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Monday, July 12, 2004

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  A number of court cases have ruled that the Department of Energy is liable for the cost of keeping the waste because of a breach of contract. How much is at stake is anyone's guess, but the industry has put the number as high as $56 billion.

The first case, involving three utilities that own the Yankee group of reactors in Maine, Vermont and Connecticut, went to trial Monday before the U.S. Court of Federal Claims. The trial is expected to last seven weeks.

Jerry Stouck, an attorney representing the utilities, outlined a case that was expected to focus on the government's repeated failures, dating back to 1983, to get approval for a central waste dump at Yucca Mountain in Nevada and its refusal in the interim to accept the waste at some other facility.

The courts already have ruled the government violated its contract with the nation's utilities to take charge of the waste. Now the utilities are seeking damages, with a total of 65 claims having been filed.

"Damages. Damages. It's all about damages. How much money are we entitled to," Stouck said during a break in the proceedings.

The case before Judge James Merow of the claims court is limited to used reactor fuel that is being stored at the Maine Yankee, Vermont Yankee and Yankee Rowe (in Massachusetts) nuclear plant sites. The issue is of special importance to the utilities because the reactors have been shut down and keeping the waste is more expensive and may affect site cleanup.

"If this litigation is successful, it will provide some financial relief to the electric customers who bear the increasing costs to store fuel at these sites as a result of the DOE's failure to met its legal obligations," said Bruce Kenyon, chairman of Yankee Atomic Electric Co.

The utilities together are asking for $548 million in damages for costs incurred to keep the spent reactor fuel in dry-cask storage until 2010. That is when the proposed Yucca Mountain waste site is expected to begin taking waste from commercial power plants.

The damages sought by the New England utilities is nearly double the $268 million cited in 1999 when they began litigation. Stouck said the cost of keeping the waste on site, initially underestimated, has grown because today's terror threats require increased security.

Stouck said the trial would show the immense costs the utilities paid to build dry storage facilities and expand storage in spent fuel pools at reactor sites because the government "left them with no choice" to maintain the waste safely.

"They built these facilities for one reason only, because of DOE's default," he said in an opening statement.

But the money sought in this trial is only a fraction of what the government might have to pay, given that these are only three of 65 claims filed by owners of the country's 102 reactors at 72 power plants.

The bill could grow if the Yucca Mountain waste site does not open in 2010 as planned. A federal appeals court raised new questions about the Energy Department's ability to keep its timetable Friday as it rejected DOE's proposed radiation protection standard for that site.

In a recent letter to Congress, Energy Secretary Spencer Abraham estimated that utilities would incur $500 million a year in costs for every year the Yucca Mountain dump is delayed past 2010. "Some portion ... the department will be liable for," he wrote.

The utilities say the government was contractually obligated under the federal nuclear waste law to physically take charge of used reactor fuel. If Yucca Mountain were delayed, another site on federal property should have been found, they argue.

The courts in separate cases have said the government was required to find a safe and suitable place for the waste, and that if none was available, the government would have to pay the utilities damages.

© 2004 Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed.

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