The Nuclear Waste Fund

April 1994

Energy Secretary Hazel O'Leary has proposed an amendment to the Nuclear Waste Policy Act. The amendment will create a new funding approach so that site characterization studies at Yucca Mountain can receive adequate funding to stay on schedule.

The Nuclear Waste Fund is a federal fund designed to provide money to site, design, construct, and operate a deep geologic repository for the permanent disposal of nuclear waste at Yucca Mountain. The fund was authorized under the Nuclear Waste Policy Act of 1982, and is paid into by utilities that produce nuclear waste.

Based on the idea that consumers of nuclear-power-generated electricity should bear the costs of disposing of the related waste, the fund assesses two kinds of fees. The first is a one-time charge for commercial high-level waste or spent fuel that existed before April 1983. The second fee is a one mill (one tenth of a cent) per kilowatt hour fee charged to rate-payers for electricity generated by nuclear reactors after April 1983. This adjustable fee is subject to annual review, and the General Accounting Office has expressed concern that the 1 mill is inadequate for the costs of waste disposal. Despite such concerns, DOE has not recommended a fee increase.

O'Leary's plan is to continue to request money from the NWF, but to allow a portion of each year's utility fee receipts to be available to the DOE's civilian radioactive waste management program. Under her proposal, one-half of each year's utility fee receipts (in excess of the President's discretionary budget for the Program) and one-half the utility fee receipts remaining from previous fiscal years (beginning with fiscal year 1995) would be available for the waste management's site characterization program at Yucca Mountain. The proposal will be considered this year by Congress, but is not expected to fare well. Even staunch nuclear power supporter Senator Bennett Johnston (D-LA) has stated that it will be difficult to pass, given other priorities in Congress this year.

The Nuclear Waste Fund had received $7 billion in fees and interest by mid 1992. Annually, the fund is expected to receive $800 million from fees and interest. Money for the fund is stored in the U.S. Treasury, but cannot be used for outside projects. Congress maintains control of the fund through the federal budget and has traditionally used this money as a hedge against the federal deficit, even though it could not legally be used. About $3.3 billion has been spent from the fund so far, and DOE estimates that the Yucca Mountain site characterization will cost more than $6.5 billion to finish.

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