Nuclear Energy Institute

DOE’s Failure To Move Used Nuclear Fuel Could Cost Taxpayers Billions, Industry Executives Tell Congress
Washington, D.C., September 28, 2000—Taxpayers needlessly could be forced to pay billions of dollars because of the federal government’s failure to meet its legal obligation to move used nuclear fuel from commercial nuclear power plants, industry executives testified in Congress today. The Department of Energy (DOE) has the capability to begin moving used nuclear fuel but continues to breach contracts with companies to move fuel beginning January 1998, executives told the U.S. Senate Committee on Energy and Natural Resources.
"The unfortunate reality is that the government’s breach of its legal obligation to remove used nuclear fuel from commercial nuclear power plant sites was foreseeable and has the potential to cost taxpayers tens of billions of dollars," said Marvin Fertel, senior vice president of business operations for the Nuclear Energy Institute (NEI). "At the same time DOE was litigating issues related to its contractual and statutory obligation to take nuclear fuel, the Administration opposed legislation that provides a reasonable plan for DOE to meet its obligation."
The U.S. government has had the responsibility to manage used nuclear fuel since the 1950s. "The government has failed taxpayers and consumers for more than four decades," said John Rowe, chairman, president and chief executive officer at Chicago-based UNICOM. "These settlements do not expedite the day when the problem is resolved."
To date, the government’s failure to take used nuclear fuel from power plants has triggered lawsuits by 12 electric utilities seeking in excess of $5 billion in damages. Additional lawsuits could be filed if the government continues to miss its contractual schedule for removing used fuel at other plant sites. In a development that led to today’s hearing, the U.S. Court of Appeals for the Federal Circuit ruled on Aug. 31 that utilities’ contracts with DOE do not preclude them from seeking damages in court.
"An alternative to prolonged litigation is readily at hand,” said Russell Mellor, president and chief executive officer of Connecticut Yankee Atomic Power Co., one of the companies that has filed suit. "DOE can and should remove spent fuel from the Yankee companies’ sites now. There is no legitimate basis for any further delay. "The Nuclear Waste Fund can and should be used to site and operate a central, temporary storage facility. Regardless of where DOE provides for storage, it has the clear authority and ability to begin removing spent fuel from reactor sites," Mellor said.
Fertel said DOE’s ability to immediately meet its obligation does not hinge on the Yucca Mountain, Nev. site being studied for a permanent used-fuel repository.
"It is not necessary to have a completed permanent repository facility in order to fulfill that contractual obligation. In fact, DOE is and has been safely moving used nuclear fuel for years. DOE should begin mitigating potential taxpayer costs as soon as possible instead of waiting until 2010, when the permanent repository is scheduled to be completed."
Eighty of the nation’s 103 commercial reactors, which meet one-fifth of U.S. electricity needs, will have run out of existing on-site storage for used fuel by 2010.
Fertel also urged Congress to ensure that the radiation protection standard for Yucca Mountain that will be issued by the Environmental Protection Agency is based on sound science. He emphasized that the EPA acknowledged in testimony before the House Commerce Committee in June that its proposed standard is based on policy, not science.
EPA’s proposed 4-millirem groundwater standard has been criticized by the National Academy of Sciences and others on the grounds that it is less protective of the public health and adds unnecessarily to the costs of the Yucca Mountain project.
"At worst, the EPA standard could needlessly disqualify Yucca Mountain-and perhaps all other potential repository locations in the U.S.-resulting in a total failure of the repository program and costing taxpayers as much as $61 billion dollars,” Fertel said. “Ironically, the result of imposing EPA’s proposed standard also would be to frustrate the ability to meet our clean-air goals because nuclear energy is our country’s largest source of emission-free electricity. I would think that is not an outcome we would expect the Environmental Protection Agency to pursue."
Although recent court decisions represent a clear victory for the Yankee companies and New England’s electric ratepayers, Mellor said, they do not provide a solution to the region’s used fuel storage challenge. The Department of Energy must still meet its statutory and contractual obligation.
In some cases, the potential liability burden to taxpayers will not be limited to the utility’s cost of storing used fuel beyond DOE’s removal schedules. For example, damages could be incurred if Xcel Energy’s Prairie Island nuclear power plant in Minnesota were forced to shut down in 2007 because used fuel is not removed from the site. "Direct damages from DOE’s failure to remove used fuel from Prairie Island will exceed $1 billion," said Xcel Energy Vice President David Sparby. "Even after this bill is paid, we will still need the federal government to institute a plan of action."
Also, damages could result if shutdown reactors, such as Yankee Atomic in Massachusetts, are prevented from completing timely and cost-effective decommissioning of their sites.
Unless DOE acts, Fertel said, taxpayers could be liable for more than $5 billion in damages from lawsuits already before the courts and potentially 10 times that amount. He suggested that a presidential decision to approve the Yucca Mountain site next year, coupled with passage of S. 1287, “can set the DOE program on a success path that would limit taxpayer liability and benefit consumers and the environment."
For the complete text, see Marvin Fertel, Testimony Before the U.S. Senate Energy and Natural Resources Committee.