NEW YORK - The U.S. government could pay Exelon Corp. (EXC.N: Quote, Profile, Research) as much as $300 million for failing to take control of waste from the company's nuclear stations under a past deadline and to reimburse costs for storing that waste, the No. 1 U.S. nuclear plant operator said.
The flap between two sides stems from the federal government's previous commitment to take title to spent fuel from commercial nuclear plants by early 1998. The U.S. government faces 66 separate pending lawsuits from utilities for failing to meet that timeline.
Under the settlement - which resolves all pending spent-fuel litigation brought against the federal government by Exelon and its subsidiaries - the company will receive $80 million immediately for storage costs already incurred.
Additional amounts will be reimbursed annually for future costs. Exelon said it could eventually receive about $300 million in total reimbursements if a national repository for spent fuel opens by 2010 and the Department of Energy begins accepting spent nuclear fuel there.
The settlement could mean an additional 3 cents per share roughly in earnings each year assuming the company receives the remaining $220 million over six years, said Jefferies & Co. analyst Paul Fremont.
"I don't think it's a windfall," said Fremont. But it "provides the company with additional cash and additional earnings."
Spent fuel from the nation's nuclear plants is piling up with more than 50,000 tons stored at interim locations in 39 states, within 75 miles of 161 million people. The Nuclear Energy Institute, which represents the nuclear energy industry, says dozens of nuclear power plants are running out of storage capacity in their used fuel pools.
"The agreement means that taxpayers in every state - including those who do not receive electricity supplies from nuclear power plants - are now officially paying the cost of the federal government's failure to meet its obligations," the group said in a statement.
The settlement is likely to put pressure on the government to step up its efforts to provide for permanent storage of that waste, said Fremont.
"On the one hand, you've got a potential financial penalty if they don't," said Fremont. "On the other, you have the fact that permanent storage is as difficult a political issue today as it was when this was originally conceived."
Based in Chicago, Exelon has the largest number of nuclear power facilities in the country with 17 reactors, 10 stations and more than 17,000 megawatts of power production capacity.
The company noted, however, that the settlement cannot be considered a substitute for permanent used fuel disposal at Yucca Mountain, Nevada, a nuclear waste storage facility planned in the desert about 90 miles northwest of Las Vegas.
Slated to open in 2010, the underground facility would hold 77,000 tons of waste from the nation's 103 nuclear power plants for 10,000 years. (Additional Reporting by Carolyn Koo in New York and Chris Baltimore in Washington)
Story by Deepa Babington
REUTERS NEWS SERVICE
