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.
Spent nuclear fuel totaling 58,000 metric tons is warehoused at 122 sites in 39 states, waiting to be moved to the Energy Department's repository. Project delays and controversy over the Yucca Mountain site pushed back the opening until at least 2020. The Energy Department on Aug. 5 estimated that the facility will cost a total of $96.2 billion over 150 years from 1983, when work began, to build the plant and store spent fuel.
Senate Democratic Leader Harry Reid of Nevada has said the Yucca Mountain facility will never be built.
"I will never allow Nevada to become the nation's nuclear waste dump, nor will I allow our nation to be put at risk by transporting radioactive waste along our roads and highways," Reid said this week. "I will continue to do all I can to kill the proposed dump."
Whether the Yucca Mountain facility is ever built could be determined by the presidential election in November. Democrat Barack Obama, an Illinois senator, is opposed to the plan. Republican John McCain, a senator from Arizona who is advocating the construction of more nuclear plants, has supported it in the past, although he has most recently pushed for an international repository.