September 28, 2000
12:00 AM
WASHINGTON, D.C. - “This country is choking on its own nuclear waste. Because the Department of Energy has so far failed to meet its contractual obligation to dispose of spent nuclear fuel, the U.S. could be liable for damages of up to $80 billion,” said Chairman Frank H. Murkowski today. He spoke during a hearing to examine the effects of the August 31, 2000 United States federal Circuit Court of Appeals decision on the government’s breach of contract for failure to accept high level waste by January 1998. In the August 31, 2000 decision, the Court rejected the distinction between operating and shut down utilities, and characterized DOE’s failure to accept waste as a breach of contract. This entitles the utilities to proceed directly to the Court of Federal Claims to prove their damages. The lawsuits were brought against the government under the Nuclear Waste Policy Act (NWPA) of 1982, which required the Department of Energy (DOE) to design and implement a system to dispose of spent nuclear fuel in a permanent geologic repository. The NWPA required DOE to begin accepting spent fuel from commercial reactors at a repository by January 1998. To fund the project, Congress ordered that the Department of Energy collect a fee of one mill (one tenth of one cent) per kilowatt hour on electricity generated by nuclear energy. The fee is collected by utilities from their ratepayers in their monthly bills and placed into a special “Nuclear Waste Fund” in the Treasury. The fund receives more than half a billion dollars per year from collections and $300 million per year in interest on the unobligated balance. To date more than $17 billion in fees and interest have been placed in the fund. In December of 1996, DOE sent a letter to all nuclear power plant owners, indicating that DOE would be unable to fulfill its obligation. A lawsuit was filed against DOE in January of 1997 and in November of 1997, the Court of Appeals of the District of Columbia ruled that DOE has an unconditional obligation to move nuclear waste ‘no later than January 31, 1998.’ “Whether the utilities litigate or settle, the burden of liability will fall on the taxpayer. If the utilities litigate and win, the money comes from the Department of Justice judgement fund, and if they settle, the money comes from the Nuclear Waste Fund paid for by electricity consumers who are also taxpayers,” said Murkowski. The current situation requires the utilities to collect money from the consumers to fund a DOE waste program which will not accept waste any time in the foreseeable future. At the same time, the utilities are faced with growing expenses for on-site storage or for a private storage facility. “Our liability as a nation will not be measured solely in the direct payments to utilities. They will be measured in the costs of lost power. We cannot afford to lose 20 percent of our electricity generation. If we don’t solve the problem of our spent nuclear fuel soon, the American taxpayer will bear the costs of the financial liability of the actual damages and the environmental damages from losing 20 percent of clean, emissions free electricity generation,” Murkowski said. “The only alternative to replace that lost power would likely be fossil fuel fired plants.” ###