Obama’s Environmental Policy: Do Nothing Good for the Environment & Raise Costs for Americans

Planet Gore’s archives are full of examples of the dysfunction that is U.S. environmental/energy policy, but if you need another example, today’s WSJ outlines the harm being done in the arena of storage of spent nuclear fuel:

A decades-old promise to dispose of the waste has become another unfunded liability, starting with a $25 billion ratepayer fund gone astray and $16 billion or more in estimated legal judgments to compensate utilities for their storage expenses. The costs of the ultimate disposal project also are sure to rise, with no plan in sight to replace the now-canceled plan to entomb the waste at Nevada’s Yucca Mountain.

Former waste-project officials say that the lack of assured long-term funding is a critical flaw in a decades-long capital project, and that over the years it exposed the Yucca Mountain plan to political meddling and budget cuts that added delays and contributed to its demise.

When the federal government took responsibility for nuclear-waste disposal three decades ago, taxpayers weren’t supposed to be on the hook. Under a “polluter pays” doctrine, the 1982 law required nuclear utilities to shoulder the cost through an annual fee paid to the federal government. The fee was to be deposited in a newly created Nuclear Waste Fund that the U.S. Department of Energy could tap to fund the storage project.

The fee, which ultimately comes from nuclear-electricity customers as a surcharge of 1/10th of a cent per kilowatt hour, now amounts to about $750 million a year. Counting past expenditures and interest earned, the fund’s balance is about $25 billion.

But that cash doesn’t really exist. Since the Balanced Budget and Emergency Deficit Control Act of 1985, Congress and successive administrations have changed the plan so that the fees paid by utilities essentially are treated like taxes and go into the government’s general coffers.

“It sounds like there’s a piggy bank and there’s all this money that is available for a future [nuclear] repository,” said Richard Stewart, a New York University law professor and co-author of a book on nuclear waste policy. “But there isn’t. Congress has spent it on other things.” The $25 billion, he and others say, amounts to little more than a federal IOU that will need to be repaid.

At the same time, the nuclear-waste program was required to compete with other programs for annual appropriations from Congress. The bottom line: Spending on the program is counted against the deficit, instead of the self-funding intended in the original law.

Because the government failed to start taking spent fuel as promised beginning in 1998, utilities are suing it to cover their additional storage costs. Federal officials have estimated it will cost $16.2 billion to pay legal judgments owed to utilities by 2020—assuming the U.S. is able to start taking waste from utilities starting then—and $500 million a year after that.