Taxpayers to Owe Billions for Nuclear Waste Storage 

MATTHEW L. WALD / NY Times 26sep02

WASHINGTON, Sept. 25 — A federal appeals court has ruled that billions of dollars in damages that the Energy Department is likely to owe to nuclear reactor owners for its failure to store nuclear waste will have to come from taxpayers, not electricity consumers.

The Energy Department signed contracts with reactor owners in the early 1980's promising to accept their wastes for burial beginning in January 1998, in exchange for payments from them based on electricity production. To date, reactor owners have paid more than $10.5 billion.

But now the department says it cannot take waste until 2010, and the operators of the reactors are suing because they have been forced to store the waste on site.

Many experts say the storage cannot start for many years, because of uncertainties about Yucca Mountain, the site near Las Vegas that the government has chosen as its waste repository.

Estimates of the damages run from $2 billion to $60 billion, and the decision, from the United States Court of Appeals for the 11th Circuit, in Atlanta, twice used the word "nebulous" to describe them. At the National Association of Regulatory Utility Commissioners, which is made up of state officials, Brian J. O'Connell, the director of the Nuclear Waste Program office, said the number would run "in the billions." Asked if it would reach tens of billions, Mr. O'Connell, said, "It gets fuzzy."

He said that one utility, Northern States Power of Minnesota, put its costs at $1 billion because it might be forced to shut three reactors prematurely, for want of storage space for the radioactive waste.

The only settlement so far is much smaller. The department and the owners of the three-reactor Peach Bottom plant, in the Pennsylvania town of the same name, agreed on $80 million, to pay extra costs for storing the wastes on site, in giant steel and concrete casks. But 13 other reactor owners sued to block the deal, because the money would have come from the Nuclear Waste Fund, money from power customers that they said was supposed to be used only to open a permanent repository.

In a decision dated Sept. 24, the appeals court ruled that money in the fund can only be used for permanent disposal. The court said that the Nuclear Waste Policy Act, the law that allowed the contracts, called for a quid pro quo "in which each utility roughly pays the costs of disposing of its waste and no more." The plan, the court said was for a system in which the burden of the government's breach of contract would "fall on the government, not other utilities."

A lawyer for the plaintiffs, Jay E. Silberg, said that if the Energy Department could use the money collected from utilities to pay damages to the utilities, the department would be "robbing Peter to pay Peter."

"The lesson learned from the court's ruling is that we need to move forward with the Yucca Mountain Project," said Joseph H. Davis, a spokesman for the Department of Energy.

At the Regulatory Utility Commissioners group, Mr. O'Connell said the decision was a victory because "ratepayers had some assurance that the nuclear waste fund would continue to be used for its intended purpose." But he acknowledged that if the burden shifted to taxpayers, it would be paid by most of the same people. "There's about an 80 percent convergence," he said.