$45.5 million used fuel settlement

22 February 2011

Wisconsin Electric Power Company has agreed a $45.5 million settlement with the Department of Justice over the US government's failure to take over management of used nuclear fuel from the Point Beach nuclear power plant from 1998. 

Point Beach (Image: NRC)
Point  Beach (Image: NRC)

Wisconsin Electric, part of WE Energies, filed a lawsuit in the US federal claims court in November 2000 over the US government's failure to meet its obligations under the 1982 Nuclear Waste Policy Act to begin taking used nuclear fuel from utilities for disposal in a permanent repository from 1998. In 2009 the court found in favour of the utility in the amount of nearly $51 million, but the government appealed against the decision in a case that is still pending.

Now, WE Energies has revealed that the government initiated discussions with the utility in the second half of 2010 and offered to settle the lawsuit. Accordingly, on 8 February the parties signed an agreement in which the US has agreed to pay Wisconsin Electric $45.5 million in full and final settlement of the suit. Wisconsin Electric intends return the $31 million net proceeds after litigation costs to its customers, and has written to the Wisconsin Public Service Commission to enable it to set up the necessary mechanisms.

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 Department of Energy 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.


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.

Wisconsin Electric sold Point Beach to FPL Energy in 2007.

Researched and written

by World Nuclear News