U.S. ends fee collections with $31B on hand and no disposal option in sight

The Obama administration this week quietly stopped collecting fees that have propped up a nuclear waste program strangled by politics.

The federal retreat comes after a successful legal battle waged by states and the nuclear industry to stop the Department of Energy's collection of about $750 million a year. The government has socked away $30.9 billion.

But state regulators and industry officials that fought the fee collection aren't celebrating what they are calling a "hollow victory."

Bottom line: There's still no place to put more than 70,000 metric tons of radioactive waste stored at reactors across the country.

"It's more of a moral victory," said Greg White, a member of the Michigan Public Service Commission and chairman of the National Association of Regulatory Utility Commissioners' Subcommittee on Nuclear Issues-Waste Disposal.


State regulators won't oppose the fee, White said, if there's a program to go with it.

"We don't want our money back," he said. "We think it's appropriate for beneficiaries to pay the costs of the program. What we really want is a program moving forward and to move toward the day when waste is removed from the plants."

DOE has been collecting the fees since 1983 under the Nuclear Waste Policy Act of 1982, which requires operators of nuclear plants to pay a tenth of a cent per kilowatt-hour to the government in return for DOE taking responsibility for spent nuclear fuel.

Over the years, utilities have paid the fees, but the government never took the waste.

The program ran aground in 2010 after the Obama administration backed away from the planned nuclear fuel repository at Yucca Mountain, Nev. That left the government and nuclear industry with no plan for commercial waste fuel storage.

The Nuclear Regulatory Commission, meanwhile, determined that waste can be stored on-site for 60 years after a reactor shuts down.

White and other state regulators acknowledge that a jump-start for the country's waste program won't happen anytime soon. Halting the fees, he said, is a good first step.

"It's something that should have happened years ago," Georgia utilities Commissioner Lauren "Bubba" McDonald said. "At least it stops the bleeding."

The end of the fees leaves a lingering question for state regulators: What's in the Nuclear Waste Fund?

In the absence of a federal fuel storage facility, the funds have been mingled with other federal revenues each year, possibly leaving the industry with an IOU of sorts, White said.

The federal government has also been forced to pay court judgments and settlements to some nuclear plant operators that brought breach-of-contract damage suits.

"The whole budget process and the revenue scoring done by the federal government is a murky area understood by very few people," White said.

"The balance of the fee payments have been used to offset the budget deficit, which raises the question of whether that money would be made available," he said. "There's probably not $30 billion sitting in a fund; rather, there's probably an IOU sitting on the books."

'That's called stealing'

Nuclear Energy Institute President and CEO Marvin Fertel in a statement said the industry shares the court's frustration with DOE's years of inaction to develop a repository.

As the Nuclear Waste Policy Act is still in effect, Fertel said, Congress should fund NRC and DOE to complete the review of the Yucca Mountain project, and Congress and the White House should develop a long-term used nuclear fuel management program.

"We urge policymakers to establish a new organization empowered with authority and funding to implement an effective and efficient nuclear waste management and disposal program," Fertel said. "Such a program requires that the new management entity be given access to revenues from future Nuclear Waste Fund fees and the $30 billion-plus fund balance."

A consolidated storage facility should be pursued while licensing the Yucca Mountain repository or siting a new disposal facility, Fertel added.

But it's not clear whether Congress or the administration has the political appetite to tackle the thorny issue in the near future.

Efforts by the Senate Energy and Natural Resources Committee to advance waste legislation have been hushed in recent months. And the Obama administration has floated a plan to find a new repository by 2048. That proposal has drawn the ire of House Republicans keen on seeing Yucca Mountain move forward.

McDonald added that Yucca Mountain, a project he supports, will continue to be a political hot potato given that Senate Majority Leader Harry Reid (D-Nev.) is among the project's enemies.

"Yucca Mountain should be licensed, but that's not going to happen as long as Harry Reid is in the Senate," McDonald said. "I don't see anything on the horizon right now. It'll just be more conversation and studying studies, and nothing happens."

For now, state regulators are vowing vigilance.

David Boyd, a member of the Minnesota Public Utilities Commission and chairman of the Nuclear Waste Strategy Coalition, said in a statement that the government still "owes the performance it is obligated to provide under statute and contract."

"We remain hopeful," he added, "that the court's series of strong directives -- combined with our repeated pleas on behalf of electric consumers and other stakeholders -- will result in timely action."

White said it's critical that the billions of dollars that utility customers have paid over the years be available for a waste solution.

"To say that the money collected from the customers is no longer available, that's called stealing," he said. "We don't think the government has the right to steal money."

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