Monday, March 22, 2010
Over 25 years ago, Congress addressed growing concerns regarding nuclear waste management by calling for federal collection of spent nuclear fuel (SNF) for safe, permanent disposal. To this end, the Department of Energy (DOE) was authorized by the Nuclear Waste Policy Act (NWPA) to enter into contracts with nuclear power providers to gather and dispose of their SNF in exchange for payments by the providers into the statutorily established Nuclear Waste Fund (NWF). Congress subsequently named Yucca Mountain in the state of Nevada as the sole candidate site for the permanent underground geological storage of collected SNF. Congress also mandated that federal disposal of SNF begin no later than January 31, 1998. Over 10 years ago, DOE breached these contracts by failing to begin the acceptance and disposal of SNF by the statutory deadline established in the NWPA. As a result, nuclear utilities have spent hundreds of millions of dollars on temporary storage for toxic SNF that DOE was contractually and statutorily required to collect for disposal. The breach has triggered a prolonged series of suits by nuclear power providers, many of which continue unresolved to this day.
At least 72 breach of contract claims have been filed against DOE since 1998, resulting in the awarding of approximately $1.2 billion in damage awards and settlements thus far. Many of these awards, however, remain on appeal in the U.S. Court of Appeals for the Federal Circuit and are not yet final. Estimates for the total potential liability incurred by DOE as a result of the Yucca Mountain litigation range as high as $50 billion. Moreover, after decades of political, legal, administrative, and environmental delays, the Obama Administration's FY2011 proposed budget eliminates all funding for the Yucca Mountain project, seeks to close the Office of Civilian Radioactive Waste Management, and reemphasizes an intention to pursue other alternatives for the disposal of SNF by establishing the Blue Ribbon Commission on America's Nuclear Future. Accordingly, contract damages will continue to build as delays in the disposal of SNF continue.
DOE's liability for breach of contract was first established in 1996 by the U.S. Court of Appeals for the District of Columbia in Indiana Michigan Power Co. v. U.S. After DOE hesitated to act on its legal obligations, citing the absence of a completed SNF storage facility, the court issued a writ of mandamus mandating that DOE "proceed with contractual remedies in a manner consistent with NWPA's command that it undertake an unconditional obligation to begin disposal of SNF by January 31, 1998." The mandamus, issued in Northern States Power Co. v. U.S., essentially prohibited DOE from deflecting liability by arguing that the lack of an existing storage facility constituted an "unavoidable delay."
In 2006, the U.S. Court of Federal Claims (CFC) held that the D.C. Circuit mandamus order in Northern States was void for lack of jurisdiction and could not preclude DOE from raising the "unavoidable delay" defense in the former's court. The case was appealed to the Federal Circuit, where the court, en banc, overturned the CFC decision and affirmed the D.C. Circuit's jurisdiction in both Indiana Michigan and Northern States. Accordingly, DOE continues to be prohibited from raising the "unavoidable delay" defense in future litigation.
This report will present a brief overview of the NWPA and its subsequent amendments, provide a survey of key issues that have emerged from the protracted waste storage litigation, describe the jurisdictional conflict between the D.C. Circuit and the U.S. Court of Federal Claims, and consider the potential for future liability arising from delays relating to the storage and disposal of nuclear waste. .
Date of Report: March 8, 2010
Number of Pages: 27
Order Number: R40996
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Posted by Penny Hill Press, Inc. at Monday, March 22, 2010