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Utilities Offer Energy Dept. Site for Waste
By Matthew L. Wald
The New York Times

Monday, March 20, 2006

WASHINGTON, March 19 ­ A group of nuclear utilities that is planning to build a private nuclear waste dump on an Indian reservation in Utah has offered to sell space there to the federal government. The move could help the government avoid billions of dollars in potential legal damages over its failure to build its own repository.

This month the utilities, eight companies from around the country, won a license from the Nuclear Regulatory Commission to open a repository at Skull Valley, on land leased on a Goshute Indian reservation, about 60 miles west of Salt Lake City.

The utility consortium, called Private Fuel Storage, does not have the permits it needs to transport waste to the site, however, and the State of Utah is trying to block those.

The Energy Department signed contracts in the 1980's with each of the nuclear operators, promising to accept their spent fuel beginning in January 1998, in exchange for a payment of a tenth of a cent for each kilowatt-hour they generated.

The project now appears to be at least 20 years behind schedule, and the department faces approximately $50 billion in damage claims from the utilities, many of which have resorted to building giant casks adjacent to their reactors to store the old fuel.

In a letter to the chairmen and the ranking minority members of the House and Senate Energy Committees, Private Fuel Storage said it could begin taking fuel within three years, at a cost of about $61 million a year. In the letter, which was sent in December but released last week, the company estimated the Energy Department's costs to maintain the fuel at the reactor sites at about $500 million a year.

The fuel is currently kept at 72 sites whose storage costs vary widely. At some sites, the reactors have been retired and torn down, and maintenance and security personnel remain in place simply for the fuel. At others, while construction of the casks was expensive, the cost to maintain them is small.

Of the eight utility partners, three have announced that they have no immediate need for off-site waste storage.

The consortium proposed either that the Energy Department take title to the fuel and pay for storage, or let the utilities continue to own the fuel but reimburse them for the storage costs. It suggested legislation to reassure Utah that even if the government's proposed repository, at Yucca Mountain in Nevada, never opened, the Goshute site would not become permanent.

Representative David L. Hobson, the Ohio Republican who is chairman of the energy and water subcommittee of the Appropriations Committee, has been pushing for dry-cask storage, possibly as a prelude to chemical processing of the wastes to extract useful material before burial. And last month, the Bush administration endorsed such chemical processing, through a partnership. But the cask idea has not gone far with the Energy Committees.

"The view right now on Capitol Hill is that this is a free-market project, and let's see if the market sends business their way," said Marnie Funk, a spokeswoman for the Senate Energy Committee.

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