Dairyland Power Cooperative has won a $73.5 million settlement from the U.S. government, which has failed to take spent fuel from Dairyland’s long-shuttered nuclear power plant in Genoa.
The La Crosse-based utility had sought $85.2 million in damages for the cost of handling and storing the waste for six years.
It is the second such award Dairyland has received — totaling more than $111 million — for having to store the uranium, which remains in dry casks at the plant site.
According to a contract with the Department of Energy, the fuel rods were to be sent to the Yucca Mountain repository in Nevada, which was supposed to begin receiving waste by January 1998 but has yet to open.
Robert Shapiro, Dairyland’s attorney in the case, said while every nuclear utility in the nation has filed similar suits, this settlement is unusual in that Dairyland will receive payment promptly and was able to negotiate more than $13 million savings on its future liabilities.
The Department of Energy did not immediately respond to questions about how many such cases it has settled or the damages paid, but Shapiro said every nuclear utility has had at least one case. There are 100 operating nuclear power reactors in the United States and another 17 in the decommissioning process.
“The government could easily have avoided this liability by opening Yucca Mountatin, or someplace, to take the spent fuel,” he said. “And rather than have spent fuel sitting all around the country at sites like Dairyland’s … they could have found one secure, central place to put it. Surely it would have a lot lower cost for the government to pay one place to store it as opposed to effectively paying a hundred places to store it.”
It will be up to the cooperative’s board to determine how the money is used. Dairyland returned half of the last such award to its members through a direct payment and used the remainder for rate relief.
“At the end of the day, based on what we did last time, we’ll give it back to the membership,” said Rob Palmberg, vice president of generation.
The fuel is a remnant of the La Crosse Boiling Water Reactor (LACBWR), which ceased operation in 1987.
Built for the federal government as a demonstrator project, the 50-megawatt plant was turned over to Dairyland for $1 and began operation in 1967. The plant was shut down when it became too expensive to operate the tiny but heavily-regulated plant.
Believing the federal government would honor its obligation to take the fuel by 1998, Dairyland chose to keep the 333 uranium rods under water inside the plant — at a cost of about $6 million a year.
Dairyland sued the government in 2004 for breach of contract, receiving $37.6 million in damages for the cost of storing the fuel from 1999 through 2006.
The fuel was moved to dry casks in 2012, after six years of planning and preparation. According to Dairyland, it costs about $2.5 million a year to maintain that dry storage site.
The second legal case covers 2007 through 2012 and includes the $47 million cost of transferring the fuel to dry storage.
Given the current stalemate over Yucca Mountain, Palmberg expects Dairyland will file a third case in the next couple of years to cover the ongoing costs.
Earlier this year, Dairyland transferred the license for the LACBWR site to a private company under contract to remove the buildings and all contaminated material from the site, which is adjacent to Dairyland’s Genoa coal-fired plant.
The decommissioning is expected to take about two years and cost roughly $85 million.