McCullough Discusses “The Other Senate Nuclear Option”

The following opinion comes from PACE colleague Glenn McCullough, Jr., former Chairman of the Tennessee Valley Authority. The piece was published on October 26th by the Wall Street Journal and can be found online here. McCullough also appeared in PACE’s 2011 mini- documentary, Unplugged: Reconnecting American Energy Policy with Reality.

Glenn McCullough Headshot

Much is at stake as Americans vote on Nov. 4. While different races have different issues, the nuclear-energy world is watching to see which party will control the Senate. If Majority Leader Harry Reid becomes minority leader, he would likely no longer be able to sustain opposition to Yucca Mountain, the Energy Department’s chosen nuclear repository.

On Oct. 16 the Nuclear Regulatory Commission issued its Yucca Mountain Safety Evaluation Report 3, stating that the facility meets the government’s long-term regulatory and safety requirements as a nuclear-waste repository, including the benchmark of remaining safe for a million years. The report is a culmination of decades of scientific and technical studies showing the underground facility in south-central Nevada to be safe and secure for storing spent fuel and other nuclear waste. Yet after nearly 30 years of study, at a cost of over $15 billion, Yucca Mountain is stuck in political gridlock.

The idea of a national used-nuclear-fuel repository was conceived in 1987 in an amendment to the 1982 Waste Policy Act, and Yucca Mountain was approved by Congress in 2002. In 2011, however, the Obama administration yanked the project’s funding.

The president had plenty of help. Nevada Sen. Reid has made it his business to personally kill Yucca Mountain. This was despite the fact that ratepayers across the U.S. who use nuclear energy had already contributed $31 billion to the project—until Energy Secretary Ernie Moniz suspended the one-tenth of a cent per kilowatt-hour fee earlier this year, in response to a court order.

Mr. Reid has unleashed his particular brand of heavy-handed politics to get his way on Yucca Mountain. As majority leader, he applied pressure on President Obama’s appointees at the Nuclear Regulatory Commission to secure commissioners who advanced his agenda. The NRC chairman who pulled the plug on Yucca Mountain was Gregory Jaczko, a former Senate aide to Mr. Reid.

Just over a year after the administration scuttled the project in early 2010, the Government Accountability Office issued a report saying the Yucca Mountain shutdown was not only strictly political, but would also set back used-fuel storage efforts by two decades. As the New York Times reported at the time, “The Obama administration did not provide a technical or scientific basis for shutting down the site and failed to plan or identify risks associated with its hasty closure.”

The Tennessee Valley Authority—which operates two nuclear plants in Tennessee and one in Alabama—has a deep commitment to producing safe, reliable and affordable nuclear energy for its customers. Over the last four decades, ratepayers in the Tennessee Valley who rely on the TVA and local power-supply companies paid about $53 million a year to the Energy Department to fund a used nuclear-fuel repository. TVA isn’t alone. All told, 100 nuclear reactors in 31 states produce 20% of the total electricity in the U.S. Nuclear is a vital part of our nation’s energy mix as we seek enhanced energy security and lower carbon emissions.

Pursuant to federal law, the government was directed to begin providing storage for spent nuclear fuel in 1998. That didn’t happen. As a result, reactor owner-operators began suing the federal government for its failure to begin picking up and storing the waste. The government has lost every one of the lawsuits. Now the Treasury has to reimburse reactor owners for the expense of on-site storage. The current cost to the taxpayer for the government’s failure to establish a national repository is estimated to be $20 billion, and growing at a rate of $500 million each year.

As House Energy and Commerce Chairman Fred Upton said when the 2011 GAO report on Yucca Mountain was released, “It is alarming for this administration to discard 30 years of research and billions of taxpayer dollars spent, not for technical or safety reasons, but rather to satisfy temporary political calculations.”

Nuclear energy is here to stay. It is safe, environmentally friendly, affordable and good for the economy, jobs and manufacturing. But the nation needs a safe repository for used nuclear fuel. When Americans go to vote next month, they have a chance to tell Sen. Reid and Democrats in Washington what they think about people who have seized Yucca Mountain and turned it into a political tool at a huge cost to taxpayers and the environment.


Rep. Lamar Smith Presses EPA for Answers

In an August 13th letter to EPA Administrator Gina McCarthy, U.S. Rep. Lamar Smith (TX) expressed a number of concerns about the data and analysis used in constructing the agency’s landmark carbon dioxide mandate. Rep. Smith is Chairman of the House Committee on Space, Science, and Technology.


Rep. Smith expressed specific concerns that the modeling used to regulate greenhouse gases under Section 111d of the Clean Air Act was flawed and deficient. Such flaws, he argues, have become routine in the agency’s analysis for important rules.

“Flaws in recent EPA analysis amplify concerns about the real impacts of these regulations. Last week the Government Accountability Office released a report highlighting a pattern of shoddy EPA analysis. It was revealed that EPA relied on decades old data and ignored important factors,” Smith’s letter reads. “The independent watchdog warned that ‘EPA cannot ensure that its [analysis provides] the public with a clear understanding  of its decision making’.”

Read Rep. Smith’s August Letter

PACE and others have argued that significant questions remain unanswered about the potential costs of the new carbon dioxide mandate, as well as about the rule’s benefits. A study by NERA Economic Consulting released just this month summarizes that EPA’s rule comes with high costs and highly questionable results. Rep. Smith alleges, too, that EPA has not been forthright with consumers about the bargain proposed by the new rule.

“The effects of EPA’s policies will vary dramatically and hinge on a wide variety of issues including everything from existing power resources and access to low cost alternatives to infrastructure constraints and energy demands. Americans deserve the bottom line: what does it cost and what will we get for the money?”

Most recently, Rep. Smith submitted a follow-up letter to Administrator McCarthy after receiving a less than satisfactory response to his detailed concerns. The letter asks the agency chief to reveal to the American people about how the modeling was performed and what the consequences of the rule will be.

Read Rep. Smith’s Most Recent Letter

“With the close of the comment period rapidly approaching, the EPA must perform the requested analysis immediately,” he writes. “We cannot afford to ignore the inconvenient details when the truth hangs in the balance. I appreciate your respect for our shared obligation to the American people to be transparent and honest.”


Study Says EPA Carbon Rule Bad Bargain

A study released just days ago by NERA Economic Consulting confirms what many already believe about EPA’s proposed carbon dioxide rule – that the rule brings high costs without much benefit. The study, entitled Potential Energy Impacts of the EPA Proposed Clean Power Plan, was commissioned by the American Coalition for Clean Coal Electricity and others, including Consumer Energy Alliance, a PACE partner.

NERA Report

Read the Full Report Here

Among the conclusions of the report:

  • EPA’s proposal is the most expensive environmental regulation ever imposed on the electric power sector, costing at least $41 billion per year. NERA’s study finds that costs from the rule could be as high as $73 billion annually, compared to EPA’s internal estimate of just $8.8 billion per year.
  • EPA’s proposal is projected to cause double digit electricity rate increases in 43 states, with fourteen states facing price increases that could exceed 20%. The nationwide impact is expected to be between 12% to 17%.
  • At least 45,000 more megawatts of coal-fired electric generating capacity are projected to retire under EPA’s proposal. That’s greater than the entire electricity supply of New England.
  • Higher electricity prices will be especially harmful to low-income, fixed-income, and middle-income families. Real income for America’s 60 million low-income and middle-income families has declined by 22% in the past decade, while energy prices have increased 27%.
  • Despite its enormous cost, the EPA proposal will have no real effect on global climate change.
  • So far, legislatures, governors, and attorneys general representing 30 states have expressed opposition to EPA’s approach.

“PACE has argued, as others have, that EPA’s carbon dioxide mandate is the wrong approach to charting a course for American energy,” explains PACE Executive Director Lance Brown. “The rule is all pain and no gain, hurting America’s most vulnerable power customers while doing little to nothing to address climate concerns.”