AN INDEPENDENT COST ASSESSMENT OF THE NATION'S HIGH-LEVEL NUCLEAR WASTE PROGRAM

 
February
1998

By          
 
PLANNING INFORMATION CORPORATION
THOMPSON PROFESSIONAL GROUP
DECISION RESEARCH INSTITUTE

 

1.  EXECUTIVE SUMMARY


This report presents the findings of a new, comprehensive and independent assessment of the Total System Life Cycle Costs (TSLCC) for the nation's high-level nuclear waste (HLNW) program and the proposed repository at Yucca Mountain, Nevada. This study finds that the costs will be $53.9 billion in constant 1996 dollars.

The study bases its cost evaluation on current plans by the U.S. Department of Energy, recent federal court decisions, and pending federal legislation that has the support of a majority of members in Congress. The costs include expenditures to date and estimated costs for the study, licensing, development, and operations necessary to implement the federal program.

The HLNW is produced or stored at 80 locations including commercial nuclear power stations, nuclear weapons facilities and temporary storage sites. Moving these wastes to Yucca Mountain requires an unprecedented national waste transportation program. Since the majority of the HLNW is produced or stored east of the Mississippi River, rail and highway transportation will affect residents in 43 states and more than 500 communities. This report fully takes account of the national scope of the federal government's HLNW program.

The assessment for future activities, events, and behaviors depends upon the quality of the data and the assumptions made about future conditions. This 1998 Independent Report provides details of how this new study was conducted, including the important assumptions, data sources, calculations, and considerations that have significant effects on the total cost estimate. The total cost reported here is a conservative estimate that includes a contingency margin for ordinary complications but does not include estimates for uncertainties that could add significant additional costs to this first-of-a-kind, century-long, and historically-troubled effort. These uncertainties--which range from the cost of extended at-reactor storage, to accidents in cross-country transportation, to the technologies of emplacement, retrieval or closure--are summarized in Table 2 and described in the body of this report.

The goal of the HLNW program is to permanently dispose of these wastes in a facility that provides geological safety for humans and the environment as long as necessary, a period of 10,000 years or more. Faced with these requirements, no country in the world has developed a HLNW disposal facility. The stringent technical requirements, the lack of any precedent in scientific, engineering, and management experience, and the need to obtain public support make any program very costly. From the very beginning of the current program during the Carter administration, up to the present day, concerns about costs have been expressed in Congress, by the nuclear power industry, and by officials of the Reagan, Bush, and Clinton administrations. In authorizing the program, Congress reserved to itself the right to annually appropriate funds for the program and it imposed requirements on the program administrators to estimate costs and revenues.

Background to a Total System Life Cycle Cost Estimate

The Nuclear Waste Policy Act (NWPA) requires the U.S. Department of Energy (DOE) to "estimate, on an annual basis, . . . the costs required to construct and operate the repositories to be needed . . . and to carry out any other activities under this Act" (Section 310 (a) (10)) and to "evaluate whether collection of the fee [authorized in the Act] will provide sufficient revenues to offset the costs . . ." (Section 302 (a) (4). The requirements are generally referred to as the analysis of "total system life cycle costs" (TSLCC) and the Fee Adequacy Assessment. During the 15 years that the Nuclear Waste Policy Act has been in effect, DOE has prepared three reports to meet these requirements. The 1986 report estimated TSLCC for a program using a single repository in tuff (at Yucca Mountain) at $30.0 billion; the 1990 estimate was $33.5 billion; and the 1995 estimate was $34.0 billion (in constant 1996 dollars).(1)

Focus on Yucca Mountain

In the Nuclear Waste Policy Act of 1982, Congress outlined a program for studying three sites simultaneously as potential locations for the nation's first HLNW repository and then developing a second repository. This would have allowed the government to choose the best of the three sites for the first repository and to achieve geographical equity by eventually developing both a western and an eastern site. Both these goals were abandoned as program requirements when the Nuclear Waste Policy Act Amendments of 1987 directed the DOE to study only the potential repository site at Yucca Mountain, Nevada. The amendments also prohibited location of an interim storage facility in Nevada. This shift in policy responded to widespread public opposition to the original program and saved the costs of site characterization studies at Hanford, Washington and Deaf Smith County, Texas. DOE estimated the savings at $7.4 billion (in constant 1996 dollars).

Progress at Yucca Mountain has been slow and difficult. Meeting U.S. Nuclear Regulatory Commission and U.S. Environmental Protection Agency licensing and permitting requirements even within time lines that were extended several times appeared impossible. Therefore, DOE suggested, and Congress authorized, a preliminary judgment about the suitability of this site in the form of a "viability assessment," which is due for release by the end of September, 1998. It now appears that this viability assessment will not include a TSLCC estimate. A presentation of the viability assessment cost estimate made to the 94th meeting of the Advisory Committee on Nuclear Waste on September 25, 1997 stated that this estimate will address only the "mined geologic disposal system" and will exclude "historical costs, licensing, waste acceptance, storage, national transportation, and other costs." The preliminary estimate for this portion of the repository work was $14.8 billion. This figure does not represent a comparable base for reference with past DOE estimates of a TSLCC or the 1998 independent assessment described in this report.

Also, it should be noted, the legislation now in Congress would remove the existing prohibition and establish an interim storage facility adjacent to Yucca Mountain on the assumption that prompt removal of wastes from civilian reactors is needed and that Yucca Mountain will eventually serve as a disposal site.

The Independent Cost Assessment by Major Category

The work done for this estimate of the TSLCC for the nation's high-level nuclear waste program can be summarized in seven categories, as shown in Table 1, below.

Table 1. Overview of Total System Life Cycle Cost by
Major Cost Categories

Major Cost CategoriesCost (bil FY'96$)


Expenditures Through Fiscal Year 1996 6.1
Estimated Future Costs 47.8
1. Onsite Storage4.3
2. Cross-Country Transportation6.0
3. Nevada Transportation3.2
4. Centralized Interim Storage Facility9.2
5. Geological Repository23.0
6. Other Development and Evaluation Costs0.4
7. Other Program Costs1.7
Total $53.9

    Each of these categories requires a brief summary description.

  1. Onsite Storage: These are costs incurred at the nuclear power reactors for onsite storage due to an estimated delay in pickup of spent nuclear fuel of 5 years assuming that DOE pickup begins in 2003 instead of the contractual date of 1998.

  2. Cross-Country Transportation: This includes costs of equipment and services for highway and rail transport of all HLNW from civilian, nuclear weapons, and temporary storage facilities to Yucca Mountain.

  3. Nevada Transportation: This includes costs to receive and transport HLNW in heavy rail casks within the State of Nevada including the development and operation of an intermodal transfer facility at Caliente, heavy-haul operations to the centralized storage facility at Area 25 near Yucca Mountain, and the construction and operation of a government-owned railroad between Caliente and Yucca Mountain.

  4. Centralized Storage Facility: This includes the costs of site development, facility construction, and operations. It also includes the cost of metal and concrete storage systems for spent fuel arriving by legal-weight truck and by rail, and for rail shipments using dual-purpose canisters or single-purpose canisters to transport spent fuel.

  5. The Geologic Repository: This includes the costs of design, licensing, constructing, equipping, operating, and closing the repository.

  6. Other Development and Evaluation Costs: This includes fees paid to the U.S. Nuclear Regulatory Commission and the costs of the Nuclear Waste Technical Review Board.

  7. Other Program Costs: This includes payments equal to taxes and benefits as provided for under the Nuclear Waste Policy Act.

All estimates in Table 1, above, include contingency, project management, and program management costs, as well as the direct costs for personnel, equipment, materials, and sub-contractor expenses.

Summary of Assumptions for the Independent TSLCC Assessment

Where possible, this TSLCC cost assessment is similar to the 1995 DOE TSLCC report. The most notable differences are in the waste management assumptions, which reflect recent court decisions and pending Congressional legislation. This cost assessment study takes into account the similar legislative proposals of Senate Bill 104 and House Bill 1270, both of which have been passed and now await actions by a conference committee in the current Congress, and the recent court decision on DOE's contractual obligations to nuclear power utilities (Northern States Power, et al., versus USDOE, November 14, 1997).

Uncertainties

Cost estimates for complex projects and programs traditionally include a contingency factor to allow for a range of conditions and performance within the planning parameters. This was done in the case of the 1995 DOE TSLCC estimate and in the 1998 independent TSLCC study reported here. These contingency allowances assume that the waste disposal program proceeds as expected with no major surprises or complications, and are included in the Table 1 figures, above.

In fact, as the history of the selection and site characterization process shows, many things could go wrong and produce additional costs or reduced revenues. More importantly, there are many major components to the waste program that have no precedent, and adverse conditions or events could create large potential costs. Some areas of uncertainty that could add significant costs to the program, but which are not included as in this TSLCC assessment are listed in Table 2, below. The disqualification of Yucca Mountain as a suitable site, which could occur because of adverse site conditions, or for regulatory, political, or technological reasons, would be the most dramatic, unaccounted for outcome.

Costs and Revenues

The estimates of revenues from civilian nuclear power plants are based upon projected electric generation of existing stations, which are expected to operate in gradually reduced numbers until the year 2033, when all currently operating reactors will have completed their license terms. There is some uncertainty about operating projections since several plants already have shut down early. Early shutdowns reduce revenues on a one-to-one basis for each kilowatt of power not produced, but the reduced amount of spent fuel reduces costs only at the margin of a program that must be developed in any case. The effects of early shutdowns in reducing nuclear waste fund revenues are likely to be substantially greater than their effects in reducing program costs.

Through fiscal year 1996, the program spent $6.1 billion, 11.4 percent of the total estimated program costs. This means that expenditures to date--the "sunk costs"--are just over one-tenth of the total estimated program costs.

Table 2.  Uncertainties in the Federal Government's HLNW Program
Uncertainty Commentary
  1. Inventory of HLNW
Nuclear power stations may produce less spent fuel due to early shutdowns, thus producing less revenue. Weapons complex wastes may be greater than currently estimated.
  1. Pickup of Spent Fuel
Pickup start dates or schedules may be delayed adding costs to the program. Courts could allocate costs to the disadvantage of the Nuclear Waste Fund. Defense waste disposal could be delayed to accommodate commercial spent fuel.
  1. Onsite storage
Onsite storage of spent fuel could result in a different mix of dry-cask and pool storage with costs in operations, repackaging, and ability to operate reactors.
  1. Canisters and Casks
Problems with the construction, performance, and maintenance of canisters and casks could introduce additional direct costs and significant indirect costs through program delays.
  1. Cross-Country Transportation
Transportation capacity, performance, and public or community responses could adversely affect the cross-country transportation costs. Accidents (or sabotage incidents) involving waste shipments could add direct costs for response and cleanup, and cause delays in the shipment schedule.
  1. Regulatory and Oversight
Licensing and permitting may delay the program. The site characterization program itself may encounter technical, budgetary, management, or personnel performance delays.
  1. Construction
Delays for numerous reasons are possible at the intermodal transfer facility, and in heavy-haul and rail construction, or due to unexpected conditions at the repository, adjustment of the design to meet revised HLNW demand, management and contractor performance, and Congressional funding.
  1. Operations
Discovery of adverse conditions not predicted during site characterization, natural events such as earthquakes, complications with the performance of advanced technologies (e.g., robotics), personnel, contractor organizations, or program managers could introduce additional costs.
  1. Retrieval
A retrieval option for wastes already emplaced is required. If conditions at the site or with the wastes required retrieval the costs could be very significant.
  1. Closure
Estimate of the TSLCC is based upon closure of the repository and termination of the costs. If the planned techniques for closure do not prove to be adequate, ongoing costs could extend indefinitely.

The costs of managing and disposing of the nation's high-level radioactive wastes have been a central concern since the late 1970s when the original terms of the Congressional program were first negotiated. The primary purpose of resulting legislation, The Nuclear Waste Policy Act of 1982, was to dispose of spent fuel from nuclear power plants and establish the Nuclear Waste Fund as the means to pay for the federal program (Section 111 (b)(4); Section 302 (a)(3)). The principle was to have the beneficiaries of nuclear power pay the costs of spent fuel disposal. The Secretary of Energy is required to annually evaluate and see whether the existing fee "will provide sufficient revenues to offset the costs" of the program (Section 302 (a)(4)). If the fee is not adequate, the Secretary is directed to propose an adjusted fee and immediately inform Congress.

Costs for federal government use of the high-level nuclear waste repository to dispose of wastes from the nation's nuclear weapons complex, for example, are funded by taxpayers through Congressional appropriations. The expected use of the nation's proposed repository at Yucca mountain is about 80 percent for civilian spent nuclear fuel and about 20 percent for the nation's nuclear weapons wastes.

Congress, on its part, has the authority to modify the program, as it did in selecting Yucca Mountain, Nevada as the only site to be studied as a potential repository. This action prohibited further study of other sites (NWPA Amendments Act of 1987) and thereby cut costs for the program. Reductions in annual Congressional appropriations for the program, which are typically less than the administration's budget requests, can delay progress and impose increased costs in the long run.

The most recent estimate by the U.S. Department of Energy is that the Nuclear Waste Fund (current balance and future revenues) will produce $28.1 billion in constant 1996 dollars, about half (52 percent) of the $53.9 billion dollar projected cost for implementing the nation's HLNW program, leaving the general taxpayer with a liability of $25.8 billion.

Implications

The cost-revenue condition of the nation's HLNW program and the potential for costly uncertainties are causes for concern. The key implications are that the probable costs of managing the nation's HLNW and the liability for the general taxpayer are substantially greater than have been estimated. The Nuclear Waste Fund under its current fee structure will not meet its share (approximately 80 percent) of the costs of permanent disposal of the nation's high-level nuclear wastes.


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