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October 20, 2014

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Energy Department kills fee meant to fund Yucca Mountain

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Yucca Mountain is located about 90 miles northwest of Las Vegas.

A charge for electricity that millions of Americans didn't even know they pay will suddenly disappear Friday, after the Energy Department this week quietly notified utilities across the country that it was suspending its fees for a future nuclear waste dump.

The Energy Department has been collecting $750 million from electricity bills every year for such a dump since 1983, putting it into a trust fund that now contains $31 billion.

The court-ordered suspension may be a modest victory for consumers, but it reflects the government's failure over the last 40 years to get rid of what is now nearly 70,000 metric tons of highly radioactive spent fuel, accumulating at 100 nuclear reactors across the nation.

"It is irresponsible on the government's part to not move forward on a program that has already been paid for," said Marvin Fertel, president of the Nuclear Energy Institute, a Washington trade group that filed a suit against the fees.

The waste fee is one-quarter of a penny on each kilowatt hour of electricity, a tiny amount on any individual consumer's monthly bill. But over the decades, the fractions of pennies added up to about $43 billion. About $12 billion of that money was spent on trying to develop the Yucca Mountain dump in Nevada, before the Obama administration essentially killed it.

Now, there is virtually no plan moving forward in Washington to build a dump or even a temporary central storage site. The $31-billion trust fund will continue to accrue interest and is available to help build a dump at some point in the future, though it is probably not enough money. Experts had estimated that the Yucca Mountain project would cost at least $100 billion.

"I don't see how it is a terrific win for anybody," said Marta Adams, the assistant attorney general in Nevada who led the state's legal efforts to block Yucca Mountain. "It relieves consumers of this charge but it doesn't get rid of the waste."

Nevada officials believe the nuclear industry's lawsuit was a subterfuge to force the Obama administration to restart licensing for Yucca Mountain, although Fertel and others argue that they simply want the government to act on its legal obligations and begin a realistic effort to build a repository that can handle the mounting waste.

Under guard by SWAT teams with machine guns, the spent fuel is slowly decaying in deep pools of cooling water and in outdoor concrete casks from the California shores of the Pacific Ocean to the banks of the James River in Virginia. The waste is expensive to store and often cited as a public safety risk. Many experts worry that the longer it sits around, the less motivation the government will have to ever deal with it.

Decades ago, the government promised nuclear utilities when they built reactors that the Energy Department would dispose of the spent fuel, temporarily easing the way for the development of nuclear energy that now supplies 20 percent of the nation's electricity.

The nuclear and utility industries, which have privately complained that the government took the money and left them holding the deadly waste, filed suit to block the fees. Last year, an appeals court ruled that the government had no reasonable plan to build a dump and could not reasonably estimate the cost of any future dump, ordering that it had to suspend collections of the fee.

It has taken about six months for the Energy Department to carry out the legal order.

"The federal courts have gotten fed up with what the Department of Energy is doing," said Jay Silberg, the industry's lead attorney in the case against the fees. "We want something in exchange for our money."

The Energy Department said Wednesday that it remains committed to finding a solution, but that it had to be done with broad public consensus. "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," the department said in a statement.

Silberg said the intent of the industry's suit was to increase pressure on the administration to start acting.

In addition to the suit, the nation's nuclear utilities have filed 90 lawsuits against the federal government, asserting that the failure to take ownership of the waste has increased their storage and operation costs. So far, they have won $1 billion in judgments and obtained settlements of $1.6 billion, Silberg said. The Energy Department has projected that it may be liable for up to $22 billion in additional judgments just through the start of the next decade and more liability would accumulate after that, Silberg said.

The problem with nuclear waste was addressed in the Waste Policy Act, a 1982 law that ordered two nuclear waste dumps to be built in the eastern and western U.S. But in 1987, Congress directed the Energy Department to build a dump at Yucca Mountain, a volcanic ridge inside the Nevada National Security Site, the former test range for detonating nuclear weapons. At the time, Nevada was among the politically weakest states, the test range was already radioactively contaminated and scientists claimed the repository's geology would keep the waste isolated.

But the plan began to collapse when the state raised a long series of scientific objections to the site. When Democratic Sen. Harry Reid became the majority leader, he vowed to kill the project and he delivered on the pledge when Obama was elected. The president appointed a blue ribbon committee to study the next step. It delivered a report in 2012, suggesting that the disposal program be taken away from the Energy Department and an interim storage site be established before a permanent repository is built.

But legislation to carry out its recommendations was never passed by Congress.

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