With the Obama administration passing on nuclear reprocessing and the hopes of storing nuclear waste at Yucca Mountain all but gone, the future for spent nuclear fuel in the U.S. remains uncertain.

[This is a guest post by Kimberly R. Reome, Vice President and Krista M. Haley, Principal, The Kenrich Group. -Ed.]

As the U.S. electric industry is contemplating building new nuclear power plants for the first time in decades, the industry continues to be faced with uncertainty regarding the ultimate long-term disposal solution for the nation’s spent nuclear fuel (SNF).

Since 1982, when Congress passed the Nuclear Waste Policy Act, nuclear power plant owners and operators have been funding the development and construction of a national SNF storage facility that may never materialize—that funding amounting to $30 billion to date.

Under the terms of the 1982 legislation, nuclear utilities entered into mandatory contracts with the Department of Energy (DOE) under which the utilities pay the federal government one mill (one tenth of a cent) for every kilowatt hour of nuclear-generated electricity sold to their customers. In return, the government assumed responsibility for the development, construction, and maintenance of a facility that would be ready to accept the nation’s SNF beginning no later than January 31, 1998.

More than a quarter century after those contracts were signed, and more than a decade after the 1998 deadline has passed, nuclear utilities have provided the DOE over $30 billion – and counting – in fees and interest. Meanwhile, development of the proposed SNF permanent storage site at Yucca Mountain in Nevada is stalled amid political debate as to whether or not long-term SNF storage at Yucca Mountain is indeed the right course of action for handling our nation’s SNF.

To date, not one spent fuel assembly has been transferred to the DOE control for permanent disposal under the contracts. And the additional costs that nuclear utilities must bear to store SNF on their own plant sites are mounting for plant owners and ratepayers, who all still await the DOE to begin accepting the utilities’ SNF.

With the SNF contracts in place, nuclear utilities did not anticipate having to add storage capacity for SNF generated after 1998. Instead, they are collectively incurring, and will continue to incur, billions of dollars in added costs related to the installation and expansion of highly-technical, on-site storage technologies—primarily dry fuel storage facilities and casks that house the highly-radioactive waste.

Now, these added costs are the central focus of a legal battle that has been officially underway since the DOE first missed the 1998 deadline.

When litigation first began, the DOE initially argued that it was only obligated to perform if the repository in question (then Yucca Mountain) was actually in existence and ready to accept SNF. The U.S. Court of Appeals for the District of Columbia Circuit rejected that argument, finding that the DOE’s duty to perform was not subject to such condition. The DOE then turned to the contention that its performance delay was unavoidable – pointing to legal, political, and scientific obstacles that the agency claimed kept it from adhering to the Nuclear Waste Policy Act’s readiness date.

That argument was rejected early on, as well. But in 2007, a Court of Federal Claims trial judge challenged that ruling, and thus, the “unavoidable delay” issue is currently awaiting an en banc decision at the U.S. Court of Appeals for the Federal Circuit.

Nonetheless, nuclear utilities that have obtained trial decisions in their partial breach cases against the DOE are being awarded the vast majority of their claimed costs incurred for increasing and maintaining on-site SNF storage capacity. And furthermore, the utilities are permitted to periodically return to the Court of Federal Claims to recover continuing damages associated with ongoing on-site SNF storage.

The DOE reported in July of this year that seventeen cases have had judgments totaling $790 million (many of which are subject to post-trial motions, appeals or remands). Of course, these costs awarded to commercial nuclear utilities only covers on-site storage costs incurred to date – as do a number of settlement agreements that have been reached. The DOE reported that close to $600 million in claims have been paid to date under these settlements. However, the SNF still remains on the sites of the various nuclear plants that produce it—with no real expectation of being accepted by the DOE and shipped off-site any time soon. Continued...