The nuclear industry supports establishing a self-sustaining, quasi-government entity—a federal corporation (Fed Corp)—to manage the federal government’s responsibilities for used reactor fuel and radioactive waste management. Such an institutional framework must be capable of withstanding political changes and maintaining public trust over the long life of the program.
September 2010
Key Points- The Obama administration’s intention to close the Yucca Mountain (Nev.) program and its establishment of the Blue Ribbon Commission on America’s Nuclear Future present an opportunity to define a comprehensive path forward to apply lessons learned from the past 30 years.
- One of the most significant lessons learned is a critical need to reform the management and financing structure of the federal government’s high-level radioactive waste management program. A new institutional framework must be built that is capable of withstanding political changes and maintaining public trust over the long life of the program.
- The nuclear industry supports accomplishing this goal by establishing a self-sustaining, quasi-government entity—a federal corporation (Fed Corp)—to manage the federal government’s responsibilities for used reactor fuel and radioactive waste management.
- A Fed Corp would operate on sound business practices, under a board of directors composed of key stakeholder representatives, with stable and accountable leadership and with direct access to the Nuclear Waste Fund. The fund receives annual payments of more than $750 million and has a $24 billion balance.
Yucca Mountain History: Missed Deadlines, Uncertain FundingNearly 30 years of experience with the U.S. Department of Energy’s management of the federal used nuclear fuel management program has highlighted endemic flaws in the institutional framework. At times, there has been a lack of leadership continuity within DOE’s Office of Civilian Radioactive Waste Management. Annual congressional funding from the Nuclear Waste Fund has been unsteady, insufficient and subject to political considerations, even though payments into the fund by consumers of electricity from nuclear power plants have far exceeded annual congressional disbursements.
A multi-billion dollar liability to taxpayers continues to mount because of DOE’s failure to begin acceptance of used nuclear fuel in 1998, as required by the Nuclear Waste Policy Act (NWPA) and contracts DOE signed with electric utilities that own the reactors. Estimates for damage liabilities through court judgments and settlements range from $13 billion to $50 billion. Potential damages will continue to grow because there is no projected date for the government to begin removing used nuclear fuel from commercial reactor sites.
Meanwhile, consumers contribute annually more than $750 million into the Nuclear Waste Fund. As of May 2010, $34.7 billion had been committed by consumers into the fund, of which $10.8 billion has been spent on the Yucca Mountain repository program.
Delays: After decades of site characterization and design work on a repository for used nuclear fuel and high-level radioactive waste at Yucca Mountain, Nev., DOE in 2008 submitted its repository license application to the U.S. Nuclear Regulatory Commission. This milestone took place six years after President George W. Bush and Congress approved DOE’s recommendation of the site, adding several years of additional delay to a project already decades behind schedule.
However, even this delayed progress was fleeting. For a program in which leadership and direction typically changed with each election, President Obama announced his intention to terminate the Yucca Mountain repository program.
Program Funding: Historically, Congress has failed to fully fund DOE’s repository program even though receipts to the Nuclear Waste Fund far exceeded proposed DOE budgets. Still, over the course of nearly 30 years, DOE spent more than $10 billion on scientific and environmental studies and to prepare the construction license application for the project. Once the Obama administration announced its intention to terminate the project, Congress further decreased program funding for fiscal 2010 to $197 million—the lowest level in years. Shortly thereafter, the secretary of energy announced that DOE would seek no further funds for the program in fiscal 2011 and that remaining 2010 funds would be reprogrammed to terminate the project.
Energy Secretary Chu also established the Blue Ribbon Commission on America’s Nuclear Future to study and evaluate alternatives to the Yucca Mountain project.
Federal Corporation Would Provide Better Management StructureThe administration has an opportunity to define a better management structure for the used nuclear fuel and high-level radioactive waste management program. Such an approach should apply the lessons learned from the past 30 years and build sustainable public trust in the program.
Perhaps the most significant lesson to be learned from past experience is that the management and financing structure of the federal nuclear waste management program needs to be reformed. A new framework must be capable of developing and maintaining strong and enduring support to withstand political changes over the decades-long life of the program. This could be accomplished by establishing a federal corporation to manage the program more effectively.
The nuclear energy industry supports creating a self-sustaining federal corporation to manage the federal government’s responsibilities for used fuel and high-level radioactive waste management. Congress should enact legislation to do so as an amendment to the Nuclear Waste Policy Act or in stand-alone legislation.
Attributes of a successful Fed Corp structure include:
- effective and stable leadership to assure long-term success
- access to funding sufficient to support sustained commitment
- accountability to reactor owners and operators, consumers and the public
- sound business practices so that it operates like a successful private company.
Fed Corp Responsibilities and ManagementA Fed Corp would be authorized to fully assume DOE’s responsibilities for managing high-level radioactive waste. It should be empowered to act on behalf of the U.S. government and to use Nuclear Waste Fund monies to provide used fuel management and related products and services.
The Fed Corp should be the exclusive U.S. agent for entering into contracts for used nuclear fuel management and related products and services. However, liability for DOE’s delays in meeting its contractual obligation should remain with the federal government.
A Fed Corp would operate like a private company, driven by sound business practices that would result in significant cost and efficiency benefits. Examples of such a structure include the Tennessee Valley Authority and the Metropolitan Washington Airports Authority.
A board of directors, appointed by the president and confirmed by the U.S. Senate, would select the Fed Corp chief executive officer. The board’s composition should ensure stability, continuity, stakeholder and bipartisan representation, and diversity of experience. At least half of the board members should be representatives of current or past contributors to the Nuclear Waste Fund, such as public utility regulators and electric utility representatives.
Fed Corp Must Have Access to the Nuclear Waste Fund The Fed Corp would be held accountable by its board of directors for using Nuclear Waste Fund monies to directly support the federal government’s program to remove used nuclear fuel from nuclear power plant sites. This accountability would be assured by the board of directors, with congressional oversight.
To ensure that Nuclear Waste Fund fees are applied for their intended purpose, such fees should be paid directly to the U.S. Treasury. The Fed Corp should have direct access to the fund and not be subject to the congressional appropriations process. In addition to having access to the fund, the Fed Corp could sell high-level radioactive waste management services to the federal government to generate the revenue necessary to effectively manage the radioactive byproducts of DOE and defense programs.