The Senate subcommittee funding the Department of Energy (DOE) may use a carrot-and-stick approach this year to push DOE into finding a quicker solution to the long- and short-term nuclear waste crisis. The debate to get the waste stored safely underground promises an appropriations war that could rival the federal budget skirmish.

Current law authorizes only a permanent repository, not interim storage. Utilities, however, claim they're running out of room to cache their waste. DOE was supposed to have a permanent repository ready by 1998, but now says its site at Yucca Mountain, NV, won't be ready to accept spent fuel until 2010.

Delay so far has prompted 59 parties, including 22 utilities, to sue DOE, seeking to compel the agency to fulfill obligations to dispose of spent nuclear fuel by 1998, as required by the Nuclear Waste Policy Act. Under the Act, about $11 billion has been collected through electric rates to pay for nuclear waste disposal, although Congress has tapped the fund to reduce the federal budget deficit.

A hint of what DOE can expect surfaced on December 14, 1995, at a hearing conducted by the Senate Committee on Energy and Natural Resources. Bill S. 1271, which calls for DOE to accept the waste by 1998, was on the floor.

Sen. Pete V. Domenici (R-NM), who chairs the Energy and Water Development Appropriations Subcommittee, implied that funding for the DOE's study of the Yucca Mountain site would be slashed unless management inefficiencies were eliminated and a decision made to go ahead with both interim and permanent storage. DOE has spent about $2 billion to bore into the Nevada mountain. Some $4 billion more was slated for what's still only a "possible" destination for waste from the nation's 109 nuclear power plants.

"I know there's an election coming and I know it's hard for presidents to pick and choose in this area, but we really need some leadership from your end," Domenici told Hazel R. O'Leary, Energy Secretary.

"The president cannot support this bill," O'Leary answered.

O'Leary is concerned that an interim facility would become a de facto permanent storage site. She suggested that her staff meet with committee members' staffs to resolve "funding differences."

"Differences" is a nice way of describing what Congress faces this year on the issue. What's ahead also includes debate on S. 1478, a bill introduced by Sen. Rod Grams (R-MN) to privatize interim storage, although O'Leary says time could be lost on privatization efforts.

A similar, but independent and radical recommendation about DOE has been made by The Heritage Foundation, a conservative think tank. The Foundation calls for privatizing all aspects of DOE nuclear disposal, including the defense department and other energy programs (see sidebar).

The House of Representatives, meanwhile, is expected to consider H.R. 1020, "The Nuclear Waste Policy Act of 1995." The bill has nearly 200 co-sponsors, and will very likely be passed. Michael E. McCarthy of the Nuclear Waste Strategy Coalition (em which represents regulators, attorney generals, and utilities in 18 states (em says the timing of House actions and the content of the bill will set the parameters of what makes it to the Senate floor: "I think they're going to wait and see the outer bounds defined by the House."

H.R. 1020's one sticking point, however, could be the "user fee" collected to continue the Nuclear Waste Fund. The fee can be increased beyond the current one-tenth of a cent per kilowatt-hour, but must average out at one mill over 14 years. In a letter to House Minority Leader Richard A. Gephardt

(D-MO), 22 members of the National Association of Regulatory Utility Commissioners (NARUC) urge that ratepayer funds designated for the program be used for that purpose rather than deficit reduction. The commissioners warn that the program's future could be in jeopary should the user fee provisions of the bill be stripped or weakened.

Federal legislators and the President also can expect heightened pressure from the states. Virginia's State Corporation Commission has investigated whether ratepayers should continue contributing to the Nuclear Waste Fund (Case No. PUE950060). Comments on staff reports and requests for oral arguments were due January 31. South Carolina was expected to take similar action. And in Minnesota, the Department of Public Utilities (DPU) has been investigating whether customers of Northern States Power Co. should pay the fee or whether the funds could be put into escrow to protect the investment (Docket No. E002/DI-95-1137). Among other issues, the DPU is examining legal and policy consequences and how an escrow fund would be administered. Minnesota has been a leader in fighting for the rights of utilities and others interested in prompt disposal of nuclear waste.

Despite the great "sport" at the Senate Energy and Natural Resources Committee hearing, McCarthy was heartened by the growing consensus. He says that Domenici's refusal to fully fund the program through another budget cycle means DOE has few options: It has to do the job smarter and spend its money wisely. "The galvanizing moment here is budget driven," he explained. "As long as you've got more money pouring in, you have no impetus to change."

Sen. J. Bennett Johnston (D-LA) pointed out that the Administration had not given Congress a nuclear waste disposal plan, and that the committee and the House had each delayed a year: "There's plenty of complicity in this, what I would call a disaster of nonpolicy."

Meanwhile, it will cost utilities $5 billion through 2010 to store their waste. An interim facility by 1998 is practical, Johnston insisted, "if we start it tomorrow. We've done amazing things in this country when we wanted to."

Sen. Paul Wellstone (D-MN) said taxpayers have been placed on the hook and will own the waste. "That's the beauty of this deal for the nuclear industry," he said facetiously. "This looks like a savings and loan bailout, with a little bit of a toxic twist."

Sen. Frank H. Murkowski (R-AK), committee chairman, said there was a reasonable chance the site could be found unsuitable and "unlicensable." Then DOE will have spent $8 billion and still lack a site.

O'Leary countered that in "two years and some months" she'd have an answer for the panel. Daniel Dreyfus of DOE's Office of Civilian Radioactive Waste Management testified to a high probability that the site can be used.

"You're stalling," Sen. Larry E. Craig (R-ID)

said to O'Leary. "I heard a very sophisticated,

first-class, articulate stall. ... And that's tragically disappointing."

"Where you and I disagree is on the timeline to move along that course, and you may choose to call that stalling," O'Leary said. "I call that responsible, appropriate action." She said the DOE team wanted to build the confidence of the country and of Nevadans as they proceeded: "What I'd like to see is not only legislation, but I'd like to see a facility built."

Sen. Jon L. Kyl (R-AZ) reminded the committee about the 75 sites where 30,000 metric tons of commercial nuclear waste already lie in storage ponds or dry storage: "We're willing to let something sit there, which obviously poses a problem and potential danger for years, while we study how we can safely store it sometime in the far, far, far distant future. There's something drastically wrong here."

Despite the head-butting, McCarthy said it was the first time committee members of both parties reached an understanding of where they needed to go and how to take the action required to provide interim and long-term nuclear waste storage. "And that's a change of direction," he said. "That's a powerful change, because that's a precursor to

consensus-making. And consensus-making is what makes legislation." t

Joseph F. Schuler, Jr. is associate editor of PUBLIC UTILITIES FORTNIGHTLY.

No DOE?

"It is time to close the Department of Energy,"

That's the call of The Heritage Foundation in a November 9, 1995, report citing "empire building, inefficiencies as high as 40 percent, and management problems." How to Close Down the Department of Energy attributes these problems and inefficiencies to DOE's continual efforts to justify its existence:

"DOE has grown in tax dollars spent and functions performed-the result of 15 years of searching for something to do.... Thanks to this continual empire-building, the department's budget has increased 235 percent, and 85 percent today is spent on activities other than energy resources. For instance, nearly $12 billion is budgeted annually for environmental quality and nuclear waste disposal, with...$3 billion ear-marked for fundamental science research."

The Heritage Foundation proposes an end to federal funding for commercial energy supply, research, and development. Research would be transferred to private companies. All commercial energy functions-including the Power Marketing Administration, Strategic Petroleum Reserves, and Uranium Enrichment-would be denationalized and sold to private companies. The Foundation claims such reforms would save $41 billion in taxes over five years. Energy Secretary Hazel R. O'Leary's "reinvention" plan would save only $14.1 billion over the same period.

Nuclear Waste Bills on the Hill

S. 1271, Nuclear Waste Policy Act of 1995

[Sen. Larry E. Craig (R-ID)] Detaches interim storage from a long-term repository, and sets a 1998 deadline for DOE to accept waste. It would streamline the environmental impact statement process and set up a performance standard for the permanent repository. It would also exempt the repository from most federal, state, and local laws. The bill leaves funding in place, but requires that it first be used for interim storage.

H.R. 1020, Nuclear Waste Policy Act of 1995

[Rep. Fred Upton (R-MI)] Calls for an interim facility to be developed along with a permanent facility. Funding of both would cost more than $400 million in fiscal 1996. The Act would replace the Nuclear Waste Fee with a "user fee," spent as it is paid in. DOE could collect more than the current one-tenth of a cent per kilowatt hour, as long as it doesn't collect more than that average over 14 years. (The Congressional Budget Office has ruled that the program could cost more than DOE could collect through the user fee, so the bill is subject to a point of order on the House floor, unless the House Rules Committee grants a waiver.)

S. 167, Nuclear Waste Policy Act of 1998

[Sen. J. Bennett Johnston (D-LA)] Calls for DOE to store spent fuel as early as possible, not 1998. Would streamline approval processes and give the President authority to exempt the facility from laws that did not apply, delayed the project, or increased costs to comply with health, safety, or environmental benefits.

S. 429, Independent Spent Nuclear Fuel Storage Act of 1995

[Sen. Richard H. Bryan (D-NV)] Would allow commercial nuclear utilities to receive credits toward contributions to the Nuclear Waste Fund. This would offset the cost of storing spent fuel if DOE is unable to accept it by January 31, 1998.

S. 473, Nuclear Energy Policy Act of 1995

[Sen. Paul Wellstone (D-MN)] Would prohibit new nuclear power reactors until a permanent disposal facility with room for all the nuclear waste of the reactor's life is licensed. At no time could the spent fuel exceed the capacity licensed.

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