Washington (Platts)--23Mar2009

The US government could be liable for roughly $30 billion in damages if
it were to abandon the Department of Energy's high-level nuclear waste
repository project at Yucca Mountain, Nevada, the Sentate Energy and Natural
Resources Committee is warning.

The panel's so-called views and estimates letter to the Senate Budget
Committee contains the views of committee Chairman Jeff Bingaman, a New Mexico
Democrat, and Alaska Senator Lisa Murkowski, the panel's senior Republican,
on the preliminary budget blueprint for fiscal 2010 that President Barack
Obama unveiled last month. Obama is expected to introduce his detailed budget
request next month. All committees are required to submit their assessments of
the budget requests to budget committees in the House and Senate each year.
The energy committee's March 12 views and estimates letter was released on
Friday.

In his preliminary proposal, Obama said he would provide the
controversial repository program only with enough funds to answer the US
Nuclear Regulatory Commission's questions during the NRC licensing review of
DOE's application to build a high-level nuclear waste repository at Yucca
Mountain.

"The president's budget blueprint proposes to abandon further work on the
Yucca Mountain nuclear waste repository," Bingaman and Murkowski said in the
joint letter. Abandoning that program, they said, would leave the US with no
way to dispose of spent fuel from nuclear power plants, spent fuel from the
Navy's nuclear ships and submarines, and high-level radioactive wastes from
DOE defense programs.

They reminded the Budget Committee that federal courts earlier found the
government to be in partial breach of contract with electric utilities,
costing taxpayers hundreds of millions of dollars, after DOE failed to begin
disposing of spent reactor fuel by a 1998 contract date. "[T]he government
could be held liable for much larger sums, including the repayment of over $16
billion in fees collected from the utilities and nearly $14 billion in
interest, if the court find the government to have totally breached the
contacts as a result of abandoning work on the Yucca Mountain repository," the
senators said.

More than $700 million a year is collected from nuclear utility customers
to bankroll the DOE repository program. Only a fraction of the annual
collection is spent on the program. The balance goes into the Nuclear Waste
Fund, a federal trust fund, which now totals roughly $22 billion.

The repository that DOE wants to build at Yucca Mountain, roughly 95 miles
outside Las Vegas, would consist of a network of tunnels built deep within the
mountain to dispose of at least 70,000 metric tons of radioactive waste. The
facility would have to meet NRC and US Environmental Protection Agency limits
for 1 million years on radiation doses from the facility.

--Elaine Hiruo, elaine_hiruo@platts.com