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Nuclear Energy's Money Pit: An Energy Sinkhole? 

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A new report by the New England Center for Investigative Journalism and the Connecticut Hearst Media Group finds that New England ratepayers have pumped $1 billion into a federal waste fund for the past three decades, honoring their end of a 1982 bargain with the government to finance the permanent storage of thousands of tons of spent fuel from the region’s reactors.

The payoff?

A cavernous $11 billion hole in a Nevada mountainside, as well as a broken promise from the U.S. government to remove the radioactive waste and mounting bills that could still saddle New England with at least five mothballed plants and dozens of dry spent fuel casks, turning communities into mini nuclear storage sites for decades, if not forever.

This is the second report in an investigative series examining the state of nuclear power in New England. As noted last week, I have been contributing to this series. The latest installment I co-wrote with journalists from NECIR.

As the unfolding calamity in Japan has resurrected debate about government and industry promises of the energy’s cost effectiveness, a review of regional costs by NECIR and the Hearst Connecticut Media Group has found:

  • New England plants, among the nation’s oldest, have already generated over 4200 tons of spent fuel, according to data from the Nuclear Energy Institute, an industry policy organization. But the plants have no clear financial plan on how to pay for long-term storage. The spent fuel sits at or near the nine regional reactors in either pools of water or dry cement fortifications known as “dry casks,” which cost between $6 to 8 million annually per plant to secure.
  • At least one New England plant is seeking U.S. Nuclear Regulatory Commission approval to raid funds set aside to cover mounting spent fuel costs, raising concerns about its plans to pay for the future dismantling and cleanup costs.
  • New England’s continuing federal bill for the waste generated to date tops $2.1 billion, including interest, NEI data shows. Millions more will be needed to provide storage for the additional 20 metric tons plants are generating annually.
  • Regional plants have a bleak history of underestimating decommissioning costs by hundreds of millions, shifting those unanticipated costs onto taxpayers and ratepayers far into the future.
  • Operators or owners of some New England plants have a limited liability corporate structure, meaning taxpayers could be financially responsible for a plant disaster.
  • Taxpayers in New England and the rest of the nation have paid out $750 million in settlements or judgments for generator lawsuits against the federal government for defaulting on its promise to remove the spent fuel to Nevada. The U.S. Department of Energy has estimated its potential liability at $13.1 billion, a November, 2010 DOE report shows.

The cost bleed is not unique to New England. Plant owners and the ratepayers they charge are grappling with intensifying spent fuel storage bills now that the Obama administration — even as it touts industry expansion — has tabled plans for a federal dump at Nevada’s Yucca Mountain.

As analysts and policy makers debate whether nuclear energy will ever be affordable, the federal government continues to spend money to support it on a vast scale. To date, $11 billion has been spent to excavate and prepare the now-abandoned Yucca site, leaving about $20 billion in the fund, industry experts said.

Beyond the unexpected storage costs, taxpayers and ratepayers could also be on the hook for billions in additional costs ranging from proposed federal subsidies and loans, as well as decommissing the plants and cleaning up the hazardous sites.

At least one New England plant is seeking an exemption from federal law that would allow it to use its decommissioning fund to pay for storage costs. Vermont Yankee — whose decommissioning fund is already short millions — wants the NRC to allow them to use the money to pay for fuel storage, according to a 2008 plan it filed with the agency.

In 2009, the NRC required Entergy Nuclear Operations Inc., which owns Vermont Yankee, a limited liability corporation, to put up a $40 million loan guarantee because its decommissioning funds are off track, said NRC spokesman Neil Sheehan.

In its NRC proposal, Entergy estimated it would need about $220 million — about half the current fund — to deal with spent fuel, seeking permission to draw from the decommissioning fund built up with ratepayer money.

“Entergy VT will periodically revisit the cash contribution required for the decommissioning fund to ensure that spent fuel management withdrawals would not inhibit the ability of the licensee to complete radiological decommissioning,” the proposal states.

To read the full story and learn more about the potential shortfall in decommissioning funds and the debate over federal subsidies and loan guarantees for nuclear power, click here.

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About The Author

Shay Totten

Shay Totten

Shay Totten wrote "Fair Game," a weekly political column, from April 2008-December 2011.

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