Jeremy L. Dillon
RW Monitor
3/14/2014
A federal court this week awarded Duke Energy the repayment of costs incurred for the storage of spent nuclear fuel due to the Department of Energy’s failure to live up to its contract to manage the spent fuel, as required by the Nuclear Waste Policy Act. The Federal Court of Claims awarded Duke Energy approximately $104 million for damages incurred from the time period of Jan. 1, 2006, through Dec. 31, 2010, for its four nuclear plants—three in South Carolina and one in Florida. Previously, the court awarded damages to Duke Energy for the same reasons for the period from 1998 to 2005. “We are pleased the court recognized the validity of our claims regarding costs incurred for fuel storage between 2006 and 2010,” said Duke spokesman Rita Sipe. “Unfortunately, until the Department of Energy moves forward with its legal obligation to accept used nuclear fuel, customers will continue to incur costs associated with fuel storage. And, utilities will continue to seek recovery of these costs from the federal government.” The Department of Justice did not return calls for comment this week.
Under the NWPA, DOE is required to deal with the high level waste generated by commercial nuclear reactors, but due to the shuttering of the Yucca Mountain geological repository in 2010 by the Obama Administration, DOE has not been able to fulfil its obligations. Payouts in total to utilities have ballooned to approximately $2.7 billion, with litigation to continue for the foreseeable future.
Pre-mature Shutdown as a Way Out?
While DOE conceded $88 million of what Duke was seeking, the major contention of the case dealt with whether or not DOE should have to pay for dry cask storage for the Crystal River reactor, which entered pre-mature shutdown last year. DOE argued that since it would not accept fuel in canisters if a repository was in operation, it would make no sense for Duke to construct a dry storage facility in that instance, and if the plant was going to be retired, the dry storage facility and the canisters would need to be decommissioned in only a few years, resulting in a large expense for little value. Duke argued it would not have to build dry storage, what it deemed a “difficult build,” if DOE constructed a repository at Yucca Mountain. The court ruled that since this contention did not fall in the time frame under consideration, it did not have bearing. “At issue here is causation for mitigation damages incurred during this claims period, and the retirement of Crystal River in 2013 cannot have caused [Duke Energy] to incur costs prior to 2010,” Judge Thomas Wheeler said in his opinion. “Put another way, recoverable costs cannot be rendered unrecoverable by future events outside of the claim period.” The Court awarded $23 million to Duke for costs related to the construction of dry storage.
Energy Northwest Also Awarded Money
In another case before the Federal Court of Claims, the court awarded Energy Northwest $19.3 million for damages for the construction and licensing of a used fuel storage area at Columbia Generating Station. “Considering EN’s exhaustive and meticulous methodology—tested and, with respect to this $19.3 million, undisputed by the government’s own experts—the Court concludes that there exists no factual or legal dispute as to EN’s entitlement to $19.3 million in costs incurred to continue to operate its dry storage program and that EN is entitled to judgment as a matter of law for that amount,” Judge Elaine Kaplan wrote in her opinion. Energy Northwest issued a similar statement to Duke Energy concerning the awarded damages. “This is another big victory for the region and the ratepayers of the Northwest,” said Energy Northwest CEO Mark Reddemann in a statement. “However, this judgment does not resolve the issue of long-term storage of used nuclear fuel, nor does it lessen the legal obligation of the federal government to develop and manage that process.”
