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D.C. Circuit Denies Rehearing on Nuclear Waste Fee Decision

The D.C. Circuit last week denied the Department of Energy’s (DOE) petition for en banc review of the court’s November decision holding that the DOE could not continue to collect nuclear waste fees from utilities.  The Nuclear Energy Institute (NEI) and National Association of Regulatory Utility Commissioners (NARUC) filed suit after the DOE’s termination of the Yucca Mountain repository program in 2010.  The organizations argued that the DOE could not continue to collect the fee from utilities if it did not have a waste management plan in place.  Last fall, the D.C. Circuit agreed and held that the DOE could not continue to collect the nuclear waste fee of one-tenth of a cent per kilowatt-hour.

In January, Secretary Moniz sent a letter to the Senate requesting that the fee be reduced to zero, in accordance with the court’s mandate.  The Secretary expressed his discontent with the court’s decision stating that “this proposal, mandated by the Court of Appeals, is not consistent with the process established in the [Nuclear Waste Policy Act] for adjusting the fee charged to utilities.”  On the same day the DOE filed a petition for en banc review of the D.C. Circuit’s decision.

The D.C. Circuit denied the rehearing request on March 18.  Both the NEI and NARUC issued statements declaring the move a win for consumers.  NEI stressed that despite the reduction of the fee, the government has a continuing obligation to remove spent nuclear fuel to a disposal facility.  Secretary Moniz’s fee reduction request is subject to a 90-day congressional review period.  If Congress does not act on it within that time period, the Secretary’s proposal will become effective and the fee will be reduced to zero.

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Nuclear Regulator Announces Temporary Suspension of Licensing Decisions

by Ari Peskoe

On the heels of a recent decision by the U.S. Court of Appeals for the D.C. Circuit, the U.S. Nuclear Regulatory Commission (NRC) issued an order last week suspending final decisions in reactor licensing cases. The recent court ruling struck down elements of the NRC’s Waste Confidence Decision (WCD), which, according to the NRC, “undergirds certain agency licensing decisions.” The suspension affects issuances of both new construction licenses and reactor license renewals that are dependent on the WCD or temporary storage rules. The NRC did not rule out taking action with respect to waste confidence on a case-by-case basis.

In New York v. NRC, the D.C. Circuit held that it “cannot defer to the Commission’s conclusions regarding temporary storage because the Commission did not conduct a sufficient analysis of the environmental risks.”   Petitioners challenged a 2010 update to the WCD, which has five findings about nuclear waste storage upon which the NRC based its rules on temporary storage. The NRC amended the WCD to state that a permanent repository for nuclear waste would be available “when necessary,” instead of “in the first quarter of the twenty-first century,” as the earlier draft stated. The NRC also extended the time horizon for safe storage of waste at reactor sites from 30 to 60 years beyond the licensed life of the plant. With regard to both amendments, the D.C. Circuit found that the NRC had violated the National Environmental Policy Act (NEPA). The Court determined that the WCD constituted a “major federal action” under NEPA and therefore the NRC must prepare an Environmental Impact Statement or an Environmental Assessment that makes a Finding of No Significant Impact.

This decision by the NRC comes less than one month after Dr. Allison Macfarlane was sworn in as the NRC’s Chairman. Macfarlane holds a Ph.D. in geology from the Massachusetts Institute of Technology, served on the Blue Ribbon Commission, and was most recently an associate professor of environmental science and policy. As an academic, Macfarlane was critical of the process that selected Yucca Mountain, a site that was long-considered to host a geologic repository until President Obama cancelled the project in 2010. For example, in 2003 Macfarlane wrote that “politics probably played as significant a role as science in the selection of Yucca Mountain” and argued that scientific studies and outcomes were oriented around the policy goal of approving Yucca Mountain. 

Earlier this year, the NRC issued licenses for new reactors at the Vogtle site in Georgia, the first licenses issued for new construction in a generation, and also issued licenses for two new reactors in South Carolina. The NRC has 16 applications for new licenses pending and an additional fourteen license renewals awaiting decisions. 

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Presidential Commission Recommends Nuclear Waste Management and Funding Reforms

by Ari Peskoe

The Blue Ribbon Commission on America’s Nuclear Future released its final report detailing a new strategy for managing the nation’s nuclear waste.  The Commission’s key recommendations include removing nuclear waste management from the purview of the Department of Energy (DOE), creating a new federally chartered corporation to implement the waste management program and immediately overhauling how utilities fund the nation’s waste management activities.  The Commission submitted its report to Secretary of Energy Chu on January 26 and urged the Secretary to appoint a senior official at the agency to coordinate prompt implementation of the Commission’s recommendations.

President Obama formed the Commission following his decision to halt work on a geologic storage facility at Yucca Mountain, Nevada.  Despite more than two decades of work on developing that site, the United States still lacks a central repository for civilian nuclear waste, and nuclear waste remains at power plants around the country.  Since the early 1980s when Congress created the Nuclear Waste Fund (NWF), utilities have paid the federal government 0.1 cents per kilowatt-hour of nuclear electricity sold in order to fund nuclear waste management activities.  Much of that money collected from utilities, however, has been used by Congress to fund unrelated programs or to reduce the annual budget deficit.

Concluding that the DOE’s record in managing nuclear waste has “not inspired widespread confidence or trust,” the Commission recommended creating a new single-purpose organization to implement the nation’s nuclear waste management program.  The federally chartered corporation would site, license, build, and operate facilities for interim storage and permanent disposal.

The Commission highlighted that reforming the NWF is critical to the success of the new organization.  The report details “a web of budget rules” that have made the approximately $750 million in annual fee revenues and the $25 billion balance in the NWF “effectively inaccessible” for their intended purpose.  The Commission noted that pending legal action against the DOE aimed at suspending the collection of annual fees until a new waste management plan is in place underscores the “sense of outrage that the only aspect of the waste management program that has been implemented in full and on schedule is the part that involves collecting fees.”

The Commission recommended that utility fee payments into the NWF each year match actual spending on waste management activities.  Under this recommendation, the DOE would amend existing contracts with utilities to require utilities to retain the balance of annual fees in irrevocable trust accounts, which would be similar to qualified nuclear decommissioning funds.  According to the Commission, DOE and utilities could implement this proposal without new Congressional legislation.

In 1998, then-Secretary of Energy Frederico Pena proposed a similar scheme.  Under that proposal, utilities would have been allowed to invest the retained portion of fee payments at “market rates of return,” but pay the government in the future the balance of the fees at the Treasury rate.  The difference in interest would have been retained by the utilities to offset the costs of the [...]

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