Feds May Have to Pay SMUD Millions

The federal government may be forced to return at least $40 million to the Sacramento Municipal Utility District because of its yet-unachieved promise to build a high-level radioactive waste repository. A U.S. Court of Federal Claims judge issued a tentative ruling last month, ordering the Department of Energy (DOE) to show cause as to why the contract it signed with SMUD should not be nullified. The federal government could also be liable for millions of dollars in costs the district has incurred to store on-site nuclear waste from its shuttered Rancho Seco nuclear plant. In 1983, the muni signed a contract with DOE under which the government agreed to provide a dump for the district?s and other utilities? nuclear plants? radioactive wastes no later than 1998. In turn, SMUD deposited $40 million into the Nuclear Waste Fund. The highly radioactive waste was originally stored in pools on-site near Rancho Seco but transferred to dry-cask storage, awaiting shipment to a government repository. The proposed Yucca Mountain radioactive waste site continues to get bogged down in controversy, and no opening date is on the horizon. SMUD, along with 60 other utilities, sued the federal government for restitution of the $40 million and costs incurred related to delays in construction of Yucca Mountain. Sacramento argued its case in late March. Judge Susan Braden on April 21 ruled that the government?s report stating nuke wastes could be shipped to a repository in 2010 ?does appear to be credible.? She gave DOE and other parties 60 days to show cause as to why the 1983 contract should not be rescinded. She will also rule on whether SMUD is entitled to damages arising from the delay in construction of a waste repository. The muni spent $78 million moving the radioactive wastes from pools to dry storage and pays a few million dollars each year on associated capital costs and security, according to Steve Cohn, SMUD?s assistant general counsel. In addition to getting back its $40 million paid in 1983 and $78 million in additional costs, the district wants the government to take ownership of the dry casks. The next best option, Cohn said, would be to have DOE pay the ongoing costs of maintaining and protecting the dry-cask storage. Calls seeking comment from DOE were not returned by press time. The matter is in the federal claims court because that is the court that decides financial disputes against the government.

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Feds May Have to Pay SMUD Millions

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