ASHINGTON, Sept. 25 — A federal
appeals court has ruled that billions of dollars in damages
that the Energy Department is likely to owe to nuclear reactor
owners for its failure to store nuclear waste will have to
come from taxpayers, not electricity consumers.
The Energy Department signed contracts with reactor owners
in the early 1980's promising to accept their wastes for
burial beginning in January 1998, in exchange for payments
from them based on electricity production. To date, reactor
owners have paid more than $10.5 billion.
But now the department says it cannot take waste until
2010, and the operators of the reactors are suing because they
have been forced to store the waste on site.
Many experts say the storage cannot start for many years,
because of uncertainties about Yucca Mountain, the site near
Las Vegas that the government has chosen as its waste
Estimates of the damages run from $2 billion to $60
billion, and the decision, from the United States Court of
Appeals for the 11th Circuit, in Atlanta, twice used the word
"nebulous" to describe them. At the National Association of
Regulatory Utility Commissioners, which is made up of state
officials, Brian J. O'Connell, the director of the Nuclear
Waste Program office, said the number would run "in the
billions." Asked if it would reach tens of billions, Mr.
O'Connell, said, "It gets fuzzy."
He said that one utility, Northern States Power of Minnesota, put its
costs at $1 billion because it might be forced to shut three
reactors prematurely, for want of storage space for the
The only settlement so far is much smaller. The department
and the owners of the three-reactor Peach Bottom plant, in the
Pennsylvania town of the same name, agreed on $80 million, to
pay extra costs for storing the wastes on site, in giant steel
and concrete casks. But 13 other reactor owners sued to block
the deal, because the money would have come from the Nuclear
Waste Fund, money from power customers that they said was
supposed to be used only to open a permanent repository.
In a decision dated Sept. 24, the appeals court ruled that
money in the fund can only be used for permanent disposal. The
court said that the Nuclear Waste Policy Act, the law that
allowed the contracts, called for a quid pro quo "in which
each utility roughly pays the costs of disposing of its waste
and no more." The plan, the court said was for a system in
which the burden of the government's breach of contract would
"fall on the government, not other utilities."
A lawyer for the plaintiffs, Jay E. Silberg, said that if
the Energy Department could use the money collected from
utilities to pay damages to the utilities, the department
would be "robbing Peter to pay Peter."
"The lesson learned from the court's ruling is that we need
to move forward with the Yucca Mountain Project," said Joseph
H. Davis, a spokesman for the Department of Energy.
At the Regulatory Utility Commissioners group, Mr.
O'Connell said the decision was a victory because "ratepayers
had some assurance that the nuclear waste fund would continue
to be used for its intended purpose." But he acknowledged that
if the burden shifted to taxpayers, it would be paid by most
of the same people. "There's about an 80 percent convergence,"