The Supreme Court said Wednesday consumers need not pay the cost of failed nuclear power projects, upholding 8-1 a Pennsylvania law that bars utilities from charging ratepayers for uncompleted construction.
The court's ruling rejected a challenge by two Pennsylvania utilities to a 1982 law that said the cost of a power plant cannot be charged to the public through rate increases until the facility "is used and useful in service to the public."The ruling is a blow to the nuclear power industry, which was forced to cancel a number of nuclear power projects in the wake of the Three Mile Island nuclear power accident and the decline in the use of power following the Arab oil embargo. Various estimates put the economic losses resulting from the failed proj-ects at $100 billion.
The cancellations prompted numerous states to pass laws prohibiting utilities from charging customers for uncompleted projects or continuing construction.
Chief Justice William Rehnquist, writing for the majority, said, "The Constitution within broad limits leaves the states free to decide what rate-setting methodology best meets their needs in balancing the interests of the utility and the public."
In the only other opinion issued Wednesday, the court ruled 8-1 that a state's statute of limitations should govern claims filed by union members under the 1959 Labor Managememt Reporting and Disclosure Act.
The case involved G. P. Reed, a union official from Charlotte, N.C., who filed a lawsuit alleging that the United Transportation Union had violated his First Amendment free speech rights. The union said the suit should be thrown out because it was filed two years after the six-month statute of limitations governing unfair labor practice claims.