Utilities win rulings on nuclear waste storage

PG&E Co. and other utilities won appeals court decisions that may result in greater compensation for the U.S. government's failure to take ownership of radioactive waste from nuclear power plants.

In three rulings, the U.S. Court of Appeals for the Federal Circuit Thursday outlined a new standard for compensating utilities that were forced to store the waste because the government hasn't begun building a promised disposal facility at Yucca Mountain, about 100 miles northwest of Las Vegas.

The government and the utilities had each appealed aspects of rulings by the U.S. Court of Federal Claims. The lower court had awarded $42.8 million to PG&E, $142.8 million to the owners of three decommissioned plants in New England and $39.8 million to California's Sacramento Municipal Utility District. Thursday's decisions may streamline the process to resolve 66 cases over the repayment to utilities for storing the waste.

"This is now almost arithmetic," said lawyer Carter Phillips of Sidley Austin in Washington, who represents PG&E. "For a substantial portion of the industry, it will be good news. Hopefully, the government will recognize it makes more sense to settle these cases."

The utilities had won rulings that the Energy Department breached a contract to begin taking used fuel from nuclear power plants in 1998. The dispute now centers on how much they should be compensated. Utility customers using nuclear power have been paying a fee that goes to an Energy Department waste fund, while utilities have shouldered the cost of storing the waste.

PG&E, the San Francisco-based owner of California's largest utility, fell 22 cents to $37.58 at 4:02 p.m. in New York Stock Exchange composite trading.

The formula for compensation is based on how much the Energy Department could have taken if the Yucca Mountain facility was open, and the Federal Circuit said the trial judges used the wrong figure. The Energy Department wanted to use a lower figure set only after it was clear the contract couldn't be fulfilled.

"The ruling provides greater clarity with respect to how fast the Department of Energy had to pick up the waste," said Jerry Stouck of Greenberg Traurig in Washington, who also represented PG&E, as well as the New England utilities.

Justice Department spokesman Charles Miller said the administration is reviewing the decisions.

Congress required utility companies in 1982 to pay into the Nuclear Waste Fund to finance the construction of a permanent storage facility at Yucca Mountain by 1998. The fund has reached $22 billion.