology

Initiative. To be matched by industry, the NEPO funding would focus on research to

extend the operating lives of existing reactors and to allow them to operate more

efficiently and reliably. The program’s goal is to increase the average production of

U.S. nuclear plants to 85% of full capacity by 2010; the capacity utilization

percentage of U.S. reactors generally averages in the mid-70s, although it was close

to 85% in 1999.

Because nuclear plants directly emit no carbon dioxide, greater production of

nuclear power from existing reactors could help the United States reduce its total

“greenhouse gas” emissions. “Nuclear energy is the only proven large-scale power

source that has unlimited potential to provide clean and reliable electricity into the

next century,” according to the DOE budget justification. However, opponents have

criticized DOE’s nuclear energy research programs as providing wasteful subsidies

to a failing industry.

Controversy has also been generated by the “electrometallurgical treatment” of

DOE spent fuel, a process in which metal fuel is melted and highly radioactive

isotopes are electrochemically separated from uranium and plutonium. DOE contends

that such treatment may be the best way to render sodium-bonded spent fuel —

particularly from the closed Experimental Breeder Reactor II in Idaho — safe for

CRS-12

long-term storage and disposal. DOE received $40 million in FY1999 to complete

a demonstration program for the technology. After the National Research Council

issues a report on the technology in 2000, DOE will determine whether to use the

process to prepare sodium-bonded spent fuel for disposal. Continued research on

sodium-bonded fuel treatment received $18 million for FY2000, and DOE requested

$15 million for FY2001. The conferees approved the Administration budget request

within a restructured funding category of $34.9 million for nuclear facilities

management. House Appropriations Committee report language requires DOE to

submit a report by March 2001 on the types of waste that the process would produce.

Opponents of electrometallurgical treatment contend that it is unnecessary and

that the process could be used for separating plutonium to make nuclear weapons.

They note that the process uses much of the same technology and equipment

developed for the plutonium-fueled Integral Fast Reactor, or Advanced Liquid Metal

Reactor, which was canceled by Congress in 1993 partly because of concerns about

nuclear weapons proliferation.

The conference agreement would establish a new DOE program called Advanced

Accelerator Applications, which includes $3 million for research on accelerator

transmutation of waste (ATW) at the University of Nevada-Las Vegas. ATW would

use powerful particle accelerators to transmute long-lived elements in radioactive

waste into shorter-lived elements for safer disposal. DOE issued a “roadmap” for the

ATW program November 1, 1999, concluding that a six-year R&D program costing

$281 million would be needed to support future technology decisions for deploying

such a system. No FY2001 funding was requested or provided by the House for

ATW, but DOE proposed to use some of the $9 million appropriated for FY2000 to

continue studies of the technology during FY2001. The Senate had earmarked $5

million for ATW studies in Nevada under the new Advanced Accelerator Applications

program.

The conferees approved DOE’s $44 million request for the Fast Flux Test

Facility (FFTF) at Hanford, Washington, a boost of about $5 million from the budget

request and $16 million above the FY2000 level. The House had voted to provide

$39 million, and the Senate had approved $44 million. FFTF, a sodium-cooled

research reactor originally designed to support the commercial breeder reactor

program, has not operated since 1992 and is being maintained in standby condition.

DOE intends to decide in FY2001 whether to restart the reactor for nuclear research

and medical isotope production or permanently shut it down. DOE contended that

a funding increase would be needed in FY2001 to begin implementing the decision.

Science. DOE’s science programs consist of a wide variety of basic research

activities concentrated in the physical, biological, and computer sciences, and

mathematics. These programs include high-energy physics, nuclear physics, basic

energy sciences (BES), biological and environmental research (BER), fusion energy

sciences, and advanced scientific computing. For the DOE science programs, the

FY2001 request was 12.1% above FY2000. The House approved $2.757 billion for

these programs, 10.1% below the request, while the Senate appropriated $2.842

billion, 5.4% below the request. Funds were restored in conference, however, with

the conferees agreeing to $3.186 billion, 0.75% above the request.

CRS-13

About two-thirds of the requested increase was concentrated in three areas.

First, DOE requested an increase of $162 million in construction funding for the

Spallation Neutron Source (SNS) project. The House, citing “severe funding

constraints,” appropriated level funding for the project of $100 million. The Senate,

however, approved $221 million for construction, touting the importance of the

project for advancing science and technology. Again, conference action restored

funds providing $259.5 million, $2.4 million below the request.

DOE also requested a $49 million increase for civilian information technology

(IT) research. The latter focuses on development and application of high performance

computing for scientific applications. The House, again citing funding limitations,

approved only $5 million of the requested increase. The Senate approved funding

about $20 million of the requested increase although much of that would come by

shifting funds from other programs. The conferees provided nearly all of the

requested funding, although a specific amount was not given.

The third major program request by DOE was an additional $36 million for

nanoscience and nanotechnology research within BES. The House made no mention

of this initiative, although its appropriation for the BES program not including the

SNS was $62.9 million below the request. The Senate expressed strong support for

the initiative but provided only about 56% of BES funding requested for it. Funds

were restored in conference with the conferees providing the full request.

The House’s appropriation for the BER program was 8.8% below the request.

Again, funding constraints were cited although the House argued that the

appropriation was in line with previous years when new projects started in FY2000

were removed. The Senate approved funding the program at 0.3% below the

request. The conferees provided $500.3 million for this program, 14.1% above the

request. Much of the increase is for projects specifically identified by Congress.

The House approved funding the High Energy and Nuclear Physics programs at

their requested level. It did note, however, that it was not anxious to fund design

work for large new accelerators in a period of limited funds. The Senate’s

appropriation for these two programs was about 5.3% below the request. The Senate

cited “severe budget constraints” as the reason. Funding was restored by the

conferees recommended a final total 2.0% above the original request.

The House also approved an increase of $7.5 million above the request for the

Fusion Energy Sciences program, which would be a slight increase over the FY2000

level. The Senate, again citing budget constraints, approved funding fusion research

at 8.1% below the request. Conferees adopted the House mark.

Nuclear Weapons Stewardship R&D. This activity is aimed at developing the

science and technology to maintain the nation's nuclear weapons stockpile in the

absence of nuclear testing. Principal activities are the development of computational

capabilities that can simulate weapons explosions and perform other important

computations, and experimental facilities to simulate and test various aspects of

weapons behavior without resorting to a full scale explosion. For the last four years,

nuclear weapons stewardship R&D was called stockpile stewardship. This year, as

DOE’s defense programs were absorbed by the newly created National Nuclear

CRS-14

Security Administration (NNSA), DOE reorganized the activity, eliminating both the

stockpile stewardship and maintenance designations, and creating four new programs:

directed stockpile work, campaigns, readiness in technical base and facilities, and

construction. Weapons R&D falls across all four programs.

For FY2001, DOE requested a 3.0% increase for weapons R&D. The House

approved a slight increase of 0.2% above the request. The House also directed DOE

to consolidate its inertial confinement fusion and defense modeling and computing

activities within the campaigns program, and approved a transfer of funds from the

readiness in technical base and facilities program to campaigns to this effect. The

Senate approved a 4.9% increase above the request for weapons R&D. It is

concerned about the slow pace of the stockpile stewardship program and believes that

significantly more funding is needed if it is to meet its goals. The conferees approved

$2.454 billion for weapons R&D, 12.5% above the request. Nearly all of the increase

above the Senate-approved amount was assigned to the NIF project (see below).

The national security budget for FY2001 was prepared for the first time under

the rubric of the NNSA, the new organization created by Congress (P.L. 106-65,

H.Rept. 106-301) to manage most of DOE’s defense activities in the wake of security

concerns uncovered in 1998. Implementation of the NNSA has been quite

controversial, and several in Congress have expressed displeasure about the way DOE

is undertaking this task. The House noted that it has been citing DOE management

problems for some time and expressed its desire that the new director of the NNSA

take the opportunity afforded by the reorganization to make major changes in the

current DOE management structure. The Senate expressed hope that NNSA can

resolve the serious concerns the Senate has with the current stockpile stewardship

program. The conferees expressed their support of efforts to staff the NNSA and

agreed that such actions should not be affected by a change in administration.

A major problem that has emerged is the large cost overrun on the National

Ignition Facility (NIF). Currently, DOE estimates the total project cost to be about

$3.26 billion compared to the original estimate of $2.03 billion. GAO estimates the

cost to be $3.9 billion. The overrun is due primarily to significant management and

technical problems that emerged during NIF construction.3 DOE has not amended

its FY2001 budget request for NIF, which was $74 million for construction plus about

$85 million in related costs. With the FY2000 appropriations, Congress had directed

DOE to provide a new cost baseline by June 1, 2000, or provide an estimate of

termination costs. DOE has only provided an estimate of the new baseline and will

not have a firm number until September. The House noted DOE’s failure to meet the

deadline, and stated that it would reserve judgment about the NIF project until

September. In the meantime it approved funding the original DOE request for NIF

for FY2001.

The Senate bill included an amendment that would cap funding for NIF at $74.1

million until the results of a study by the National Academy of Sciences on the project

was delivered. The study was to be completed by September 1, 2001, and would,

Congressional Research Service, The National Ignition Facility: Management, Technical,

and Other Issues, by Richard Rowberg, CRS Report RL30540, updated May 16, 2000.

CRS-15

among other things, examine the contribution of NIF to the Stockpile Stewardship

program (SSP) and determine whether existing technical problems are likely to add

to the project’s cost and whether a smaller version of NIF would suffice.

In conference, the funding of $199 million for NIF for FY2001 was agreed to.

Of this amount, $65 million would come from funds transferred from other weapons

programs and $134.1 million would be in new appropriations. The final

appropriations bill limits the amount available to DOE for NIF to $130 million at the

start of FY2001, releasing the remaining funds after March 31, 2001 and only after

certification by the NNSA that several conditions have been met. These conditions

include, among other things, a review of alternative construction options; certification

that project milestones, schedule and costs are being met; completion of a study on

whether a full-scale NIF is needed to meet the goals of the SSP; and a five-year plan

for the SSP that describes how NIF is to be paid for in the out years.

Another issue raised by the House concerned the amount and use of Laboratory

Directed Research and Development (LDRD) funds. For FY2000, the Congress had

reduced the LDRD funding level to 4% of funds appropriated for labs from 6%. DOE

requested restoring the level to 6% for FY2001, but the House retained that 4% level

and further directed DOE to submit a specific request for these funds within each

program in future budget submissions. In an amendment adopted on the floor, the

Senate approved a level of 8% and included funds from the Environmental

Management programs. The conferees adopted a level of 6% for LDRD for the

laboratories and 2% for the weapons production plants. The House requirement that

DOE produce a financial accounting report of these funds was also adopted.

Nonproliferation and National Security Programs. DOE’s nonproliferation

and national security programs provide technical capabilities to support U.S. efforts

to prevent, detect, and counter the spread of nuclear weapons worldwide. Also

included are Cooperative Threat Reduction programs to reduce nuclear, chemical, and

biological weapon dangers in Russia and other countries of the former Soviet Union,

and arms control treaty verification programs. Some intelligence programs are also

included. These nonproliferation and national security programs are to be included

in the newly established National Nuclear Security Administration (NNSA).

The Administration’s FY2001 request for these programs was $682 million, an

increase of $135 million from the FY2000 request. Congress appropriated $547

million for FY2000 and nearly $580 million for FY1999. The House approved $861

million for DOE nuclear nonproliferation programs in the Energy and Water

appropriations bill for FY2001. Part of the increase is due to the Committee’s

inclusion of the U.S.- Russia fissile material disposition program and other Russia

programs with the nonproliferation programs. The Administration had proposed

separate funding.

The FY2001 request for nonproliferation and national security programs includes

$100 million for a new long-term nonproliferation program with Russia. The new

program, part of the Administration’s Expanded Threat Reduction Initiative, is the

result of several years of negotiations aimed at ending Russia’s continuing production

of plutonium that can be used to make nuclear weapons. The funds would be used

to store Russian nuclear waste instead of reprocessing it to recover plutonium, and

CRS-16

to accelerate efforts to improve the safety and security of nuclear materials in Russia.

The House approved $48.5 million for these programs, but funded them separately

instead of as a distinct new program.

Not included in the Administration’s nonproliferation and national security

budget request was a separate FY2001 budget request for $223 million to dispose of

excess U.S. and Russian nuclear weapons materials, an increase of about $21 million

over the FY2000 appropriation for fissile material disposition. The United States and

Russia have each declared 50 tons of former weapons materials to be excess and

removed from military stockpiles. Many tons of additional materials are expected to

be added to these amounts. DOE’s fissile material disposition program is aimed at

disposing of the excess material to make sure that it is not reused to make nuclear

weapons. The House included $241 million for U.S. and Russian fissile material

disposition in its Energy and Water appropriations for FY2001, but not as a separate

budget item from the nonproliferation account.

Environmental Management. DOE’s Environmental Management Program

(EM) is responsible for cleaning up environmental contamination and disposing of

radioactive waste at DOE nuclear sites. The FY2001 conference level for the

program is $6.4 billion, nearly the full request, excluding the Uranium Enrichment

Decontamination and Decommissioning Fund. The House had voted a $300 million

reduction from the budget request, and the Senate had cut about $100 million.

The conference agreement cuts all but $65 million of the $539 million request

for the “privatization” of major DOE waste management projects, primarily a project

to solidify high-level radioactive waste at Hanford, Washington. Because DOE

decided in spring 2000 that the Hanford project would not be “privatized” after all,

the conferees transferred $377 million from the privatization account to the Office of

River Protection at Hanford, where the waste solidification effort will be managed

under a more routine DOE contract. The conferees also approved a rescission of $97

million that had previously been appropriated to the contract.

The FY2001 EM budget request is based on the program’s accelerated cleanup

strategy, which attempts to maximize the number of sites that can be completely

cleaned up by the end of FY2006. DOE managers contend that substantial long-term

savings can be gained by focusing on completing work at those sites, allowing the

earliest possible termination of infrastructure costs. Major sites scheduled for

shutdown during that period are included in the “defense facilities closure projects”

account, for which $1.1 billion is included in the conference agreement, the same as

the Administration request. The largest facilities under that account are the Rocky

Flats site in Colorado and the Fernald site in Ohio. Another $981.5 million is

provided for “site/project completion,” about $65 million above the request, for

cleanup activities to be finished by 2006 at DOE sites that will remain in operation.

Despite the 2006 cleanup goal, the bulk of EM’s funding is in the “post-2006

completion” account, including the Office of River Protection at Hanford. This

account includes cleanup projects that are expected to continue sometime after 2006.

The conferees approved $3.46 billion for post-2006 completion projects, including the

CRS-17

$377 million transfer for the Hanford waste solidification project from the

privatization account. The Administration had sought $2.97 billion.

The Hanford waste project, called the Tank Waste Remediation System

(TWRS), consists of a pilot vitrification plant that would turn liquid high-level waste

into radioactive glass logs for eventual disposal. The $450 million sought by DOE for

TWRS was by far the largest item in EM’s FY2001 privatization funding request.

TWRS suffered a severe setback in spring 2000 after contractor BNFL Inc.

announced that costs would total $15.2 billion, more than twice the previously

estimated level. DOE announced in May 2000 that it would select a new contractor

and switch to traditional financing methods for the project. The House had cut DOE’s

FY2001 appropriations request for TWRS to $194 million, and the Senate had voted

$259 million.

Another major privatized project is a facility to treat “mixed” radioactive and

hazardous waste at the Idaho National Engineering and Environmental Laboratory,

for which $65 million was requested and approved by the conference agreement. The

Idaho project, the Advanced Mixed Waste Treatment Project, is opposed by some

residents of Wyoming who are concerned about radioactivity from a planned

incinerator. In response to that opposition, Energy Secretary Bill Richardson halted

further work on the incinerator on March 27, 2000, and established a panel to

recommend alternatives. However, the construction of the rest of the treatment

project is to proceed.

The EM privatization effort is intended to reduce costs by increasing competition

for cleanup work and shifting a portion of project risks from the federal government

to contractors. Profits to contractors would depend on their success in meeting

project schedules and holding down costs; potentially, profits could be substantially

higher or lower than under traditional DOE contracting arrangements.

In a typical non-privatized DOE project, a contractor would be hired to build and

operate a facility with government funds. DOE would approve and pay all the

contractor’s costs, and then award the contractor a profit based on performance.

Under the privatization initiative, a contractor would be expected to raise almost all

funding for necessary facilities and equipment for a project. The contractor would

recover that investment and earn a profit by charging previously negotiated fees to

DOE for providing services under the contract, such as solidification of radioactive

waste.

With a privatized project, the contractor could earn higher profits by reducing

costs, but the contractor could lose money if project costs were higher than expected

or the required services were not delivered. If DOE cancelled the project, the federal

government would repay the contractor’s expenses to that date. To cover that

contingency, DOE needs enough funding to be appropriated as construction proceeds.

If the project were to begin operating as planned, the accumulated appropriations

would be used to pay for waste treatment under the contract. In the case of the

Hanford TWRS project, however, DOE concluded that the risks involved would

cause the private sector to charge excessive prices to the government, negating the

potential cost savings.

CRS-18

DOE’s $295 million request for decontamination and decommissioning of

uranium enrichment plants and mill sites would provide a 21% boost over the FY2000

appropriation, and the conferees provided a further increase to $345 million. Much

of DOE’s proposed increase was targeted toward environmental cleanup activities at

DOE’s uranium enrichment plants at Paducah, Kentucky, and Portsmouth, Ohio,

which are currently leased to a private firm. Recent controversy has focused on

environmental hazards posed by the plants, particularly contamination resulting from

the past enrichment of reprocessed uranium at Paducah. The conference agreement

provides an additional $42 million above the request for reimbursing the mining

industry for cleaning up uranium and thorium mill waste. The House had voted to cut

the request to $260 million because of “severe funding constraints,” according to the

Appropriations Committee report, while the Senate had approved $298 million.

Civilian Nuclear Waste. The conferees voted to provide $391 million for the

civilian nuclear waste program in FY2001 – nearly $40 million below the budget

request but a $40 million increase over the FY2000 level. House had voted to

provide $413 million, while the Senate had voted to provide $351 million. As

required by the Nuclear Waste Policy Act, DOE is studying Yucca Mountain,

Nevada, as the site for a national waste repository, currently scheduled to open in

2010. A final Environmental Impact Statement for the proposed Yucca Mountain

repository is to be completed in FY2000. DOE contends that increased funding will

be needed to prepare a site recommendation report for the President in FY2001, and

to work on a license application to be sent to the Nuclear Regulatory Commission

(NRC) in 2002, but the House Appropriations Committee report contended that DOE

could meet its objectives with a smaller increase.

Funding for the program comes from two sources. Under the FY2001 budget

request, $325.5 million would be provided from the Nuclear Waste Fund, which

consists of fees paid by nuclear utilities, and $112 million would come from the

defense nuclear waste disposal account, which pays for disposal of high-level waste

generated by the nuclear weapons program. The House voted to appropriate $213

million from the Nuclear Waste Fund and $200 million for the defense disposal

account. The House also voted to rescind $85 million appropriated in FY1986 for

interim nuclear waste storage – funding that was contingent on the passage of

legislation that was vetoed by the President. The Senate approved $292 million from

the defense disposal account and $59 million from the Nuclear Waste Fund, and also

included the rescission of $55 million for interim storage. The conference agreement

provides $191 million from the Nuclear Waste Fund and $200 million from the

defense account. It also rescinds $75 million from the previously appropriated $85

million for interim storage, and authorizes DOE to use the remaining $10 million if

it is needed to complete the Yucca Mountain site recommendation report on time.

The 2010 target for opening a permanent repository is 12 years later than the

Nuclear Waste Policy Act deadline of January 31, 1998, for DOE to begin taking

waste from nuclear plant sites. Nuclear utilities and state utility regulators, upset over

DOE’s failure to meet the 1998 disposal deadline, have won two federal court

decisions upholding the Department’s obligation to meet the deadline and to

compensate utilities for any resulting damages. Utilities have also won several cases

in the U.S. Court of Federal Claims, although specific damages have not yet been

CRS-19

determined. In August 2000, a U.S. appeals court ruled that utilities could sue DOE

for damages without first pursuing administrative remedies.

Power Marketing Administrations.

DOE’s four Power Marketing

Administrations (PMAs) developed out of the construction of dams and multipurpose water projects during the 1930s that are operated by the Bureau of

Reclamation and the Army Corps of Engineers. The original intention behind these

projects was conservation and management of water resources, including irrigation,

flood control, recreation and other objectives. However, many of these facilities

generated electricity for project needs. The PMAs were established to market the

excess power; they are the Bonneville Power Administration (BPA), Southeastern

Power Administration (SEPA), Southwestern Power Administration (SWPA), and

Western Area Power Administration (WAPA).

The power is sold at wholesale to electric utilities and federal agencies "at the

lowest possible rates ... consistent with sound business practice," and priority on PMA

power is extended to "preference customers," which include municipal utilities, co-ops

and other "public" bodies. The PMAs do not own the generating facilities, but they

generally do own transmission facilities, except for Southeastern. The PMAs are

responsible for covering their expenses and repaying debt and the federal investment

in the generating facilities.

The 104th Congress debated sale of the PMAs and did, in 1995, authorize

divestiture of one PMA, the Alaska Power Administration. The future of the

remaining PMAs may rest on decisions yet to be made about the treatment of public

power in the broader context of electric utility restructuring.

BPA receives no annual appropriation. The Administration's request for the

other three PMAs for FY2001 was $199.6 million, a reduction of 25% from the

FY2000 appropriation. The savings stemmed from the Administration's proposal that,

beginning in FY2000, customers of SEPA, WAPA, and SWPA would be responsible

for making their own power purchases and transmission arrangements from any

suppliers other than the PMA to satisfy their needs. Under the Purchase Power and

Wheeling Program (PPW), the PMAs have purchased electricity and transmission

capability, which is repaid by PMA customers, to supplement federal generation. The

premise behind the proposed elimination of the PPW program was that deregulation

should make it less expensive and less complicated for PMA customers to make these

arrangements. Another possible reason is that the money appropriated to the PMAs

under PPW is repaid to the Treasury rather than to DOE. This means that the PPW

appropriation is fully scored against the caps on discretionary domestic spending with

which DOE must comply. The Committee recommended, and the House approved,

$195.6 million, reflecting a reduction to WAPA that will be offset by the use of prioryear balances.

CRS-20

Title IV: Independent Agencies

Independent agencies that receive funding from the Energy and Water

Development bill include the Nuclear Regulatory Commission (NRC), the

Appalachian Regional Commission (ARC), and the Denali Commission. The House

voted not to fund the Denali Commission for FY2001 or the proposed Delta Regional

Authority.

Table 7. Energy and Water Development Appropriations

Title IV: Independent Agencies

(in millions of dollars)

Program

FY2000

FY2001

Request

H.R. 4733

Senate

Bill

Conf.

Appalachian Regional

Commission

66.4

71.4

63.0

66.4

Nuclear Regulatory

Commission

(Revenues)

Net NRC4

465.0

(447.9)

34.0

481.9

(447.9)

34.0

481.9

(457.1)

24.8

481.9

(457.1)

24.8

481.9

(448.0)

33.9

Defense Nuclear Facilities

Safety Board

17.0

18.5

17.0

18.5

Nuclear Waste Technical

Review Board

2.6

3.2

2.7

3.0

2.9

Denali Commission

20.0

30.0

20.0

128.5

177.2

107.5

162.7

171.9

Tennessee Valley

Authority

Delta Regional Authority

Total

Key Policy Issues — Independent Agencies

Tennessee Valley Authority. Until recently, the Tennessee Valley Authority

(TVA) received congressional appropriations for its non-power activities, but as the

consequence of debate and enactments during the late 1990s, the Administration did

not seek, and the House did not grant, any new funds for TVA for FY2001. The

Senate also voted to provide no FY2001 TVA funding.

Includes appropriations from Nuclear Waste Fund, and excludes the NRC Inspector

General’s Office.

CRS-21

TVA was established as a federal corporation in 1933 to bring electricity and

development to a region encompassing all of Tennessee and portions of Kentucky,

Virginia, North Carolina, Georgia, Alabama, and Mississippi. The agency’s electric

power operations are self-supporting and receive no appropriation.

TVA is also responsible for certain non-power functions intended to further the

agency’s mission to develop and conserve the region’s natural resources. These

include flood control, recreation, navigation, and an Environmental Research Center.

TVA operates more than 50 dams and reservoirs and a 170,000-acre recreational area

in Kentucky and Tennessee, Land Between the Lakes (LBL). These non-power

programs represent roughly 2% of TVA's total budget and, until recently, were

supported by congressional appropriation. However, critics of TVA argued in recent

years that TVA should absorb the cost of these programs and could do so with the

savings that could be realized from more efficient operation. The last appropriation

for these programs was in FY1999.

An omnibus spending bill enacted shortly before the end of the 105th Congress

(P.L. 105-277) also stipulated that if the recreational area, Land Between the Lakes,

were not provided $7 million by Congress in future annual appropriations,

administration of LBL would be transferred from TVA to the Forest Service. In line

with this, the Administration requested only $7 million specifically for the operation

of LBL for FY2000. The Senate concurred; the House did not. House

Appropriations recommended no funding for TVA, commenting in the Committee

report that "final year appropriations for the non-power programs" were provided in

FY1999. The FY2000 conferees authorized TVA to spend $3 million from previously

appropriated funds for administration of TVA, pending transfer of LBL to the Forest

Service, and for expenses relating to the transition in stewardship.

Nuclear Regulatory Commission. The conferees approved the full request by

the Nuclear Regulatory Commission (NRC) for $481.9 million in FY2001, an increase

of $16.9 million over FY2000. Major activities conducted by NRC include safety

regulation of commercial nuclear reactors, licensing of nuclear waste facilities, and

oversight of nuclear materials users. The funding request provides an additional $6.2

million for the NRC inspector general’s office, which the conferees cut to $5.5

million. Both the House and Senate had taken the same action.

The House and Senate Appropriations Committees sharply criticized NRC in

1998 for allegedly failing to overhaul its regulatory system in line with improvements

in nuclear industry safety. The committees contended, among other problems, that

NRC’s regional offices were inconsistent with one another, that NRC was

inappropriately interfering with nuclear plant management, and that numerous NRC

review processes were outdated and unnecessary. But the panels praised NRC for

making improvements during the FY2000 budget cycle, and the House

Appropriations continued the positive tone in its FY2001 report.

For the past decade, NRC’s budget has been offset 100% by fees on nuclear

power plants and other licensed activities, including the DOE nuclear waste program.

The nuclear power industry has long contended that the existing fee structure requires

nuclear reactor owners to pay for a number of NRC programs, such as foreign nuclear

safety efforts, from which they do not directly benefit. To account for that concern,

CRS-22

the conferees adopted an NRC proposal to phase down the agency’s fee recovery to

90% during the next 5 years – two percentage points per year. Neither the House nor

the Senate had approved the phasedown plan.

For Additional Reading

CRS Issue Briefs

CRS Issue Brief IB88090. Nuclear Energy Policy

CRS Issue Brief IB92059. Civilian Nuclear Waste Disposal.

CRS Issue Brief IB10041. Renewable Energy: Tax Credit, Budget, and Electricity

Restructuring Issues

CRS Issue Brief IB10036. Restructuring DOE and Its Laboratories: Issues in the

106th Congress.

CRS Issue Brief IB10019. Western Water Issues.

CRS Reports

CRS Report RL30307. Department of Energy Programs: Programs and

Reorganization Proposals.

CRS Report 97-464. The National Ignition Facility and Stockpile Stewardship.

CRS Report 96-212. Civilian Nuclear Spent Fuel Temporary Storage Options.

CRS Report RL30445. Department of Energy Research and Development Budget for

FY2001: Description and Analysis.

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