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

 

2.   THE RESULTS, UNCERTAINTIES AND IMPLICATIONS OF THE INDEPENDENT COST ASSESSMENT


Introduction

Escalating costs in the U.S. Department of Energy's (DOE) High-Level Radioactive Waste Management Program have been a matter of concern since the early days of the program. Initial estimates of the costs for characterizing three potential repository sites under the original Nuclear Waste Policy Act of 1982 were in the neighborhood of $80 million per site. The currently estimated cost of characterizing just one site - Nevada's Yucca Mountain - exceeds $5 billion.

Recognizing the importance of cost as a factor in determining the feasibility of continuing with the program, DOE initially included an assessment of program costs as one of the four components to its Yucca Mountain "Viability Assessment" (VA) that is being prepared for submission to the President and Congress in September, 1998. The VA was initially conceived by DOE in 1996 as part of a revised Program Plan for the Yucca Mountain project. The VA is intended to provide a basis for an assessment, by Congress and the Administration, of the overall feasibility of moving ahead with the federal high-level waste program. As proposed by DOE, the VA will have four components: (1) a preliminary Total System Performance Assessment (TSPA), (2) a conceptual design for the proposed repository and support facilities, (3) a plan for obtaining a license to construct and operate the repository from the Nuclear Regulatory Commission, (4) and an assessment of program costs. In 1997, DOE revised its concept of the VA to include only an assessment of the current and future costs associated with constructing and operating a repository - not the total costs for the program. DOE subsequently announced plans to issue a Total System Life Cycle Cost report in mid-September, 1998, but this will not be part of the VA.

Together with the ability of the site to isolate highly radioactive wastes from the environment for tens of thousands of years, the overall cost of the effort is a major determinant of the program's scope, direction, and impacts to states and communities. It is also a crucial ingredient for determining whether the program can, in fact, be implemented. The State of Nevada embarked on an independent system-wide cost assessment when it became known that the cost estimates in the VA would not be reflective of the total costs involved with implementing the federal high-level waste program. This independent cost assessment effort has two interrelated objectives: (1) to serve as the basis for critically and substantively evaluating DOE's conclusions about project costs as they are presented in the VA and in any associated TSLCC assessment and (2) to provide an objective and complete picture of the costs of the federal high-level waste program and the implications for impact assessment and for national high-level nuclear waste policy. Given the history of cost overruns and schedule delays not only for the Yucca Mountain program but also for a variety of other DOE programs nationwide,(2) a credible assessment of total system life cycle costs for the high-level waste program is indispensable for determining whether or not the federal program is, in fact, viable.

Since 1987, contractors for the State of Nevada's Yucca Mountain socioeconomic impact assessment studies have been collecting data on program costs as major factors that will drive project impacts in Nevada. At the same time, Nevada technical contractors have been closely monitoring DOE's site characterization activities and the design processes for the repository and related facilities. These efforts have generated significant amounts of information directly relevant to the issue of total system costs. In order to effectively and adequately evaluate the cost projection component of the DOE's VA, independent contractors have been engaged to compile available information on current and projected inventory requiring disposal, the costs of continued on-site (at reactor) storage, the costs of cross-country transportation, the costs of heavy haul and rail transportation in Nevada, the costs of centralized storage, and the costs of repository evaluation, licensing, construction, operations, and closure. Independent contractors also estimated contingency, and project and program management costs.

All of this information was then rolled up into a total system life cycle cost for the DOE program, as that program is defined by DOE's revised Program Plan, the requirements of currently-proposed legislation (e.g. S.104/H.R. 1270), the rulings of the U.S. Circuit Court of Appeals for the District of Columbia in litigation brought by utility companies (Northern States Power Company et al. v DOE), and recent DOE policy shifts. A prominent national accounting firm, KMPG Peat Marwick, was engaged to ensure that the independent cost analysis used reasonable and accurate assumptions, costing procedures, and cost factors.

This independent assessment draws on source data assembled by DOE and NRC, previous TSLCC and fee adequacy assessments by DOE, U.S. General Accounting Office (GAO) reports dealing with costs of DOE's high-level radioactive waste program (especially the 1990 report that reviewed DOE's findings with regard to Waste Fund adequacy),(3) and related assessments by special interest groups to support particular positions(4).

2.1   TOTAL SYSTEM COST RESULTS

This section reviews the results of the independent cost analysis. Unless otherwise noted, cost estimates include contingency and project and program management as well as direct costs. Following sections address the uncertainties that suffuse the high-level nuclear waste program and their potential cost effects, and the key implications that flow from the findings of the assessment. Chapter 3 of this report discusses the basis for the cost analysis in greater detail--the assumptions regarding the inventory requiring permanent disposal, the strategy for waste management and the schedule for its implementation, the cost categories themselves and the cost analysis procedures.

Total and Projected System Costs

The independent cost assessment for the DOE/OCRWM program estimates total system costs at $53.9 billion (FY'96$), about 54.1 percent greater than DOE's estimate in September 1995 (see Figure 1). Projected expenditures after FY 1996 are estimated at $47.8 billion, about 66.8 percent greater than the DOE 9/95 estimate for this period. Of the total system cost, about 88.6 percent is projected expenditure and only 11.4 percent is "sunk costs" through FY 1996 (see Figure 2).

As mentioned, future expenditures are estimated at $47.8 billion, of which 9.0 percent is the cost of onsite storage due to delay in DOE pickup, about 12. 5 percent is cross-country transportation, about 6.8 percent is Nevada transportation, about 19.2 percent is centralized storage, about 48.0 percent is the cost of the repository, and about 4.5 percent is other program components (see Figures 3 and 4). About $38.5 billion (80.7 percent) is costs attributable to the disposal of commercial spent nuclear fuel, for which the Nuclear Waste Policy Act anticipates full recovery from the Nuclear Waste Fund.


Figure 1.Total Cost Is Estimated at 53.9 Billion (FY'96$)


Figure 2.About 11 Percent of the Total Has Been Spent


Figure 3.Future Costs for Major Components


Figure 4.Sunk and Future Program Costs
(FY'97 - FY'71; MIL 96$)

   Total %FY'83+ %FY'97+ %categ
GRAND TOTAL: FY 1983FY 207153905.4100.0%NA NA 
EXPENDITURE THROUGH FY 19966128.0 11.4%NA NA 
FUTURE COSTS: FY 1997 FY 207147777.4 88.6%100.0%NA 
 
1.0 ONSITE STORAGE COSTS4278.9 7.9%9.0%100.0%
1.1 Commercial SNF in Que3886.1 7.2%8.1%90.8%
1.2 DOE SNF & SNF not in Que392.8 0.7%0.8%9.2%
1.3 DOE High-Level WasteNA 0.0%0.0%0.0%
 
2.0 X-COUNTRY TRANSPORTATION5968.2 11.1%12.5%100.0%
2.1 Commercial SNF in Que4269.3 7.9%8.9%71.5%
2.2 DOE & Other SNF not in Que590.1 1.1%1.2%9.9%
2.3 DOE High-Level Wastes505.1 0.9%1.1%8.5%
2.4 Technical Assist Trng: 180(c)603.7 1.1%1.3%10.1%
 
3.0 NEVADA TRANSPORTATION3244.7 6.0%6.8%100.0%
3.1 Intermodal Transfer Facility92.3 0.2%0.2%2.8%
3.2 Heavy-Haul to CSF437.2 0.8%0.9%13.5%
3.3 Rail Spur to CSF/YMP2715.1 5.0%5.7%83.7%
 
4.0 CENTRALIZED STORAGE FACILITY  9179.3 17.0%19.2%100.0%
4.1 Misc Upfront Costs65.2 0.1%0.1%0.7%
4.2 Construction429.7 0.8%0.9%4.7%
4.3 Major Equipment8469.2 15.7%17.7%92.3%
4.4 Operations215.2 0.4%0.5%2.3%
 
5.0 REPOSITORY22955.1 42.6%48.0%100.0%
5.1 Site Characterization2553.8 4.7%5.3%11.1%
5.2 Design & License Application1079.2 2.0%2.3%4.7%
5.3 Surface Facilities6142.5 11.4%12.9%26.8%
5.4 Underground Facilities7158.2 13.3%15.0%31.2%
5.5 Waste Containers6021.4 11.2%12.6%26.2%
 
6.0 OTHER DEVEL & EVAL COSTS433.6 0.8%0.9%100.0%
6.1 NRC Fees400.0 0.7%0.8%92.3%
6.2 NWTRB33.6 0.1%0.1%7.7%
6.3 Nuclear Waste Negotiator0.0 0.0%0.0%0.0%
 
7.0 OTHER PROGRAM COSTS1717.8 3.2%3.6%100.0%
7.1 PETT Payments1233.0 2.3%2.6%71.8%
7.2 Benefits484.8 0.9%1.0%28.2%


Extended Onsite Storage

As implied in the November 14, 1997 decision of the District of Columbia Circuit Court in Northern States Power et al versus USDOE, this assessment assumes that the federal government and the Nuclear Waste Fund (not individual utility ratebases) have an obligation to pay for the costs of onsite storage of SNF which would have been removed from commercial reactor sites had DOE pickup begun in 1998 (as anticipated in the NWPA) and proceeded at rates specified in proposed legislation. These include costs for onsite dry storage, for operation of spent fuel pools as interim storage facilities after reactor shutdown, and for limited upgrades at spent fuel pools needed to load casks for cross-country transportation.

This assessment assumes that DOE pickup of commercial SNF will be delayed from 1998 to 2003, during which time centralized storage, intermodal transfer and other needed facilities might be designed, licensed and constructed. The projected cost (FY'97+) to the nuclear waste program for onsite storage associated with a five-year delay is $4.3 billion, of which $3.9 billion is for onsite storage of SNF at commercial reactor sites, and $0.4 billion is for onsite storage of SNF located elsewhere. Of the $3.9 billion, about $0.6 billion (14.8 percent) is for dry storage, and about $3.3 billion (84.2 percent) is for the operation of pools as interim storage facilities after reactor shutdown. Since this assessment bases transportation choices on the current loading capabilities of spent fuel pools, the estimated cost for upgrading pool dimensions or lifting apparatus is only $37 million (1.0 percent).

Cross-Country Transportation

For legal-weight truck shipments, cross-country transportation includes the cost of shipment from origin sites to Yucca Mountain or Nevada Test Site (NTS) Area 25. These include the shipment costs, the shipment escort and inspection costs, the cost of the high-capacity cask and special truck trailer, and the operations, maintenance, replacement and decommissioning costs of this equipment.

For rail shipment, cross-country transportation is the cost of shipment in dedicated trains to Caliente (NV), where such shipments would be transferred to heavy-haul trucks or continue along a 365-mile government-owned and operated rail spur. Equipment purchases include cask and buffer cars; shipment costs are based on the loaded cask and the ballast in the buffer cars. Some rail shipment sites which lack or no longer have a rail spur require heavy-haul to a nearby railhead.

The total cost of cross-country transportation is estimated at $6.0 billion, of which $4.3 billion is for transport of SNF from commercial reactor sites, $0.6 billion is for SNF transport from other sites, $0.5 billion is for HLW transport from four sites in the DOE complex, and $0.6 billion is for emergency management training for affected states, counties and Tribes. Of the $4.3 billion, about $3.1 billion (71.9 percent) is for rail and truck carrier costs for 24,400 cask shipments over 56 million miles, about $1.0 billion (22.7 percent) is for purchasing, maintaining and decommissioning transportation casks and equipment, and $0.2 billion (5.4 percent) is for shipment escort and inspection.

Nevada Transportation

In this assessment, Nevada transportation is included to enable transportation (cross-country and in Nevada) by rail as well as by legal-weight truck. Intermodal transfer and heavy-haul are included (consistent with directives in proposed legislation) to enable early cross-country shipment by rail as well as by legal-weight truck. Nevada transportation costs are estimated at $3.2 billion, of which $0.5 billion (16.3 percent) is for the intermodal transfer facility at and heavy-haul from Caliente, while $2.7 billion (83.7 percent) is for the construction and operation of a 365-mile government-owned and operated rail spur from Caliente to Yucca Mountain.

Consistent with DOE's 1991 conceptual plan, the direct construction cost for the Caliente-Yucca Mountain rail route is estimated at $1.2 billion (FY'96$). Contingency and project and program management costs increase this figure to $1.9 billion. Upfront design and right-of-way costs, the construction of ancillary facilities, the purchase and maintenance/replacement of major equipment, and operations costs account for the remainder of the $2.7 billion estimate for the rail spur.

The Central Storage Facility at NTS Area 25

Under the assumptions of this assessment, the centralized storage facility receives and stores SNF until it is emplaced in the nearby geologic repository at Yucca Mountain. About two-thirds of the SNF arrives at the centralized storage facility in dual-purpose rail canisters. Under normal circumstances, these canisters need not be opened at the central storage facility; they are removed from transportation casks and placed in concrete bunkers or vaults for onsite storage. This assessment assumes that, at 16 rail shipment sites, utilities choose to purchase dual-purpose canisters as an onsite storage cost in order to limit the operation of spent fuel pools as interim storage facilities after reactor shutdown. At 31 other rail shipment sites, utilities choose to use storage-only canisters for dry storage; the cost of dual-purpose canisters for transportation and central storage of SNF from these sites is included as a central storage cost.

About one-third of the SNF arrives at the centralized storage facility uncanistered in high-capacity casks for legal-weight truck transport. Under the assumptions of this assessment, this SNF is removed from the transportation cask and held in a reinforced concrete fuel transfer facility until a sufficient number of PWR or BWR assemblies have accumulated to fill a metal cask for onsite storage.

The total cost for centralized storage is estimated at $9.2 billion, of which $2.4 billion (26.3 percent) is the direct cost of purchasing, replacing and decommissioning metal casks for storage of SNF arriving by legal-weight truck, about $2.7 billion is the direct cost for dual-purpose canisters for rail shipment of SNF which has been stored onsite in pools or storage-only canisters, and about $0.4 billion (4.4. percent) is the direct cost of concrete storage for all SNF arriving by rail or heavy-haul. Other direct costs include upfront and construction costs (about $0.3 billion, 3.4 percent) and operations (about $0.14 billion, 1.5 percent). Contingency and project/program management costs account for the remaining non-direct portion of centralized storage costs.

The Repository

Under the assumptions of this assessment, the geologic repository would dispose of the nation's entire current and projected inventory in 11,000 waste containers for SNF and 19,234 canisters(5) for HLW, emplaced in 94 miles of drifts bored in parallel rows at a single emplacement level through the fractured tuff beneath Yucca Mountain. Major challenges include the design of the emplacement drifts and the movement and emplacement of waste packages within and among them, the monitoring and possible retrieval of flawed or damaged packages, and the backfill and decommissioning of the facility(6) late in the 21st century.

The projected cost of the Yucca Mountain repository is estimated at $23.0 billion, of which the completion of site characterization is $2.6 billion (11.1 percent). Licensing and design (upfront and ongoing during construction and operations) is $1.1. billion (4.7 percent). The cost of surface facilities at the repository (their construction, equipping and operation throughout emplacement, care-taking and decommissioning) is estimated at $6.1 billion (26.8 percent of projected repository costs). Underground facilities are estimated to cost $7.2 billion (31.2 percent). The direct cost of waste emplacement containers for SNF is estimated at $6.0 billion (26.2 percent), of which $3.9 billion is the direct purchase cost at an estimated $350,000 per container.

2.2   UNCERTAINTIES IN THE DOE/OCRWM PROGRAM

The projected costs described above include estimated contingency costs to address the potential for ordinary complications in scheduling, regulatory compliance, design, construction, procurement or hiring. However, any large, long-term, first and only-of-its-kind project is subject to uncertainty over and above standard contingency factors. This section reviews some of the uncertainties in the DOE/OCRWM program, and suggests how they could affect program costs and/or the implementation of the waste management strategy implicit in current directions and proposed legislation.

The Inventory Requiring Permanent Disposal

A Reagan administration decision in 1985 required collocated geologic disposal for high-level defense wastes as well as SNF from commercial and DOE reactors. However, the disposition of GTCC(7) and other wastes (e.g., decommissioned nuclear weapons) remains uncertain. Also, the estimates of high-level wastes are not finalized and are increasing; DOE's estimates in December 1996 are 45 percent greater in volume and 39 percent greater in canisters than its estimates 15 months earlier in September 1995. Additional waste streams could increase costs for cross-country and Nevada transportation, complicate the design and emplacement strategy for the repository, and increase repository construction and operations costs.

The NWF Obligation Due to Delay in DOE Pickup of SNF

In its November 14, 1997 decision in Northern States Power et al versus USDOE, the US Court of Appeals for the District of Columbia Circuit concluded that the federal government has an obligation under its standard contract(8) with utilities to remediate costs attributable to delays in pickup and/or reductions in pickup rates. However, it declined to specify a remedy until delays actually begin, and it did not determine whether the costs of delay should be drawn from the Nuclear Waste Fund or from the general fund.

In the absence of a court-approved formula, this assessment allocated the costs of delay based on an estimate of the projected inventory at each site (assuming pickup beginning in 2003 and proceeding at rates specified in proposed legisilation) compared to the inventory had pickup begun in 1998. The uncertainties are a) the Court could specify a remedy more advantageous to utilities and less advantageous to DOE and the NWF or general taxpayer, and b) DOE could fail to begin pickup in 2003 and/or fail to proceed at S-104 rates. These contingencies could increase onsite storage costs and/or the portion of onsite storage costs allocated to the NWF or general taxpayer. If not anticipated and very effectively managed, delays in pickup (start date or rates) could result in unused capacity in cross-country and Nevada transportation, and in additional costs of systems developed but not fully used. Delays in the SNF pickup start date and rate could result in delay in pickup of high-level defense wastes, which the DOE Office of Environmental Restoration and Waste Management must vitrify and store while awaiting shipment to a geologic repository for permanent disposal.

Dry Storage for Discharges in Excess of Pool Capacity

The assessment assumes that dry storage can be developed at any site at which it may be required. However, at some sites physical limitations or community concerns could complicate the licensing and development of dry storage facilities. The consequence could be a more costly solution to dry storage and/or a utility decision to shutdown before license term, thus depriving the NWF of currently anticipated revenues.

Defective Canisters and/or Transportation Casks

This assessment assumes no defective storage canisters or transportation casks. If canisters are found to be defective, they would need to be repaired or replaced--increasing costs for onsite storage, transportation or centralized storage, depending on the point at which the defect is discovered. Defective transportation casks may or may not require repair or replacement, since transportation choices and schedules could result in an excess cask inventory in some shipment years. The major cost consequences, however, depend on the management of defects by utilities and/or DOE as they occur. Ineffective management could have major cost consequences.

Canister and Cask Standardization

Our estimates assume all SNF will be shipped in a standard LWT cask and one of two rail casks, each matched with a standard canister for storage and/or transportation. If the container delivery "system" (DOE, NRC, vendors, fabricators) fails to deliver an adequate quantity of standard casks and canisters, as required by shipment schedules, system efficiency would go down and costs would go up. Under a privatized transportation system, such as DOE is now proposing, market-driven decisions could result in use of a variety of unstandardized casks, perhaps with reduced cask purchase costs, but with increased costs for handling, repackaging and storage at the centralized facility.

Shipment Costs for Cross-Country Transportation

Transportation carrier costs for 30,400 cask shipments and 65 million cask shipment miles on the nation's Class A railroads and interstate highways are not yet negotiated. Rail carriers and USDOE disagree on the need for and cost of shipping SNF in dedicated trains. Given speed, route and operating restrictions for shipments of SNF and HLW--and the implications of these restrictions for other rail or highway freight traffic--shipment costs per ton-mile or per ton-originated may be higher than assumed in this assessment.

Concerns in Transportation Corridor Communities

The willingness of corridor communities to accept a shipment campaign of this type and magnitude--the ability of our political system to produce and maintain acceptance when such a large portion of affected communities see themselves as corridors for dangerous materials originating elsewhere and benefitting others--has not been demonstrated. Resistance could come from state-local-tribal governments along corridors or from grassroots activism. Some believe that concerns with early shipments will rapidly diminish after the initial shipments along various routes; others anticipate the concerns could build as the campaign proceeds.

It is conceivable that concerns among corridor communities, as expressed through participatory state and local politics, could shutdown or greatly complicate parts of the nationwide campaign for cross-country shipment of high-level wastes. DOE could build a central storage facility and/or repository, and be able to ship only parts of the projected inventory to these Nevada facilities.

Accidents in Cross-Country Transportation

Our assessment assumes no accidents in a cross-country shipment campaign involving 16,920 legal-weight truck shipments and 37.6 million cask shipment miles on often-congested public highways, plus 4,500 dedicated train shipments over 9.1 million miles of heavily-used rail corridors. Accidents in cross-country transportation are likely. Such accidents could require substantial emergency response, as well as evacuation, road closure or other measures resulting in losses for corridor businesses. The associated costs are not included in this assessment. Nor are the costs of potential radiation releases, should such occur, which would be paid under guidelines established by the Price-Anderson Act of 1957, as amended in 1988. The major costs of accidents in cross-country transportation, however, are likely to be subsequent to the accident itself, in the management and operation of the shipment campaign.

NRC Review for Shipment Staging or Switching Locations

Our assessment assumes that NRC review and/or licensing is not required for staging or switching locations required in the cross-country shipment campaign--e.g., major rail yards in Chicago, St. Louis, Kansas City. Should such be required (e.g., if an accident or a security breakdown occurred in a rail switching yard), significant additional cross-country transportation costs could result.

NRC Licensing for the Intermodal Transfer Facility

Our assessment assumes, based on Senate Bill 104, that NRC licensing is not required for the intermodal transfer facility at Caliente (NV). Should safety or security considerations (or litigation, or political action by affected parties) require NRC licensing, the result would be a delay in the pickup start date, with consequent implications for onsite storage costs at commercial reactor sites. Licensing could also require additional construction and operations costs at the intermodal transfer facility itself.

Delays in Heavy-Haul Operations

Heavy-haul operations could be delayed due to complications in negotiating or funding the necessary improvements in the public highways along the 365-mile route, and/or due to concerns in local communities along such routes. The result could be increased costs for heavy-haul construction and operations, and (more significantly) increased upstream costs for onsite storage and cross-country transportation.

Delays in Rail Spur Construction and Operation

Delays in procuring the required right-of-way and/or environmental permits along the 365-mile rail spur route could increase construction costs. Indirect effects could include an extension of heavy-haul operations (and the associated intermodal transfer and heavy-haul costs) and/or increased upstream costs for extended onsite storage or cross-country transportation.

Seismic Activity at NTS and the Central Storage Facility

Seismic activity is expected to be a major concern in the licensing of a centralized storage facility for up to 24,000 MTU of SNF at NTS Area 25. These or other concerns could lead to increased costs to meet NRC licensing requirements regarding the spent fuel transfer building, storage procedures and equipment, or decontamination facilities. If such requirements delay the operations of the centralized storage facility or reduce its throughput capacity, there could be significant additional upstream costs in onsite storage and/or excess transportation capacity developed but not fully used.

Delays in Site Characterization at Yucca Mountain

Several contingencies not addressed in this assessment could delay the completion of Yucca Mountain site characterization: e.g., a seismic event which damages surface or underground facilities and equipment at the exploratory studies facility; an unexpected geologic condition (e.g., a large body of perched water, a highly fractured unstable zone) encountered by the east-west tunnel currently under construction; discovery or confirmation of a health hazard for workers underground;(9) a major equipment failure which damages the heater test or causes an electrical fire or rock fall within the ESF. Any such contingency would increase site characterization costs and could indirectly increase costs in other components of the waste management program.

Repository Construction and Operation

The construction and 60-year operation of a permanent repository in the heavily fractured tuff of Yucca Mountain involves many contingencies not addressed in this assessment: e.g., defects in the repository block (faulting, fracturing, perched water) which were undetected during characterization and which reduce capacity or require reconfiguration; variations in rock quality in the repository block which complicate thermal loading and affect capacity, ventilation or emplacement layout; escalating surface facility construction costs due to seismic events or NRC license requirements; complications in the operation of robotic equipment within emplacement drifts; the cost of waste containers fabricated from exotic materials to meet stringent performance standards.

Retrieval of Emplaced High-Level Waste

Performance standards require that SNF be retrievable for 50 years after initial emplacement. The feasibility of retrieval at any cost is uncertain at best. The costs, should retrieval be required, are not included in this assessment--very rough estimates are in the billions or tens of billions of dollars, depending on the complexity and extent of retrieval required. Also not included are the costs of dealing with the waste retrieved, should the retrieval be occasioned by hazards detected in the emplaced wastes.

Permanent Closure of the Geologic Repository

In closing the repository, the federal government warrants that the materials it contains will be safely isolated from the human environment, without further government involvement, in perpetuity. Yet the backfilling techniques proposed for closure are unproven as to feasibility or effectiveness. Some argue that the repository should remain unclosed or ventilated, implying that the government responsibility (and costs) could extend indefinitely.

2.3   IMPLICATIONS OF THE COST ESTIMATES

The implications of the total system cost estimates, and of the uncertainties not reflected in the cost estimates, are wide ranging. The key implications are that the probable cost of managing the nation's SNF and HLW is substantially greater than has been estimated by DOE, that the general taxpayer stands to bear about half of the projected cost.

While there are and will continue to be substantial uncertainties inherent in projecting the costs and revenues of a complex program over many years, two things are apparent--the Nuclear Waste Fund as currently constituted is woefully inadequate to meet the long-term costs of implementing current DOE plans and proposed legislation, and this shortfall is likely to increase rather than decrease over time.

This section of the report briefly elaborates on these and related implications of the independent assessment of total system costs.

Waste Management is More Costly than Estimated by DOE

The projected cost of managing SNF and HLW in accordance with the NWPA (as revised by the Amendments of 1987 and legislation proposed in Senate Bill 104 and House Bill 1270) and recent US Appeals Court decisions is $53.9 billion--a figure about 18.9 billion (54.1 percent) greater than estimated by DOE in September 1995. The projected cost of managing SNF and HLW in fiscal years 1997-2071 is $47.8 billion--a figure $19.1 billion (66.8 percent) greater than DOE's estimates for the same period.

Program Uncertainties Could Further Increase Costs

The above estimates do not include the cost implications of uncertainties in a program that involves many scientific and technical challenges, difficult equity and perceptual issues, and consequent demands on our regulatory and political systems. Should any or some combination of these uncertainties materialize, they could significantly increase the above estimates of costs required to see the nation's high-level nuclear waste program through to a satisfactory conclusion. Even more difficult, perhaps, they could require a rethinking of the nation's waste management program at a point when even more funds have been expended and wastes are partly emplaced, partly in central storage, and partly at commercial reactor and other DOE sites.

NWF Revenues will Likely Further Contract

This assessment assumes that all commercial nuclear plants operating in 1997 will continue to operate (and generate revenues to the Nuclear Waste Fund) through their license term. DOE's fee adequacy assessment makes a similar assumption.(10) In recent months, however, several utilities have announced that they intend to or are considering early shutdown of several plants--e.g., Big Rock, Oyster Creek, Maine Yankee, Zion 1 and 2.

Early shutdowns would reduce the expense of waste management under the NWPA, by reducing the amount of spent fuel which must be stored on an interim basis, transported or emplaced. However, the reductions in NWF revenues as a consequence of early shutdowns will likely be much greater than the corresponding reductions in expenses. Early shutdowns reduce revenues on a one-to-one basis for each kilowatt of expected nuclear power not generated by a commercial reactor. Early shutdowns reduce waste management costs at the margins of an overall program which must be fully 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. The assumptions of this assessment (all reactors operating in mid-1997 continue to operate through license term) represent the "best case" scenario of revenues and expenses for the NWF.

Fund Management Could Diminish Investment Revenues

Nuclear utilities, frustrated by prospective delays in DOE pickup of spent nuclear fuel and by the inclusion of the Nuclear Waste Fund in the general federal budget, have proposed that annual fee collections be limited to the amounts actually appropriated by Congress for implementation of the DOE/OCRWM program. This would place the program on a current cost basis, and reduce the projected balance in the Nuclear Waste Fund, the investment of which was intended by the Nuclear Waste Policy Act to support the implementation of the program over the decades after nuclear reactors shut down.

The General Taxpayer Stands to Pay $26 Billion

DOE's most recent assessment of the one-mil per kilowatt hour fee on sales of nuclear generated power, established by the NWPA to meet the costs of permanent disposal of commercial SNF, estimates that the fee provides a revenue base of $28.1 billion (FY'96$) from which to meet projected program expenditures.(11) The independent cost assessment estimates program costs at $53.9 billion (FY'96$), suggesting that the general taxpayer liability is about $25.8 billion, or about half (48 percent) of total program expenditure.(12)

A Small Portion of Total Costs are "Sunk"

Though the DOE/OCRWM waste management program is now in its fifteenth year, only 11.3 percent of estimated TSLCC have been incurred through FY 1996; 88.7 percent will be incurred in future years. Thus, despite the huge investment at Yucca Mountain and the large investments in investigating sites at Hanford, Deaf Smith County and elsewhere, just over ten percent of the costs which the nation should expect to spend for permanent disposal of HLNW have been "sunk." In determining future directions for the program, sunk costs should be relegated to a lesser role than they seem to have been in many policy determinations to this point.

2.4   SOURCES FOR TOTAL SYSTEM COST ASSESSMENT

Several sources were consulted in preparing the independent assessment of total system costs for the permanent disposal of the nation's SNF and high-level waste.

USDOE Assessment of Total System Costs

The Nuclear Waste Policy Act requires DOE to prepare "an estimate, on an annual basis, of the costs required to construct and operate the repositories anticipated to be needed . . . and to carry out any other activities under this Act" (Section 301 (a) (10)). Based on the estimate of costs, the Act requires that DOE "shall annually review the amount of the fees (on sales of civilian nuclear power). . . to evaluate whether collection of the fee will provide sufficient revenues to offset the costs. . ." (Section 302 (a) (4)). The former requirement is generally referred to as the assessment of "total system life cycle costs" and is part of DOE's responsibility to develop and maintain a mission plan for management of the nation's high-level nuclear waste. The latter requirement is referred to as the "fee adequacy assessment," and is part of DOE's responsibility to manage the nuclear waste fund established by the NWPA.

This assessment included a thorough review of DOE's most recent analysis of total civilian costs (published in September 1995), and a comparative review of estimates prepared in 1986, 1989 and 1990. DOE's assessments describe waste management assumptions (e.g., projected inventory, number of repositories, repository media, etc.) but do not describe their cost analysis procedures or cost factors.

Our review compared DOE estimates of total system costs, selecting comparable waste management assumptions (e.g., single repository, in tuff) and adjusting for changes in the projected inventory and for constant dollars. The key observation is that, in a program that has had many changes of direction and adjustments in cost, the DOE estimates of TSLCC have been very consistent. The 1995 estimate is only about ten percent above the initial estimate prepared in 1986, only seven to eight percent higher than the estimate from 1989, and virtually identical to the 1990 estimate prepared to reflect the effects of the 1987 amendments to the NWPA.

USGAO Reports to Congress

In response to requests from Congress and its committees, the General Accounting Office (GAO) has made numerous inquiries into various aspects of DOE's program for management of the nation's high-level nuclear wastes and/or the site characterization project at Yucca Mountain. Some GAO inquiries have focused directly on program costs or revenues; other have focused on management issues which have a significant but indirect bearing on costs. The GAO has found numerous persistent causes for concern:

  • A September 1994 report concluded that comprehensive review of the disposal program is needed.
  • A December 1994 report expressed concerns about DOE's management and organization of the Nevada repository project.
  • A September 1993 report inquired about funds spent to identify a monitored retrievable storage facility site.
  • A May 1993 report observed that Yucca Mountain project was behind schedule and facing major scientific uncertainties.
  • A May 1992 report concluded that DOE's repository site investigations would be a long and difficult task.
  • A March 1992 report concluded that the development of casks for transporting spent fuel needs modification.
  • A June 1992 report evaluated the status of actions to improve DOE user-fee assessments.

GAO's major review of total system costs in the DOE/OCRWM program was published in June 1990(13) and concluded that changes were needed in DOE user-fee assessments to avoid shortfalls in the Nuclear Waste Fund. The review evaluated DOE's estimates of total system cost, but did not investigate costs analysis procedures in detail, nor did it validate cost factors. Much of GAO's review focused on the one mil per kilowatt hour fee and the uncertainties regarding its adequacy to support projected expenses.

GAO has reviewed 80 projects designated by DOE as major systems acquisitions and identified many which suffered significant cost overruns or schedule slippages:(14) e.g.,

  • The final cost of the Fuels and Materials Examination Facility at Hanford (WA) was 39 percent above the original estimate, and the completion schedule slipped 14 months. The $234 million facility is now used for storage and office space.
  • The costs of the West Valley Demonstration Project in New York increased 226 percent from an original estimate of $446 million to a final cost of $1,008.5 million, and the originally estimated completion date slipped seven years and five months.
  • The cost of the Super Conducting Supercollider in Texas increased from an original estimate of $5.9 billion to over $11 billion before the project was terminated in October 1993.
  • The vitrification plant at the Savannah River Site in South Carolina was completed in November 1996--62 percent over original budget and 6½ years behind schedule.

GAO notes the many causes for cost overruns and schedule slippages in large and technically demanding projects, but finds several underlying causes (unclear or changing missions, incremental project funding, a flawed system of incentives, insufficient DOE personnel to effectively oversee contractor operations) common to many DOE major systems acquisitions.

DOE/NRC Management Information

This assessment included significant efforts to collect, organize and analyze information collected by DOE or NRC. Examples include:

  • DOE expenditures, as reported in detail in "status of obligation authority" reports.
  • DOE records of spent fuel discharges (by reactor, current location, number and type of assemblies, MTU) through 1995.
  • NRC data on operating and shutdown commercial nuclear power reactors (Information Digest: Appendix A).
  • DOE projections of spent fuels discharges under no-new-orders, end-of-license term assumptions (DOE/RW-0431, June 1995)
  • DOE's Integrated Data Base Report (DOE/RW-006, December 1996) including estimates of high-level defense waste and DOE spent nuclear fuel.

Other Sources for the Independent Assessment

Other information sources used in this assessment include data received from the American Railroad and American Trucking Associations, inputs from sources in the nuclear industry (e.g., the Nuclear Energy Institute and its consultant Energy Resources International), and construction industry standards.

The State of Nevada began the independent assessment in late 1996. Independent contractors were engaged to collect available information on the current and projected inventory requiring permanent disposal, the costs of continued onsite storage due to delay in DOE pickup, the costs of cross-country transportation, the costs of heavy-haul and rail transportation in Nevada, the costs of centralized storage, and the costs of repository characterization, licensing, construction, operations, and closure. Independent contractors were asked to estimate contingency, project management and program management costs--arriving at a total cost for the life-cycle of the DOE program. Waste management assumptions were specified so as to reflect a program which responds as practicable to initiatives currently underway as part of DOE's May 1996 revised program plan, the requirements of currently proposed legislation (e.g., S.104/HR.1270), the remedies resulting from the November 14, 1997 decision in Northern States Power Company et al versus USDOE, and recent DOE/OCRWM policy shifts. An outside contractor was engaged to ensure that the independent cost analysis used reasonable assumptions, costing procedures and cost factors.

Chapter 3 of this report describes the inventory requiring permanent disposal; the strategy for managing the waste inventory; the types of costs required by the waste management strategy; the schedules for storage, pickup and emplacement which determine cost streams over time; and the key cost


Back | TOC | Next


Return to the
Nuclear Waste Project Office
Home Page
State of Nevada
Nuclear Waste Project Office
Capitol Complex
Carson City, NV 89710
(702) 687-3744 voice
(702) 687-5277 fax
nwpo@govmail.state.nv.us e-mail

*