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Federal Document Clearing House
Congressional Testimony
September 28, 2000, Thursday
SECTION: CAPITOL HILL HEARING TESTIMONY
LENGTH: 3627 words
COMMITTEE:
SENATE ENERGY & NATURAL RESOURCES
HEADLINE: TESTIMONY FAILURE TO MEET NUCLEAR WASTE
STORAGE DEADLINE
TESTIMONY-BY: THOMAS A. SCHATZ ,
TESTIMONY OF THOMAS A. SCHATZ
BODY:
Thursday,
September 28, 2000 Testimony of Thomas A. Schatz, President Citizens Against
Government Waste Before the Senate Energy and Natural Resources Committee Mr.
Chairman, members of the committee, thank you for the opportunity to testify
today. My name is Thomas A. Schatz. I am president of Citizens Against
Government Waste (CAGW), a nonprofit organization dedicated to eliminating
waste, fraud and abuse in government with one million members and supporters
throughout the country. In the interest of full disclosure, I am pleased to
inform you that Citizens Against Government Waste has not received any federal
grant and we do not wish to receive any in the future. CAGW was created 16 years
ago after Peter Grace presented to President Ronald Reagan 2,478 findings and
recommendations of the Grace Commission (formally known as the President's
Private Sector Survey on Cost Control). These recommendations provided a
blueprint for a more efficient, effective and smaller government. Since 1984,
the implementation of Grace Commission recommendations has helped save taxpayers
more than $650 billion. CAGW has been working tirelessly to carry out the Grace
Commission's mission to eliminate government waste. Recognizing that spent
nuclear fuel from commercial power plants and government defense activities was
being stored throughout the country at sites that were not designed for that
purpose, Congress enacted the Nuclear Waste Policy Act (NWPA) in 1982. The law
mandated that the Department of Energy (DOE) begin accepting spent nuclear fuel
at a permanent repository no later than January 31, 1998. The NWPA also created
the Nuclear Waste Trust Fund to pay for the construction of the permanent
repository. Customers who purchase electricity generated from nuclear power have
deposited more than $17 billion in fees into the fund. The situation seems
pretty straightforward: the law required DOE to construct a permanent facility
to receive spent nuclear fuel before 1999. In order to pay for this, electrical
customers would be charged a fee. Revenue generated through this fee would be
put into a trust fund for this purpose. Unfortunately, DOE decided to ignore its
legal obligation and has only spent $7 billion assessing the proposed
Yucca Mountain, Nevada site. The remaining $10 billion from the
so-called "trust fund" has been used to pay for other unrelated government
spending. Yet, spent fuel continues to accumulate at 72 commercial and 5 of
DOE's own facilities around the country, adding to the 40,000 metric tons
currently stockpiled. DOE's obligation to take the fuel is not in doubt. Just
last week, the U.S. Court of Appeals for the Federal Circuit ruled that three
utilities could maintain an action for breach of contract against the Department
of Energy for failing to dispose of the nuclear waste that had been produced at
the utilities' nuclear power plants. The court made it clear that this was not a
contract dispute that could be resolved under the terms of the agreement between
DOE and the utilities; it was a complete breach of the contract itself and
therefore could be pursued in court. The court specifically rejected the
government's contention that the failure to complete the nuclear waste
repository by January 31, 1998 was covered under the avoidable delays clause of
the contract between DOE and the utilities. For that clause to be effective, a
specific type of delay had to occur, namely the delivery, acceptance or
transport of nuclear waste. That does not cover the failure to build the
repository, only delays that involve individual contractors and which arise
during the performance of the contract. In other words, they would have occurred
after DOE began to dispose of the nuclear waste. The Court of Appeals was very
clear that Yankee Atomic's claim against DOE was broader than the improper
delays in performing DOE's contractual obligations. The court agreed with Yankee
Atomic that the government breached "a critical and central obligation of the
contract - that it begin disposal of nuclear waste by January 1, 1998." The
Court went on to say that "The breach involved all the utilities that had signed
the contract - the entire nuclear energy industry. This decision opens up DOE to
claims for breach of contract with every nuclear power company, leaving the
government open to massive liability that will eventually fall upon the
taxpayers. This is not the first time the courts have ruled against DOE in this
matter. In 1996, the U.S. Court of Appeals for the District of Columbia ruled
that the department must proceed with nuclear waste removal and storage. In
January 1997, a court ruled that DOE could not claim it lacked authorization to
take the fuel. The federal courts also found that the government is now liable
for paying for the on-site storage at nuclear facilities across the country.
Those costs range from $34 to $56 billion, even as high as $80 billion. The DOE
compliance date to accept the nuclear fuel has come and gone. Rather than
complying with the law, DOE has instead delayed the projected completion date
until 201 0. Not surprisingly, the president and vice president are cheering
this open defiance of the courts. President Clinton and Vice President Gore have
no substantive arguments, only politics on their side. DOE has adopted the
current administration's all-purpose defense when caught in one its ubiquitous
schemes -- it claims that is not responsible. The DOE has argued, incorrectly,
that it is not liable to begin accepting the spent fuel until a permanent
repository is operational. DOE continues to confiscate more than half a billion
dollars a year from utility ratepayers all over the country and hasn't moved a
single fuel rod. Numerous lawsuits have been filed in response to DOE's
recalcitrance. Though the courts have consistently sided with the utilities,
they have also refused to force DOE to move the fuel. The remedy, they say, is
monetary damages. That's bad news for taxpayers and the 20 percent of the
consumers who depend upon nuclear power for electricity. The utilities will be
forced to construct temporary on-site storage facilities or to arrange to have
the spent fuel moved elsewhere. Some may be forced to decommission early. And
that doesn't include court costs. Cost estimates for future damages range from
$50 billion to $80 billion, and are expected to escalate dramatically after
2007. DOE's approach to paying damages is to dip into the nuclear waste trust
fund. In other words, the Clinton-Gore Administration wants to pay the costs of
damages for its failure to perform out of the pool of money collected to pay for
the storage of nuclear waste, a task it has so far failed to perform. Of course,
this idea has been met with disdain by the nation's nuclear waste stakeholders
(states' attorneys general, public utility commissioners, nuclear utility
companies, and ratepayers). They are appropriately enraged at DOE and the
Clinton- Gore Administration for violating their legal responsibility, leaving
millions of electricity ratepayers and future generations of taxpayers with
massive, unexpected legal and infrastructure costs. Meanwhile, the spent nuclear
fuel continues to accumulate, potential damages are accruing and the costs will
almost certainly be paid by the taxpayers. The DOE's continued abdication of its
duty lays the groundwork for the shutdown of nuclear facilities throughout the
country as they run out of storage capacity. Given the massive stonewalling and
contempt for the law by the Clinton-Gore Administration, one is forced to
believe that this is the intent, rather than an incidental effect, of their
policies. Of the 107 nuclear reactors sites, 8 5 will be out of storage capacity
by 201 0. Since nuclear facilities have to plan at least five years in advance
for the storage crisis, either by designing additional dry storage space or
building new storage space. If these choices prove to be too expensive, the
plant must be decommissioned, and the utility must find other energy sources to
meet demand. It would appear, based on the administration's position, President
Clinton and Vice President Gore would like nothing more than to pull the plug on
the nuclear power industry. Of course, they have no fiscally responsible
alternative to supply the 20 percent of the nation's energy now provided by
nuclear power. It's time for the Clinton-Gore Administration to stop holding the
American people and much of our nation's energy supply hostage to their
political whims and their friends in the environmental movement. DOE scientists
have performed rigorous scientific testing to determine Yucca
Mountain's suitability. They have strongly made the case that it is the
best location to place and store the nation's spent nuclear fuel and high-level
radioactive waste. In December 1998, a favorable Viability Assessment of
Yucca Mountain was made which reviewed the site's suitability
as the permanent containment of the nation's spent nuclear fuel. In July of
1999, DOE submitted a favorable Environmental Impact Study (EIS) on
Yucca Mountain. The EIS reported that the DOE's preferred
course of action is to construct and eventually close a geologic repository for
the disposal of spent nuclear fuel and high-level nuclear waste at Yucca
Mountain. Alongside the positive appraisals of Yucca
Mountain, the EIS concluded that the cost of inaction and maintaining
the status quo is unacceptable. DOE estimates the costs at Yucca
Mountain, which include construction, transportation, and monitoring of
the site for I 00 years, at $28.8 billion. In contrast, DOE's cost estimates for
leaving the spent fuel where it is now, in temporary storage facilities at 72
commercial sites and 5 DOE sites, nearly doubles to between $51.5 and $56.7
billion over 100 years. The estimates are only the tip of the iceberg, however,
since they do not include costs incurred by the utilities to build and maintain
temporary storage facilities until the DOE can begin accepting the spent fuel at
Yucca Mountain, now tentatively scheduled to start in 201 0.
Taxpayers will bear these costs, one way or another. For example, should any of
the utilities be forced to decommission their power plants prematurely due to
DOE's failure to perform, they will have to replace that power. The courts could
slap the DOE with damages for those costs. The utilities estimate that costs for
temporary storage of the spent fuel could reach $8 billion. This is above and
beyond the $16 billion ratepayers have already deposited in the nuclear waste
trust fund. Continued delays are simply unaffordable and will only lead to
massive monetary damages, increased infrastructure costs, and skyrocketing legal
costs, all of which will be passed on to ratepayers and taxpayers. The federal
government in 1982 made a legally binding promise to ratepayers, taxpayers,
utility companies, and state officials to remove spent nuclear fuel that has
accumulated at sites around the nation and store it in perpetuity at a central
location. The DOE accepted tens of billions of dollars from electricity
ratepayers to pay for those activities and has spent $6 billion. Studies show
Yucca Mountain to be a safe and appropriate location for the
permanent repository. Congress should be commended in trying to stop the delay
and limit the increasing taxpayer liability being created by the Clinton-Gore
Administration's obstructionism by approving S. 1287, Nuclear Waste Policy
Amendments Act, that was introduced by the chairman of this committee. S. 1287
provides a vehicle to prod the administration into action. The bill reiterates
DOE's obligation to proceed with developing Yucca Mountain as
the permanent repository for spent nuclear fuel. It authorizes the DOE to begin
accepting spent fuel once the Nuclear Regulatory Commission signs off on the
construction of the permanent facility at Yucca Mountain. It
further reinforces the integrity of the nuclear waste trust fund, prohibiting
DOE from tapping the money to pay for damages incurred through its failure to
perform. It puts the regulatory authority for enforcing background radiation
standards at Yucca Mountain where it belongs, with the Nuclear
Regulatory Commission, which has a more rigorous compliance process then the
Environmental Protection Agency. S. 1287 also gives Congress some oversight over
any future adjustment of the fee structure. By approving S. 1287 and sending it
to the president, Congress sent a clear message: taxpayers will not tolerate an
arrogant executive ignoring the courts and saddling future generations with tens
of billions of dollars in monetary liabilities. Unfortunately, President Clinton
vetoed the bill so that his administration can continue to flaunt the
government's commitment, court decisions and the interests of the American
people. Hopefully, another vote to override his veto will be held and enough
members will support protecting the American taxpayers. The Clinton-Gore
Administration should honor the commitment made to taxpayers, stop playing
political games at the people's expense and stop blocking this legislation. This
concludes my testimony. III be glad to answer any questions you may have.
LOAD-DATE: October 4, 2000, Wednesday