Funding Mechanism Vital to Yucca Mountain Construction

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Publication date: 
29 August 2008

After twenty years of study by more than 2,000 scientists and engineers about the feasibility of using Yucca Mountain, Nevada as a permanent nuclear waste repository, the United States is about "three to four years away from answering that question and putting it to bed."  So stated Edward F. Sproat III, Director of the Office of Civilian Radioactive Waste Management of the Department of Energy at a congressional hearing last month.

Sproat was one of the witnesses at a July hearing of the Subcommittee on Energy and Air Quality of the House Energy and Commerce Committee.  Since that hearing was held, DOE released a 52-page report that estimates a $96.2 billion life cycle cost over 150 years to research, construct, and operate the repository.

The "three to four years" Sproat referred to is the length of time that the Nuclear Regulatory Commission will need to review the 8,600-page license application that DOE submitted in early June. After an initial review of the adequacy of the application, NRC will, following reviews and hearings, determine if a construction and operating license can be issued. The earliest opening date for the repository is now estimated to be 2020.

The reasoning behind the $96.2 billion (constant 2007 dollars) cost of the repository is contained in an Office of Civilian Radioactive Waste Management report issued earlier this month entitled "Analysis of the Total System Life Cycle Cost of the Civilian Radioactive Waste Management Program, Fiscal Year 2007" (available here. )   This "best estimate" figure increased 38 percent from a study performed in 2001, primarily due to a projected 26 percent increase in the amount of spent nuclear fuel and high-level radioactive waste that would be stored in the repository.   The increased waste necessarily incurs additional costs for transportation, waste packaging, and emplacement.   Since 2001, DOE has further refined the rail transportation route alignment, and the canister-based storage system.   $16 billion in inflation was also factored into the calculation. The study assumes that emplacement would continue through 2073, requiring 42 miles of tunnels and the fabrication of 17,450 waste containers.  Waste would be fully retrievable for at least 50 years.  Transportation of the waste to Yucca Mountain would be by train, including a rail line leading to the site that must be built.  The site would be decommissioned in 2133 with the storage of an estimated 109,300 metric tons heavy metal.  Waste from potential new reactors was not included in the new analysis.  The report notes that this most recent cost figure "should not be interpreted as a final, definitive estimate" since many assumptions were made.

Beyond the NRC review, and certain litigation, the opening of the repository faces another imposing obstacle: financing.  The repository program has historically received $350 to $500 million a year.  "That will not be sufficient to build or operate the repository" Sproat told the House committee.  DOE estimates that between $1.2 billion and $1.9 billion will be required annually to construct and operate the repository.

A funding mechanism was established for the construction and operation of the repository that is now worth $21 billion. $750 million is added to this fund every year in mandatory nuclear utility fees.  The fund also draws approximately $900 million in annual interest.

Congress has not used these funds as intended.  Rather than allowing DOE to draw from this fund, Congress appropriates money.  As subcommittee chairman Rick Boucher (D-VA)  admitted during the hearing, "in practice, most of that [Nuclear Waste Fund] money has been expended for other purposes."  DOE has submitted bills to the last two Congresses to remedy this issue, but Sproat told the subcommittee "unfortunately, that legislation has gone no where."  Sproat added that with the submission of the license application, interest in a future bill may increase.  "This is the key issue for moving Yucca Mountain forward," he said.

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