Nuclear Waste:

DOE Should Base Disposal Fee Assessment on Realistic Inflation Rate

RCED-88-129: Published: Jul 22, 1988. Publicly Released: Jul 22, 1988.

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GAO reviewed the Department of Energy's (DOE) annual assessment of the nuclear waste disposal program fee, focusing on DOE treatment of inflation in assessing fee adequacy.

GAO found that: (1) in June 1987, DOE recommended that the disposal fee remain unchanged, even though its analysis showed that, at a 4-percent inflation rate, the current fee would result in end-of-program deficits of $21 billion to $76 billion; (2) DOE should have proposed a fee increase to Congress, based on the inflation rate, to ensure that revenues would cover program costs; and (3) future program changes and reduced costs should enable DOE to begin using a realistic inflation rate in determining fee adequacy in 1988.

Recommendation for Executive Action

  1. Status: Closed - Implemented

    Comments: DOE implemented the recommendation in its November 1990 fee assessment. See Nuclear Waste Fund Fee Adequacy: An Assessment, November 1990, DOE/RW-0291P.

    Recommendation: The Secretary of Energy should use a realistic base-case inflation rate estimate in determining the waste disposal fee needed to produce sufficient revenues to recover total program costs.

    Agency Affected: Department of Energy

 

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