The NRC is required by federal law to recover approximately 90 percent of its budget through fees. The NRC satisfies this objective by collecting fees from applicants and licensees when the agency provides a specific benefit to them (e.g., licensing reviews and inspection activities) and through annual fees paid by certain NRC licensees to recover generic regulatory costs. The NRC’s approach to fee-related activities has not changed significantly in the past 15 years. Some changes may, however, be on the horizon.
On March 22, 2016, the NRC published a Federal Register notice requesting information from the public on a number of issues associated with the development of the agency’s fees. In the notice, the NRC specifically requested stakeholder input regarding the general communications the NRC provides about its fees and the public’s understanding of the NRC’s fees. This self-examination is overdue. Licensees have long-complained about the lack of transparency in NRC fees.
As a government agency, the NRC’s effectiveness is not judged based on any economic performance measures and success is not measured in profitability. Tools used by corporations to manage effort, assure efficiency, and control costs are employed sparingly, if at all, during NRC licensing reviews and inspections. For example, license fees for specific applications are based on NRC hourly charges. But advanced estimates for the cost and duration of NRC licensing reviews are rarely available. Applicants, who are ultimately paying for the NRC to perform licensing reviews, have limited abilities to monitor the spend or the status of the reviews. And, NRC invoices typically lack the detail that would permit applicants and licensees to effectively engage with the NRC on the costs of their review. There can also be large charges for undefined project management activities.
Some of the topics that the NRC is seeking input on aim only to address NRC “process issues,” such as ways to improve the public’s understanding of the fees, to improve the NRC’s explanation of changes to fees each year, or to improve the timeliness of its fee-related activities or enhance the quality of information available online. These are good questions for the NRC to be asking and critical to increasing stakeholder understanding and support for NRC activities.
But, other questions raise specific and substantive issues that licensees and applicants ought to consider carefully. For example, the NRC is seeking information on ways that the NRC can improve the clarity and content of NRC invoice forms. Increasing invoice detail would undoubtedly increase transparency for the hours spent on specific projects and inspections. And, if this were coupled with reforms to the NRC’s fee dispute processes, there then would be the potential to significantly improve the accountability for fees.
The NRC is also asking whether there are activities that the agency should convert from fee-billable to non-fee-billable (or vice versa). One example given by the NRC is whether hearings for new licenses should be fee-billable. This strikes us as inappropriate. Hearing-related fees have historically been considered generic regulatory costs related to a process that exists for the public benefit, not just the benefit of a specific applicant. Hearings are initiated by a member of the public, and not typically at the request of a licensee. Neither the NRC Staff nor the Commission have direct control over the complexity and duration of the process. Opponents of a project would have every incentive to raise as many issues as possible in the hearing, knowing that NRC’s costs would be borne by the applicant. The uncertainty associated with the possibility of a hearing may simply be too great, particularly for smaller projects and applicants. This is inconsistent with the intent of the hearing process, which is to improve the quality of agency decisions and not to be an impediment to new projects. It is also inconsistent with the policy of lowering bars to innovation that already exist in the licensing of advanced technologies.
The NRC’s request for information is an important step for the NRC. The questions seem to acknowledge that improvements are possible, if not warranted, to achieve greater transparency, increased accountability, and improved stakeholder acceptance of the costs of the NRC’s regulatory activities.
Comments are due by May 6, 2016.