Xcel recovers used fuel storage costs
11 July 2011
Xcel Energy has agreed a settlement with the US federal government over the Department of Energy's (DoE's) failure to take over management of used nuclear fuel from the Prairie Island and Monticello nuclear power plants from 1998.
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| Prairie Island (Image: Xcel Energy) |
Xcel said that under the settlement, the federal government will pay some $100 million for used fuel storage costs incurred by its Northern States Power Co (NSP) business at the two plants between 1998 and 2008. The company said that the government will also pay used fuel storage costs incurred between 2009 and 2013. It expects these costs to total a further $100 million that would be paid over the next four years. However, Xcel said that the settlement "does not address costs for used fuel storage after 2013; such costs could be the subject of future litigation."
The settlement resolves litigation in two cases Xcel brought against the federal government. The first case, decided by the US Court of Federal Claims in September 2007, was on appeal, and the second case was scheduled to go to trial in the Court of Federal Claims later this month.
The utility said that the money it receives from the government will be returned to NSP customers in Minnesota, Wisconsin, North Dakota, South Dakota and Michigan. Xcel said that it will "make appropriate regulatory filings in the coming weeks that will address the best means of returning the proceeds to customers."
Judy Poferl, president and CEO of NSP, said: "This is a good outcome for our customers. It compensates our customers for costs already incurred because of the federal government's delays and provides a timely means for recovering future costs."
She added, "This settlement will not alter our efforts to pressure the federal government to fulfil its obligations under the Nuclear Waste Policy Act to find a long-term solution for waste disposal outside of Minnesota. Xcel Energy will continue to press for federal action to remove the waste from plant sites and is committed to working with our stakeholders to this end."
The failure of the US government to meet its obligation to manage used nuclear fuel - despite collecting a levy from nuclear utilities for the job - forced nuclear plant operators to find their own means of storage at plant sites, in many cases having to build dry storage facilities. In 1998, some 41 utilities filed lawsuits against the DoE demanding it meet its obligations, and utilities have sued the government for damages amounting to billions of dollars. In 2006, the US Justice Department reached an agreement with Exelon on recovering up to $300 million in storage costs for its used fuel to 2010, and since then federal courts have awarded damages to numerous utilities. According to Xcel, 17 lawsuits involving 44 reactors had previously been settled.
However, a levy is still charged on nuclear generation in the USA for the management of used fuel, and the Nuclear Waste Fund built up from the levy is currently estimated to stand at around $24 billion. In 2010, after it was decided to discontinue work on the planned waste repository at Yucca Mountain, a group of US utilities and regulators filed a lawsuit seeking the suspension of payments into the fund.
Researched and written
by World Nuclear News