NPPD, DOE reach settlement on costs for on-site storage

July 15, 2011

Columbus, Neb.- Nebraska Public Power District has reached a settlement agreement with the United States Department of Energy over costs incurred by the utility for on-site storage of used nuclear fuel from Cooper Nuclear Station. The settlement follows a decade of litigation and, more recently, months of negotiations with the DOE.

The settlement between NPPD and the DOE has resulted in an initial payment of $60,572,538 to the District. This amount covers the costs NPPD incurred through 2009 for construction of an independent spent fuel storage facility at CNS to store used nuclear fuel previously stored in the used fuel pool on site. Costs for used fuel storage needs between 2010 through 2013 will be submitted annually to the DOE and settlement payments will be determined accordingly.

DOE was obligated under the National Waste Policy Act (NWPA) of 1982 to be responsible for the disposal of high-level radioactive waste and used nuclear fuel. To date, DOE has not accepted any fuel, and a permanent facility, originally designated to be Yucca Mountain in Nevada, has not been established. The failure of DOE to accept the used nuclear fuel per the contract led NPPD and other nuclear utilities to file a lawsuit against the DOE in 2001. Due to the settlement, NPPD’s case has been dismissed.

“This settlement is favorable for the District and its customers,” said NPPD President and CEO Pat Pope. “Over the years, our customers have been paying into the federal fund for a permanent storage location which has not been developed. NPPD anticipates that it will have recouped approximately 90 percent of our costs through 2009 for the on site storage facility, and have avoided significant, future, legal expenses by agreeing to this settlement.”

Since 1983, NPPD has made quarterly payments into the NWPA fund managed by DOE. A total of $167 million has been paid through the end of the first quarter of 2011. The amounts are based upon each kilowatt hour of electricity generated at Cooper Nuclear Station.

DOE was required to begin receiving the fuel in 1998, but did not, forcing many nuclear power plants to begin constructing and operating on-site storage facilities similar to the one constructed at Cooper. Used nuclear fuel is typically stored in a used fuel pool on site. Used fuel pools only have limited space and must make room for additional fuel that is removed from the reactor during refueling outages.

Pope said the settlement payment from DOE would be used for working capital purposes and the purchase of future nuclear fuel requirements. Costs for new fuel for the plant in the spring of 2011 were $66 million, with forecasts of the next purchase of fuel rod assemblies to be approximately $120 million. Part of that increase comes as a result of moving from an 18-month refueling cycle to a 24-month cycle, which requires a larger batch of fuel assemblies.