Legislature(2019 - 2020)BELTZ 105 (TSBldg)

03/03/2020 03:30 PM Senate COMMUNITY & REGIONAL AFFAIRS

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03:31:02 PM Start
03:31:47 PM SB194
05:13:02 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Heard & Held
-- Testimony <Invitation Only> --
**Streamed live on AKL.tv**
                    ALASKA STATE LEGISLATURE                                                                                  
    SENATE COMMUNITY AND REGIONAL AFFAIRS STANDING COMMITTEE                                                                  
                         March 3, 2020                                                                                          
                           3:31 p.m.                                                                                            
MEMBERS PRESENT                                                                                                               
Senator Click Bishop, Chair                                                                                                     
Senator Peter Micciche, Vice Chair                                                                                              
Senator Lyman Hoffman                                                                                                           
Senator Mike Shower                                                                                                             
Senator Elvi Gray-Jackson                                                                                                       
COMMITTEE CALENDAR                                                                                                            
SENATE BILL NO. 194                                                                                                             
"An Act relating to advanced nuclear reactors."                                                                                 
     - HEARD & HELD                                                                                                             
PREVIOUS COMMITTEE ACTION                                                                                                     
BILL: SB 194                                                                                                                  
SHORT TITLE: ADVANCED NUCLEAR REACTORS                                                                                          
SPONSOR(s): COMMUNITY & REGIONAL AFFAIRS                                                                                        
02/17/20       (S)       READ THE FIRST TIME - REFERRALS                                                                        
02/17/20       (S)       CRA, RES                                                                                               
03/03/20       (S)       CRA AT 3:30 PM BELTZ 105 (TSBldg)                                                                      
WITNESS REGISTER                                                                                                              
CODY GRUSSENDORF, Staff                                                                                                         
Senator Click Bishop                                                                                                            
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Introduced SB 194.                                                                                        
MARC NICHOL, Senior Director                                                                                                    
New Reactor Deployment                                                                                                          
Nuclear Energy Institute                                                                                                        
Washington, DC                                                                                                                  
POSITION STATEMENT: Provided an overview of advanced nuclear                                                                  
COREY MCDANIEL, PhD, Chief Commercial Officer,                                                                                  
Nuclear Science and Technology                                                                                                  
Idaho National Laboratory                                                                                                       
Idaho Falls, Idaho                                                                                                              
POSITION  STATEMENT: Provided  an  overview  of advanced  nuclear                                                             
reactor safety and deployment.                                                                                                  
GWEN HOLDMANN, Director                                                                                                         
Alaska Center for Energy and Power                                                                                              
University of Alaska Fairbanks                                                                                                  
Fairbanks, Alaska                                                                                                               
POSITION  STATEMENT: Provided  an overview  of the  potential for                                                             
micronuclear reactors in Alaska.                                                                                                
SPENCER NELSON, Professional Staff Member                                                                                       
U.S. Senator Lisa Murkowski                                                                                                     
U.S Senate Energy and Natural Resources Committee                                                                               
Washington, DC                                                                                                                  
POSITION  STATEMENT: Provided  an overview  of federal  policy on                                                             
nuclear energy.                                                                                                                 
ACTION NARRATIVE                                                                                                              
3:31:02 PM                                                                                                                    
CHAIR  CLICK  BISHOP called  the  Senate  Community and  Regional                                                             
Affairs Standing Committee meeting to  order at 3:31 p.m. Present                                                               
at  the  call  to  order were  Senators  Gray-Jackson,  Micciche,                                                               
Hoffman,   and  Chair   Bishop.  Senator   Shower  arrived   soon                                                               
                SB 194-ADVANCED NUCLEAR REACTORS                                                                            
3:31:47 PM                                                                                                                    
CHAIR BISHOP announced  that the only order of  business would be                                                               
SENATE  BILL  NO.  194,  "An Act  relating  to  advanced  nuclear                                                               
reactors."  He said  the Senate  Community  and Regional  Affairs                                                               
Committee is  the sponsor of SB  194 and the committee  will hear                                                               
invited testimony related to the bill.                                                                                          
3:32:43 PM                                                                                                                    
CODY  GRUSSENDORF,  Staff,  Senator Click  Bishop,  Alaska  State                                                               
Legislature, Juneau,  Alaska, presented SB 194  with a PowerPoint                                                               
that started with a description of advanced nuclear reactors.                                                                   
3:32:51 PM                                                                                                                    
SENATOR SHOWER joined the committee meeting.                                                                                    
MR.  GRUSSENDORF explained  that  advanced  nuclear reactors  are                                                               
small  enough to  transport  easily;  run for  10  or more  years                                                               
without requiring  refueling; can provide power  for rural Alaska                                                               
villages, mining operations, and  military installments. They can                                                               
also provide  backup power  to regional power  grids such  as the                                                               
Railbelt. Advanced nuclear reactors  can provide clean, safe, and                                                               
reliable  power which  could  bring rural  Alaska  out of  energy                                                               
poverty. They can also be used in urban Alaska.                                                                                 
He said SB  194 would ensure that companies  can make investments                                                               
with  the  knowledge  that  there  is a  market  in  Alaska  once                                                               
advanced nuclear reactors come online.                                                                                          
3:33:44 PM                                                                                                                    
MR.  GRUSSENDORF  displayed slide  3  and  explained that,  under                                                               
current law,  AS 18.45.025 requires the  legislature to designate                                                               
in law each parcel of state  land on which a nuclear facility may                                                               
be  located. Each  individual parcel  with this  designation must                                                               
also   receive   a  permit   from   the   Alaska  Department   of                                                               
Environmental Conservation  (DEC) and a license  from the Nuclear                                                               
Regulatory Commission (NRC).                                                                                                    
MR. GRUSSENDORF said SB 194  would add "advanced nuclear reactor"                                                               
to the requirements in AS  18.45.025, define nuclear reactor, and                                                               
remove  the   requirement  that   the  legislature  pass   a  law                                                               
designating  each  parcel of  land  that  would  be used  for  an                                                               
advanced nuclear reactor. Other  nuclear facilities listed in the                                                               
statute  would not  be  exempt from  this  requirement. The  bill                                                               
leaves in  local control, DEC  licensing, and  federally required                                                               
licensing  by the  NRC.  SB  192 would  signal  to industry  that                                                               
"Alaska is Open for Business."                                                                                                  
3:35:04 PM                                                                                                                    
MR. GRUSSENDORF  said slide 4  lists many of  the characteristics                                                               
of advanced nuclear  energy. It is not a  specific technology and                                                               
it  can encompass  many of  attributes  listed on  the slide.  He                                                               
noted  that  many  companies are  currently  developing  advanced                                                               
3:35:33 PM                                                                                                                    
MR. GRUSSENDORF said  he broke the reasons  that advanced nuclear                                                               
is  a good  fit in  Alaska  into three  columns. First,  advanced                                                               
nuclear  technology is  remote  capable.  Microreactors could  be                                                               
easily integrated into the power  baseload in the 300 small rural                                                               
communities  that   have  independent  grids.   Advanced  nuclear                                                               
reactors could  also provide  mines with  access to  reliable and                                                               
affordable energy, and possibly extend  the operational life of a                                                               
mine  by making  lower grade  ore  more profitable.  He said  the                                                               
military  is  always  looking for  independent  grids  to  supply                                                               
secure   and   resilient   power.   Advanced   nuclear   reactors                                                               
potentially   have  long   term  operations   without  refueling.                                                               
Advanced nuclear  reactors are  black-start capable,  which means                                                               
they can be started without a significant power source.                                                                         
Second, advanced nuclear reactors  are cost effective. They would                                                               
reduce  electricity and  heating  costs  significantly and  would                                                               
only need to be refueled  every 10-plus years. The projected cost                                                               
is between $0.09 and $0.41 per KWH.                                                                                             
Third,   microreactors   are   climate   friendly.   They   would                                                               
significantly improve air  quality for all of  Alaska. Diesel and                                                               
coal  account  for  23  percent   of  the  electricity  currently                                                               
generated in Alaska. By contrast,  advanced nuclear generation is                                                               
carbon free.                                                                                                                    
3:38:06 PM                                                                                                                    
MR. GRUSSENDORF  turned to the  chart on  slide 6 that  shows the                                                               
projected  costs  of  energy  generated  from  microreactors  and                                                               
diesel  fuel. He  said the  estimated cost  for first  generation                                                               
microreactors  is between  $0.14 and  $0.41 per  KWH, and  future                                                               
generation  estimates are  between $0.09  and $0.33  per KWH.  He                                                               
noted  that the  graph comes  from the  Nuclear Energy  Institute                                                               
(NEI) Cost Competitive Report. He  deferred to Mr. Mark Nichol to                                                               
discuss the chart further.                                                                                                      
MR. GRUSSENDORF  explained that slide  7 lists some of  the rural                                                               
Power Cost  Equalization (PCE) communities and  their electricity                                                               
rates  before  the PCE  Program.  He  directed attention  to  the                                                               
following statement from the April 2019 PCE Fact Sheet:                                                                         
     The  Power  Cost  Equalization (PCE)  Program  provides                                                                    
     economic  assistance to  communities  and residents  of                                                                    
     rural electric utilities where  the cost of electricity                                                                    
     can be  three to five  times higher than  for customers                                                                    
     in more urban areas of the state.                                                                                          
3:39:34 PM                                                                                                                    
MR.  GRUSSENDORF said  the next  slide shows  that the  estimated                                                               
timeline to deploy a microreactor  is lengthy. Once a contract is                                                               
signed,  there  is  licensing, manufacturing,  site  preparation,                                                               
construction, training, and startup.                                                                                            
MR. GRUSSENDORF  directed attention  to the safety  points listed                                                               
on  slide  9. He  said  advanced  microreactors are  designed  to                                                               
reduce the probability of an  accident through the use of passive                                                               
or inherent  safety features as  opposed to  traditional reactors                                                               
that require someone to activate  electrical or mechanical safety                                                               
systems  in the  event of  a malfunction.  Advanced microreactors                                                               
are  designed to  use physics  and natural  forces to  intervene.                                                               
They  operate at  atmospheric pressure,  the cooling  system uses                                                               
liquid metal  or molten salt  instead of water, and  they operate                                                               
with  minimal or  no moving  parts. The  definition of  "advanced                                                               
nuclear reactor" is the same in both NELA and SB 194.                                                                           
3:42:08 PM                                                                                                                    
At ease.                                                                                                                        
3:42:22 PM                                                                                                                    
CHAIR BISHOP called the committee back to order.                                                                                
3:42:55 PM                                                                                                                    
MARC  NICHOL, Senior  Director, New  Reactor Deployment,  Nuclear                                                               
Energy Institute (NEI), Washington, DC,  said NEI members are the                                                               
owners,  operators, developers,  constructors,  and supply  chain                                                               
for the nuclear industry both in the U.S. and internationally.                                                                  
MR. NICHOL  said NEI supports  SB 194 and commends  the committee                                                               
in  trying  to  reduce  the  burden  to  bring  advanced  nuclear                                                               
reactors to Alaska.                                                                                                             
He  explained that  his  overview would  address  why people  are                                                               
interested  in  advanced  nuclear reactors  and  their  features,                                                               
including used fuel, safety, licensing, cost, and timelines.                                                                    
MR.  NICHOL commenced  with his  PowerPoint presentation  stating                                                               
that there  is a lot  of interest currently in  advanced reactors                                                               
and nuclear  energy in general. He  turned to slide 2  that lists                                                               
eight imperatives for  nuclear energy; they are  the reasons that                                                               
people   are  interested   in  the   technology  for   generating                                                               
electricity and  other energy products. Clean  energy, meaning no                                                               
carbon emissions,  is one of  the most important  attributes, but                                                               
others are  interested in  energy resiliency,  reliability, jobs,                                                               
and enhancing U.S. national security and global influence.                                                                      
3:45:00 PM                                                                                                                    
MR. NICHOL  turned to the chart  on slide 3 that  illustrates the                                                               
estimated  decarbonization trajectory  of various  U.S. utilities                                                               
from 2005 to  2050. He said some states  previously had renewable                                                               
portfolio  standards, but  they  recognized that  to achieve  100                                                               
percent decarbonization  of the electric sector  would requires a                                                               
firm, clean energy source like nuclear energy.                                                                                  
He  said  utilities  are  also  looking  at  decarbonizing  their                                                               
portfolios.  Several   dozen  utilities   have  made   their  own                                                               
commitments,  some  in  states  that do  not  have  clean  energy                                                               
policies.  Generally,  their goals  are  to  achieve zero  carbon                                                               
emissions by 2050 with interim  milestones within that timeframe.                                                               
To achieve  this goal, many  utilities are taking a  serious look                                                               
at   advanced  reactors   to   increase   their  nuclear   energy                                                               
MR. NICHOL  displayed the graphic  on slide 4 and  explained that                                                               
when NEI looks  at the potential role of nuclear  energy in a low                                                               
carbon electricity future, the first step  is to look at what the                                                               
first fleet  of nuclear reactors  produces. On a  national level,                                                               
that is currently about 20 percent.                                                                                             
He  explained that  over time,  the current  nuclear plants  will                                                               
either retire or receive a  second license renewal (SLR) from the                                                               
NRC for  20-40 years.  However, when looking  at what  portion of                                                               
electricity could be  derived from nuclear in  the United States,                                                               
there are questions about the  role of renewable energy, the role                                                               
of storage, and the role of other sources.                                                                                      
MR. NICHOL said the estimates  of how much renewables can produce                                                               
range  from  30-90 percent,  but  regardless  of those  estimates                                                               
there  is  a clear  need  for  firm,  clean electricity  such  as                                                               
nuclear. He pointed  out that for the U.S. to  achieve 20 percent                                                               
of its energy generation from  nuclear would require 90 gigawatts                                                               
(GW) of  new nuclear generation  or double the  current portfolio                                                               
of 100  reactors. To  increase nuclear  generation to  33 percent                                                               
would require  another doubling of  reactors. He  reiterated that                                                               
there is a great need for additional nuclear in the U.S.                                                                        
3:48:05 PM                                                                                                                    
MR. NICHOL  explained that  when NEI  looks at  technologies that                                                               
will be  available in the future,  they look at the  continuum of                                                               
innovation  illustrated on  slide  5. The  technologies that  are                                                               
deployable today  are large light-water  reactors (LWR)  like the                                                               
AP1000 that is  being built in Georgia at  Southern Company Plant                                                               
Vogtle  units  3 &  4.  NEI  is  also  looking at  advanced  fuel                                                               
technologies  for   the  current  LWRs  to   help  improve  their                                                               
performance and economics.                                                                                                      
MR.  NICHOL  said NEI  expects  microreactors  and small  modular                                                               
reactors  (SMRs)  to  be deployed  in  the  2025-2030  timeframe.                                                               
Microreactors, like  the Oklo  Aurora plant  shown on  the slide,                                                               
have power levels of 1 to  10 megawatts (MW). SMRs are defined as                                                               
less than  300 MW in  power and it  is possible to  have multiple                                                               
reactors at the same site. He  noted that SMRs can be light-water                                                               
reactors  or  non-LWRs.  The microreactor  and  SMR  technologies                                                               
benefit from using the proven  and existing technology in today's                                                               
operating reactors,  making them smaller while  adding additional                                                               
features. After  2030, NEI expects  small or large  advanced non-                                                               
LWRs  that would  be based  on technologies  that might  use high                                                               
temperature gas,  liquid metal, or  molten salt instead  of water                                                               
to keep the reactor cool.                                                                                                       
3:50:01 PM                                                                                                                    
MR. NICHOL said innovation is  the key for advanced technology in                                                               
reactor design,  safety, fuel, and demand  response. He explained                                                               
that  smaller  designed  reactors  are  simpler  and  safer.  For                                                               
example,  the NuScale  reactor  operates  on natural  circulation                                                               
without pumps which  allows for cooling during a  power loss like                                                               
the  one at  Fukushima,  Japan.  Additional reactor  advancements                                                               
would use  molten salt that  operates at  atmospheric temperature                                                               
to avoid having to push pressures  or forces outside of a reactor                                                               
vessel if there was an accident.                                                                                                
MR.  NICHOL said  fuel is  also advanced.  Many advanced  reactor                                                               
designs use  high assay low  enriched uranium (HALEU). It  is low                                                               
enriched uranium to 20 percent  so it does not have proliferation                                                               
concerns.  That  is  greater  than  the 5  percent  that  can  be                                                               
produced commercially  today, but  the U.S. Department  of Energy                                                               
(DOE) is working on programs  to help encourage and provide HALEU                                                               
in the interim.                                                                                                                 
MR.   NICHOL  said   advancements  in   digital  technology   and                                                               
automation will allow for  microreactors to automatically control                                                               
power  levels in  response to  demand. Also,  companies designing                                                               
microreactors are looking at inherent  features where the physics                                                               
itself  would shut  down the  reactor. Some  reactor designs  are                                                               
basing  the  safety of  a  natural  physics  shutdown on  a  test                                                               
reactor at  the Idaho National  Laboratory (INL) that  tested the                                                               
3:53:11 PM                                                                                                                    
SENATOR  HOFFMAN asked  what countries  are  leading in  advanced                                                               
reactor development.                                                                                                            
MR.  NICHOL  answered  that  China   and  Russia  are  developing                                                               
advanced reactors and, in some respects,  may be ahead of the US.                                                               
China is focused  on high temperature gas reactors  and Russia is                                                               
focused on fast reactors; both are close to commercialization.                                                                  
SENATOR HOFFMAN asked what country uses the most nuclear energy.                                                                
MR.  NICHOL answered  that the  U.S. has  the most  nuclear power                                                               
plants, but  France uses  more nuclear power  as a  percentage of                                                               
CHAIR BISHOP asked if a 1 MW  plant brings a dropped load back up                                                               
immediately or incrementally.                                                                                                   
MR. NICHOL  replied the NuScale SMR  has a feature to  bring back                                                               
power  quickly. It  has full  bypass capabilities  for continuous                                                               
operation at 100 percent power. Then  they can dump the steam and                                                               
go  back to  100  percent  power onto  the  electrical grid.  The                                                               
NuScale reactor  also has  features for  a longer-term  outage to                                                               
slowly increase power.  He said he did not  know if microreactors                                                               
have the features to dump the  energy and continue at 100 percent                                                               
power,  but they  can manipulate  power quickly  by coming  up in                                                               
CHAIR BISHOP  said he looks  forward to  a fieldtrip to  INL next                                                               
3:55:58 PM                                                                                                                    
MR.  NICHOL  said the  advanced  reactor  technologies result  in                                                               
three  key  performance improvements:  reduced  cost  in time  to                                                               
market, enhanced  safety, and flexibility to  manipulate power to                                                               
match renewables  or switch to  other energy products  instead of                                                               
MR.  NICHOL said  the  graphics  on slide  7  show that  advanced                                                               
nuclear reactors are  being developed for a  variety of different                                                               
3:56:35 PM                                                                                                                    
MR.  NICOL reviewed  the characteristics  and management  of used                                                               
fuel outlined on slide 8. He  said some people call the radiation                                                               
and heat from  used nuclear fuel waste, but less  than 10 percent                                                               
of  its  potential  energy  has  been consumed  so  it  could  be                                                               
recycled and  used for  another reactor. He  noted that  the U.S.                                                               
does not  recycle fuel for  economic reasons, but  countries like                                                               
France do.  He said another  characteristic of used fuel  is that                                                               
it is solid and compact. The  light-water SMR and the Oklo Aurora                                                               
reactor are meant to illustrate  this. The light-water reactor is                                                               
a new fuel  assembly that looks like a used  fuel assembly. It is                                                               
solid and very compact given  its energy density. The Oklo Aurora                                                               
reactor shows the  fuel inside the reactor  to illustrate current                                                               
thinking about refueling a reactor  by taking out the old reactor                                                               
with its  fuel and  putting in  a new reactor  with new  fuel. He                                                               
suggested  thinking  about  it as  swapping  out  batteries.  The                                                               
microreactor  would  not  have  used  fuel  onsite  for  extended                                                               
periods  even   though  the  storage   of  used  fuel   has  been                                                               
demonstrated to be safe.                                                                                                        
He  said  the  Department  of Energy  (DOE)  ultimately  has  the                                                               
responsibility to dispose  of the fuel. They  will have contracts                                                               
with companies  that own and  operate advanced reactors  and they                                                               
will eventually move the used fuel to final disposal.                                                                           
3:58:35 PM                                                                                                                    
MR.  NICHOL  said  a  lot   of  licensing  work  is  ongoing  and                                                               
anticipated with  the NRC.  The NuScale  design is  expecting its                                                               
NRC certification later  in 2020 for the  first advanced reactor.                                                               
NEI expects an  NRC application to be submitted soon  by the Oklo                                                               
Aurora  microreactor. There  are  a number  of advanced  reactors                                                               
that are proceeding toward NRC licensing.                                                                                       
CHAIR BISHOP asked where NuScale is manufacturing its reactor.                                                                  
MR.  NICHOL  answered  that  NuScale is  working  with  the  BWXT                                                               
Nuclear  Operations  Group in  Virginia  and  Canada, and  Doosan                                                               
Heavy Industries & Construction in South Korea.                                                                                 
SENATOR MICCICHE  said he was  pleased that the U.S.  is forward-                                                               
looking on potential technology  but wonders why advanced nuclear                                                               
reactors have yet to be developed.                                                                                              
MR.  NICHOL   answered  that  national  laboratories   have  been                                                               
developing  and testing  advanced technologies  for decades,  and                                                               
some  of   the  designs  are  operating   commercially  in  other                                                               
countries.  Until  recently,  the  U.S. was  focused  on  getting                                                               
large,  1000 MW  LWRs to  market.  About 2010  people started  to                                                               
realize the need for smaller  reactors, and then started to focus                                                               
on non-light-water reactors.                                                                                                    
4:01:50 PM                                                                                                                    
COREY MCDANIEL,  PhD, Chief  Commercial Officer,  Nuclear Science                                                               
and  Technology, Idaho  National Laboratory  (INL), Idaho  Falls,                                                               
Idaho, said the INL tested,  developed, and successfully deployed                                                               
the original  LWRs in the  1950s. The  INL developed many  of the                                                               
technologies that  Mr. Nichol mentioned,  but they did  not reach                                                               
the deployment stage.                                                                                                           
DR.  MCDANIEL  said there  is  a  new  sense  of urgency  due  to                                                               
decarbonization  and the  competitiveness with  Russia and  China                                                               
where  there  is now  an  imperative  and  the markets  are  more                                                               
accepting of advanced  technologies. He said the INL  is taking a                                                               
second shot at  getting advanced reactors deployed  from the U.S.                                                               
while watching other countries that  have started deploying those                                                               
4:02:33 PM                                                                                                                    
MR.  NICHOL said  demonstrations of  advanced reactors  take many                                                               
forms.  It  could  be  the first  commercial  reactor,  which  is                                                               
expected  for  light-water SMRs;  it  could  be a  non-commercial                                                               
reactor  that   demonstrates  that  the  reactor   works  without                                                               
producing  power   to  sell;  or   it  could  be   smaller  scale                                                               
MR. NICHOL reported  that the Department of Energy  is working on                                                               
a Joint  Use Modular  Program at INL  to demonstrate  the NuScale                                                               
technology  at a  plant owned  by the  Utah Associated  Municipal                                                               
Power Systems  (UAMPS). DOE is  also in the process  of launching                                                               
the  Advanced  Reactor  Demonstration  Program.  Funding  in  its                                                               
FY2021  budget provided  for  two  demonstration reactors  within                                                               
five to  seven years,  and two  to five  additional demonstration                                                               
reactors in the longer term. The latter might be commercial.                                                                    
MR.  NICHOL  said  the  U.S.   Department  of  Defense  (DOD)  is                                                               
extremely  interested in  microreactors  to  provide both  mobile                                                               
operational  energy and  stationary  reactors  for domestic  base                                                               
installations. The commercial market  is not interested in mobile                                                               
microreactors  but  the  department   plans  to  demonstrate  the                                                               
mobility feature  in 2024. DOD envisions  piloting a microreactor                                                               
for a  stationary reactor at a  remote base by 2027,  possibly in                                                               
locations within Alaska  like Fort Greely Army  Base, Eielson Air                                                               
Force Base, or Fort Wainwright Army Base.                                                                                       
He  said   there  are  several   companies  looking   at  private                                                               
demonstrations funded  by private investors who  would not depend                                                               
on    government   funding.    INL   expects    private   company                                                               
demonstrations to occur within the next few years.                                                                              
4:05:41 PM                                                                                                                    
SENATOR  HOFFMAN  asked  if   private  companies  are  soliciting                                                               
communities for demonstrations.                                                                                                 
MR.  NICHOL replied  he expects  private demonstrations  to first                                                               
occur at  a national  laboratory. Some  private companies  may go                                                               
straight  to  a commercial  reactor  so  they  would look  for  a                                                               
commercial location.                                                                                                            
SENATOR HOFFMAN remarked that that would not include Japan.                                                                     
MR. NICHOL  agree that Japan is  not looking at new  and advanced                                                               
reactors due  to their continued  focus on restarting  their shut                                                               
down reactors.                                                                                                                  
SENATOR HOFFMAN  asked if certain  regions of the state  are more                                                               
interested than others.                                                                                                         
MR.  NICHOL replied  it is  more  dependent on  utilities than  a                                                               
region. A  number utilities  have shown  interest, but  none have                                                               
made public announcements of their plans for advanced reactors.                                                                 
4:07:09 PM                                                                                                                    
MR.   NICHOL   reviewed   the  financing   options   for   design                                                               
development,  plant  construction,   and  operation  of  advanced                                                               
reactors. He said over $1 billion  in private capital has gone to                                                               
advanced reactor  companies. A few  companies, such  as municipal                                                               
utilities,  are  looking   at  self-financing.  Some  third-party                                                               
capital investors  are looking  at privately  financing reactors,                                                               
but  many other  companies are  looking for  federal support  for                                                               
their projects.                                                                                                                 
MR.  NICHOL explained  that the  federal  government has  several                                                               
tools  available to  provide  financial  support. Production  tax                                                               
credits is  one tool where  an operator receives tax  credits for                                                               
the  power  they produce.  Loan  guarantees  are  a way  for  the                                                               
government to  reduce the financing costs  for investor-owned and                                                               
municipal  utilities.   The  nuclear  industry  pays   for  these                                                               
guarantees  so there  is no  cost  to the  taxpayer. The  federal                                                               
government can also use power  purchase agreements to assist with                                                               
financing,  and there  is some  talk about  mechanisms where  the                                                               
government agency could pay for  the value of the resilience they                                                               
are receiving.                                                                                                                  
He  said there  are also  options for  state support  through tax                                                               
incentives  to  help  reduce  the  financial  burden  in  reactor                                                               
construction. He noted that policies  related to carbon reduction                                                               
are also helpful to make a business case for some projects.                                                                     
4:09:37 PM                                                                                                                    
MR.  NICHOL  turned  to  slide  12 that  shows  a  graph  of  the                                                               
estimated costs of the first  light-water SMR. He noted that this                                                               
work was done with SMR Start  to estimate the cost of reactors of                                                               
less than 300 MW. The study looked  at two 200 MW reactors with a                                                               
total plant size of 400 MW.  They found that the capital cost for                                                               
the plant  would be  about $2 billion;  the operating  costs were                                                               
estimated to  be $27 per MWH  and the plant could  be constructed                                                               
in about 36  months. The study also estimated a  10 to 20 percent                                                               
cost reduction through learnings and repetitive builds.                                                                         
4:10:28 PM                                                                                                                    
MR.  NICHOL turned  to  slide  13 and  explained  that the  chart                                                               
reflects the results of the  cost competitiveness assessment that                                                               
NEI performed for  microreactors. It illustrates how  the cost of                                                               
microreactors  can   be  reduced  through  lessons   learned  and                                                               
deploying multiple reactors.  The capital cost for  the first 10-                                                               
MW reactor  would be about  $150 million or $15,000  per kilowatt                                                               
(KW). Those costs are expected to  come down to $0.05/KWH and the                                                               
time to  construct a microreactor  would be less than  24 months,                                                               
with some designs taking less time.                                                                                             
4:12:17 PM                                                                                                                    
COREY MCDANIEL,  PhD, Chief  Commercial Officer,  Nuclear Science                                                               
and  Technology, Idaho  National Laboratory  (INL), Idaho  Falls,                                                               
Idaho,  started his  testimony by  reextending the  invitation to                                                               
the committee  and other legislators  to visit the  laboratory to                                                               
see  its demonstration  sites, equipment,  and the  test reactors                                                               
used to support advanced reactor technology.                                                                                    
4:13:43 PM                                                                                                                    
DR.  MCDANIEL advised  that his  presentation would  specifically                                                               
address deployment  and demonstration  activities that  happen at                                                               
INL,  and  that  he  was   available  to  address  any  technical                                                               
questions about reactor  safety. He said there has  been a strong                                                               
interest  in   clean  energy,   reliable  energy,   and  national                                                               
security,  particularly  the  geopolitical  risk  of  not  having                                                               
advanced  nuclear technologies  when  countries  like Russia  and                                                               
China  are developing  and deploying  the technologies.  He noted                                                               
that Russia  is in the  process of deploying many  large reactors                                                               
in almost 30 countries.                                                                                                         
He highlighted  that Congress has shown  unprecedented bipartisan                                                               
support   for   advanced   nuclear  technology   with   increased                                                               
appropriations   year  over   year  and   some  new   authorizing                                                               
legislation. He noted  that U.S. Senator Murkowski,  chair of the                                                               
Senate Energy  Natural Resources  Committee, oversaw many  of the                                                               
pieces  of  legislation signed  into  law  or reintroduced.  This                                                               
includes NEICA that  became law in 2018 and NELA  that is part of                                                               
the energy bill  senators are considering this week.  He said his                                                               
presentation  would also  cover the  National Reactor  Innovation                                                               
Center (NRIC) that is expected to launch in August 2020.                                                                        
DR.  MCDANIEL   detailed  that  one   of  the   advanced  nuclear                                                               
technology activities  is from Terra  Power, a company  funded by                                                               
Bill Gates to address climate change and leadership development.                                                                
4:15:32 PM                                                                                                                    
DR.  MCDANIEL  turned to  the  graphic  on  slide 3  relating  to                                                               
industry  efforts to  safely manage  spent  nuclear fuel  despite                                                               
political  inaction.  He  directed  attention  to  the  U.S.  map                                                               
showing the location  of the reactors, and  assured the committee                                                               
that  all the  nuclear reactors  in the  U.S. are  safely storing                                                               
spent fuel  onsite and will  continue to do  so until there  is a                                                               
political solution.                                                                                                             
CHAIR BISHOP  asked if  storing spent fuel  at Yucca  Mountain is                                                               
open for conversation.                                                                                                          
DR. MCDANIEL  said Congress and  the administration  have debated                                                               
Yucca Mountain  for a long  time without reaching  consensus. The                                                               
Secretary of Energy  spoke with Senator Murkowski  today during a                                                               
hearing  about  the  federal  budget for  nuclear  and  said  the                                                               
administration would continue to look for a better solution.                                                                    
4:16:57 PM                                                                                                                    
DR. MCDANIEL turned  to slide 4 and explained that  the origin of                                                               
the  Idaho  National  Laboratory  (INL) came  from  the  National                                                               
Reactor  Testing Station  after it  was used  as a  gunning range                                                               
during World  War II.  The laboratory was  set up  in cooperation                                                               
with  Argon National  Laboratory  in Chicago.  That facility  was                                                               
developing fission  technologies using thermal and  fast neutrons                                                               
and water and sodium coolants.  They were developing technologies                                                               
both  for  the  military  for  the naval  reactors  and  for  the                                                               
commercial use of nuclear power.                                                                                                
In  1974,  the  laboratory  changed its  name  and  the  missions                                                               
changed  to  focus on  energy  and  environmental management.  In                                                               
2005, a  combination with Argon National  Lab-West (ANL-W) formed                                                               
INL.  INL has  been in  operation for  the last  15 years  as the                                                               
nation's lead  nuclear laboratory. INL works  in cooperation with                                                               
other  national laboratories  on  nuclear  energy, including  the                                                               
Argon National Laboratory, the  Oakridge National Laboratory, and                                                               
more  than   a  dozen  other   facilities  within   the  national                                                               
laboratory system.                                                                                                              
4:18:28 PM                                                                                                                    
DR.  MCDANIEL   explained  that   INL's  strategic   science  and                                                               
technology initiatives  address the sustained development  of new                                                               
technologies in  support of the  existing reactor  fleet, working                                                               
on  fuel cycle  issues  to  take care  of  waste.  They focus  on                                                               
advanced  materials  and  manufacturing,  and  integrated  energy                                                               
systems  for   things  other  than  electricity   such  as  heat,                                                               
desalination, and  hydrogen production.  INL also plays  a strong                                                               
role with  the U.S.  Department of  Homeland Security  to develop                                                               
secure and resilient cyber physical  systems. This is relevant to                                                               
remote reactor operations where there is limited staffing.                                                                      
4:19:46 PM                                                                                                                    
DR. MCDANIEL stated  that the vision at INL is  to take the tools                                                               
it  has  from new  test  reactors,  advanced technologies,  cyber                                                               
security,  and  human  factors  to  support  the  development  of                                                               
advanced reactor technology through  a program called the Gateway                                                               
for  Advanced Acceleration  Innovation  in  Nuclear (GAIN).  GAIN                                                               
focuses on working with the  industry to develop the technologies                                                               
to get to demonstration.                                                                                                        
4:20:27 PM                                                                                                                    
DR.  MCDANIEL  advised that  the  next  few slides  describe  the                                                               
workforce at  INL. When the  committee visits they will  meet and                                                               
visit  the  nuclear  science   and  technology  directorate,  the                                                               
materials  fuels  complex where  materials  are  tested, and  the                                                               
advanced test reactor that is  used for the commercial sector and                                                               
the U.S. Navy to test reactor fuels.                                                                                            
4:20:55 PM                                                                                                                    
DR.  MCDANIEL   stated  that  INL  has   been  demonstrating  and                                                               
deploying  reactors  since  the  1950s  for  naval  reactors  for                                                               
submarines  and ships,  and for  most commercial  reactors around                                                               
the world. INL  has demonstrated other technologies  for the fast                                                               
reactor,  high temperature  gas-cooled  reactor,  and the  molten                                                               
salt  reactor, but  they  have not  been  deployed. The  National                                                               
Reactor  Innovation Center  (NRIC)  is now  focused on  deploying                                                               
those  technologies with  support  from  federal legislation  and                                                               
He detailed  that INL is  working on microreactors that  are less                                                               
than 10  MW, for  commercial use as  well as  mobile applications                                                               
for  DOD  use.  Commercial  microreactors could  be  deployed  in                                                               
remote   locations  for   mines  initially   and  eventually   in                                                               
DR. MCDANIEL noted that the SMR,  such as the NuScale reactor, is                                                               
going   straight  to   deployment.   Laboratories  have   already                                                               
demonstrated  the  SMR  technology  and  the  expectation  is  to                                                               
receive NRC design certification in  the near future. The NuScale                                                               
reactor will  be a commercial  deployment in Idaho with  the hope                                                               
for additional deployments both domestic and international.                                                                     
4:23:04 PM                                                                                                                    
CHAIR BISHOP asked how many megawatts the SMRs will produce.                                                                    
DR. MCDANIEL answered  that the six modules will  have a combined                                                               
load  of  over  600  MW,  but  each  module  will  have  just  50                                                               
CHAIR BISHOP recalled earlier testimony  that the price for a 600                                                               
MW plant would be around $2 billion.                                                                                            
MR. NICHOL answered correct.                                                                                                    
CHAIR BISHOP asked how a 600 MW SMR would be financed.                                                                          
DR.  MCDANIEL answered  that the  financing would  be similar  to                                                               
other  nuclear power  plants.  The license  is  typically for  40                                                               
years  and the  financing  would be  for 40  years.  He said  the                                                               
financial outlook  is better when  the license is extended  for a                                                               
second  40  years.  Smaller  microreactors  may  have  a  10-year                                                               
lifetime specifically suited to provide  1-3 MW of power and heat                                                               
at a mine with just one fueling.                                                                                                
CHAIR  BISHOP asked  if the  cost for  a small  reactor would  be                                                               
approximately $150 million.                                                                                                     
MR.  NICHOL  replied  his presentation  indicated  that  a  10-MW                                                               
reactor was $150 million.                                                                                                       
CHAIR BISHOP  asked if a 1  MW reactor was anticipated  because a                                                               
lot of rural communities in Alaska do not need 10 MW.                                                                           
MR. NICHOL answered  that there are designs  for microreactors as                                                               
small as 1 MW or less.                                                                                                          
4:25:35 PM                                                                                                                    
DR. MCDANIEL  returned attention to  slide 10 and noted  that the                                                               
Versatile   Test  Reactor   (VTR)  that   is  supported   by  the                                                               
administration and funded by Congress,  could be operating at INL                                                               
by  2026. The  VTR  is an  important tool  that  would offer  the                                                               
ability  to  test   and  develop  fuels  for   fast  reactors,  a                                                               
technology  that INL  developed.  The only  three countries  that                                                               
operate   fast    reactors   for   experimental    purposes   for                                                               
commercialization are Russia, China, and India.                                                                                 
DR.  MCDANIEL   detailed  that  INL  is   hoping  to  demonstrate                                                               
advanced-advanced  non-LWR  technology  by 2030.  They  would  be                                                               
reactors  with coolants  other than  water and  with more  exotic                                                               
designs that might be more efficient and cost effective.                                                                        
CHAIR BISHOP asked if the non-LWR would be safer.                                                                               
DR. MCDANIEL  replied the  safety of all  the reactors  is fairly                                                               
well  established. The  reactors that  are low  pressure, because                                                               
they  are liquid  metal cooled  or have  tri-structural isotropic                                                               
(TRISO)   type  fuel   with   particle   protection,  are   using                                                               
technologies that  have been well tested,  but it is a  matter of                                                               
getting them demonstrated and to the deployment stage.                                                                          
4:27:23 PM                                                                                                                    
DR. MCDANIEL  said slide 11  has more  discussion of some  of the                                                               
issues that Mr. Nichol mentioned.  He explained that HALEU is not                                                               
being  commercially  produced but  INL  is  providing it  at  the                                                               
laboratory and  is working with  industry groups to find  ways to                                                               
make the fuel available for  these reactors. He detailed that INL                                                               
will  demonstrate real-time  instrumentation  via  the joint  use                                                               
module  program with  the NuScale  reactor. He  said INL  is also                                                               
taking the lead on the back end of the fuel cycle.                                                                              
4:28:13 PM                                                                                                                    
DR.  MCDANIEL turned  to slide  12  and noted  that the  National                                                               
Reactor  Innovation Center  (NRIC)  came out  of the  legislation                                                               
Senator Murkowski sponsored.  He said NRIC is  the cornerstone of                                                               
how  INL  will use  the  tools  at  the laboratory,  provide  the                                                               
infrastructure to  demonstrate the  reactors, and have  that lead                                                               
to deployment for  the Department of Defense as  well as industry                                                               
in  the U.S.  and internationally.  The expectation  is that  the                                                               
reactors will be deployed in  communities once the technology has                                                               
been demonstrated at a military base  or a commercial site like a                                                               
DR. MCDANIEL  turned to slide  13 and explained that  the Gateway                                                               
for Accelerated  Innovation in Nuclear (GAIN)  was the foundation                                                               
on which NRIC was built. It is a  tool for industry to be able to                                                               
access  INL tests,  technology,  and expertise.  It  has been  so                                                               
successful in the  last few years that it is  clear that there is                                                               
a need to demonstrate these  reactors. He said demonstrations can                                                               
be  anywhere,  but INL  is  particularly  suited because  it  has                                                               
already  demonstrated 52  reactors,  some of  which  have led  to                                                               
commercial  deployments. Other  possible demonstration  sites are                                                               
in Washington state and Oakridge,  Tennessee, but INL has a track                                                               
record  of  demonstrations  and  is housing  the  NRIC  and  GAIN                                                               
programs that are not specific to Idaho.                                                                                        
4:30:17 PM                                                                                                                    
DR.  MCDANIEL   concluded  his   testimony  saying   the  current                                                               
situation with nuclear  energy is more positive than  it has been                                                               
in  the  past.  A  combination  of  federal  funding,  bipartisan                                                               
political  support,  demonstrating  new tools,  focusing  on  the                                                               
NuScale  module  demonstration,  the  VTR  program,  microreactor                                                               
demonstrations,   and  legislation   led  primarily   by  Senator                                                               
Murkowski  has put  INL  is a  position  to demonstrate  advanced                                                               
reactors in the  near term and have them ready  for deployment in                                                               
places like Alaska as the market dictates.                                                                                      
4:31:07 PM                                                                                                                    
SENATOR HOFFMAN asked how much nuclear energy INL uses.                                                                         
DR. MCDANIEL  replied none at this  time. Most of the  power that                                                               
INL uses comes from hydro and some coal through Idaho Power.                                                                    
CHAIR BISHOP asked if INL has an operational reactor.                                                                           
DR. MCDANIEL replied  INL has advanced test reactors  but it does                                                               
not  produce  electricity.  That  will change  when  the  NuScale                                                               
reactor  is up  and running.  That electricity  will go  onto the                                                               
grid  and  serve  30  potential  customer  utilities  around  the                                                               
Mountain West.                                                                                                                  
CHAIR BISHOP  observed that  it will  have to  be load  tested at                                                               
some point.                                                                                                                     
DR.  MCDANIEL agreed.  He noted  that when  the committee  visits                                                               
they  might  see a  demonstration  from  UAMPS  to show  how  the                                                               
reactor  could load-follow  with the  wind and  be used  in other                                                               
hybrid energy applications.                                                                                                     
4:33:33 PM                                                                                                                    
GWEN  HOLDMANN,  Director, Alaska  Center  for  Energy and  Power                                                               
(ACEP), University of Alaska  Fairbanks (UAF), Fairbanks, Alaska,                                                               
explained that  ACEP focuses on  applied energy research  that is                                                               
relevant  to  the  needs  of  Alaska  residents  and  industries.                                                               
Because  Alaska produces  and  uses power  in  unique ways,  ACEP                                                               
focuses  both  on  power  generation  and  on  broad  usage  that                                                               
includes heat and transportation.                                                                                               
4:34:22 PM                                                                                                                    
MS.  HOLDMANN  explained that  ACEP  first  became interested  in                                                               
small modular reactors  (SMRs) and microreactors in  2010. At the                                                               
direction of  the legislature, ACEP  worked on a  200-page report                                                               
to  identify  whether  this  nuclear  technology  might  have  an                                                               
application  in Alaska.  The study  sparked  interest among  ACEP                                                               
researchers,  and   the  center   has  continued  to   track  the                                                               
She said a big part of  the initial report, which Senator Hoffman                                                               
supported due  to his interest  in SMR technology, was  that this                                                               
technology  had  the  potential to  provide  baseload  power  for                                                               
remote  locations   that  depend   on  intermittent   sources  of                                                               
renewable energy. There  was also interest in  looking at options                                                               
to offset heating loads in these remote locations.                                                                              
MS.  HOLDMANN displayed  a map  showing the  more than  70 Alaska                                                               
communities that  have renewable  energy powered  microgrids. She                                                               
said  Alaska has  over 50  percent  of the  U.S. microgrids  with                                                               
renewable power connections  and 12 percent of  the world's total                                                               
number of microgrids.  The state is a  national and international                                                               
leader  in  microgrid  technology,   but  many  renewable  energy                                                               
sources have intermittent output which creates challenges.                                                                      
4:36:08 PM                                                                                                                    
MS.  HOLDMANN   displayed  a  short   video  to   illustrate  the                                                               
difficulty associated  with variable power demands.  For example,                                                               
the  power  demands  in  Cordova   increase  markedly  when  fish                                                               
processing  comes online.  She pointed  out  that when  renewable                                                               
resources and  the loads  are highly variable,  it makes  it very                                                               
difficult  to  make  incorporating  renewables  as  a  meaningful                                                               
offset to diesel fuel.                                                                                                          
She said the concern in  rural Alaska about switching from diesel                                                               
fuel  to  nuclear microreactors  is  related  to safety  and  the                                                               
potential  for environmental  contamination.  However, there  are                                                               
many examples  where diesel fuel  was the cause  of environmental                                                               
contamination  in communities  in rural  Alaska. She  pointed out                                                               
that very little  is done that has no  environmental footprint so                                                               
it  is important  to  think  about what  is  acceptable risk  and                                                               
balance  that between  what is  done  today and  what the  future                                                               
could potentially look like.                                                                                                    
4:38:03 PM                                                                                                                    
MS. HOLDMANN displayed a map  of the panarctic circumpolar region                                                               
and highlighted  that there is  no electrical grid on  20 percent                                                               
of the Arctic landmass. Power  in this area is provided primarily                                                               
through diesel generation,  so there is real  opportunity for the                                                               
region to  benefit from nuclear microreactor  technology. This is                                                               
particularly important  because of  the high  demand for  heat in                                                               
the Arctic. She  said Alaska should be tracking  the evolution of                                                               
this technology to  make sure that people  and organizations like                                                               
the  Idaho   National  Laboratory   (INL)  consider   the  unique                                                               
circumstances in Alaska.                                                                                                        
MS. HOLDMANN  restated that  diesel fuel for  space hearing  is a                                                               
large concern  from a cost  standpoint in many places  in Alaska.                                                               
Nuclear  microreactor technology  is  an  opportunity to  address                                                               
both heat and electric power.                                                                                                   
She directed attention to a photo  of a fuel barge accompanied by                                                               
a  Coast Guard  cutter delivering  fuel  oil to  Nome in  January                                                               
because the fall storms prevented  delivery of the fall shipment.                                                               
She  said  the  limited  need for  microreactor  refueling  would                                                               
provide  a  different paradigm  for  energy  security for  remote                                                               
areas in Alaska.                                                                                                                
4:40:03 PM                                                                                                                    
MS. HOLDMANN highlighted  a 2010 report by the  Alaska Center for                                                               
Energy  and  Power  (ACEP)  and  the  Institute  for  Social  and                                                               
Economic  Research (ISER)  that looked  at whether  small modular                                                               
nuclear  power was  an  option  for Alaska.  She  said ACEP  went                                                               
through the  following steps  that culminated  in recommendations                                                               
and a roadmap for the state:                                                                                                    
 • Review history of nuclear technology utilization in Alaska                                                                   
   • Consider technical and economic feasibility of proposed SMR                                                                
   • Assess siting and permitting requirement/barriers to                                                                       
   • Host a workshop as a forum for discussion and knowledge                                                                    
   • Create recommendations and develop a roadmap for the State                                                                 
     of Alaska                                                                                                                  
She  directed attention  to  the  photo of  the  Fort Greely  SM1                                                               
primary  reactor  facility  that  was commissioned  in  1962  and                                                               
decommissioned in 1972. She pointed  out that microreactors are a                                                               
very  different  technology  that  present much  less  risk.  The                                                               
reactor at  Fort Greely used 93-percent  enriched uranium whereas                                                               
the  proposed   microreactors  address  safety  by   having  fuel                                                               
enrichment levels below 20 percent.                                                                                             
4:41:22 PM                                                                                                                    
MS.  HOLDMANN said  even  though  ACEP did  not  look at  smaller                                                               
reactors  in the  2010 report,  the  center identified  continued                                                               
research  into smaller,  less  than 10  megawatt,  reactors as  a                                                               
priority.  The  ACEP  report  recommendations  included:  a  site                                                               
feasibility study for two locations  in Alaska; continued studies                                                               
of SMR  economics and technology development;  monitoring federal                                                               
legislation and support at the  national level; and identifying a                                                               
technology  lead for  somebody in  the state  to keep  an eye  on                                                               
small  reactor  technology  and   interact  with  people  on  the                                                               
national level.                                                                                                                 
MS.  HOLDMANN  displayed   a  map  that  shows   the  10  Alaskan                                                               
communities with  sufficient heating and electric  loads to match                                                               
small  modular  reactor  capabilities that  are  currently  under                                                               
She said one of the limitations  of the 2010 project was that the                                                               
smallest reactor technology at the  time was 45 MW. She suggested                                                               
that the study is worth  updating because microreactor technology                                                               
can accommodate much smaller loads.                                                                                             
4:43:07 PM                                                                                                                    
MS. HOLDMANN displayed a chart  of the local price thresholds for                                                               
the 10  communities. She said  the data is  out of date,  but the                                                               
size  of the  bars is  relevant from  an economic  standpoint. It                                                               
shows  that it  makes  the  most sense  to  deploy  one of  these                                                               
systems in the  Fairbanks area. The smaller  communities were not                                                               
cost competitive when the only  option was a 45 megawatt reactor,                                                               
but  microreactors with  1-10 MW  output is  a game  changer. She                                                               
said  she envisions  the potential  for no  diesel generators  in                                                               
rural Alaska in 25 years.                                                                                                       
MS. HOLDMANN  displayed images of  the Fort Wainwright  Army Base                                                               
and the  Red Dog Mine  to illustrate that  military installations                                                               
and  mining   operations  are   other  potential   locations  for                                                               
microreactors. She  posited that  there could be  a demonstration                                                               
project  at a  military base  in Fairbanks  or another  permanent                                                               
installation within a few years.                                                                                                
She said  SB 194 is  an important step  in making sure  Alaska is                                                               
open for  business and willing to  actively consider microreactor                                                               
technology in the future. The  nuclear industry and people at the                                                               
federal  level   are  looking  for  partners   who  are  actively                                                               
interested  and  willing  to collaborate  on  issues  related  to                                                               
safety,  nuclear  equipment  disposal,  and  the  size  range  of                                                               
reactors. There  will be  benefits if Alaska  is willing  to step                                                               
forward and be an active partner.                                                                                               
4:45:03 PM                                                                                                                    
MS. HOLDMANN displayed  the roadmap that ACEP  developed in 2010.                                                               
She  said  it   goes  through  a  stage  gate   process  that  is                                                               
surprisingly relevant and  accurate today. It says  the first SMR                                                               
will be  licensed in 2020; the  previous speaker said that  is on                                                               
target and a pilot project might happen sooner than 2030.                                                                       
MS.  HOLDMANN  said  the  final three  slides  are  historic  and                                                               
illustrate  how technology  has  developed over  time. The  first                                                               
image shows  the export of  whale oil  from Alaska in  the 1880s.                                                               
This was  the major energy  export at  that time. The  next image                                                               
shows horse-drawn wagons  of cordwood. In the  Interior there was                                                               
a lot of clearcutting to  power paddle wheel boats, and Fairbanks                                                               
initially  was powered  with 100  percent biomass.  She said  the                                                               
images are  a reminder that there  can be no assumption  that the                                                               
energy  sources used  today will  be used  tomorrow. Thus,  it is                                                               
important for the  state to be prepared and think  about what the                                                               
future might look  like. She suggested that is  an important role                                                               
for  the  university  that the  legislature  should  be  thinking                                                               
4:47:15 PM                                                                                                                    
MS. HOLDMANN concluded  her testimony pointing out  that in 2019,                                                               
Bethel spent about  $8 million for 3.2 million  gallons of diesel                                                               
fuel  for  just power  generation.  That  did not  include  space                                                               
heating. She estimated  that about $15 million was  spent on both                                                               
space heating  and power  generation. She  noted that  an earlier                                                               
slide showed that the average  baseload power needs for Bethel is                                                               
about  7 MW.  If a  10 MW  microreactor were  installed for  $150                                                               
million, the payback would be 10  years. She said there are a lot                                                               
of other  costs to consider  but this does demonstrate  that this                                                               
is a conversation worth having.                                                                                                 
CHAIR  BISHOP  referred to  the  slide  showing the  heating  and                                                               
electric loads  for 10 communities  in Alaska. It shows  that the                                                               
Railbelt uses  about 900 MW of  energy. He asked Mr.  Nichol if a                                                               
$2 billion,  600 MW reactor could  be scaled to 900  MW for about                                                               
$2.2 billion. He  also asked how long until a  600 MW plant would                                                               
need to be refueled.                                                                                                            
4:49:45 PM                                                                                                                    
MR.  NICHOL confirmed  that the  plant  could be  scaled up.  The                                                               
NuScale design  has 12 reactors  that are each  60 MW. That  is a                                                               
720 MW plant  and the cost is  in the ballpark of  $3 billion. He                                                               
noted that there  are also 300 MW plants that  could be scaled up                                                               
to 900 MW.                                                                                                                      
CHAIR  BISHOP  asked how  often  a  300  MW plant  would  require                                                               
MR. NICHOL  answered that refueling  for those reactors  would be                                                               
every 1.5 years  to 2 years. They would bring  in about one-third                                                               
of the fuel  so the fuel actually  lasts 3 cycles for  a total of                                                               
4.5 to 6 years.                                                                                                                 
4:50:46 PM                                                                                                                    
CHAIR BISHOP  offered his  understanding that  reactor technology                                                               
is  coming that  combines both  heat and  power, like  a combined                                                               
cycle gas  plant where power  comes from  one end and  heat comes                                                               
off the back  end. For example, a major  Fairbanks hospital burns                                                               
6,000  gallons of  diesel fuel  a day  during cold  weather so  a                                                               
nuclear powerplant that produces heat  could save a lot of diesel                                                               
fuel very quickly.                                                                                                              
SENATOR   HOFFMAN   remarked   that  rural   Alaska   could   use                                                               
microreactors,  but so  could the  entire world.  There would  be                                                               
universal uses.                                                                                                                 
He  noted  that   Alaska  has  $1  billion  in   the  Power  Cost                                                               
Equalization (PCE)  Fund, and  that money  could be  matched with                                                               
public/private  partnerships and  expended  throughout Alaska  to                                                               
make living  more affordable throughout  the state.  He suggested                                                               
the  legislature  talk to  Senator  Murkowski  to emphasize  fast                                                               
forwarding small reactors in the next decade.                                                                                   
4:53:31 PM                                                                                                                    
CHAIR BISHOP  agreed and pointed  out the circumpolar  map showed                                                               
multiple off-grid settlements.                                                                                                  
SENATOR  HOFFMAN remarked  that  10  years ago  it  was "if"  for                                                               
nuclear energy and now it is a matter of "when."                                                                                
MS. HOLDMANN replied  that is why updating the  2010 study should                                                               
be a priority.                                                                                                                  
She   referenced  Senator   Hoffman's   earlier  question   about                                                               
microreactors reacting to  an unexpected fault in  the system and                                                               
explained that SMR  technology, like the NuScale  reactor, is not                                                               
that much different from a  coal plant where heat generates steam                                                               
and  the  back  end  is  the  same. She  said  it  is  about  the                                                               
switchgear  that the  utility  has and  the  inner connection  to                                                               
handle  faults  in the  system.  Microreactors  are more  like  a                                                               
nuclear battery  with the reactor  being replaced after  10 years                                                               
so there is no onsite refueling.                                                                                                
MS. HOLDMANN  said she agrees  that there  is a lot  of potential                                                               
for all Alaskans to benefit.                                                                                                    
SENATOR  HOFFMAN asked  what the  legislature spent  on the  2010                                                               
ACEP study.                                                                                                                     
MS. HOLDMANN  answered that the Alaska  Energy Authority received                                                               
$200,000 for the study.                                                                                                         
CHAIR  BISHOP remarked  that he  was thinking  about a  committee                                                               
substitute for the bill.                                                                                                        
4:55:40 PM                                                                                                                    
SPENCER  NELSON, Professional  Staff  Member,  U.S. Senator  Lisa                                                               
Murkowski, U.S.  Senate Energy  and Natural  Resources Committee,                                                               
Washington, DC,  said Senator  Murkowski is  chair of  the Senate                                                               
Energy  and Natural  Resources Committee  and nuclear  energy has                                                               
been a priority for her for a long time.                                                                                        
MR. NELSON  said the focus  of his  overview would be  on federal                                                               
policy regarding  nuclear energy. He  advised that he  was unable                                                               
to attend the committee meeting  in person due to a comprehensive                                                               
energy bill on the floor that included advanced nuclear.                                                                        
He  reiterated  that  Senator  Murkowski  has  been  relentlessly                                                               
focused on any  kind of technology that would  lower energy costs                                                               
for  people  who are  either  in  Alaska  Native villages  or  in                                                               
remote, rural  communities that are  spending a  large percentage                                                               
of their  annual income on  electricity and heating.  The current                                                               
option  is diesel  or nothing,  whereas microreactors  provide an                                                               
opportunity for an alternative to fossil fuels.                                                                                 
4:57:50 PM                                                                                                                    
MR.  NELSON  said  different pieces  of  federal  legislation  on                                                               
advanced  reactors, specifically  smaller reactors,  are uniquely                                                               
suited  to  the  Alaskan  market.  One of  the  first  pieces  of                                                               
legislation enacted  into law was  the Nuclear  Energy Innovation                                                               
Capabilities Act (NEICA). That law  established a program for the                                                               
demonstration of  privately funded advanced reactors  at national                                                               
laboratories. It  sets up  research infrastructure  for a  lot of                                                               
advanced modeling and  simulation. He noted that  the bill passed                                                               
the Senate  unanimously, demonstrating  that there  is bipartisan                                                               
support within Congress for advanced nuclear technologies.                                                                      
MR. NELSON said the second bill  that became law in late 2018 was                                                               
the  Nuclear  Energy  Innovation Modernization  Act  (NEIMA).  It                                                               
changed  the  way nuclear  energy  is  regulated by  the  Nuclear                                                               
Regulatory Commission  (NRC) to recognize that  advanced reactors                                                               
are very  different from light-water reactors  (LWRs), especially                                                               
for not having the same  safely and security issues and therefore                                                               
can be evaluated  more quickly. As a result of  NEIMA, the NRC is                                                               
accelerating a  lot of its  advanced reactor reviews and  is also                                                               
looking  for new  ways to  regulate.  For example,  the NRC  just                                                               
released a position paper saying  that small reactors under 10 MW                                                               
may be able to address  environmental reviews on a generic basis.                                                               
That  will save  a lot  time by  not going  through the  National                                                               
Environmental Policy Act (NEPA) analysis.                                                                                       
He said there are a lot  of interesting things that can happen on                                                               
the regulatory front  with advanced reactors because  they are so                                                               
much better  suited for streamlined  regulatory review  than some                                                               
of the larger LWRs.                                                                                                             
5:00:35 PM                                                                                                                    
MR. NELSON said Congress also enacted  the 45 J Tax Credit, which                                                               
is an important  modification to an advanced  nuclear tax credit.                                                               
The credit is  $18.00 per MWH for the first  6,000 MW of advanced                                                               
nuclear capacity that  is built in the U.S. He  said much of that                                                               
will likely  go to  Plant Vogtle  in Georgia,  but there  will be                                                               
leftover capacity  for projects like  the NuScale pilot  plant at                                                               
INL or the first microreactors.                                                                                                 
He said Chair  Murkowski's staff has been working  on the Nuclear                                                               
Energy Leadership  Act (NELA).  It was  first introduced  in 2008                                                               
and  again in  2019 and  is a  bi-partisan proposal  with 22  co-                                                               
sponsors  in  the  U.S. Senate.  NELA  authorizes  federal  power                                                               
purchase authority  for advanced  reactors for  periods up  to 40                                                               
years. This  will take advantage  of the fact that  many advanced                                                               
reactors  can  run  for  much longer  than  the  current  10-year                                                               
statutory limit.  NELA will allow  INL to purchase power  for its                                                               
facilities  from  some of  the  advanced  reactors they  plan  to                                                               
demonstrate on site.                                                                                                            
MR. NELSON explained  that NELA sets a  two-tranche timeline: two                                                               
smaller reactors by  2025, and two to five reactors  by 2035 that                                                               
could  include  bigger  reactors  like  Bill  Gates'  reactor  or                                                               
others. The  NELA timelines are aggressive,  especially to people                                                               
who  are  not  working  on  nuclear.  However,  NELA  raises  the                                                               
ambition  for the  U.S. Department  of  Energy (DOE)  as well  as                                                               
slants  things  towards  microreactors.  He  noted  that  several                                                               
microreactor  design  demonstrations  are  likely  by  the  early                                                               
5:04:32 PM                                                                                                                    
MR. NELSON noted  that Congress created an  important program for                                                               
the U.S. Department of Energy  (DOE) to provide an interim supply                                                               
of advanced nuclear fuel. Twenty  percent enriched fuel that many                                                               
advanced  reactors  require  for operation  is  not  commercially                                                               
available in the  U.S. The program either converts  used DOE fuel                                                               
or  supports new  fuel facilities  for the  first demonstrations.                                                               
Once  the  commercial market  establishes  the  fuel supply,  the                                                               
program would  end. DOE made  an award  to recycle used  fuel for                                                               
one of  the microreactor  demonstrations that  will likely  be at                                                               
INL for the  [Oklo Aurora Application]. DOE  also contracted with                                                               
Centrus Energy  Corporation to begin demonstrating  their ability                                                               
to  enrich  fuel  up  to  the  20  percent  needed  for  advanced                                                               
reactors.  The  hope  is that  fuel  technology  and  regulations                                                               
governing advanced nuclear fuel  transportation will be ready for                                                               
the first reactors.                                                                                                             
MR.  NELSON aid  NELA also  addresses advanced  nuclear workforce                                                               
needs  in  the  U.S.  by   reauthorizing  a  nuclear  engineering                                                               
scholarship program  for industry, NRC, and  the National Nuclear                                                               
Security Administration.  He noted that  NELA is just a  bill and                                                               
not  a   law,  but  companies   are  going  forward   with  their                                                               
demonstration plans with the hope that NELA will happen.                                                                        
He  noted  that the  federal  budget  included appropriations  in                                                               
December  2019 for  demonstration  funding, which  is similar  to                                                               
what NELA calls for. The  appropriation includes $230 million for                                                               
two advanced  demonstration reactors  within 5-7 years,  and some                                                               
money for  later staged reactors. Expectations  are for companies                                                               
to apply  for demonstration funding later  in 2020. Corresponding                                                               
demonstration   programs   are    going   forward   through   the                                                               
appropriation process regardless of NELA.                                                                                       
5:07:57 PM                                                                                                                    
MR. NELSON said  the intent is to get NELA  through the Senate as                                                               
part  of  the American  Energy  Innovation  Act (AEIA).  AEIA  is                                                               
broader  than just  nuclear energy.  It includes  all aspects  of                                                               
energy innovation, cyber security,  electrical grid security, and                                                               
workforce development.  The U.S.  House of Representatives  has a                                                               
companion bill  to NELA  with corresponding  measures. Regardless                                                               
of  NELA  enactment,  there  are  expectations  for  microreactor                                                               
license applications  to be  submitted to NRC,  maybe as  soon as                                                               
next  week, for  demonstrations  at  INL. The  hope  is that  the                                                               
microreactor  submissions  ultimately  look at  opportunities  to                                                               
deploy in Alaska.                                                                                                               
MR. NELSON  said SB 194  is important because the  bill addresses                                                               
the ambiguity in  building advanced nuclear in  Alaska because of                                                               
the  current  statutory  requirement that  the  legislature  pick                                                               
sites. Changing the statute would  allow the decision to build an                                                               
advanced reactor  between the community  and the  developer while                                                               
maintaining  NRC  oversite.  Having   the  community  onboard  is                                                               
important  as well  as allowing  the developer  to pick  specific                                                               
sites  to  provide  power  from an  environmental  and  land  use                                                               
perspective. Without  SB 194, there  would have  to be a  plan to                                                               
set sites because  the sites that the legislature  sets might not                                                               
be  the  most economic  or  most  politically viable  to  develop                                                               
advanced nuclear.                                                                                                               
5:11:21 PM                                                                                                                    
CHAIR BISHOP thanked Mr. Nelson  for his comprehensive review. He                                                               
said the  committee intends to bring  SB 194 back next  week with                                                               
possible amendments.                                                                                                            
5:12:23 PM                                                                                                                    
At ease.                                                                                                                        
5:12:39 PM                                                                                                                    
CHAIR  BISHOP called  the committee  back to  order. He  said the                                                               
committee  will  bring  SB  194  back  on  March  10  for  public                                                               
testimony with the intent to move  the bill to the next committee                                                               
of referral.                                                                                                                    
[SB 194 was held in committee.]                                                                                                 
5:13:02 PM                                                                                                                    
There being  no further  business to  come before  the committee,                                                               
Chair Bishop adjourned the Senate  Community and Regional Affairs                                                               
Standing Committee meeting at 5:13 p.m.                                                                                         

Document Name Date/Time Subjects
SB 194 Sponsor Statement.pdf SCRA 3/3/2020 3:30:00 PM
SCRA 3/10/2020 3:30:00 PM
SB 194
SB 194 Sectional Analysis.pdf SCRA 3/3/2020 3:30:00 PM
SB 194
SB 194 DRAFT Fiscal Note DEC-CO 03-02-2020.pdf SCRA 3/3/2020 3:30:00 PM
SCRA 3/10/2020 3:30:00 PM
SB 194
SB 194 Supporting Document- CATF Advanced Nuclear Energy.pdf SCRA 3/3/2020 3:30:00 PM
SB 194
SB 194 Supporting Document- NEI Cost Competitiveness.pdf SCRA 3/3/2020 3:30:00 PM
SB 194
SB 194 Supporting Document- NEI Road Map Microreactors.pdf SCRA 3/3/2020 3:30:00 PM
SB 194
SB 194 Supporting Document- PBS Article 02-12-2020.pdf SCRA 3/3/2020 3:30:00 PM
SB 194
SB 194 Supporting Document- Nuclear Energy Leadership Act.pdf SCRA 3/3/2020 3:30:00 PM
SB 194
SB 194 Bill Presentation.pdf SCRA 3/3/2020 3:30:00 PM
SB 194
SB 194 Presentation-Alaska Center for Energy and Power-Holdmann.pdf SCRA 3/3/2020 3:30:00 PM
SB 194
SB 194 Presentation-Idaho National Lab-McDaniel.pdf SCRA 3/3/2020 3:30:00 PM
SB 194
SB 194 Presentation-Nuclear Energy Institute-Nichol.pdf SCRA 3/3/2020 3:30:00 PM
SB 194