DOE Can’t Collect Fees for Not Managing Nuclear Waste

COMMENTARY Energy Economics

DOE Can’t Collect Fees for Not Managing Nuclear Waste

May 16th, 2014 2 min read
Katie Tubb

Policy Analyst

Katie Tubb is a policy analyst for energy and environmental issues in the Thomas A. Roe Institute for Economic Policy Studies.

The commercial nuclear power industry has for over 30 years been paying billions of dollars for a nonexistent government waste management program—until today.

As of today, the Department of Energy (DOE) can no longer collect fees from commercial nuclear power plants to fund a nuclear waste management facility at Yucca Mountain, Nevada, that the federal government has promised but has not acted on.

Pursuant to the Nuclear Waste Policy Act of 1982 (NWPA), nuclear power plants have paid the DOE a flat fee per kilowatt hour they generate in order to fund a national nuclear waste disposal program. That amounts to roughly $750 million per year. The fee has never once been changed and is supposed to be based on the program’s cost. But what if there is no program?

Since passage of the NWPA, not a single cask of nuclear waste has been collected by the government, though it was promised to be begun by 1998. Flouting the law, the Obama Administration unilaterally abandoned the review of Yucca Mountain’s license application and left the industry without a plan for nuclear waste management (until 2013, when the DOE released a new “strategy” tall on rhetoric and short on details). The Court of Appeals for the D.C. Circuit subsequently required the DOE to reexamine the nuclear waste fee to determine if it was adequate to cover the cost of nuclear waste disposal.

Again in court, the DOE concluded that the cost of disposal was “somewhere between a $2 trillion deficit and a $4.9 trillion surplus.” In other words, the DOE was without a concrete waste disposal plan and could not determine if the nuclear waste fee was too much or too little, which nearly caused the judges to break out in song: “This presentation reminds us of the lawyer’s song in the musical, ‘Chicago’—‘Give them the old razzle dazzle.”’

Ultimately the DOE could not eat its cake and have it too: The court determined that, until the Yucca Mountain project is resumed or Congress rejects Yucca Mountain and directs the DOE to pursue a new plan, the DOE could not collect fees while trying to figure out how to manage waste.

Companies will still have to submit the paperwork as if they were paying the fee—and the NWPA requires nuclear companies to be financially responsible for the full cost of waste disposal. Ultimately, someone will have to pay, but until Congress indicates otherwise, the DOE won’t be collecting $750 million per year to do nothing.

This episode is evidence of what a failure the government’s management of nuclear waste has been. But why not use this as an opportunity for real reform that puts responsibility in the hands of industry and allows it to seek waste management services from the private sector?

For example, rather than a flat rate that is disconnected from the actual cost of managing waste, companies could (and should) pay for the actual cost of service and available space. Accurate pricing would be a first step to putting the nation on track for a nuclear waste management system that depends not on political tides but on the interests and demands of American consumers and businesses.

This piece originally appeared in The Daily Signal