By Wayne Barber
The U.S. Court of Federal Claims continues to be an active venue for nuclear power companies to seek reimbursement from the U.S. government for the Energy Department’s ongoing breach of its legal obligation to take possession of spent nuclear fuel from commercial reactors.
The Federal Circuit held in 2000 that the department had breached the “Standard Contract” under the 1982 Nuclear Waste Policy Act by failing to meet its obligation to begin accepting nuclear waste before Jan. 31, 1998. The law directs DOE to build a permanent repository for the waste, but that has yet to happen.
Since then, it has become fairly routine for nuclear companies to win federal compensation for costs incurred by virtue of nuclear plant sites still having to house the spent fuel. The U.S. government as of December 2015 had paid out $5.3 billion to electric utilities, and its total remaining liabilities would reach $23.7 billion if DOE could within a decade begin taking waste, the Congressional Budget Office has found.
In some of the more recent cases, nuclear companies have broadened their storage litigation to seek compensation for certain ancillary expenses they allegedly would not have incurred in a “non-breach world.”
Here’s a rundown of certain key Federal Claims decisions in the first half of 2016.
The federal government does not have to return an estimated $4.3 million in Nuclear Regulatory Commission fees to Southern Co. subsidiaries Alabama Power and Georgia Power, a Court of Federal Claims judge ruled in June.
The case was Alabama Power and Georgia Power versus the United States, in which the Court of Federal Claims granted the government’s motion for partial summary judgment.
In court papers, the Southern utilities said they had not immediately appealed the denial of a potential $4.3 million recovery of Nuclear Regulatory Commission fees for fear such a move would have delayed the already-awarded total of about $63 million they had won in a prior ruling on the DOE spent fuel breach.
But the federal government successfully argued that $4.3 million issue had already been litigated in a prior legal round.
The complaint alleged the utilities have “incurred increased and/or additional regulatory fees, including but not limited to the dry storage portion of the Spent Fuel Storage/Reactor Decommissioning Fee imposed by the Nuclear Regulatory Commission, as a result of the Government’s partial breach of the Standard Contract for Plant Vogtle Units 1 & 2.”
In May, an Entergy subsidiary was allowed to recoup over a half-million dollars in addition to a major judgment it had already won from DOE. The Court of Federal Claims held that the subsidiary is due more than $560,000 in spent fuel “characterization” costs from DOE.
The court had already awarded utility Entergy Gulf States total damages exceeding $47.5 million for site modifications, additional security, and cask loading costs at River Bend Nuclear Station in Louisiana.
“Plaintiffs here have established, as did the plaintiffs in System Fuels, that DOE will likely not accept the fuel as it is currently stored,” the Claims court said in its May decision. Therefore, Entergy Gulf States is allowed to recoup the additional costs, the court held.
In a decision in late February, the court determined that the Sacramento Municipal Utility District (SMUD) is entitled to roughly $28.8 million in damages to mitigate DOE’s partial breach of the Standard Contract from Jan. 1, 2010 to June 30, 2015.
During the 1980s, SMUD operated the Rancho Seco nuclear plant in Sacramento. In June 1989, the voters of Sacramento chose to shut down Rancho Seco.
In this case, the court approved a long list of expenses – including operation and maintenance costs of a couple buildings — which SMUD would not have otherwise incurred in a “non-breach world.”
The U.S. Court of Federal Claims ruled in February that it would be premature to consider the spent fuel-related financial damages being sought by Boston Edison because the Pilgrim nuclear plant in Massachusetts is still operating. It dismissed Boston Edison’s complaint because its claim is not yet ripe.
Entergy and Boston Edison, respectively the current and former owner of the Pilgrim plant, brought separate suits against DOE, for claims related to the storage of spent fuel at the facility.
Entergy filed its present suit in 2015 to recover damages that it incurred between Dec. 31, 2008, and June 30, 2015, due to DOE’s ongoing partial breach of contract. Subsequently, Boston Edison filed suit to recover damages for DOE’s breach of contract, alleging that its damages are now “ascertainable” because the decommissioning of Pilgrim has allegedly begun.
On Nov. 10, 2015, Entergy notified the Nuclear Regulatory Commission that it has decided to permanently cease power operations at Pilgrim no later than June 1, 2019. But as of now Pilgrim plant is operating and it has not undertaken any activities related to decommissioning, the court noted.
Boston Edison’s suit to recover “at least” $40 million for DOE’s breach, would not be “ascertainable” until decommissioning starts at Pilgrim, according to the decision filed Feb. 14.
