A fee in your electric bill added up to $31 billion that went nowhere
WASHINGTON — You may have been paying it for 30 years without even knowing.
But it all ended Friday.
After a protracted legal battle, the Department of Energy is removing a small fee from electric bills intended to pay for the disposal of spent fuel at nuclear power plants.
Power companies and state regulators successfully fought the Energy Department over the matter, saying the government has been collecting the fee for 30 years but won’t begin disposing of nuclear waste for another 34 years.
In a November ruling, a federal appeals court called the fees “quite unfair” and ordered the government to stop collecting them. The change takes effect Friday.
The fee is tiny — one mill, or a tenth of a cent, for every kilowatt hour generated by nuclear power. That amounts to about 15 to 20 cents on the average monthly electric bill, industry officials estimate.
But those tiny fees add up.
Since 1982, the Nuclear Waste Fund has grown by about $40 billion, and fees contribute an additional $750 million every year.
But interest income means the fund will continue to grow by about $1.3 billion a year.
Currently, the fund contains $31 billion, after the government spent billions on the failed effort to open a nuclear repository at Yucca Mountain in Nevada.
Waste not removed
For Michigan Public Service Commissioner Greg White, who fought the fee for years, the court victory is “bittersweet.” The lawsuit, White says, primarily was intended to prod the federal government into solving the nuclear waste issue.
“From the very infancy of the commercial nuclear power industry, the federal government has always stated that it would take responsibility for the (disposal) of high-level nuclear waste, and that hasn’t happened,” White said. “The waste all sits at the plant sites where it was generated, despite the collection of some $40 billion.”
Meanwhile, stockpiles of spent nuclear fuel continue to grow. An estimated 2,000 metric tons of waste are generated every year to the 70,000 tons stored at some 100 sites nationwide.
Cooling the fuel
Spent nuclear fuel typically is stored for five years in pools of water, where it is allowed to cool. Then it is transferred to dry casks, which are considered safer because they can be cooled passively with air.
In 1982, Congress passed the Nuclear Waste Policy Act, which gave the Department of Energy a 1998 deadline to begin disposing of spent nuclear fuel. After lengthy studies, Congress designated Yucca Mountain as the site for a permanent repository of nuclear waste.
But opposition was intense, both from Nevada residents and environmentalists. And in 2010, President Barack Obama, fulfilling a campaign promise, scuttled the Yucca Mountain program.
A group of state utility commissioners, power companies and others went to court arguing that the government should not be collecting fees in the absence of a program.
The court, in turn, pressed the Department of Energy to defend the fee, demanding estimates on the cost of future waste disposal efforts. It didn’t like what it heard.
The real solution: dispose of waste
“According to the Secretary (of Energy), the final balance of the fund to be used to pay the costs of disposal could be somewhere between a $2 trillion deficit and a $4.9 trillion surplus,” U.S. Appeals Court Judge Laurence Silberman wrote. “This range is so large as to be absolutely useless as an analytical technique” to determining the size of the fee.
The Nuclear Energy Institute, the industry organization, heralded the decision to kill the fee, and lamented the lack of progress in finding a nuclear waste storage site.
“On-site storage is safe and can be maintained without any environmental impact. But that does not in any way excuse the federal government’s failure to meet its commitment… to remove used fuel,” it said in a statement.
White, the Michigan utility commissioner, said the fee is “a consumer rip-off.” “When you’re paying a fee, you should be getting something for what you’re paying for.”
But he said the court ruling is an imperfect victory.
“A perfect victory would have been that the court would compel the federal government to do the program as required by law,” he said.
White said he would welcome the return of the fee if it was accompanied by a workable plan to dispose of spent fuel.