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News Analysis

Fortnightly Magazine - July 1 1998

in 34 states.

Nuclear waste program funding is about $635 million a year, according to Steve Unglesbee, Nuclear Energy Institute spokesman. Congress typically appropriates $190 million annually to use for the program, with the rest put on the books to make the deficit look smaller.

"I have not seen any indication from anyone, anywhere in the country, state or utility, that had any level of satisfaction with what was put on the table," said Mike McCarthy, administrator of the Nuclear Waste Strategy Coalition.

"Not all utilities will take this, I would imagine," said Lake H. Barrett, acting director of the DOE's office of civilian radioactive waste management. "I would be surprised if all utilities take this proposal... Some may."

The offer comes after two federal appeals court decisions. The first, decided Nov. 14, 1997 by the United States Court of Appeals (Northern States Power Co., et al., No. 97-1064, consolidated with Nos. 97-1065, 97-1370 and 97-1398) required the DOE to work out its disagreements over payment of damages to 49 companies under their Nuclear Waste Policy Act contracts. The second, decided May 5 by the same court under the same docket, took "no opinion on the legality of the DOE's using utility or ratepayer-supplied monies to pay costs or damages."

DOE, believing the suits posed no roadblocks to its plans, went ahead.

"It certainly looks like their timing was calculated," said one observer from the regulatory community who asked not to be named. "All they have to do is persuade two or three senators that this settlement offer is something to think about and you don't have to do the legislation. And if you have any doubts about the legislation, you don't have to vote for it."

Barrett insisted that the DOE's timing was coincidental.

"It has taken a long time to develop this and get all the internal coordination within the administration," the DOE official said. "We knew the court process was going forward and we were trying to, as I said, acting in good faith to get a proposal out since we didn't get any proposals in from the other side, other than legislation. It just took us a long time to get it out. It's a coincidence that this got out this week."

Relinquishing Rights

Barrett says under the DOE plan, utilities would only pay their portion of the program funding that would be used. The balance could be invested until it was paid back, at the Treasury Bill interest rate, currently about 5 percent. It would be paid back when the DOE received the waste for permanent, underground storage at Yucca Mountain.

Assuming a 10-percent return and assuming all utilities took the offer, the combined utility earnings would be $2.8 billion. Assuming a rate of return of 14 percent, $5 billion could be earned, he said. These scenarios also assume the waste is received by 2010.

But what compelling reason would utilities have to give up their rights to sue for damages?

"There's a very broad range of utilities and each utility situation is unique," Barrett said. "If