May 29, 1998

Bottom line: Fee caps stick taxpayers with new $25.8 billion cost
Taxpayers didn't make the mess - Don't make them pay for it

Dear Senator:

As the Senate moves to consider new nuclear waste storage legislation, Taxpayers for Common Sense urges you to oppose caps on the fees for nuclear waste disposal. Through indirect means, such fee caps would fundamentally change federal policy from "polluter pays" toward "taxpayer pays" and stick taxpayers with a $25.8 billion cost never envisioned under the 1982 law.

In 1982, Congress enacted legislation directing the federal government to create a permanent storage site for high-level nuclear waste. To pay for it, the law also authorized a fee on nuclear-generated electricity to feed a trust fund. The assumption of the law was that polluters would pay full cost of nuclear waste and the fees could be raised to cover additional costs. Nothing in the 1982 law requires or assumes that the taxpayers would be stuck with a whopper cleanup bill.

During the 15 years since 1983, the fee has remained unchanged at one mill per kilowatt-hour while the estimated costs of the program have increased significantly. The resulting shortfall between revenues and costs has grown to $25.8 billion, according to an independent cost assessment reviewed by KPMG Peat Marwick:

  (Constant 1996 $)
 account for the 'Northern States Power" court 
 decision and assuming enactment of similar 
 provisions of S. 104 and H.R. 1270 as passed.) 
 (Latest estimate by U.S. Dept. of Energy. Includes 
 current balance and projected future revenues 
 through 2033, when all plants will be retired) 
 (Liability to be imposed on federal taxpayers.)  

Indeed, the cost assessment notes that this estimate may be optimistic for several reasons:

  • Most costs are still in the future - Only 11.4 percent of the total estimated program costs (about $6.1 billion of the total $53.9 billion) have been spent to date.

  • Early shutdowns reduce revenues - Several existing nuclear power plants have shut down earlier than originally projected, which cuts revenues more than costs. The study notes that "the effects of early shutdowns in reducing revenues are likely to be substantially greater than their effects on reducing (disposal) costs"

  • Nothing can go wrong? - Nobody has ever permanently disposed of large amounts of high-level nuclear waste. The program has seen surprises and major complications. Costs could still go through the roof.

Of course, nuclear utilities will respond that the federal government has operated in bad faith by collecting money from ratepayers without spending enough of it to solve the problem. On the contrary, Taxpayers for Common Sense believes nuclear utilities have operated in bad faith, handing off a mess while preventing the government from raising enough money to pay for it.

So, Taxpayers for Common Sense has a deal to offer the nuclear utilities: repeal the 1982 law, take back all responsibility for your nuclear spent fuel, and take back all unspent revenues in the Nuclear Waste Fund. (Even if taxpayers also refunded the $6.1 billion already spent by the federal government, taxpayers would still be better off than if they got stuck with a $25.8 billion shortfall later.)

The bottom line is that taxpayers cannot afford to get stuck with this bill. Please oppose any provisions in this bill to cap fees or undermine the principle that polluters, not taxpayers, should pay.


Ralph DeGennaro
Executive Director


An independent watchdog for the taxpayers of today and tomorrow

  • Ralph DeGennaro, Executive Director
  • Jill Lancelot, Legislative Director
  • Advisory Committee: Senator William Proxmire, Honorary Chairman

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