On Tuesday, November 19, 2013, the United States Court of Appeals for the District of Columbia Circuit (“D.C. Circuit”) held that the Secretary of Energy (“Secretary”) again failed to perform a valid evaluation of annual fees collected from generators for disposal of nuclear waste under the 1982 Nuclear Waste Policy Act (the “Act”).  The D.C. Circuit ordered the Secretary to suspend collection of the fees until such time as it resumes its work with regards to the creation of the Yucca Mountain storage project, as set out in the Act, or until Congress chooses to enact an alternative waste management plan.

The case involves the annual fees that the Department of Energy (“DOE”) collects from nuclear plant owners and operators for disposal of civilian nuclear waste.  The annual fees are intended to cover the “full costs” of the government’s long-term disposal of civilian nuclear waste, and are placed in a Nuclear Waste Fund.  Under the Act, the Nuclear Waste Fund must cover the lifetime costs of the government’s civilian nuclear waste disposal program, with excess funds returned to the contributors.  However, because the government has discontinued the development of a nuclear waste disposal site at Yucca Mountain, Nevada, plant owners and operators have argued that the annual fees should be suspended or at least reduced.

Last year the D.C. Circuit determined that the Secretary had not complied with his statutory obligation to establish annually the adequacy of the fee petitioners pay to the government.  Despite the government’s argument that the Secretary’s only duty under the Act was to review the fees, the DC Circuit concluded that the Secretary failed to perform a valid evaluation, and that his 2010 determination was legally inadequate.  Further, the court found that the Secretary’s reliance on using the costs anticipated for the Yucca Mountain project, a project that DOE has indicated it will not pursue, was inappropriate.  The D.C. Circuit then remanded the Secretary’s 2010 determination and ordered the Secretary to respond to the remand within six months of the issuance of the mandate, with the D.C. Circuit retaining jurisdiction. (See June 19, 2012 edition of the WER).

In its order Tuesday, the D.C. Circuit again found fault with the Secretary’s evaluation of the annual fees.  While the Secretary remedied some of the accounting defects found in its last determination, it declined to set out an analytical technique that would allow the Secretary to determine if the assessed fees were appropriately matched to the anticipated costs of waste management or if they were inadequate or excessive.  The D.C. Circuit explained that “so long as the government has no viable alternative to Yucca Mountain as a depository for nuclear waste [the nuclear plant owners and operators] should not be charged an annual fee to cover the cost of that disposal.”

The D.C. Circuit clarified that “when the Secretary is again able to conduct a sufficient assessment, either because the Yucca Mountain project is revived, or because Congress enacts an alternative plan, then payments will resume (assuming that some future determination concludes that further fees are necessary).”  The D.C. Circuit ordered the Secretary to submit to Congress a proposal to change the annual fee to zero until pending such a time as either DOE resumes its work toward the Yucca Mountain project or until Congress modifies the statutory framework and provides for an alternative waste management plan.

To view the order, click here.