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.

(Sign up for
POLITICO’s Morning Energy tip sheet)

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.

(Also on POLITICO:
Full energy and environment policy coverage)

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.