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Ruling on nuclear waste storage is mixed bag for SMUD

From the February 11, 2013 issue of Public Power Daily

Originally published February 11, 2013

By Robert Varela
Editorial Director
A federal court has ruled that the federal government owes the Sacramento Municipal Utility District $34.7 million as a result of the government’s failure to provide a permanent storage site for nuclear waste from the utility's Rancho Seco plant. However, that was less than half of the costs SMUD incurred for storing the waste from 1992 through 2009. The utility is analyzing the Jan. 30 decision to decide whether to appeal, SMUD General Counsel Arlen Orchard told Public Power Daily.

In what Orchard termed "a little bit of crazy math," Judge Susan Braden of the U.S. Court of Federal Claims ruled that the government was entitled to an offset of $35 million for the amount that SMUD saved by placing the spent nuclear fuel into dry storage and decommissioning a wet storage pool. 

Orchard offered an analogy for the reasoning behind the offset: Imagine if someone ran into your car and you took it to a garage that wanted $10,000 to repair it. You then take it to a second garage that says it can do the job for $8,000 by using a mid-range paint. The insurance company then says you could have spent $10,000 so you saved $2,000 and thus they are giving you only $6,000. 

SMUD’s ultimate objective is to resolve its outstanding claims for past costs and reach an agreement with the government on a methodology for the utility’s going-forward costs, which amount to about $6 million per year, Orchard said. SMUD can’t sue for future costs, "so it puts us in the position of suing every five years" for past costs, he said. "It would be in everybody’s best interest" to change that state of affairs, he said.


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