Energy and Water Bill Passes House

Energy and Water Bill Passes House

On Thursday, the House approved a $34 billion energy and water spending bill, providing funding for projects ranging from water development to nuclear security in FY 2015.

While the bill is $50.5 million below the spending level enacted for FY 2014, it still represents a $326.9 million increase from the $33.7 billion requested by the President for the upcoming fiscal year. A few of the bill’s highlights are provided below.

 

SMRs

One bright spot in the bill was the Committee’s decision to cut funding for the first award DOE made under its Small Modular Reactor (SMR) Licensing Technical Support Program.  After getting selected to receive up to $252 million in matching funds in April 2013, Babcock & Wilcox began looking for other investors to meet its cost-share obligations with DOE. Unable to find anyone willing to take even a minority stake in its SMR subsidiary, B&W has cut back its spending. 

The Committee has taken a good first step in correspondingly cutting back DOE’s spending for the project, but it should have taken the broader hint from B&W and cut all of DOE’s SMR funding. Instead, it kept in $54.5 million for DOE’s second award recipient and provided $138 million to DOE’s Reactor Concepts Research, Development, and Demonstration (RD&D) budget, $37.5 million more than DOE requested, which also funds SMRs.

Through March 2014, DOE spent $101 million on B&W’s SMR project. Now that the company has left the project, it looks like taxpayers have surely lost that money. 

 

MOX

In March, DOE’s budget requested putting construction of the Mixed Oxide Fuel Fabrication Facility (MOX) in “cold-standby.” TCS welcomed the proposal. With escalating costs and schedule delays, the need to review the project and consider other alternatives is long overdue.

Unfortunately, the House bill refuses to make any cut to the program and funds MOX at $345 million for FY 2015. The bill also directs DOE to continue studying its options concerning MOX, but to stop considering three of its alternatives.

 

Fossil Energy Funding

The bill provides a total of $593 million to be spent on Fossil Energy Research and Development (R&D), a 5.5% increase from the $562 million allocated for FY 2014.

The bill continues to bet money on unproven Carbon Capture and Storage (CCS) technologies and power systems to the tune of $412 million. This includes $90 million for Carbon Capture, $100 million for Carbon Storage, $25 million for Coal Utilization Science, and $50 million for the National Energy Technology Laboratory’s (NETL) Coal Research and Development program.

In an effort to moderate such excess, Rep. Jackie Speier (D-CA) offered an amendment to cut funding for Fossil Energy R&D by a conservative $31 million, which would have maintained funding for the program at its FY 2014 level. The amendment failed in a roll call vote of 235-184.

 

Elimination of USEC Funding:

One positive development is that the bill permanently rescinds all money in the United States Enrichment Corporation (USEC) Fund, which has a current balance of $1.6 billion.  Established by the Energy Policy Act of 1992, the Fund was initially used by USEC to carry out its functions, including the acquisition and marketing of uranium and enriched uranium. After USEC was privatized in 1998, the Fund was retained on the US Treasury’s books to help pay for environmental clean-up expenses and privatization costs.

To justify the elimination of USEC funding, the Committee report cites a May 2014 decision by the Government Accountability Office (GAO), which found that all authorized uses of the Fund have been fulfilled. According to Rep. Mike Simpson (R-ID), Chairman of the House Appropriations Energy and Water Subcommittee that earlier approved the bill, with the money no longer available for other purposes, it was “just a bookkeeping exercise to get the balances off the books.”

USEC, which filed for bankruptcy in March, has benefitted from years of DOE financial support, costing hundreds of millions of taxpayer dollars.

 

Nuclear Energy R&D:

The bill, as introduced, also substantially increased funding for DOE’s Nuclear Energy Research and Development (R&D) program.  In the Omnibus Appropriations Act for FY 2014, Congress provided $153.7 million above what DOE requested for Nuclear Energy R&D.  The FY 2015 bill provided for funding above DOE’s request yet again, adding $35.6 million for the program. A floor amendment offered by Rep.s Janice Hahn (D-CA) and Bill Huizenga (R-MI) was passed that cut spending for DOE’s entire Nuclear Energy program by $73.3 million, and shifted $57.6 million of it to the U.S. Army Corps of Engineers Operation and Maintenance account.

Below is a comparison of Congress’ spending on the Nuclear and Fossil Energy R&D programs compared to DOE’s requests in the last two appropriations cycles.

 

Funding Item FY14
Request
Omnibus Compared
to Request
FY15
Request
House
E&W bill
Compared
to Request
Fossil Energy
R&D
420,575 562,065 + 141,490 475,500 593,000 + 117,500
             
Nuclear Energy 735,460 889,190 + 153,730 863,386 825,691 – 37,695
Nuclear Energy
R&D
372,400 488,630 + 116,230 467,886 483,500 + 15,614