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.
