The federal government has paid $7.4 billion to resolve dozens of lawsuits from nuclear utilities over the Department of Energy’s failure to meet its legal obligation to dispose of spent nuclear fuel from commercial power reactors, the DOE Inspector General’s Office said in a new report.
The Energy Department estimates its ultimate liability could exceed $34 billion, according to the Congressional Research Service. The nuclear industry says the number could be much higher.
In the 1982 Nuclear Waste Policy Act, Congress established a Nuclear Waste Fund that would pay for construction of a repository for permanent disposal of tens of thousands of tons of spent nuclear fuel and high-level radioactive waste. The Department of Energy entered into “Standard Contracts” with the holders of that radioactive material, under which those commercial entities would pay fees into the fund in return for DOE beginning disposal of their used fuel by Jan. 31, 1998.
More than $40 billion was paid into the fund before the Obama administration halted collections in 2014 under federal court order. However, the Energy Department is more than two decades past its deadline with no disposal facility in sight. Congress’ dedicated location for the repository, under Yucca Mountain in Nye County, Nev., remains unlicensed and unfunded.
“Significant litigation claiming damages for partial breach of contract has ensued as a result of the delay,” according to the Nov. 15 DOE IG report, Management Challenges at the Department of Energy – Fiscal Year 2019. “Specifically, to date, 40 suits have been settled and an additional 57 cases have been resolved, resulting in $7.4 billion paid to the utilities for the delay damages.”
The most recent ruling in the U.S. Court of Federal Claims involved a lawsuit filed by Entergy Nuclear Generation Co. against the United States.
In that case, Entergy had sought $66.3 million for damages it said it incurred from Dec. 31, 2008, to June 30, 2015, at the Pilgrim Nuclear Power Station in Massachusetts. The utility specifically cited construction and maintenance expenses and fees during that period.
The federal government disputed just $24.3 million of the cited expenses as being separate from DOE’s delay in taking possession to Pilgrim’s spent fuel. The judge in June granted Entergy’s request for summary judgment for immediate payment of the uncontested $42 million and change.
In September, Entergy agreed to a $62 million payment from the U.S. Treasury, which was made the following month.
The single-reactor Pilgrim plant is scheduled to close by June 1 of next year. Entergy has already placed 1,156 fuel assemblies in dry storage, with another 580 still in the reactor and 2,378 in a cooling pond. All of the used fuel is expected to be in dry storage by 2023, years after Entergy hopes to sell the plant to Holtec International for decommissioning.
Along with Pilgrim, Entergy owns six operational nuclear power plants and the retired Vermont Yankee facility.
“We will continue to work to recover future costs until the federal government meets its obligation and finalizes a location for the nation’s spent fuel,” Entergy spokesman Pat O’Brien said by email this week. “Until that obligation is met, Entergy will safely and securely store and manage the used fuel on site at our nuclear power plants.”
Chicago-based Exelon, the nation’s top nuclear power provider, could receive as much as $600 million under a 2004 settlement with the Energy Department, the Congressional Research Service (CRS) said in a September update to its analysis of civilian nuclear waste disposal.
The government’s overall liability increases by roughly $2.2 million daily, according to Rod McCullum, senior director for decommissioning and used fuel at the Nuclear Energy Institute, the Washington, D.C.-based trade group for the nuclear industry. The primary expense is moving spent fuel from wet to dry storage at nuclear power plants, according to the Government Accountability Office (GAO).
The total amount of used fuel at these facilities already stands at about 80,000 metric tons, and it grows by 2,200 metric tons annually, the GAO said in a 2014 report.
While DOE assesses its eventual liabilities as topping out at $34.1 billion, CRS said, the “nuclear industry has predicted that future damages could rise by tens of billions of dollars more if the federal disposal program fails altogether.” The money is paid out of the Treasury’s Judgment Fund.
“Things have not changed much [since 2014] except as we renew more dry storage licenses aging management programs get put in place that impose additional costs, which will also be passed on to the Government,” McCullum said by email. “Too early in these programs to have any numbers, but safe to say the rate of increase in the liability will escalate as these programs get implemented on an increasing scale.”
The Department of Energy filed its Yucca Mountain license application with the Nuclear Regulatory Commission in 2008, during the George W. Bush administration, but the Obama administration defunded the proceeding two years later. The Trump administration requested funds in both fiscal 2018 and the current fiscal 2019 for the two agencies to resume licensing, but has been shot down both times by Congress.
The NRC is also reviewing two license applications for facilities that could consolidate the spent fuel until the permanent repository is ready. An Orano-Waste Control Specialists partnership wants to store up to 40,000 metric tons of material in West Texas, while Holtec hopes to build a facility for up to 173,000 tons of used fuel in southeastern New Mexico. Even if one or both are approved, they would not open until the early 2020s. That means more legal action is likely while nuclear power companies continue to pay to manage their spent fuel.
“There is only one way DOE can resolve the liability issue, and that is by removing the fuel from reactor sites as called for in the contracts it has with the utilities,” McCullum said. “Keep in mind there was an acceptance schedule that dictated the rate at which this was supposed to happen starting in 1998. Because they are currently 20 years behind schedule, it will take several years from the point at which they start doing this to catch up and stop the bleeding from the taxpayers wallets.”
