Congress chose the site in 1987 as the country’s sole permanent nuclear repository. The $38 billion nuclear waste fiasco

Doing nothing often has a cost — and when it comes to storing the nation’s nuclear waste, the price is $38 billion and rising.

That’s just the lowball estimate for how much taxpayers will wind up spending because of the government’s decades of dithering about how to handle the radioactive leftovers sitting at dozens of sites in 38 states. The final price will be higher unless the government starts collecting the waste by 2020, which almost nobody who tracks the issue expects.


The first $15 billion is what the government spent on a controversial nuclear waste repository at Nevada’s Yucca Mountain until the Obama administration scrapped the project. The other $23 billion is the Energy Department’s estimate of the damages the government will have to pay to nuclear power utilities, which for the past 30 years have paid a fee to DOE on the promise that the feds would begin collecting their waste in 1998.

Industry argues that the damages are closer to $50 billion — which raises the bottom line to $65 billion including the money spent on Yucca.

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The cost of the refunds is little known to the public, but it’s such a huge liability that DOE tracks the figure closely. The government is still fighting the utilities’ claims in court, but utilities have been racking up a string of wins.

The costs of inaction don’t just include dollars. The lack of a final resting place for the waste means that each nuclear plant has to stockpile its own. Thousands of tons of waste are stranded at sites around the country, including at plants that have shut down.

“I’m trying to think of some fancy words, but at the end of the day it’s just a massive consumer rip-off,” said Greg White, a regulator on the Michigan Public Service Commission who also heads the nuclear waste panel for the National Association of Regulatory Utility Commissioners. NARUC, which represents state-level regulators, won a legal victory this month when the D.C. Circuit Court of Appeals ordered DOE to stop collecting the fee.

Salo Zelermyer, a former George W. Bush-era DOE attorney who works at the law firm Bracewell & Giuliani, said the waste program has “plainly broken down” and that the government had made “no discernible progress towards its commitments.”

Energy Secretary Ernest Moniz also expressed frustration last month, calling the system of storing nuclear waste at reactor sites “politically unsustainable.”

“For nuclear energy to be competitive here in the U.S. and ensure its safety and security abroad, we have to address the problem of disposition of used nuclear fuel and high-level waste,” Moniz said during a panel discussion at an American Nuclear Society meeting. He previously served on a blue-ribbon commission that advised Obama on changes to the nation’s nuclear waste policy.

But like others in the Obama administration, Moniz maintains that Yucca Mountain is not “a workable option.”

Congress chose the Nevada site in 1987 as the country’s sole permanent nuclear repository, but it continues to draw fierce opposition from many of the state’s residents and elected officials. One of its most powerful opponents is Senate Majority Leader Harry Reid (D-Nev.), who blocked funding for the project and pushed the Obama administration to kill it — something DOE did in 2010.

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Reid and Sen. Ed Markey (D-Mass.) have long argued that the studies supporting the project were discredited because Congress short-circuited the site-selection process to focus solely on Yucca. The administration says the government needs to start over with a new waste site — and this time, the selection process must be “consent based” to win public acceptance.

“When this administration took office, the timeline for opening Yucca Mountain had already been pushed back by two decades, stalled by public protest and legal opposition, with no end in sight,” DOE spokeswoman Niketa Kumar said in an email.

The end is still far off. DOE’s latest plan calls for a repository to open in 2048, although the department would try to open a temporary storage site by 2021. Even Yucca couldn’t be finished until at least 2027 if the government were to revive it immediately, the Government Accountability Office estimated last year.

Meanwhile, DOE’s Nuclear Waste Fund is sitting with more than $25 billion in cash collected from utilities — and their customers —since 1983. The 0.1-cent charge for each nuclear-generated kilowatt-hour of electricity has recently added up to about $750 million a year. The fund will continue to generate about $1 billion in interest each year, even though the appeals court zeroed out DOE’s further collection of the fee until Congress passes a new nuclear waste program or the agency dusts off Yucca Mountain.

When it became clear DOE wasn’t fulfilling its end of the bargain, utilities began demanding that the government repay them for the costs they’ve incurred to store the waste on their own. They include the costs for reconfiguring the increasingly crowded spent-fuel pools, moving and packaging the used fuel rods and providing maintenance services such as on-site security.

Utilities have filed at least 61 lawsuits in the past 15 years over the broken promise. And bills have ramped up quickly.

Payments to utilities totaled $567 million by the end of September 2009, during Obama’s first year in office. Three years later, they amount to more than $2.6 billion, according to DOE financial reports.

The Justice Department is pushing back hard against the utilities, but one lawyer who follows the cases said DOJ is no longer using the “scorched earth” approach it once had. The lawyer said that’s mainly because courts have agreed with many of the utilities’ claims, giving government attorneys fewer legal options to stanch the flow of cash.

In another win for the utility side, the Court of Federal Claims on Nov. 14 ordered Treasury to pay $235 million to the owners of three decommissioned nuclear plants in the Northeast — Yankee, Maine Yankee and Connecticut Yankee — on top of a $160 million payment they extracted in February. Those sums cover the utilities’ expenses through only 2008.

The costs for storing waste at plants with longer life spans will undoubtedly be even higher because the utilities will have to move more spent fuel from cooling pools into longer-term dry casks. Each cask costs about $1 million plus handling.

Seeking to head off future payments, the government has made some little-noticed changes to DOE’s waste contract with companies building new power reactors.

Southern Co. and SCANA, which are building four reactors in Georgia and South Carolina, respectively, essentially had to give up the major leverage points that power companies historically used to sue the government over waste storage. The new contract has a more flexible waste pickup schedule, limits the kinds of costs DOE is willing to compensate utilities for and caps certain damage claims.

Still, Moniz said this summer that DOE projects the damages will total as much as $23 billion in the next 50 years — assuming the government can haul the waste to either a temporary or permanent site beginning in 2020. Just two years ago, DOE’s estimate was $15 billion.

After 2020, the federal government will hand over an average of $500 million a year as a result of the lawsuits.

The real twist of the knife for some DOE critics is that the agency doesn’t supply the money it’s losing in nuclear waste lawsuits. Payments to utilities are coming from every taxpayer through an indefinite Treasury account that pays for general litigation against the government. Some critics say this has amounted to a double tax for taxpayers who also happen to get their power from a nuclear plant.

DOE has continued to justify the fee based on its latest nuclear waste strategy — the one that envisions opening a repository in 2048. But the appeals court mocked the agency’s defense and called some of DOE’s positions “obviously disingenuous.”

DOE’s new plan came partly from the recommendations of the 15-member panel that Moniz participated in, which was led by former Rep. Lee Hamilton (D-Ind.) and former National Security Adviser Brent Scowcroft. Critics like White say they respect the commission’s work but doubt the administration’s sincerity.

“I’m not convinced, right at the moment, that the Department of Energy, under this current administration, has any interest in doing anything related to this program,” White said. “They’re basically biding time until the current president is no longer in office.”

Meanwhile, attempted fixes in Congress have moved at a snail’s pace.

Two years ago, Sen. Lisa Murkowski of Alaska, the top Republican on the Senate Energy and Natural Resources Committee, introduced a bill with Sen. Mary Landrieu (D-La.) to fast-track the approval of interim storage sites by offering large financial incentives for the communities hosting them. But the sizable price tag would have been peanuts compared with the liability taxpayers are facing.

Since then, Murkowski has worked with Senate energy panel Chairman Ron Wyden (D-Ore.) and Sens. Lamar Alexander (R-Tenn.) and Dianne Feinstein (D-Calif.) to address the price tag while acknowledging the political reality of Reid’s opposition to Yucca. But their bill has stalled this year amid other congressional crises.

“Sen. Murkowski still believes that Yucca should still be on the table and that a permanent repository is necessary,” said her spokesman Robert Dillon. “But in the interim, while there are political roadblocks to that, that doesn’t mean you quit working on the liability issue.”

Their legislation would create a new agency to handle nuclear waste and allow it to set up temporary storage locations, while requiring utilities to settle their lawsuits against the government in exchange for using the storage sites.

Former South Carolina regulator David Wright objected to that trade-off. Forcing utilities to settle would “perpetuate the untenable situation of prolonged on-site dry cask storage,” he wrote the Energy Committee.

White also found the requirement hard to swallow, saying it could damage hopes for DOE to act on a permanent repository. “If utilities have to waive their rights to damage claims, then where is there any kind of impetus for the department to do anything?” he asked.

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