Federal Court Reopens Case Disputing Nuclear Waste Fund Fees

The U.S. Court of Appeals for the D.C. Circuit last week reopened and set a relatively expedited briefing schedule for a case in which several states and nuclear utilities have claimed collection of a nuclear waste fee by the Department of Energy (DOE) is unlawful.

The National Association of Regulatory Utility Commissioners (NARUC), which represents state regulatory agencies from all 50 states, and industry group the Nuclear Energy Institute (NEI) in 2010 sued the DOE for collection of a fee from nuclear generators for nuclear waste disposal that they say averaged nearly $750 million a year since 1983. The fee is "legally defective" because development of the Yucca Mountain permanent spent fuel waste facility had been discontinued, the groups argued.

But while the D.C. Circuit in June 2012 ruled that the fee was unlawful, it ordered the DOE to conduct a reevaluation of the Nuclear Waste Fund and report back to the court within six months. This January, the DOE submitted a 180-page filing to the court, determining that "neither insufficient nor excess revenues are being collected in order to recover the costs incurred by the Federal Government" as specified in the Nuclear Waste Policy Act (NWPA) of 1982. The DOE argued that the fees were necessary because the administration and Congress intended to pursue a new nuclear waste strategy. Just a week before, it quietly unveiled a waste disposal strategy that calls for a phased, consent-based approach to siting and implementing a nuclear waste management and disposal system and endorsed building a pilot interim storage facility by 2021.

The 1982-passed NWPA established a broad policy framework for the permanent disposal of used nuclear fuel and high-level radioactive waste derived from nuclear power generation. The NWPA authorized the government to enter into contracts with reactor operators—the generators and current owners of used nuclear fuel—providing that, in exchange for the payment of fees, the government would assume responsibility for permanent disposal. The fees, of $0.001/kWh levied on electricity generated and sold, were to ensure that the reactor owners and power generators pay the full cost of the disposal of their used nuclear fuel and high-level radioactive waste.

More than 68,000 metric tons heavy metal (MTHM) of used nuclear fuel are stored at 72 commercial power plants around the country, with about 2,000 MTHM added to that amount every year, the DOE says.

A November 2012–released independent audit of the DOE’s Nuclear Waste Fund balance sheet by consulting group KPMG found that as of Sept. 30, 2012, the Nuclear Waste Fund had a market value of $38.7 billion (compared to $35.1 billion at the end of 2011). Utilities paid $3.26 million to the fund in 2012. 

"The Court did the right thing by reopening the case and setting a relatively expedited briefing schedule,” said NARUC General Counsel Brad Ramsay in a statement last week. “The most recent fee assessment contains the same flaws as the one previously before this same set of judges. If their last opinion was any indication, it appears likely the court will conclude the Energy Department’s most recent evaluation of the fees paid into the fund is deficient and therefore the agency should stop assessing it until Congress adopts a new nuclear waste policy. Either that or the Administration should resume the process established more than 30 years ago in the Nuclear Waste Policy Act.”

Sources: POWERnews, NARUC, DOE

Sonal Patel, Senior Writer (@POWERmagazine)

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