Thomas Gardiner
The U.S. Court of Federal Claims in November awarded utility Duke Energy $68.5 million in damages over the Department of Energy’s failure to remove spent nuclear fuel from some four nuclear power plants.
The court ruling cites the Energy Department’s actions as a partial breach of contract with Duke subsidiaries Duke Energy Progress and Duke Energy Florida. Judge Thomas Wheeler awarded more than 95 percent of the $71 million Duke claimed in the case; DOE had contested only $3.4 million of that amount.
Duke’s claims for damages came from costs the company incurred for spent fuel management from 2011-2013 at its Harris and Brunswick nuclear plants in North Carolina, its Robinson facility in South Carolina, and the shuttered Crystal River site in Florida. This was the third round of claims against DOE for the four nuclear plants.
The Energy Department has faced a host of lawsuits from nuclear utilities for its failure to meet the mandate in the 1982 Nuclear Waste Policy Act to begin moving spent fuel away from U.S. commercial reactors by 1998. The department’s mandatory “Standard Contract for Disposal of Spent Nuclear Fuel and/or High Level Radioactive Waste” with nuclear power providers set a Jan. 31, 2018, for DOE to begin accepting spent fuel.
As of December 2013, Duke’s fees for disposal of spent fuel under its Standard Contracts with DOE for the Harris, Brunswick, Robinson, and Crystal River plants totaled $904 million. “To date, DOE has not provided the transportation of SNF from Duke’s sites to a DOE facility,” Wheeler wrote. “Duke intends to hold DOE to its obligation to perform, thus making DOE’s delay a partial breach of the contract.”
The federal government has paid out over $5 billion over the last 10 years, and still does not have permanent or interim repositories for the waste. Total DOE liability to nuclear utilities has been estimated at north of $20 billion.
In the Duke case, trial was held from June 5-7, followed by a post-trial briefing in August and closing arguments on Sept. 13.
The Energy Department contested 12 specific monetary claims filed by the utility, including some big-ticket items for Crystal River: $565,443 for dry storage system and contract termination costs; $1.3 million for modifications to an auxiliary building; and $1.2 million for modifications to a crane. The court denied all the contested claims connected to Crystal River, but ordered DOE to pay the remaining eight for expenses at the other three sites.
Wheeler determined DOE was not liable for storage and other waste-related costs connected to the September 2009 shutdown of Crystal River. Duke attempted to refuel the facility and replace its steam generators in 2009. According to court documents, the company attempted the project without an outside consultant, something no other utility had done successfully. The process faltered and Duke was forced to close down the facility.
The government also filed a claim to have damages reduced by more than $1.5 million because of state agencies’ approval for Duke electricity rate increases in North and South Carolina. DOE argued that those changes allowed Duke to recover some of those costs through rate hikes in respective states. The court denied that claim.
