Washington (Platts)--20Apr2012/704 pm EDT/2304 GMT

The US Department of Energy does not have a spent fuel disposal program and should suspend its collection of a nuclear waste fee until there is a program to spend that money, attorney Jay Silberg told a federal appeals court Friday.

"There is no program, no costs, but DOE wants to continue to collect this fee," Silberg told the three-judge panel of the US Court of Appeals for the District of Columbia Circuit. Silberg presented oral arguments on behalf of the National Association of Regulatory Utility Commissioners and the Nuclear Energy Institute, which sued DOE in 2011 after the department refused to suspend collection of the fee even though it did not have a program to spend it on.

Nuclear utility customers now pay roughly $750 million a year into the Nuclear Waste Fund, a federal trust, based on a one-tenth of a cent fee for every kilowatt-hour of nuclear-generated electricity sold. Congress created the fund in 1982 to pay for the disposal of utility spent fuel.

When fiscal 2011 ended September 30, the fund had a balance of $26.7 billion and earned nearly $1.3 billion in interest, according to NARUC. DOE dismantled the deep-geologic repository project at Yucca Mountain, Nevada, in 2010, calling the site "unworkable," and did not have another site to take its place. A brief NARUC and NEI filed with the court said the department later used the Yucca program as a "proxy" and conducted a congressionally mandated fee-adequacy study, which measures projected costs against projected fee revenue, and determined the existing fee is adequate.

"There are a lot of factors that make it [Yucca] unique," Silberg told the court. Yucca is the only proposed repository site in the world above a groundwater table and as such incurred costs other sites have not.

"Really nothing has changed. DOE is giving you nothing after all these years," Chief Judge David Sentelle said at one point. Sentelle has presided over other nuclear waste cases.

A fee-adequacy study that was done in 2008, when the Yucca Mountain project still existed, was the proxy for the most recent fee study, Department of Justice attorney Harold Lester told the court. Judge Laurence Silberman questioned what factors Energy Secretary Steven Chu weighed when that study was being done.

"Didn't he have to look at what traditionally is looked at -- what are the costs, what is the revenue," Silberman said.

Lester said that one remedy would be for the court to remand the study to DOE, with direction on what should be considered. He suggested, however, that the court should not specify a completion date for a new study.

But Silberg said in his closing remarks that "a remand would be wrong." DOE would still be collecting the fee, he said.

--Elaine Hiruo, elaine_hiruo@platts.com

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