Secretary Pena's Proposal to Utilities

Secretary Pena's Proposal to Utilities Fails To Satisfy DOE's Waste Obligation

WASHINGTON, D.C., May 18, 1998--Last week, Energy Secretary Federico Pena invited a dozen electric utility executives to meet with him regarding an Energy Department (DOE) proposal to settle the contractual issues raised by the agency's failure to meet its Jan. 31, 1998, deadline to begin accepting used fuel from commercial nuclear power plants. The proposal, outlined in a meeting held today with representatives from the Nuclear Energy Institute and five utilities essentially allows companies to escrow fees above the amount required for the annual civilian appropriation made to the nuclear waste management program. Under the proposal, DOE estimates that approximately 50-75 percent of the funds could be escrowed, and the remainder of the current fee would be paid to the government to cover program needs. As a condition of accepting the proposal, utilities would agree not to file claims or seek damages for the delay resulting from DOE's failure to meet its obligation to being ! moving used fuel. The following is a statement by the Nuclear Energy Institute's president and chief executive officer, Joe F. Colvin, in response to Secretary Pena's proposal. Colvin was among those attending the meeting.

"Well-intentioned as it may be, the nuclear waste proposal that Secretary Pena made today does not satisfy the Energy Department's obligation to move used fuel from commercial nuclear power plants. It does not provide a date certain for the movement of used fuel, nor does it offer any hint as to how the Energy Department intends to meet its unconditional obligation to dispose of used fuel in the future.

"Seen in this light, the Secretary's proposal is virtually a non-starter. The best solution to this important environmental challenge is enactment of the Nuclear Waste Policy Act pending in Congress. The legislation, strongly supported on both sides of the aisle in Congress, provides for both interim storage and permanent disposal of used fuel, and it ensures adequate funding for the federal government's nuclear waste management program. The pending legislation remains the BEST option by far to resolve this issue.

"Other shortcomings of the Energy Department's new proposal include these:

-- It provides absolutely no relief to utilities or communities with shutdown nuclear power plants.

-- It does not provide 'new money' for continued on-site storage.

-- Under DOE's proposal, the amount of money that utilities could use to help defray the costs resulting from the department's failure to perform falls well short of the amount of money that the industry estimates it will need to manage used fuel on-site as the result of the department's failure to move used fuel from reactor sites. Given the high number of sites--80--that will exhaust on-site storage space in the years to come, we estimate that on-site storage costs will hit the $5 billion to $6 billion mark by the year 2010. Based on assumptions that we find unreasonable, the Energy Department estimates that the industry could earn, by the year 2020, $2.8 billion to $5 billion in 'excess interest' that could be available to help cover delay costs. Clearly, the proposal is inadequate to meet the costs of DOE's inaction.

"Again, the industry emphasizes the need for political leadership, both from Congress and the White House, on this important issue."


For more information, contact NEI's media relations staff at (202) 739-8000 during business hours or at (703) 644-8805 after hours and on weekends.

The Nuclear Energy Institute is the nuclear energy industry's Washington-based policy organization.

Other information about nuclear energy is available on NEI's Internet site at

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