DOE and PECO make a deal over waste

30 August 2000

Seeking a way to avert utility lawsuits, the US Department of Energy (DOE) has agreed that it will compensate PECO and to allow the utility to defer up to $80 million in payments into the Nuclear Waste Fund over the next ten years, because of extraordinary delays that have taken place in the federal government's nuclear waste management programme.

The agreement, which applies only to PECO's Peach Bottom plant, is intended to ease the burden on the utility of the continued on-site storage of spent fuel. The DOE was contracturally obligated to assume ownership of the fuel more than two years ago.

DOE hopes to renegotiate similar waste management contracts with other US nuclear plant owners, many of which have joined lawsuits against it on a case-by-case basis.

Following enactment of the 1983 Nuclear Waste Policy Act, the DOE signed contracts with all nuclear plant owners obligating them to contribute 0.1 cents/kWh to the Nuclear Waste Fund, which with accumulated interest now totals over $15 billion. In return, the Energy Department pledged to take title to their spent fuel by 31 January 1998, but DOE defaulted on that obligation because years of delay in its nuclear waste management programme meant it had no place to store the fuel.

Today, some 36,500 tons of spent fuel generated by the commercial nuclear industry remains on site at over 80 nuclear plants in the US. The Energy Department is studying Yucca Mountain in Nevada as a potential permanent underground repository, but is not due to recommend a site to the White House until next year.

Meanwhile, president Clinton has twice vetoed bills passed by Congress that would have authorised construction of an interim above-ground facility adjacent to Yucca Mountain. The congressional plan called for spent fuel to be stored there until the permanent repository was ready to receive it.

Energy secretary Bill Richardson said the recent agreement with PECO demonstrates that the department and the utilities can reach a resolution regarding delay without resorting to costly and protracted litigation. "I hope it will be a precedent for additional settlement negotiations with other utilities," he said. The agreement requires DOE to take title to Peach Bottom's storage casks, but not the spent fuel storage pools or the spent fuel in them. It also calls for DOE to pay PECO for reasonable costs that the utility has incurred. The agreement also requires PECO to demonstrate that the delay in moving the spent fuel off-site warrants the reduced payments into the Nuclear Waste Fund.

"This contract amendment is a positive step forward that will provide for the appropriate reimbursement of costs that result from delays in siting the repository, without impairing the Nuclear Waste Fund," said Corbin McNeill Jr, chairman, president and chief executive of PECO.
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