Absent a Repository, Nuclear Waste Fee Suspended

The nuclear waste fee, established by the Nuclear Waste Policy Act of 1982, pays for the building of a permanent repository for used nuclear fuel. When the government settled on Nevada’s Yucca Mountain for the repository site, Congress in 1987 amended the act to include it.

All that made sense – the industry paid for a repository and the government would take charge of used fuel and put it there. But when President Barack Obama ended the Yucca Mountain project in 2009 with no alternative site envisioned, numerous unresolved problems developed: first, the law stipulates Yucca Mountain and no place else as the repository. And second, how much money should the industry’s ratepayers pay into the nuclear waste fund without an actual repository to fund. Is $29 billion enough? Because that’s how much has been collected. Should the industry keep paying about $750 million per year when the government has no designated repository site to spend it on.

The U.S. Court of Appeals in Washington ruled that the Energy Department must take steps to suspend collection of the nuclear-waste fee from utilities because the government has provided no alternative to a canceled project at Yucca Mountain in Nevada, for which the funds are collected.

The three-judge panel said the Energy Department failed to come up with an adequate evaluation for the waste fee, which is paid into a fund that has grown to more than $29 billion since the first money was collected in 1983.

Because how do you evaluate it when the repository itself is vapor?

The agency’s assessment of disposal costs was “so large as to be absolutely useless to be used as an analytic technique,” Circuit Judge Laurence Silberman wrote in the seven-page decision. He said the department’s presentation reminded the court of a line from the musical “Chicago,” which says, “Give them the old razzle dazzle.” 

This is from Bloomberg’s Brian Wingfield and Andrew Zajac. Matt Wald a the New York Times adds more context.

In a decision written by Judge Laurence H. Silberman, the court ruled that “until the department comes to some conclusion as to how nuclear wastes are to be deposited permanently, it seems quite unfair to force petitioners to pay fees for a hypothetical option.” What they have already paid might cover that cost, Judge Silberman wrote, adding, “the government apparently has no idea.”

That’s on the button. That’s the issue and Judge Silberman makes of it a simple question of fairness – well, not only fairness, of course, but that is key to the industry’s position. You can read the whole decision here. It was fair to contribute when there was a repository and will be again when there is a designated site, but now?

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Wald points out that this dovetails with another court decision that has implications for the used fuel repository:

There is in fact no assurance that Yucca would turn out to be suitable. The Energy Department applied to the Nuclear Regulatory Commission for a license to build and operate the repository, but then tried to withdraw the application, and the commission stopped work. This year, the appeals court ordered the commission to resume work on the license, and on Monday, the commission said it would do so until it had exhausted the money it had on hand for that purpose, about $11 million.

It’s taken awhile, but the consequences of stopping Yucca Mountain – and continuing the fee – and ending the NRC’s assessment of the site – has become considerably clearer. And Congress, which passed the act and now could amend it to cover current circumstances?

The decision increases pressure on Congress to act, but on this issue, as on others, it is deadlocked. House Republicans want Mr. Obama to follow the laws passed in the 1980s and develop Yucca. Harry Reid, the Nevada Democrat who is the Senate majority leader, has blocked funding.

And so it goes. Some bipartisan movement has occurred on the issue and the court decision could spur further developments. In any event, a lot of the news lately on these issues have been good – and when the news about this is good, it’s good not just for the industry, but especially for electricity consumers.

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NEI’s General Counsel Ellen Ginsberg issued this statement on the nuclear waste fee decision:

“Today’s decision confirms that the federal government cannot continue to defy Congress’ explicit direction to implement a viable program to manage reactor fuel from America’s nuclear power plants. The court’s ruling reinforces the fundamental principle that the federal government’s obligation is to carry out the law, whether or not the responsible agency or even the president agrees with the underlying policy.

“We agree with the court that unless and until the Energy Department’s repository program is restarted or another waste disposal program is developed, it is appropriate that the Nuclear Waste Fund fee be suspended.

“The court’s decision should prompt Congress to reform the government’s nuclear waste disposal program. We strongly encourage Congress to establish a new waste management entity, and endow it with the powers and funding necessary to achieve the goals originally established in the Nuclear Waste Policy Act. We look forward to working with Congress as members develop legislative proposals to remedy the currently untenable situation.”