Nuclear Reactor Waste Fees Ordered to Zero by Appeals Court

Photographer: David McNew/Getty Images

A "no trespassing" sign warns people to stay away from the proposed nuclear waste dump site of Yucca Mountain at Nellis Air Force Base, located approximately 90 miles north of Las Vegas. Close

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Photographer: David McNew/Getty Images

A "no trespassing" sign warns people to stay away from the proposed nuclear waste dump site of Yucca Mountain at Nellis Air Force Base, located approximately 90 miles north of Las Vegas.

The U.S. Department of Energy was ordered by a federal appeals court to move toward ending a fee utilities pay for nuclear waste disposal because the government has no alternative to the canceled Yucca Mountain repository.

The department has failed to come up with a court-ordered assessment to determine if the current fee is appropriate in the wake of the suspension of the Yucca Mountain project, Circuit Judge Laurence Silberman wrote for a three-judge panel in Washington. The disposal fee cost utilities $750 million last year, according to court documents.

Because the agency hasn’t come up with a legally adequate fee assessment, it was ordered to send Congress a proposal to change the fee to zero until it “chooses to comply with the act as it is currently written, or until Congress enacts an alternative waste management plan,” the court ruled.

The decision today was hailed by the utilities and nuclear power-plant operators who brought the suit and have been frustrated with the Obama administration’s decision to stop work on Yucca without providing an alternative.

Government’s Obligation

“The court’s ruling reinforces the fundamental principle that the federal government’s obligation is to carry out the law, whether or not the responsible agency or even the president agrees with the underlying policy,” Ellen Ginsberg, general counsel for the Nuclear Energy Institute, said today in a statement. The Washington-based industry group represents reactor owners including Chicago-based Exelon Corp. (EXC) and Southern Co. (SO) of Atlanta.

Finding a way to dispose of the nation’s 70,000 metric tons of civilian nuclear waste has bedeviled politicians and the nuclear industry for decades. Congress in 1987 designated that a repository be built at Nevada’s Yucca Mountain, about 100 miles (161 kilometers) northwest of Las Vegas. The project, which has cost taxpayers and industry about $15 billion according to the Government Accountability Office, has faced local opposition, notably from Senate Majority Leader Harry Reid, a Nevada Democrat.

President Barack Obama in 2010 cut funding for the Yucca project and established a panel to consider other alternatives for waste storage. The group last year recommended that the U.S. begin work on a temporary site.

Nevada Hole

Meanwhile, the Energy Department has continued to collect the nuclear waste fee. State regulators and the nuclear industry have argued that without a repository or an alternative site, the government shouldn’t continue to collect the fee.

Niketa Kumar, an Energy Department spokeswoman, said the order is under review.

The National Association of Regulatory Commissioners said more than $30 billion has been collected since the early 1980s for a waste repository that resulted in no more than a “hole in the Nevada desert.”

“Nuclear-power ratepayers should not be charged for a program the federal government has closed down,” the group said in a statement today, calling the decision “great news.”

The department has 45 days to ask for a re-hearing by the court. After that, it must submit a proposal setting the fee at zero to Congress, which has 90 days to act on it, according to Jay Silberg, at attorney at Pillsbury Winthrop LLP, who argued the case for NARUC.

If Congress does nothing, the fee would be eliminated, Silberg said.

While lawmakers could set the fee at another level, Silberg said he doubts there would be enough support to get legislation enacted in both houses.

The current waste disposal charges remain in effect until the Congressional process runs its course, he said.

The case is National Association of Regulatory Utility Commissioners v. U.S. Department of Energy, 11-1066, U.S. Court of Appeals for the District of Columbia (Washington).

To contact the reporters on this story: Andrew Zajac in Washington at azajac@bloomberg.net; Brian Wingfield in Washington at bwingfield3@bloomberg.net

To contact the editors responsible for this story: Michael Hytha at mhytha@bloomberg.net; Jon Morgan at jmorgan97@bloomberg.net

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