US nuclear utilities question waste fees

10 July 2009

US nuclear utilities have written to Energy Secretary Steven Chu asking him why they should continue paying some $770 million annually towards the Yucca Mountain waste repository since the project has now been scrapped and no alternative has yet been proposed.


In February, the Obama administration announced that funding for the Yucca Mountain project had been reduced to all but zero and that a new plan for the disposal of the country's used nuclear fuel and high-level waste would be developed. However, licensing activities for Yucca Mountain are to continue. The result is that, although Yucca Mountain has not been officially cancelled, the USA currently has no firm plan for the disposition of over 60,000 tonnes of used nuclear fuel from power stations, as well as 20,500 tonnes of wastes from military activities.


The Nuclear Energy Institute (NEI), the US industry body, has written to Chu on behalf of its members to "express its deep concern about the federal government's failure to fully carry out the statutory obligation to implement the nuclear waste policy established almost three decades ago in the Nuclear Waste Policy Act of 1982 (NWPA)."


The NEI points out that "the NMPA remains the law and it is incumbent on the [Department of Energy] to comply with its mandates." The NWPA, it says, requires the Energy Secretary to annually review the payments made by utilities to ensure they will meet the costs of the DoE's used nuclear fuel management program. The fees can be adjusted according to this review.


"Cessation of the Yucca Mountain repository project activities, other than those limited to licensing, compels precisely that action," the NEI told Chu. It added, "As the fees ultimately are borne by consumers of electricity from the nation's 104 reactors, equitable considerations also compel such an adjustment."


Companies producing nuclear power have paid 0.1 cents per kWh of power generated into the Nuclear Waste Fund (NWF) since 1982. According to the NEI, nuclear utilities have so far paid or obligated more than $30 billion into the fund. The NWF has a current balance of $22 billion and generates annual interest of just over $1 billion, which is added to the fund.


"In the absence of the Yucca Mountain repository program, and given that the interest that the NWF accrues is more than enough money to cover the $196.8 million provided for in fiscal 2010 budget proposal, payments into the fund should be suspended," the NEI told Chu.


The National Association of Regulatory Utility Commissioners (NARUC) has also written to Chu in support of the NEI's call for payments to the NWF to be suspended. The organization told Chu, "Our public utility commissioners find it extremely difficult to explain to ratepayers in states where their utilities provide nuclear-generated electricity that their electric bill includes pass-through of the Nuclear Waste Fund fees being paid to the government for nuclear waste disposal that was to have begun in 1998."


NARUC added, "Now the fee payments continue to be paid even though no one can say for certain what the money will eventually be used for. If we are going to pause to reconsider disposal options, we feel it is also appropriate to pause the fee payments."


"We see no reason to collect fees when only 12% of the amount collected will be put to its intended use and no one knows how or when the spent fuel will be disposed of or perhaps be reprocessed at some distant time for unknown costs," NARUC told Chu.


The bulk of the NWF could be repaid to consumers under legislation introduced to the Senate in April. Republican senator Lindsey Graham put forward the Rebating America's Deposits Act in response to President Barack Obama's decision to put the Yucca Mountain project on hold. The bill was co-sponsored by eight other Republican senators including John McCain.


The bill specifies that within 30 days of passage the President would have to either confirm that Yucca Mountain remains the "preferred choice" for high-level radioactive material disposal or begin to rebate "all funds currently in the Nuclear Waste Trust Fund" built up to pay for Yucca.


If the nuclear waste fund was handed back to the utilities that have paid into it, some 75% of it would be mandated to go back to customers. The remainder would be allocated to building interim used nuclear fuel storage facilities at current nuclear power sites where the fuel would remain until there was a new disposal route.