Nuclear Waste:

Status of Actions to Improve DOE User-Fee Assessments

RCED-92-165: Published: Jun 10, 1992. Publicly Released: Jul 13, 1992.

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Pursuant to a congressional request, GAO reviewed the Department of Energy's (DOE) implementation of recommendations GAO made regarding DOE assessments of whether nuclear power plant operation fees cover the costs of the civilian nuclear waste disposal program.

GAO found that: (1) DOE does not agree that it should automatically adjust disposal fees on the basis of annual inflation rates, citing the need to consider all factors affecting the Nuclear Waste Fund's balance; (2) inflation accounts for about $4.5 billion of the total $12-billion increase in disposal costs between 1982 and 1988; (3) DOE estimates indicate that the Nuclear Waste Fund may already be underfunded by $2.4 billion to $4.1 billion; (4) DOE does not have adequate funding to both finance programs with present-day benefits and pay its share of projected waste disposal costs, but has not requested additional appropriations to pay its Fund debt; (5) if DOE waits until 2015, its projected date for beginning waste disposal, to pay its Fund debt, it could owe about $11.7 billion; (6) DOE fully implemented a recommendation to disclose its estimated $3.8-billion to $5.8-billion contingent liability for its share of program costs, but did not record its current actual liability of $700 million in its financial statements; (7) the Nuclear Waste Fund's financial statements record about $1.7 billion in receivables from utilities, but the statements do not disclose that some of these funds may not be collectible due to some utilities' financial conditions; and (8) DOE acted on recommendations to ensure the reliability and usefulness of annual cost estimates for the nuclear waste program, but did not implement a recommendation to ensure that its published estimates include all costs or explain their exclusion.

Matter for Congressional Consideration

  1. Status: Closed - Implemented

    Comments: The House-passed version of the Energy Policy Act of 1992 would have required DOE to automatically adjust the disposal fee on the basis of the annual rate of inflation, however, this provision was not retained in the final legislation agreed to and passed by both houses of Congress.

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

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: On September 1, 1998, DOE's environmental management and radioactive waste disposal organizations completed a memorandum of agreement for acceptance of DOE's highly radioactive waste. Among other things, the memorandum requires DOE to pay its fair share of total disposal costs and sets out procedures for calculating DOE's fair share. DOE's annual budget requests will include an appropriate amount of funds for its share of waste disposal costs and Defense Nuclear Waste Disposal appropriations received are to be credited towards DOE's outstanding disposal obligation balance. Finally, before physical acceptance of DOE's highly radioactive wastes may begin, DOE's appropriations must have satisfied all prior outstanding financial obligations for the disposal of DOE's wastes. Thereafter, if DOE's appropriation for disposal of its highly radioactive wastes is less than the amount calculated to be appropriate, the acceptance rate for DOE's wastes will be similarly reduced.

    Recommendation: To help ensure that DOE can dispose of its highly radioactive waste in accordance with its current schedule, the Secretary of Energy, in cooperation with the Director, Office of Management and Budget (OMB), should: (1) develop a payment plan to pay DOE debt to the Nuclear Waste Fund by 2015 or sooner; and (2) request annual appropriations from Congress in accordance with such a plan.

    Agency Affected: Department of Energy

  2. Status: Closed - Not Implemented

    Comments: DOE did not agree with this recommendation on the basis that (1) all affected utilities had recorded their liabilities to the Nuclear Waste Fund in their own financial statements and (2) DOE had no basis for booking an allowance for any receivable or potentially uncollectible.

    Recommendation: The Secretary of Energy should ensure that the financial statements of the Nuclear Waste Fund fully disclose the circumstances surrounding any uncertainties regarding the collectibility of the one-time fees owed by utilities, the potential impact on the fund resulting from any receivables that may be uncollectible, and any actions that DOE plans to take to deal with this matter.

    Agency Affected: Department of Energy


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