In a filing with the U.S. Court of Appeals, D.C. Circuit, state utility regulators and nuclear utilities rejected claims in a recent Department of Energy (DOE) filing that Nuclear Waste Fund fees were necessary, and they called on the court to temporarily suspend the fees.

The National Association of Regulatory Utility Commissioners (NARUC), which represents state regulatory agencies from all 50 states, and the Nuclear Energy Institute (NEI, an industry group) said the Energy Department’s filing was "fundamentally flawed."

NARUC and the NEI had sued the DOE in 2010, arguing that collection of a fee by the DOE that totaled nearly $750 million a year from nuclear generators for nuclear waste disposal since 1983 was “legally defective” because development of the Yucca Mountain permanent spent fuel waste facility had been discontinued. In its June 2012 ruling in that case (NARUC and NEI v. DOE), however, while the court held 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.

But in its 180-plus page filing to the court on Jan. 18, the DOE said that the Nuclear Waste Fund fees were necessary because the administration and Congress intended to pursue a new nuclear waste strategy.

A week before that filing, the DOE had unveiled a strategy for the management and disposal of the nation’s spent nuclear fuel, calling for a phased, consent-based approach to siting and implementing a nuclear waste management and disposal system. The strategy also endorses building a pilot interim storage facility by 2021. In Congress, meanwhile, Sen. Ron Wyden (D-Ore.), who is chairman the Senate Committee on Energy and Natural Resources, is expected to release draft nuclear waste legislation over the next several weeks.

"Unfortunately, the [DOE’s] report does not comply with the court’s directions, NARUC and NEI said, because it is based upon the speculative belief that Congress will adopt a new nuclear-waste strategy," NARUC said in a statement last week. "DOE only states that it intends ‘to work with Congress to enact legislation to implement the strategy. At bottom, DOE has based its conclusion to continue to collect the Nuclear Waste Fund fee, unabated, on a plan that has not been, and may never be, authorized and implemented by Congress.’”

“Until such time as Congress acts, the key components of DOE’s assumed program have not been approved,” the plaintiffs said in their filing. “As DOE concedes, the strategy is based on an ‘assumed disposal system’ and is only a ‘plan for developing’ a waste-disposal program.”

According to legal expert Michael McBride from VanNess Feldman, the federal court had in prior cases been willing to defer to the DOE determinations of the amount of the fee, but after the Yucca Mountain program was suspended in 2010, it did not seem inclined to defer fee determination to the agency. "Effort at rationalizing the continued collection of the fee is guaranteed to result in further court challenges. DOE will have a hard time prevailing if it keeps the fee in place," he said.

McBride notes that the Blue Ribbon Commission had recommended the fees be escrowed, "which could be done without legislation and would best carry out Congressional intent that beneficiaries of nuclear energy bear the costs of disposal of spent fuel."

The 1982-passed Nuclear Waste Policy Act (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 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.

Because it failed to meet contractual obligations with nuclear generators to begin accepting used nuclear fuel by 1998, the federal government is facing other lawsuits from contract holders for damages to cover the costs of onsite spent nuclear fuel storage.

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.

Sources: POWERnews, NARUC, DOE

—Sonal Patel, Senior Writer (@POWERmagazine)