Washington (Platts)--6Nov2008

Nuclear power generator operators would go straight to the US Department
of Energy to seek damages instead of to the courts if the agency does not
remove all of the spent fuel from future reactor sites within 10 years after
the unit closes, DOE waste program director Edward Sproat said Monday.

Sproat told reporters following a nuclear waste symposium in Washington
that under a proposed DOE spent fuel disposal contract for new reactors, a
utility would receive $5 million a year until all of the spent fuel has been
removed from the site. Total damages paid to a utility, Sproat said, would be
limited to the total amount the utility has paid into the federal Nuclear
Waste Fund for the disposal of spent fuel generated by that unit.

More than 60 utilities sued the federal government for damages after DOE
failed to begin disposing of utility spent nuclear fuel by the January 31,
1998, date in spent fuel disposal contracts the department signed with nuclear
utilities in 1983. By DOE's own estimates, damages from the contract breach
would total $11 billion if a repository becomes operational in 2020, a date
still in doubt.

DOE has said the proposed contract it announced Friday will be the
starting point for negotiations with generating companies that want to build
new reactors. Unlike existing spent fuel disposal contracts that DOE signed
with nuclear utilities in 1983, contracts for new reactors would not contain a
specific date by which DOE would be obligated to remove spent fuel from a
reactor site.

Instead, the proposal states that DOE would begin taking that waste, at
the earliest, 20 years after the unit's first refueling. All spent fuel would
be removed from the reactor site within 10 years after the unit shuts down,
according to the proposal.

Sproat said that he deliberately has not been involved in the contracts
and does not know if any utility has entered negotiations or signed a contract
yet. The US Nuclear Regulatory Commission will not issue a combined
construction permit-operating license for a new reactor until the generating
company has a signed contract with DOE or is negotiating one. Seventeen COL
applications have been filed with NRC since 2007.