Copyright 1999 Federal News Service, Inc.
Federal News Service
FEBRUARY 10, 1999, WEDNESDAY
SECTION: IN THE NEWS
LENGTH:
1189 words
HEADLINE: PREPARED TESTIMONY OF
STUART
E. SCHIFFER
DEPUTY ASSISTANT ATTORNEY GENERAL
CIVIL DIVISION
BEFORE
THE HOUSE COMMERCE COMMITTEE
SUBCOMMITTEE ON ENERGY AND
POWER
SUBJECT - H.R. 45, THE NUCLEAR WASTE POLICY ACT OF 1999
BODY:
Mr. Chairman, and members of the
subcommittee, I am Stuart E. Schiffer, and I am a Deputy Assistant Attorney
General of the Department of Justice. I am pleased to testify today regarding
the implications of recent litigation concerning the Department of Energy's
obligations under the Nuclear Waste Policy Act of 1982.
Let me note at the
outset that much of the litigation about which you have asked the Department of
Justice to provide testimony is still pending in the Federal courts. As a
result, the Department's pending matter policy applies to any discussion of
those cases. Pursuant to that policy, I will be happy to discuss matters that
are in the public record.
The Nuclear Waste Policy Act of 1982 authorized
the Secretary of Energy to enter into contracts with generators of high-level
radioactive waste and spent nuclear fuel -- mostly nuclear power utilities --
through which, in return for the utilities' payment of fees into the Nuclear
Waste Fund, the Department of Energy agreed to start disposing of spent nuclear
fuel created by the utilities' production of nuclear power beginning not later
than January 31, 1998. The Department of Energy then promulgated standard
contracts through notice and comment which contain the terms used in the
utilities' contracts. In 1984, Congress designated Yucca
Mountain in Nevada as the sole site for which the Department of Energy
is to perform a permanent repository feasibility determination. While site
testing continues at Yucca Mountain, construction of the
repository cannot begin. The Department of Energy has publicly represented that,
at the present time, it anticipates that the federal repository will not be
ready for use until 2010.
The Department of Energy's inability to begin
acceptance of the spent nuclear waste by January 31, 1998 has resulted in two
different tracks of litigation. The first set of cases were filed by utilities
who had paid fees to the Secretary of Energy under the NWPA and by state
commissions. These cases were filed in the United States Court of Appeals for
the District of Columbia Circuit, as permitted by chapter 108 of the NWPA,
seeking to require specific performance of the terms of the standard contracts
providing that disposal of spent nuclear fuel would begin by January 31, 1998.
The D.C. Circuit denied the utilities' demand for specific performance, finding
that the remedial scheme of the standard contracts offers a potentially adequate
remedy to the utilities. That remedial scheme, which is set forth in the
disputes clause in the standard contracts, requires the utilities to submit
their claims for monetary damages to the Department of Energy contracting
officer for decision, followed by an appeal by the utilities to the Energy Board
of Contract Appeals of any claims that the contracting officer denies.
Although the D.C. Circuit denied the utilities' requests for specific
performance, that court also issued a writ of mandamus precluding DOE from
excusing its delay in beginning disposal efforts by arguing on the grounds that
it has not yet prepared a permanent repository or interim storage facility.
Although we filed a petition for a writ of certiorari with the United States
Supreme Court to challenge the writ of mandamus, the Supreme Court denied our
petition. At the present time, several utilities are continuing to seek specific
performance in the D.C. Circuit and to seek to compel the Department of Energy
to reduce the fee payments for utilities still paying into the Nuclear Waste
Fund.
A second set of lawsuits is currently pending before the United States
Court of Federal Claims. To date, ten utilities have filed complaints in that
court, seeking damages ranging from $70 million to $1.5 billion, and totalling
approximately $8.5 billion, for alleged breaches of contract and takings under
the fifth amendment of the United States Constitution. We filed motions to
dismiss in several of the cases, upon the ground that the utilities had failed
to exhaust the administrative remedies which the standard contracts require,
through submission of a request for an equitable adjustment to the Department of
Energy contracting officer followed by an appeal to the Energy Board of Contract
Appeals. With regard to utilities that have ceased producing nuclear power, the
Court of Federal Claims, on October 29, 1998, rejected that argument. The court
determined that, because the utilities pay fees only during the period of time
during which they are generating electricity, and because,according to the
court, the standard contract contains no provision for a refund of previously
paid fees, the contractual remedy of an equitable adjustment was unavailable to
utilities that no longer generate electricity because they could not offset
future fee payments by the damages that they were allegedly incurring as a
result of the delayed spent nuclear fuel disposal. The court also found that
DOE's failure to begin disposing of the closed utilities' spent nuclear fuel by
January 31, 1998 constituted a breach of the standard contract, entitling those
utilities to damages. Discovery related to damages in three cases involving
utilities that no longer generated electricity has recently commenced. We are
currently awaiting decisions upon our motions to dismiss in cases involving
utilities that are currently generating electricity.
This committee has
requested that we address several points regarding these cases, including the
issue of whether payments of judgments arising out of the pending cases would
come out of the Nuclear Waste Fund. We are presently awaiting an opinion from
the Office of Legal Counsel regarding this matter.
The committee has also
requested that we address the impact that any such payments may have upon
program funding. The Department of Justice has no specific expertise relating to
this issue. We believe that the Department of Energy is a better source of
information regarding this particular matter.
In light of the fact that the
cases that I have described are currently pending in Federal court and the short
time that we have had to review H.R. 45, we must reserve any specific comments
regarding that legislation. However, we note that, to the extent that Congress,
through H.R. 45, determines that the Secretary must increase quarterly fees or
must change the timing of the collection of the one-time fee set forth in
Article VIII of the standard contracts, which the utilities have the option of
paying at any time prior to the first delivery of spent nuclear fuel under the
current standard contracts, there is a likelihood that the plaintiff utilities
will claim that this change would constitute another breach of contract for
which they are entitled to damages.
Finally, the Department of Justice joins
EPA in its concerns that H.R. 45 would preclude application of EPA standards,
limit the applicability of the National Environmental Policy Act, and preempt
other federal, state and local environment, safety and health laws.
This
concludes my testimony. I would be pleased to answer any questions that the
committee may have.
END
LOAD-DATE: February 11,
1999 
