Washington (Platts)--8Jul2009

Members of the US House Appropriations Committee passed the fiscal 2010
energy and water funding bill worth $33.3 billion early Wednesday after
debating into the night, heeding Chairman David Obey's sternly worded message
that he wants all 12 appropriations bills passed before August recess.

According to a committee staffer, the bill could move to the floor for a
vote next week.

The committee recommended that funding for DOE be set at $26.9 billion in
fiscal 2010, which begins October 1. DOE's nuclear weapons program was the
department's big-ticket item with a suggested allocation of $6.3 billion, $64
million below the budget request. Separately, the department would receive
roughly $5.4 billion for the cleanup of its nuclear defense sites.

The committee supported nuclear power and stated in the bill report that
"a well-formulated nuclear energy policy is no longer just an economic and
environmental imperative nationally, but is also necessary to maintain our
competitiveness on a global scale." Lawmakers told DOE that it must submit a
detailed nuclear energy research and development strategy within 90 days of
the bill's enactment.

Funding for DOE's nuclear energy programs would get a boost under the
bill, which reflected recommendations the Energy and Water Development
Subcommittee approved last week. The full committee set Nuclear Power 2010's
allowance at $71 million, roughly $51 million above the budget request but
$106.5 million below the fiscal 2009 level. The bill report noted that the
additional funds would complete the department's commitment to this cost-share
program between government and industry aimed at the near-term deployment of
advanced reactors.

The committee rejected an amendment offered by Republican Representative
Michael Simpson of Idaho that would have authorized the energy secretary to
move funds around in DOE's loan guarantee program by adjusting the caps for
the different energy categories. The amendment, Simpson said, would allow the
secretary to react to events in the energy market. Obey, a Wisconsin Democrat,
disagreed, warning that changing the energy categories could undermine support
for the bill when it's taken up on the House floor. Obey is barring floor
amendments to any of the appropriations bills this year.

Research and development work on DOE's next-generation, or Generation IV,
reactor technology would receive roughly $272.4 million, about $81.4 million
above the budget request. Like the subcommittee, the full committee
recommended that DOE's Next Generation Nuclear Plant receive not less than
$245 million next fiscal year, including $7 million for deep-burn research.

The program provides the basis for the commercialization of a new
generation of advanced nuclear plants that use high temperature gas-cooled
reactor technology to generate electricity and produce large quantities of
process heat.

Elsewhere in the bill, lawmakers recommended that DOE's repository
program at Yucca Mountain, Nevada, receive roughly $191.8 million and that an
additional $5 million would be used to establish a blue-ribbon commission that
would evaluate alternatives to a Yucca Mountain repository.

Lawmakers also used the bill report to direct DOE to pay its repository
program's prime contractor--USA Repository Services--at least $70 million in
fiscal 2010 to ensure it has "sufficient legal, scientific and technical
expertise necessary to maintain and update the Yucca Mountain license
application and its supporting documentation" needed for NRC's licensing
review. USA-RS beat out the program's incumbent contractor Bechtel SAIC Co.
for a five-year $2.5-billion contract last October to run the program and
integrate its work.

The NRC, meanwhile, would have a budget authority of roughly $1.06
billion, the same as the budget request. The recommendation includes $56
million, matching the budget request, to support NRC's review of DOE's
repository license application. The committee noted in the bill report that
NRC has recently begun to provide international training and support for
radiological regulations that the DOE National Nuclear Security
Administration's Global Threat Reduction Initiative has ongoing.

"In particular, the committee is concerned that the NRC may be providing
physical protection recommendations that are less stringent than those
recommended by the International Atomic Energy Agency," the bill report
stated. It directed NRC and NNSA to prepare a joint report explaining each
program, identifying potential overlaps, gaps and conflicts and describing how
those issues will be resolved.