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Paying the Nuclear Piper
Nuclear Waste Fund Fee Adjustment

$315 million

"GAO recommends that Congress amend the Nuclear Waste Policy Act to authorize the Secretary of Energy to automatically adjust the civilian nuclear waste disposal fee on the basis of an inflation index." General Accounting Office

To offset the costs associated with high-level nuclear waste generation, nuclear utilities pay into a fund to help cover the long-term costs of managing radioactive waste. Since 1983, this payment has been a flat fee of one-tenth of one cent per kilowatt-hour (one mill per kilowatt-hour). However, this rate of contribution will not cover the costs originally anticipated, much less new and unforeseen costs, of waste disposal. If the Nuclear Waste Fund fee were indexed for inflation, it would save taxpayers millions and perhaps billions of dollars and make the market price of nuclear power more accountable to future costs.

Green Scissors Proposal
Index the Nuclear Waste Fund Fee to inflation and make recommendations on how to adjust the fee further to cover additional nuclear waste costs. According to a 1995 Congressional Budget Office (CBO) analysis, indexing the fund for inflation would have saved taxpayers $315 million between 1996 and 2000 alone.

Current Status
The Nuclear Waste Policy Act (NWPA) allows the Secretary of Energy to propose Nuclear Waste Fund fee adjustments. But under the original law, either chamber of Congress could unilaterally veto a proposed adjustment. In September 2002, a decision by the Court of Appeals for the 11th Circuit struck this provision, finding it unconstitutional. The decision requires both chambers to pass a disapproval resolution that must be signed by the president in order to prevent a fee increase. Although this makes it easier for the Secretary of Energy to adjust the Nuclear Waste Fund fee, no adjustment has been proposed and the fee continues to be assessed at the rate of 0.1 cents per kilowatt-hour.

Currently, the Nuclear Waste Fund is being used to partly finance the Yucca Mountain nuclear waste repository program. While Nuclear Waste Fund fees have stayed constant and inflation has eroded the Fund, the Department of Energy's (DOE's) total cost estimate for the Yucca Mountain Project has soared to nearly $60 billion - almost double the original projection.

Meanwhile, at least 19 nuclear utility companies are suing the DOE for its failure to begin accepting waste by its contractual deadline of Jan. 31, 1998. The nuclear industry estimates that damages could amount to $50 billion. Although the recent 11th Circuit court ruling dismissed the idea of paying compensation from the Nuclear Waste Fund, it remains to be seen how the DOE will finance these damages if utility lawsuits are successful. Withdrawing utilities' damage awards from the Nuclear Waste Fund would further deplete its reserves.

Concerns about health, safety and property values along nuclear waste transportation routes raise the specter of yet more lawsuits that could drain Nuclear Waste Fund monies. For example, a lawsuit filed in Nevada District Court in June 2002 contends that the DOE's Yucca Mountain Environmental Impact Statement violates the Equal Protection Clause of the 14th Amendment of the U.S. Constitution by not considering the environmental justice implications of proposed nuclear waste shipments.

Project Hurts Taxpayers

The fee has remained the same for 19 years, however, inflation has eroded the fee's buying power by well over 45 percent. If the Nuclear Waste Fund fee were indexed for inflation, it would have saved taxpayers $315 million between 1996 and 2000 alone.

Taxpayers will be liable for shortfalls in the Fund. The fee has remained the same for 19 years, however, inflation has eroded the fee's buying power by well over 45 percent. If the Nuclear Waste Fund fee were indexed for inflation, it would have saved taxpayers $315 million between 1996 and 2000 alone.

Taxpayers will be liable for shortfalls in the Fund. If the current rate of one mill per kilowatt- hour is not increased, there may be a shortfall of 10 percent of the funds needed for full cost recovery by the DOE, according to a study by the General Accounting Office. A 1998 financial review commissioned by the State of Nevada concluded that the funding shortfall would range from $12 to $17 billion in 1996 dollars. Additionally, pending lawsuits may lead to additional depletion of the Nuclear Waste Fund. This means that even less funding will be available for a long-term solution to the nuclear waste problem.

Project Hurts the Environment

Without adequate funds, finding and implementing a safe and acceptable solution to nuclear waste disposition will be impossible. High-level nuclear waste remains deadly for more than a quarter of a million years. Current projections show the Fund to be woefully inadequate to deal with this problem.

Charging nuclear operators the full cost for nuclear-generated electricity helps to level the economic playing field for use of cleaner, more efficient energy sources.

Contacts

• Lisa Gue, Public Citizen, (202) 546-4996;
• Anna Aurilio, U.S. Public Interest Research Group, (202) 546-9707;
• Kevin Kamps, Nuclear Information & Resource Service, (202) 328-0002.