A Fast(er) Track Solution for Spent Nuclear Fuel

by Larry Eisenstat, Dickstein Shapiro LLP

The U.S. Department of Energy (DOE) withdrew its application to the Nuclear Regulatory Commission (NRC) to license Yucca Mountain more than two decades after that site had been identified as the nation’s permanent nuclear waste repository.

Meanwhile, turning back the clock to pre-Yucca days, the DOE announced the formation of a blue-ribbon commission to determine in the next two years what to do with U.S. nuclear waste.

Yucca died because of politics, primarily because its numerous proponents lost the battle over public perceptions.

Yucca will remain dead at least as long as Nevada politics do not change and until the project’s tangible benefits can be shown to far outweigh its perceived risks. Was this outcome inevitable?

More important, do we have to wait two full years for the blue-ribbon commission’s final report and recommendations before testing the options for long-term nuclear waste disposal in the United States?

On balance, it is a mistake for the commission to proceed to the exclusion of all other processes, particularly those that would be relatively inexpensive to pursue simultaneously and that might lead to an acceptable approach.

I would proceed on two tracks, only one of which would involve continuing to rely on a government-based approach; the other would mirror, to a large extent, the third-party project development model that has proven successful at facilitating the construction of other large infrastructure projects.

Specifically, track one would be the blue-ribbon commission’s two-year process to consider all alternatives.

Track two would entail the DOE’s immediately attempting to partner with the private sector to develop a scientifically sound, commercially sustainable and politically acceptable solution to nuclear waste disposal using the following process:

  1. The DOE should post potentially suitable repository or reprocessing sites, some of which already have been identified. An acceptable site must meet pertinent geological and safety criteria and be far from the public, yet reasonably accessible by transportation. We are told there are many such sites in the U.S., some on federal land.
  2. The DOE should escrow up to $100 million of the roughly $24 billion in fees that nuclear utilities already paid the government as part of the plan to construct Yucca and make this money available to some pre-qualified private companies (possibly selected via lottery) interested in developing one or more sites. The monies would be advanced to the developer, paid or reimbursed, possibly in a manner analogous to that used by regulated utilities to recover development and pre-construction costs. If the DOE needs new authorizing legislation to do so, it should ask the president to request it.
  3. Just as nuclear plant owners were required to sign long-term contracts for Yucca to be built and the government to be responsible for safely storing the waste, so should a developer proceed to license and build the facility (or be selected to do so should more than one wish to proceed). Its capital base for financing purposes should include the $24 billion already collected plus the roughly $800 million a year to be collected going forward. It also should receive a long-term contract, with the government acting on behalf of the plant owners, where the yearly payment would be in such amount, and in combination with such guarantees, as would be required to finance the roughly $70 billion it would cost to build the repository. If private lenders were unwilling to finance the project, the government would guarantee the debt or outright finance the facility itself. That’s right, I’m saying that anything can be project-financed if the payment streams are certain.
  4. Last, whether a private or government entity develops the project, there is one way to gain support of the pertinent state and local communities: money. The DOE should allow the developer, when negotiating with state and local communities, to commit to pay affected communities, contingent on its receipt of an NRC license, up to $1 billion of the spent fuel fees for projects of the locality’s choosing. This price would be small, comparatively, and state and local governments could use it.

If experience is any guide, no centralized disposal or reprocessing facility will be built unless the tangible benefits of hosting this facility are shown to outweigh its perceived risks.

Receiving substantial tax revenues and gaining many jobs are important, but far more benefits will be required to overcome the basic institutional distrust even of the best risk assessments.

It makes sense to at least see whether the private sector can succeed where the government has not.


Larry Eisenstat is the head of Dickstein Shapiro LLP’s energy practice. Reach him at eisenstatl@dicksteinshapiro.com or 202-420-2224.

More Electric Light & Power Articles
Previous articleUncovered: 100 Years of Electricity History
Next articleBreathing New Life Into the Legacy CIS

No posts to display