Nuclear Waste:

Changes Needed in DOE User-Fee Assessments to Avoid Funding Shortfall

RCED-90-65: Published: Jun 7, 1990. Publicly Released: Jun 7, 1990.

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Pursuant to a legislative requirement, GAO provided information on the Department of Energy's (DOE) efforts to implement nuclear waste legislation.

GAO found that: (1) the nuclear waste program might be susceptible to future budget shortfalls; (2) without a fee increase, the civilian waste part of the program might be underfunded by at least $2.4 billion; (3) DOE has neither paid its share of costs nor disclosed this liability in its financial records; (4) DOE estimates did not adequately recognize program uncertainties; (5) DOE intends to address one major cost uncertainty by indexing the civilian disposal fee to the inflation rate; and (6) DOE did not use a realistic inflation rate as its most probable scenario in assessing whether user fees were adequate.

Matter for Congressional Consideration

  1. Status: Closed - Not Implemented

    Comments: Legislation was proposed to require the Secretary of Energy to adjust the fee based on an inflation indexing system; however, the provision was deleted from the bill that was enacted into law in October 1992.

    Matter: Congress should amend the Nuclear Waste Policy Act of 1982 to authorize the Secretary of Energy to automatically adjust the nuclear waste disposal fee that utilities pay into the Nuclear Waste Fund on the basis of the annual rate of inflation.

Recommendations for Executive Action

  1. Status: Closed - Not Implemented

    Comments: Although DOE said that it already was doing what GAO recommended, it did not believe that the results should be made public. GAO believes that the information would be of interest to Congress and others. In its November 1990 fee-adequacy report, DOE stated that it did not believe that these scenarios were sufficiently definable to be considered in its fee assessment.

    Recommendation: To make the annual cost estimates of the nuclear waste management program more reliable and useful, the Secretary of Energy should have estimates made for additional scenarios, such as program delays and a finding that Yucca Mountain would not be suitable for a repository.

    Agency Affected: Department of Energy

  2. Status: Closed - Implemented

    Comments: DOE issued a report on a new estimate of the total cost of the program in September 1995. The report, however, was not fully responsive to GAO's recommendation because it did not include all reasonable assumptions in the cost analysis. For example, in the report, DOE assumed that all highly radioactive nuclear waste--over 90,000 metric tons--would be disposed of in a single repository at Yucca Mountain, Nevada even though current law limits the amount of waste that can be disposed of at that site to 70,000 metric tons.

    Recommendation: To make the annual cost estimates of the nuclear waste management program more reliable and useful, the Secretary of Energy should ensure that the estimates include the costs of all major facilities, tasks, and activities or, if excluded, explain the rationale for such exclusion.

    Agency Affected: Department of Energy

  3. Status: Closed - Implemented

    Comments: DOE agreed in principle with the recommendation and made the necessary entries on its fiscal year 1992 financial statements for the Nuclear Waste Fund. DOE disclosed its defense waste cost share in its latest cost estimate and fee-adequacy reports for, and in its annual report to, Congress on the Nuclear Waste Fund. According to a note to DOE's audited financial statements for fiscal years 1991 and 1992, DOE also recorded its related defense high-level waste liability.

    Recommendation: The Secretary of Energy should record DOE liability for its share of waste program costs in DOE financial records and reports and recognize the amount owed by DOE in the annual financial statements of the Nuclear Waste Fund. Finally, the Secretary should include the government's contingent liability for future defense waste disposal costs in DOE financial records and reports.

    Agency Affected: Department of Energy

  4. Status: Closed - Implemented

    Comments: DOE implemented the recommendation to use a base-case inflation rate estimate in making its annual fee assessments for 1990. See the Nuclear Waste Fund Fee Adequacy: An Assessment, November 1990, DOE/RW-0291P.

    Recommendation: If Congress authorizes the Secretary of Energy to implement a system to automatically adjust the civilian waste disposal fee each year based on an appropriate inflation index, the Secretary of Energy should use a realistic base-case inflation-rate estimate to determine when the system should be implemented.

    Agency Affected: Department of Energy

  5. Status: Closed - Implemented

    Comments: In its September 1995 report presenting a new estimate of the total cost of the nuclear waste disposal program, DOE fully disclosed the amount of contingencies it included in its estimates of repository construction and operating costs, waste transportation costs, and the costs of developing the repository and the transportation system.

    Recommendation: To make the annual cost estimates of the nuclear waste management program more reliable and useful, the Secretary of Energy should ensure that all major categories of the estimates include adequate provision for contingencies and that the total portion of the estimates devoted to contingencies be disclosed.

    Agency Affected: Department of Energy

 

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