Nuclear Waste Fund a $15 Billion Slush Account To Hide Fed Deficits

by LeRoy Koppendrayer
Chairman, Minnesota Public Utilities Commission and Chairman, Nuclear Waste Strategy Coalition

Yucca Mountain workers test remote control robot to handle nuclear waste

Two years ago, Congress overwhelmingly ratified the President's February 15, 2002, recommendation to proceed with licensing and development of a permanent repository for the nation's civilian and defense nuclear waste at Yucca Mountain, Nevada. One would have thought that the repository was on its way to being completed. This is not the case. Instead, the very existence of the nuclear waste disposal program is threatened due to lack of annual funding.

Our nation's plan for the disposal of civilian and defense nuclear waste was established by Congress when it passed the Nuclear Waste Policy Act (NWPA) in 1982. The NWPA included a provision for funding the nuclear waste disposal program through a federal nuclear waste fund. Since 1983, ratepayers across the nation have paid and continue to pay into the nuclear waste fund.

As mandated by Congress, the nuclear waste fund is designed to fund the Department of Energy's establishment of a safe, timely, and cost-effective centralized storage and permanent disposal of the civilian spent nuclear fuel and high-level radioactive waste. Unless Congress comes to grips with the intent of the NWPA, the nuclear waste disposal program may soon come to a grinding halt.

The nation's ratepayers who receive electric energy generated from nuclear power make more than $750 million per year in payments into the nuclear waste fund, and with interest credits, this amount exceeds $1 billion annually. After deducting expenses to date, the fund now holds about $15 billion.

Unfortunately for the public, this account balance has been used to camouflage the federal deficit each year, rather than for developing a repository to receive spent nuclear fuel and high-level radioactive waste from the nation's nuclear power plants, as intended by the Nuclear Waste Policy Act. After being chronically underfunded for years, the nuclear waste disposal program now faces its most severe budget crisis ever.

In its FY 2005 budget, the Department of Energy requested $880 million to keep the project on track. However, the administration only allocated $131 million for the defense nuclear waste disposal program and zero for the civilian waste disposal program, incorrectly assuming that legislation would be enacted which would provide $749 million from annual ratepayer contributions.

Though the House Energy and Commerce Committee recently approved this legislation (H.R. 3981), only $131 million was marked-up by the House Appropriations Energy and Water Development Subcommittee and it did not attach the bill to the FY 2005 Energy and Water Appropriations bill.

Unless the House and Senate enact H.R. 3981 expeditiously, the Program will not be able to retain an adequate workforce to meet the milestone dates necessary to allow waste to be accepted by 2010. As a result, spent nuclear fuel and high-level radioactive waste could be stranded indefinitely at plant sites throughout the nation.

Killing the current federal program permanent repository at Yucca Mountain would have dire consequences to the nation's electricity generation portfolio, and the environment. Nuclear power comprises 20 percent of our nation's base-load electric generating capacity and produces no controlled air pollutants, such as sulfur and particulates, or greenhouse gases.

To aide this ailing program, we understand that Senator [Pete] Domenici plans to introduce a proposal to temporarily increase the fee customers' pay into the nuclear waste fund through their electric bills. This one-year only Òtransition feeÓ should collect $446 million to help make up for the $749 million shortfall in the Department of Energy's fiscal year 2005 budget.

However, since the nuclear waste fund already contains a $15 billion unused balance, the members of the Nuclear Waste Strategy Coalition are not in favor of taxing the nation's ratepayers with an increased fee.

As a regulator, I believe it will be very hard for a state utility commission to justify double taxing its ratepayers when we have a $15 billion balance in the nuclear waste fund.

Further, we are very concerned that any increase in the nuclear waste fund fee could become permanent. However, if this single-year fee will be the instrument that clears the way to remove the nuclear waste fund fees from the annual appropriations stranglehold permanently and the DOE can tap annually into the corpus of the nuclear waste fund, as needed, then the Nuclear Waste Strategy Coalition may consider supporting it.

Government studies have determined that the current fee level is sufficient to build and operate the disposal site if these fees were appropriated annually. However, over the past several years, Congress has failed to appropriate adequate amounts. The resulting severe funding constraints have threatened the Program's ability to meet important Program milestones.

If Congress would enact legislation to codify the nuclear waste fund annual receipts as offsetting collections, it would ensure that every cent collected from the ratepayers will be delivered to the Program, as intended by the 1982 Nuclear Waste Policy Act. Therefore, the members of the Nuclear Waste Strategy Coalition urge the full House and Senate to enact H.R. 3981 expeditiously to ensure that this Program does not falter or come to a grinding halt.