Taxpayers on the hook for nuclear liability contracts, documents reveal

Near the end of the Bush administration when it became clear that time was ticking down on the Yucca Mountain Project, federal officials forged contracts with more than a dozen nuclear power companies, according to documents obtained by an energy policy research group.

Because Department of Energy officials promised the agency would dispose of highly radioactive waste from new reactors though there might not be a place to put it, taxpayers probably will be on the hook for billions of dollars when the government defaults to cover damages for not taking the waste if the reactors are built.

The claims were made Wednesday when the research group and nuclear watchdogs posted the documents obtained through the Freedom of Information Act.

In them, DOE officials agreed to dispose of spent fuel from 21 reactors proposed by utility companies in the southern and eastern United States. In other cases, contracts were changed.

"In the event of any delay in the delivery, acceptance or transport" of spent fuel, costs to the party not responsible "will be equitably adjusted," many of the contracts said.

Arjun Makhijani, president of the Institute for Energy and Environmental Research, and Kevin Kamps, an advocate with Beyond Nuclear, estimate penalties for not disposing the waste could cost tens of billions of dollars while scientists pursue a safer repository program under a course charted by a commission, which began meeting Thursday.

Makhijani and Kamps estimate potentially deadly used fuel from the 21 proposed reactors plus more awaiting disposal at existing reactor sites would require at least two repositories the size of the one DOE planned for Yucca Mountain before the project was canceled this year by the Obama administration.

The documents were released during a news teleconference by Makhijani, a nuclear engineer and industry expert who maintains Yucca Mountain is a flawed site.

"I think we need to take a breather for about 10 years" he said, adding that a new path forward for dealing with nuclear waste needs to be carefully plotted.

"This is a chess game, and it's been played like a horse race," he said.

Kamps said the nation should not be generating more nuclear waste. "New reactors represent a financial risk," he said.

Fuel rods that are being kept in pools and in dry casks above ground need more robust containers and improved safety features to reduce the risk from terrorist attacks, Kamps said.

Makhijani said he is perplexed by President Barack Obama because during his campaign, the president said he would not support new reactors until waste problems had been resolved, yet he recently approved loan guarantees for new reactors.

Diane Curran, an attorney for a firm that provides legal advice on environmental law to nonprofit groups, said the government should have waited until it could deliver on new contracts before it agreed to take on more liability.

By 2020, liability will amount to $12.3 billion in breach of contract damages. As decades pass without a repository, damages could top $50 billion, she said.

Any damages for not fulfilling the contracts would have to be shouldered by the U.S. Treasury because the government can't use the $23.8 billion Nuclear Waste Fund to pay liability. The fund is supported by nuclear utility ratepayers.

"The new contracts signed in the waning days of the Bush administration will add significantly to the government's liability," she said. The contracts were signed between November 2008 and January 2009.

Makhijani said DOE has wasted some $12 billion pursuing Yucca Mountain through a backward program in which the site was declared scientifically sound in the absence of a license application.

DOE has moved to withdraw "with prejudice" its construction license request for the site at Yucca Mountain, 100 miles northwest of Las Vegas. DOE would be prevented from filing a license application again for that site.

"Yucca Mountain is the worst single site that has been investigated. It's very difficult to characterize because of the complexity of the geology," Makhijani said. "We shouldn't be wasting any more time on Yucca Mountain."

Contact reporter Keith Rogers at krogers@reviewjournal.com or 702-383-0308.