February 7, 2013

Payment to Maine Yankee owner may lower electric rates

Damages of $81.7 million arise from federal failure to deal with disposal of nuclear waste.

By Tux Turkel tturkel@pressherald.com
Staff Writer

After 14 years of legal action, the federal government has reimbursed the owners of the Maine Yankee nuclear plant and two others in New England nearly $160 million in damages for the government's failure to begin removing spent nuclear fuel and other radioactive waste from the three former reactor sites.

click image to enlarge

At the former Maine Yankee nuclear plant site in Wiscasset, steel canisters inside concrete casks hold highly radioactive fuel rods that will stay there until the federal government decides how to dispose of them.

Gabe Souza/Staff Photographer

Maine Yankee's share of the damage award is $81.7 million. The money has been put in a trust fund while the company files a plan with federal utility regulators for using the award to benefit ratepayers.

It's too early to say how an average Maine electric customer will make out: The $81.7 million is subject to state and federal taxes, and any benefit would be based on power use.

News of the award was released by the Yankee Atomic Power companies, which operated nuclear plants in Wiscasset, Connecticut and Massachusetts.

Maine Yankee operated from 1972 to 1996. Although activists fought for years to close the plant, it was the company's board that ultimately voted to pull the plug rather than fix expensive, safety-related problems.

Yankee Rowe in Massachusetts closed in 1992. Connecticut Yankee shut down in 1996.

By law, the federal government is charged with coming up with a long-term solution for disposing of radioactive waste from nuclear reactors. It was supposed to begin removing waste in 1998. That hasn't happened, and plans to build a permanent waste repository in the Nevada desert were scrapped in 2009 by President Obama.

For the foreseeable future, highly radioactive fuel rods are being stored in 60 airtight steel canisters and housed in concrete casks on the Maine Yankee site in Wiscasset. Another four canisters hold radioactive steel from the decommissioning process. Maintaining them costs $9 million a year.

The $81.7 million award will reduce assessments on the utilities that owned Maine Yankee for the cost of operating the storage site. The savings will be passed along in the form of slightly lower electric rates, according to Richard Davies, Maine's public advocate.

"Any reduction in rates will lower ratepayer electric bills by some, yet to be determined amount," Davies said. "Our office will be involved in the rate proceedings that will determine how much of a reduction will be approved by regulators."

The lawsuit by the Yankee Atomic companies is among dozens of legal actions totaling billions of dollars that have been filed against the government on this issue. Some have been settled, others resolved in court and others are pending.

The awards for the Maine, Connecticut and Massachusetts plants were welcomed by the Nuclear Energy Institute in Washington, D.C., which represents plant owners.

"This damage award takes the nation and U.S. taxpayers along another costly step down the road that we have been on too long, as a result of the federal government's failure to meet its used-fuel management obligations under the Nuclear Waste Policy Act," said Steve Kerekes, senior director for media relations at the trade group.

Taxpayers will continue to pay until the government fulfills its obligation to develop a spent-fuel management program, he said.

The awards represent only a first phase of litigation and involve damages through 2001 for Connecticut Yankee and Yankee Atomic, and through 2002 for Maine Yankee. The federal government decided not to appeal a U.S. Court of Appeals judgment of May 18 that confirmed the 2010 U.S. Court of Federal Claims awards to Connecticut Yankee in the amount of $39.7 million, and to Maine Yankee of $81.7 million. It also increased the award to Yankee Atomic to a total of $38.3 million.

"We are very pleased that after 14 years of litigation the three companies have recovered for our ratepayers nearly $160 million in costs resulting from the Department of Energy's failure to remove spent nuclear fuel and (other radioactive) waste from our three sites," Wayne Norton, president of Connecticut Yankee and Yankee Atomic, and chief nuclear officer of Maine Yankee, said in a news release. "These funds, and additional damage claims we hope to recover in the future, will all benefit our ratepayers."

Norton noted, however, that the monetary damage award doesn't do anything to remove the spent fuel from the decommissioned reactor sites.

He expressed optimism about a new Department of Energy strategy report, in which the Obama administration supports an integrated nuclear waste management system. That system would include a pilot interim storage facility, with the initial focus of accepting spent nuclear fuel from closed reactor sites.

The announced damage award also holds promise that ratepayers will see more money in the future.

The ongoing litigation between the three companies and the Department of Energy is being conducted in phases. An earlier U.S. Court of Claims decision ruled that utility companies cannot receive damage awards for costs that have not yet been incurred. As a result, the three companies expect to continue to take legal action every several years to request damages for ongoing costs.

The three companies are currently seeking approximately $247 million in additional damages in a second round of cases that were filed with the U.S. Court of Federal Claims in 2007.

In these cases, Connecticut Yankee is seeking $135.3 million, Yankee Atomic $76.6 million, and Maine Yankee $35 million. These numbers reflect the damages that Connecticut Yankee and Yankee Atomic incurred from Jan. 1, 2002 through Dec. 31, 2008, and that Maine Yankee incurred from Jan. 1, 2003 through Dec. 31, 2008.

Staff Writer Tux Turkel can be contacted at 791-6462 or at:

tturkel@pressherald.com

 

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