Although there are no plans on the horizon for a new nuclear waste repository to replace Yucca Mountain, the Department of Energy can continue collecting fees from energy producers to pay for it - at least for now.
But in a sharply-worded opinion issued today, the U.S. Court of Appeals for the D.C. Circuit gave Secretary of Energy Steven Chu six months to come up with a better rationale to justify the amount that's collected.
The court called a key part of the government’s argument “farfetched, almost absurd,” its cost estimates “obviously inflated,” and concluded that “plain language utterly destroys the Secretary’s claim that he can remain entirely passive and only act if some deus ex machina were to bring him information,” wrote Senior Judge Laurence Silberman for the unanimous panel, which also included Chief Judge David Sentelle and Judge Janice Rogers Brown.
The government collects about $750 million a year from nuclear power plant owners and operators - money that’s intended to cover the full costs of long-term disposal of civilian nuclear waste. But since the government in 2009 abandoned the proposed Yucca Mountain site in Nevada and has yet to come up with an alternative, the National Association of Regulatory Utility Commissioners, represented by Pillsbury Winthrop Shaw Pittman partner Jay Silberg, filed suit asking that the fees be suspended.
For close to three decades, power plant owners have paid the fees while forced to store their own waste (and in separate litigation, have sued the government for billions in reimbursement). The court noted that the government’s Nuclear Waste Fund has amassed close to $28 billion.
The Secretary of Energy under the Nuclear Waste Policy Act of 1982 is obliged to “annually review the amount of the fees to evaluate whether collection of the fee will provide sufficient revenues to offset the costs” or if downward adjustment is warranted.
After the government abandoned Yucca Mountain, the Department of Energy did not adjust the annual fees. Rather, the director of the Office of Standard Contract Management issued a memo stating, “We are aware of no evidence that would provide a reasoned and sound basis for determining that excess or insufficient revenues are being collected ,” according to the court. The director also said that current fees were adequate based on using Yucca Mountain costs as a proxy.
The petitioners objected that the Department of Energy failed to conduct a cost evaluation or account for the uncertain schedule of finding a new site (a blue ribbon commission estimated that selection and evaluation of another site will take 15 to 20 years), and that using the cost of Yucca Mountain as an estimate was arbitrary and capricious.
The government, represented by the Justice Department’s Harold Lester Jr., said the Secretary of Energy is only required to review the fees, but has total discretion in identifying and evaluating costs. If there is insufficient information, the secretary is not obligated to change the fees.
The court was scornful of the notion that the Secretary of Energy “may, like an ostrich, put his head in the sand; so long as he is unaware of any information that questions the existing fee structure, he is not obliged to propose an adjustment.”
The suggestion that the cost of Yucca Mountain serve as proxy fared no better. First, it doesn’t factor in “the enormous delay in even selecting a new site,” wrote Silberman.
“To add to the irrationality ,” he continued, the government’s $97 billion estimate of Yucca Mountain costs is “unfortunately, and somewhat embarrassingly...obviously inflated.” The figure includes costs associated with disposing of defense-related waste, which civilian power plant operators are not obliged to pay for. “In other words, the government submits to us a calculation that appears to be off by $30 billion – which, even today, is real money,” he wrote.
While the panel “readily conclude[s] that the Secretary’s determination is legally inadequate,” the judges ruled it was premature to suspend fee collection outright. Instead, the court remanded the matter to the Secretary of Energy “with directions to comply with the statute within six months. The panel will retain jurisdiction over this case so that any further review is expedited.”
And in a footnote, the court took both sides to task for using far too many acronyms, writing, “Here, both parties abandoned any attempt to write in plain English, instead abbreviating every conceivable agency and statute involved, familiar or not.’”