Free Response - District Court of Federal Claims - federal

Case 1:01-cv-00116-FMA

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Departmentof Energy
WasNngton, 20585 DC June 3, 1997 CERTIFIED MAIL. RETURN RECEIPT REQUESTED Nebraska Public Power District Arm.: Eugene Larming, Nuclear Fuel Manager P.O. Box 499 Columbus, NE 68601 Nebraska Public Power District Contract DE-CR01-83NE44397 Contract DE-CR01-83NE44475 Dear Mr. Lanning: This letter follows up on myletter to you dated December17, 1996, in wkich I informed you of the Department'santicipated delay in beginning spent nuclear fuel disposal by Janua.D' 31, 1998, and on the responses from contract holders to the Departmenfs request for comments how on best to accommodatethe delay. The Department has reviewed the commentsreceived, and I am attaching to this letter a summa3.' those comments the Department'sresponses to them. of and The purpose of this letter is to advise you howthe Department intends to proceed in light of the anticipated delay. The Departmenthas determined that two different provisions of the Standard Contract are applicable in the present circumstance: Article IX - Delays, and Article XV- Amendments. Article IX deals specifically with howthe parties are to proceed in the event either the Department the contract holder experiences a delay in its ability to deliver, accept or transport or spent fuel or high level waste in accordance with an applicable schedule. ArtMeXVrecognizes the "uncertainties necessarily attendant upon long-term contracts" and provides a meansby which the parties can mutually agree to amendthe contract "as the parties maydeemto be necessary or proper to reflect their respective interests." Whilethe Departmentbelieves the Article IX remedygoverns the presently anticipated delay, we also recognize that the delay may create particular hardships for certain contract holders. Accordingly, in addition to proceeding under the Delays clause, weare inviting any interested contract holder to propose to the Department, in accordance with Article XV, particularized contract amendments that mayassist it in dealing with hardships it mayexperience as a result of the Department'sdelay in accepting its spent fuel on the contract holder's presently scheduled delivery date.

COF-028-0660

Case 1:01-cv-00116-FMA

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Article IX - Delays A numberof the contract holders submitted corrtments in response to the Department's December 17, 1996 letter indicating that they believe the Department'sdelay in accepting spent fuel was avoidable and that an adjustment of fee or other compensationwould therefore be appropriate. The Department'sdi'afi ProgramPlan indicates that, if YuccaMountainis determined to be suitable and licensable for disposal of spent fuel and high level waste, it wouldbe available for disposal activities in 2010. Furthermore,the Department indicated that, if it receives has authorization from the Nuclear Regulatory Commission begin construction of a repository at to YuccaMountainin accordance with the time schedule in the draft ProgramPlan, with Commissionapproval, the Department could commence spent fuel acceptance at the repository in 2007. I have preliminarily determined that this delay was unavoidable. (A copy of that preliminary determination is attached.) Because of the difference of views regarding whether or not the delay was avoidable, I have determined that a dispute exists within the meaningof Article XVI-Disputes, regarding whether or not the Department's anticipated delay was avoidable. Therefore, I am hereby providing you with 60 days within which to respond to mypreliminary determination by submitting a written statement, supported by any relevant documentation, setting forth the factual and legal basis for any contention that the delay was avoidable. After considering any such submissions, I will issue a final determination that will be appealable to the Board of Contract Appeals as described in Article XVI. If you wish to contest mypreliminary determination that ~the Department'sdelay in beginning disposal of spent fuel was unavoidable, please submit on or before August 4, 1997, written statements and documentation supporting your position to the following address: U.S. Department of Energy Office of Headquarters Procurement Services ATTN: Ms. Beth Tomasoni, HR-542 1000 Independence Avenue, S.W. Washington, D.C. 20585 Article XV - Amendments

Wh~lethe Departmem believes that the delay at issue was unavoidable, and that the Department is therefore not obligated to provide a financial remedyfor the delay, as noted above, we recognize that such delay mayhave resulted in hardship to certain contract holders. Therefore, the Departmentis prepared to address individual contract holders' spent fuel storage concerns through negotiation of amendments individual contracts. Specifically, the Departmentis to willing to consider amendments individual contracts that would mitigate the impacts of the to delay particular contract holders will experience in the acceptance of their spent fuel. Possible amendments could include, for exafaple, compensationfor onsite storage costs.

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COF-028-0661

Case 1:01-cv-00116-FMA

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If you are interested in proposing amendments your contract, please contact Mr. David to Zabransky at (202) 586-9198to schedule a meeting for the purpose of discussing such ~mendments. Sincerely,

Beth A. Tomasorti Contracting Officer Office of Headquarters Procurement Services Attachments cc: William R. Mayben(w/o attachment)

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COF-028-0662

Case 1:01-cv-00116-FMA

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Department of Energy Wa~hin~on, 20585 DC

CERTIFIEDMAIL Mr. Jerry Hastings Accounting Department Sacramento Municipal Utility District P.O. Box 15830 Sacramento, CA95852 Sacramento Mu~eipal Utility District Contract DE-CR01-83NE44415 DearMr. Hastings: This letter follows up on myletmr to you dated December 1996, in whichI informedyou of 17, the Department's anticipated delay in beginningspent nuclear fuel disposal by January31, 1998, and on the responses contract holders to the Department's from request for comments how on best to accommodate delay. The Department reviewedthe comments the has received, and I am attaching to this letter a summary those comments the Department's of and responsesto them. Thepurpose this letter is to adviseyouhow _Department of the intendsto proceed fight of the in anticipateddelay. TheDepartment determined has that two different provisfons of the StandardContract ~re applicable in the present eircurnstanse: Article IX- Delays,and Article X'V Amendments. Article IXdeals speci~eallywith how parties are to proceedin the event either the the Department the contract holderexperiences delay in its ability to deliver, acceptor transport or a spent fuel or high level wastein accordance with an applicable schedule. Article XV recognizes the "uncertainties necessarily attendant uponlong-termcontracts" and providesa means by whichthe parties can mutuallyagree to amend contiaet "as the parties maydeem be the to necessaryor proper to reflect their respective intere~s." Whilethe Department believes the Article IX remedy governsthe presently anticipated daiay, wealso recognizethat the delay may create particular hardshipsfor certain contract holders. Accordingly, addition to proceeding in underthe Delaysclause, weare inviting any interested eonta'actholderto propose the to Department, accordancewith Article X'V,particularized contract amendments mayassist in that it in dealing with hardshipsit may experience a result of the Department's as delay in accepting its spent fuel on the contract holder's presentlyscheduled deliverydate.

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Case 1:01-cv-00116-FMA Article IX - Delays

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A numberof ~e contract holders submitted commitsin response to ~e Department'sDe~nber I7, 1996lc~r indicating that they believe ~ Depamnent's delay in accepting spent rue3 was avoidable and that an Mjnstm~nt f~ or ottm" compensation of wouldth~refumbe appro~at~. The Dc3~u~m~fs draft ProgramPlan indicates ~hak~fYuec~ Mountain determinedto be is suitable andlicensablefor dispo, sal of S-l~ funl andhig~h l~vel vc-ast~it would available:for b~ disposal a~iviti~s in 2010. Furthermore,th~ Departme~lms indicated tha~ flit r~c~ives authorization flora the Nuclear Regulatory C.o~ ~ ~ coma'action of a r~osimry at Yucca Mountain aeeorthmce in ,,~ith the time schedulein the da-a1% P-ingrainPlan, with Commission approval, the Depar~ent could commence spent fuel acceptance at the repository in 2007. I havepreliminarily d~termined this &layw~sunavoidable.(A copy of that th~ preliminarydetermination attache.t)" Because tl~ differenco of viewsregarding.w~theror is o:f not the delay ~vasavoidable,I havedetermined a fft~/mte exists withinthe meaning Article that of XVI-Disputes, regarding wbeth~or not the Departmm~s anticipated delay wasm, oidable. Therefore, I amhereby providing you with 60 days withia which1o respondto myprelimimwy determination by submitting a written statement, suppoa~by relevant documentation, any setting :forth the :factual andlegal basis :for anycontention that the delaywasavoidable. After consideringany suchsubmissions, will isst~ a final determination will be appealableto the I that Boardof Contract Appealsas described in Article XVL If youwishto conte~tmypre "lmainary determination that the Deparmaeat's delay in begJarfing disposal of spent fuel wasunavoidable.,please submiton or before August 1997,writtan 4, statements and documentation supportingyour position to the followingaddress: U.S. Department Energy of Office of HeadquartersProcurement Services ATTN: Ms. Beth Tomasoni, HR-542 1000 Independence Avenue,S.W. Washington,D.C. 20585 Article XV- Amendments Whilethe Department believes that the delay at issue kvas unavoidable,and that the Department is th~-refo~not obligatedto p~videa financial remedy, the delay, as notedabove,we for recognize that such delaymay haverestfited in hatflship to certain contract holders. Tharefore, the Department preparedto address individual conl~-t holders' spent fuel storage concerns is through negotiation of amendments individual conlra~. Specifically, the Department to is willing to consideramendments individual conh-aetsthat wouldmitigate the impactsof the to delayparticular contract holderswill experience the in aceeplanee the'= spent tirol. Possible of amendments could include, for example,compensation onsite storage costs. for

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If you arc inmrcstsdin proposingame~lmenIs your conlract, plca.~ coma~tMr.David t~ Zabramky (202) 5~6-919g sch~dul*"a m~'tingfor ths purpo~of di,scussing such at to amendments. Sincerely,

B~h A. Tomasoni Contrac~g Officer Offi~ of Hc~amrt~s

cc: Ms. Jan Schofi (w/o attachment)

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SMUD061141

Case 1:01-cv-00116-FMA

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CONTRACqqNG OFFICER'S P ,RF_J/A~[NA~RY DE~AT~ON THAT TH~ DEPARTMENT OF ENERGY'S DELAY IN BEGINN~G SPENT FUEL DISPOSAL WAS UNAVOIDABLE ]~&CKGROUN])

Article IXprovides,in brief~ that neither the Government the contractholdershall be liable nor ~or damages causedby ~lure to performits obligations if s.uch ~lure arises out of causes beyond the control and withoutthe fault or negligence the party failing to perform.Thisarticle of indicates that an unavoidable delay includes drcumstances beyond reasormblecontrol of a the party to the Contra~such as acts of God,of the public enemy, of Government either ks or in sovereign ¢unwactual or capacity. In the event of an unavoidable delay, the parties are to readjust schedule~ appropriate to acz.ommodate delay. as the PRELIM~ARY DETERMINATION TheDepartment's draRProgram Plan indicates that, if Yucca Mountain determined be is to suitable and licensablefor disposalof spent fuel andhigh level waste, it would availablefor be disposalactivities in 2010.Furthermore, Department indicatedthat, if it receives the has authorlzmion from the NuclearRegulatoryCommission begin construction of a repository at to Yucca Mountain accordance in with the time schedulein the draft Program Plan, with Commission approval, the Department could commence spent fuel acceptanceat the repository in 2007. I havereviewedthe record providedby OCRWM, I preliminarily find that this delay and wasdue to circumstancesbeyondthe reasonable control oFDOE therefore the anticipated and delay was"unavoidable" within the meaning Article IXof the StandardContract. of

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Jun~ 3, I997

In order to understand the comcr:t within whichth~ delays described below have oeeurrecl and th~ basis for mypreliminary determination, it is hetFrml to review, the history, of the program how and DOE's statutory mahorlty for the implemematioa its disposal obligmioa has evolved ove~ of While sp~ fuel discharged f~omnuc.lear power reactors ha~ been ~fely stored for dec~le~ with no discernible ~Iverse effects on the health and safety of the public, spe~t fuel w~l remain radioactive, and thus mu~tbe isolated, for thou~nd~of ye~r~. Consistent wlth the vicw~of other nations, United Stat~ policy has been that our r~ponsibliities to futn~ gancrations are l:~tter discharg~t by ~ str~gy of final disposal than by rdiance on storage. D~pgeologic dispo~ ~s internationally recogniz~ a safe and viable mea~of disposing of spent nuclear fuel ~s OCRWM, Mission plan 3, DOE[KW-0005 DOE, (1985), E~dronmental. and Ethical B~mi~ .Geologic Dispo~ 8,18, Nuclear Energy Agency, OECD, Paris, France. However, there is not yet any permanent disposal fa "eflity for spent nuclear fuel anywhere the world. in TheNuclear Waste Policy of 1982 wasenacted Act (NWPA) against thisbackground and consistent federal with policy utilize geologic to d~p disposal a permanent as solution spent to fuel and high level radioactive waste management (hereinafter used interehangeably). The NV~PA established the Office of Civilian Radioa.etive Waste Management (OCRWM) within the Department of Energy (DOE)to develop and implement a spent fuel management and disposal system for the natior~

The original NWPA requital DOE site, obtain a license, construct, and operate two geologic to repositories. The NWPA gave DOE days to issue general guidelines for the recommendation 180 of sites, which were published in final in November 1984after extensive public review and concurrence by the Nuclear Regulatory Commission(NRC). Drak environmental assessments (EA) for nine potential sites were issued in December1984. Morethan 20,000 commentswere received. As required by the NWPA, after public briefings and hearings on the draft EA's, in - 2 -

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SMUD 061143

Case 1:01-cv-00116-FMA

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june3, 1997

In compIkance section of the~WPA, completedstudy thenell with 141 DOE a on fora Monitored R~cvable Storage facility submitted and a timely proposal Congress 1987 to h~ for autho~zatlon to construct operatelicensed and a temporary storage facility OakPddge~ in Tennessee. stated 1987 DOE in that plan start ks to storage operations1998 kt would allow the system to receive spent fuel a fall five years sooner than without the storage facility under thencurrent schedules. OCRW'M, Monitored Retrievable Storage, Submission to Congress DOE Volume 1, page 3 (March I987), DOEIKW-0035/I-Rev The Nuclear Waste Policy Amendments of 1987 madesignificant changes to the program. Act The amendments directed DOE characterize only the YuccaMountainsite for its suitability as to a repository site and prohibited site-s.l~Sfic a~as for a second repository. With regard to temporary storage for the spent fuel, the amendments: established an independent Monitored 1) Retrievable Storage (MILS) ReviewCommission report to Congress in 1989 on the need for to MILS fa~lity; 2) prohibited MRS siting until the site for the ~first repository has been reeommeoded the President and prohibited MRS to eonstruefion until the issuance of an NKC construction authorizmionfor the repository, 3) limited the capacity of the MKS facility to no more than 10,000 metric tons of heavy metal; 4) nullified DOE'srecommendation site an MRS to fadlity ha Tennessee;5) prohi'bited siting an MRS facility in Nevada;and 6) established the Office of NuclearWasteNegotiator for the purpose of finding a. volunteer site for an/VlRSfacility. Furthermore, the amendmentsestablished an eleven-member Nuclear Waste Technical Review Boardto be appointed by the President to evaluate the teelmieal and scientific validity of the programactivities. Although the amendments were intended to ease the task of the geological repository pro~p-amby limiting site charaeterizatlon activities to one site, the singling out of Nevada the only potential as site caused the State, whichstrongly opposedthat decision, to greatly increase its efforts to halt the program. Shortly thereafter, the Nuclear Waste Technical Review Board recommended that the major componentof the site characterization program at YuccaMountainbe reevaluated.

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3une 3, 1997 And statutory pro~ifion on siting a t~nporarys~oragefadlity before a site for ~ rectory the has beenrecommended tha Pre~fideot made virtually impom'ble DOE beg~nspent fuel to it for to ac~epUmce 1998. by BASIS FORD~'F.2,1MINATION When Co~gr~s passed the Nuclear WastePoliay A~t in 1982(NWPA), prescribed a complex it mdoumbersome proo~s for the ~nsUugtiaaand operation era tim-time, sta~e-of-~e-an, deep geologiofadlity for the permanent disposal of the Nafion~ spem nuclear fuel and lfigh-l~vel waste. Beeaa~se a fanility had neverbeenconstmoted such befora, either in this countryor dsewhem the world, there wasno establish~ blueprint for aahiowi~g in rids goal. Congress, n~"verthde~, e~tablish~lthe expectationth~ a repository ¢z~uldbe ~ lie..zmsed, consU'uc~:ed and operating by 3enuary31, 1998.Experlenc~ shown has that the scheduleestablished by the NWPA an operational geologic repository wasoverly optimisti~ end under~.imated for the teclmlcal, regulatoryandinstitutional challenges that would confrontsucheffort. I conclude that the Department's inability to meetthe date established by Congress the result of unavoidable ~ delay andthat the causesfor that unavoidable delayfall into s'mbroadandoverlapping ~ategories: Technical problems Regulatorydelays Roadblocks implementation interim or monitored to of retrievable storage Fundingrestri~ions Litigatiun delays Consultationrequirements Thediscussionthat follows demonstrates each of these'causescontributedto the delay. how I. TECHNICAL PROBLEMS

Asa state-of-the art s~ienfifio and engineering project grounded geosoience, in h3;drology ¯ andother soienttfic endeavors, one that mustproj~-'t .throughmathematical end modeling of fadlity performance natural and engineered era systemfor at least 10,000years, the site characterization program into many ran tedmir.al di~.dties that ]ed to unavoidable delay in commencementrepository operations. Examples of ofthe~e technical problem~ include: Ddayin development prototype dry drilling equipment.Chara~erlzafion of the of tmsamrated rocks at Yucca Mountain required the colleotion of undistu~oed samplesfi'om bomholes to 2,500feet deep. Theu-amrrant up drilling technologymethods used fo.r environmental, well, or oil field driIIing couldnot be utilized to obtainthe required water undisturbed samples. Thus, ~ first-of-a-kind drilling systemshad to be designed, procuredand reded by DOE before drilling could pro~xi.

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SMUD061145

Case 1:01-cv-00116-FMA

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June 3. 1997 Moreover, had to I~ usedas the circulating medhun, air rather than mud,to assure that samples representafiv~ the in sire rock. Air is not a parfi~terly e.fficimt were of circulation medium removingcuttings from th~ bottomof a hole~ and a ~ for revg~se~'vacuum assist s}~te~, had to b~ de~lopecL Pcm~a'afion rates wer~lowerthan ¢~pected; equipmentdevelopm~t~ was longer than anticipat~ and the cost of bpreholed_n'lling and sampling greater than expected.As a result, th~ sampling was and analysis of the rock at Yucc~ Mountain delayed. AcquisitionTechnicalSpecifications was for the LM-300 Drill Ri~, the LM-300 Vacuum Syster~ and the Venturi ReverseAir CirculationDdl[Bits, Available methods address v61canlsm faulting wereinadequate.Defining the to and potential hazardsposedby vokmnoes earthquakesrequires age-datingof .soll and ro~k and deposits. Availablemethods provedto be inadequateto chara~edze age either of the the LathropWellscinder con% volcanic upwellingnear Yu~',aMountain. the earthquake a or faulting at Yucca Mountain. This lea to uaprecedented scientific debate over the age and origin of the deposits in and aroundthe Yucca Mountain area. As a result, newagedating techniqueshad to be pioneeredfor use in the Yucca Mountain area. Several agedating techniquesweredevdoped, used and then revised basedon the scientific debate. We expect to reach closure with NuclearRegulatoryC~mmission on this issue this staff year. OCP,WM, DOE, Cheraeterizafion progress Report: YuccaMountain,Nevada, Number15, pages A52-A55,DOE/KW-0498 (Apnq 1997) Groundwater Debate--TheSz~manski Reports. The vein-like deposits of calcite and ftlica exposedin the walls of Trench14 at the Bow RidgeFault at Yucca Mountain and extending the floor of the trenchhavebeenthe subject of'extensive to scientific debate. Thedebateconcerns origin of the waterresponsiblefor depositingthe mineralsin the the veins. Mostscientists believe the deposits were formed downward by percolating rainwaterthat dissolvedcarbonate mineralsand silica as it moved throughthe soils and redeposited themwhenthe waters evaporatedat lower levels. However, somesdenfists, including Jerry S. Szymansld, scientist employed DOE Yucca a by at Mountain, believed that these deposits could have been plae~ by an upward movement of'the groundwater aquifer caused by seismic activity. OCRSV/vl FY1992.Annual Report To Conqress DOE, 20, DOE/KW-0422 (July 1993) Mr. Szymanski publishedtwo reports on this problem,in 1989and in 1992. Becauseof the potentially serious impactof the concerns raised on the suitability of Yucca Mountain as a geologicalrepository for spent fuel, DOE concluded that it wasnecessaryto accept Mr. Szymansh's recommendation "an external and independentpeer revie~v" of his for 1989report In January 1990, a five-member panel wasselected. Thereports resulting fromthe peer reviewwere completed 199l. Thosereports prompted in still further debate, and additions] reviewswereperformed, by a panel of 17 scientists at the one National Academy Sciences, and one, at the request of the NKC, the Center of of by - 5 SMUD061146

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june3, 1997

Delay in hydrologic testing at Hanford. While DOE was still t~lUtred by the NWPA to characterhe multiplesites for a possible repository, in o~der to preserve data pertaining to the local groundwate~flow system aRer shaR cons~uction at Hartford, changes had to be madein the hydrologic testing prograu~ This resulted in a dday of about one year in the exploratory schedule that shaft for site. Turthermore, in consultation the HRC, with decided thehydrologic to be conducted that tests before start e0cplomtory the of shaR construction be farmore should comprehem~ive originally than planned. delayed This shaft constru~on approximately yea~Mission for two PlanAmendment g. 7, 2. REGULATORY DELAYS

Becauseof the nature and potential severity of the risks associated with radioactive waste disposal, the d~culty of the technical challenges posed by a programdesigned to safely isolato rnateria~ 10,000 for years, theresulting cow,ceres,spent disposal and public the fuel program is subject regulation to orovct~ight a large, by perhaps unprecedented of agencies number and organiz~fiuns.brings ownperspectives Each its andexpertisethetask. challenges to The of meeting all of the applicable regulatory requirements and expectations and of attempting to build consensus wheredifferent regulators have had different approaches to the sameor related problemshave led to significant and unavoidabledelays in the Department'sability to begin to accept spent fuel for disposal. The following is a description of someof the regulatory, oversight and advisory bodies with whom must work to reach a consensus on the safety and environmental soundness ofslting DOE and constructing a repository, and someexamplesof regulatory issues that have delayed developmentof a gcologie repository. Nuclear Regulator 7 Commission, The NRCis respons~le for approving any OCRWM storage or disposal facility site and its design. It mustlicense the facility and inspect k during construction and operation. The developmentof criteria for a deep geologic disposal facility has required the NRC move to wall beyondits normalscope of activities, whichfocus primarily on engineered, not natural, systems. The Commission also is responsible for setting packaging standards and regulates the shipment and containment

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security of spent" nuclear fuel shipmants to and from commercialnuclear powezplants. Examples ofissu~ raised by the NRCthat have unavoidably delayed sit~ ~on for the g~ologic repository include: Inferred fault in the proposed location of the exploratory shaft at Yucc~ Mountain. The NRC e~pre~d concern regarding an inferred fanlt (one that appe.~rs to e~ist but eaumotb¢ de.fmitivdy d~ermiaed) the vidaity of tim in proposed location of the exploratory shafts at YuccaMoantai~ In response, DOE had to und~aikea technical asseasmant review in or6er to further study the possible fractm~ of ro~ks when sinking sha~. Pr0gres~. Report, Numbez pag~ 2, 11. Unprecedentedapplication of NRC quality assurance standards for reactors to scientific investigations for a repository. NRC regulations require DOE to impl~m~mt a quality assuran~ (QA) program for repository site ~on that is based upon the criteria in I0 CFR Part 50, Appendix whichwas B, promulgatedfor use in nuclear powerreactor license applications. NRC frees de, quality asmmmc~ all oft.hose planned and systematic actions n~.~ary to as provide adequate confidanea that tim geologic repository and its subsystems ~ perform satisfactorily in sexvica. 10 CFR60.150. Applying the NI~C'squalky assuranr~ approach for reactors to both the engineered features and the sdentific knvesfigation of natural features in a geosc~enceprogramat the cutting edge of te~knologyproved to be very difficult_ Tha quality assurance concerns of the lqRC w~re not completely resolved until 1991. OCRWM, DOE,...AnnuM Report to ~ 29, DOEIKW-0144 (April I987); QCRWM~ DOE, FY 1992 Annual Report To C.onRress 5--6, DOE/RW-0422 (Jflly 1993) Design control objections to the Site Characterization Plato The NWPA requires DOE issue a general plan for its sit~ cham~erizationactivifi~ St~don to 112(bXIXA)of the NWPA. 1988, DOE In isled a Consultation Draft Site Charact~izafion Plan (SCP)and submitt .ed it to NRC review. NR.C for infl~catcd areas of potential objection~ DOE NRC and workedto resolve these issue~ and the $CPwas issued in 198~. In July 1989, NRC issued objections to the design control portions of the SCPthat resuk~din an on-goingseries of interactions with the NRC. lvC, m'ch 1993, NRC In liRed the design control objections, allowing DOE to proc_,e~I with the Ex-ploratory Studies Facility design and construction. The three and one-half year period of delay in the start of construction following issuanc~ of the SCPoverlapped the developmentof the QAplan and was primarily ddvanby the inabllity to bring about resolution on the QArequirements for Exploratory Studies Facility co-located with a repository.

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J~3,

1997

E.S. Environmental Protection Agency. The Environmental Prote~on Agenoy (EPA) is res~rt~ble regulating off.'ire for rdes~es radioactive material repositories. NWPA, of Section 121(a). EPApromulgated such standards in 1986 (40 ~'~ Part 191), but were hdd invalid md remanded to E_PA for reconsideration. ~Namm~ Reso~rc~ ~ Council y, ]~A, 824 F.2d 1258 (1st Cir. 1987). The,Energy Pollcy Act of 1992 required EPA dwelopseparate site-specific radiation standards for a repository at Yucca to Mo~ntaiv. EPA~as not yet proposed new radiation protection standazds. Once E;PA pronmlgates them, the NI~Cmust incorporate the n~wEPA standards in its repository licensing regulations. The lack of dearly-defined standards has complicated the Department'~ ability to fo~_s its site investi~fion activities on clearly-defined regulatory

Nuclear Waste Technical Review Boreal As noted above, the 1987 amendments to the NWPA established the Nuclear Waste Techrdcal Review Board to overs~ DOE's work at Yucca Mountah'LIn the late 1980's, the Board recommended that DOE rer~ew alternatives to DOE's then-current plan to construct two exploratory sha_,~ and a small underground facility for site characterization. The Board also recommended that DOE conduct more extensive undergrotmdinvestigations than previom~lyplazmed and maximizethe use of the most modem mechardcal excavation teehn~ques and tunnel construction methods. DOE reviewed 34 options for the configuration and cortstmction of the Exploratory Studies Facility and concludedthat it should use rampsinstead of shafts for the Studies Facility. DOE also initiated procurement state-of-the-art tunnelof boring equipmenL 1~acility was not ¢omplereduntil April 1997. The significant The invrease in the extent of undergroundinvestigations undertaken since the developmentof ¯ the l~ss~on Plan in 1985has resulted in a seven-year delay from the schedule originally set in the 1985 IVlission PLan. First Report to the U.S. C~n~ress~end the U.S. SeeretaWo£ Er~ar~'v from the Nuclear Waste Technical ~view Board 12,13 (March 1990); Report to the U.S. Con~-ess and the U.S-. Secretar~ of Energy from the Nuclear Waste Technical.Reel .ew Board9-II,13 (May1991); tvfission Plan 59. Department of Interior (Bureau of Land Management, Fish and Wildlife Service, Bureau of Indlan Affairs, U.S. Geological Survey)~ The Bm-eauof Land Management(BLIV0 responsible for approval ofplaus to site waste management is fadiifies on Federal lands over which it has jurisdiaion. B!2~_has provided DOE accgss to YuccaMountainfor site investigation. As discussed below, BLM's grant of a right-ofway has been challenged at the Interior Board of Land Appeals and in court. The F'mhand Wildlife Servic~ which is responsible for implementation of the EndanguredSpedes Act, announced emergency its listing of the desert tortoise, w~chinhabits areas of Yuc~,a Mountahn, an endangeredspecies. As a result of the listing, DOE to restrict the as had a~ess to the YuzcaMountainsite, and prepare a biological assessment to evaluate the Project's potential effeas on the tortoise and alternatives for avoiding or minimizing impacts. OCRWM. Progess Report on the Scientific Inv~-..sti~ation Programfor the DOE, - 8 SMUD 061149

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Nevada Yucca Mountain Site, Number page I, DOEJRW-0292P 2, 1 R__ep...~). The Bureau ofindian Affairs isthe (BiA) Federal with agency primary reaponsl~oility with for worldng federally-recognized governments, Indian Tribal including administr~on and r;mn~ernent held tzust the ofland in by United States Indians. for BIA /sthe agency responsible for making determination particular tribes the whether Indian are affected tribes Section under 2(2)(B)of NWPA. U.S. the The Geological Survey 02SGS) serves a technical as advisor DOEand NRC. to the Under memorandttm a of understanding DOE, with USGS conducts geologic inve~gations Yucc~ of the Mountain sit~. Department Transportation of (Federal ]Railroad Administration,Federal Highway Administration, Motor Carrier Safety Program). TheDepm~ent Transportation of ('DOT) regulates the shipment commemeall radioactive material, includingspent in of nuclear fuel shippedtrader the NWPA, all modes transport. DOT respunm'ble by of is for developing enforcingregulationscovering labeling, classification, and mal-ld~g and the of all spent fuel packages, well as muting as choiceand carrier qualifications. DOT regulationson the use of preferredmtrtes for highway shipments affect the selection will of routes for OCRWM shipmentsof spent nuclear fuel and high-levd radioactive waste. TheFederal Railroad Administration (FRA)wascreated to promoteand enforce safety throughoutthe U.S. railroad system.TheOffice of Motor Carriers within the Federal Highway Adminisa'ation (FHA) administers the MotorCarrier Safety Assistance Program to enhancecommercial motorvehicle safety on the Nation's highways.This program developspolicies: standards, and procedures comply to with Federal safety and hazardous materials regulations and monitors field inspection, investigation, and enforcemem activities. Departmentof Labor (Occupational Safety and Health Administration). The OccupationalSafety and Health Administration(OSHA) regulates workerhealth and safety for workers involved construction Exploratory Facilitysite inthe ofthe Studies mad characterization Moantair~ operation reposltoE: atYucca When ofthe be, g~ns, conditions for workers all involved intransportation, storage, tempor.ary orburialthe of wastes will have beincompliance OSHA to with regulations. General AccountingO~ce.TheC-en~--A AccountingOffice (GAO) the Lnvestigative is armof Congress,headedbythe ComptrollerGeneral. Responsiblefor examining matters relating to the receipt and disbursement publicfunds, it conducts of audits and evaluations ofFedera/Government programsand ac-tivities, including OCRWM. Section 304(d) of the NWPA requires the ComptrollerGeneral to conduct an ara'tual audit of the OCRWM program_ Advisory Committeeon Nuclear Waste. The Advisory Committeeon Nuclear Waste (ACNW) established by the NRC 1988 to provide the NRC was in with independent - 9 SMUD061150

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Nevada Division of Environmental Protection and NevadaState ]gngineer. The YuccaMountain project, like other federal actions, is subject to extensive state environmental regulation. Because Nevadais an tmvaql~ host for this project, the need to obtain state environmental permits has engenderedconsiderable unavoidable delay. In 19~8 and 1989, DOE submitted appfications to Nevadafor air, underground water ~hdrawal, and underground inj~'tioa permits in order to begin site charmerizsfion at YuccaMounta~The State fa~ed to act on those applications. Instead, the State returned the permit applications to DOE the grounds that: (i) Nevadalaw madeit on iliegai to store high-level radioactive waste in Nevada,and (~) r~m~State legislative resolutions opposedthe siting of a radioactive waste repository anywhere the State and in prohibited a repositOly at Yucca Mounta~ A location was originally selected in Area 25 of the NevadaTest Site to conduct prototype drilling in order to develop a drilling system for YuccaMountain site characterization. Test drilling at YuccaMountainwas delayed because Nevadarefuel to iswae an operating permit required by Nevadaair-quality re.gulation$. In order to proceed, DOE moved the.test drilling to a site in Utah to test the prototype dry drilling equipmem. Progress Report, Number page 1 i. 1, In 1990, DOE, through the Departmentof Justice., brought suit to force the State to act on the permit applications and to prohibit Nevada from unlawfully interfering with its site characterization activities. The State's interference with site characterization continued until Mayof 1991 whenthe court ordered Nevadato process the air and underground injection permits. In July 1991, after issuance of the two permits, DOE began th~ first surface disturbing work at YuccaMountainsince 1986. In March1992, following a lengthy hearing, the State issued a water permit t6 DOE withdraw water at the Yucca to Motmtain site. Pm~ess Report Number5, pages 2-3, DOElRW..O307P-5(June 1992) 3. Roadblocks to ].mplementation of Interim or Monitored Retrievable Storage

The DepartmentrecogNzedearly in the life of the programthat it would be extremely difficult to have an operating geologic repository ready to accept spent nuclear fuel by January 31,. 1998, and it madetwo different efforts to provide for temporarystorage by that date. The first effort was rebuffed by the utilities; the second effort was blockedby Congress. In fiscal year 1994, DOE barred fi'om providing funding assistance to facilitate the separate efforts of the was Nuclear Waste Negotiator.

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A. ~edera| Interim Storage. B~inning in January 19~4, DOE offered to provide a Fcd~'al interim Storage Programto ufilifi~ as anthodz~d by Subtitle B of tim NWPA. OCRWM~ Initial Impl~-nentzfion Plan for Deplo~m~nt D0.~ 0f.~eder~l Interim Storage Facilities for Commerelal $1~ent Nuclear.Fuel DOE/RW-O003(1984); OCRWM. DOE. ImplememationPhn for Deplqymcntof Fede~'al Interim Storage Facilities fOr Commer¢~ Spent Nuclear Fuel DOFe.tRW-0019(1985); I_~d., DOE/KW-0045(1986); DOEAZWo Id. 0"120(1986); Id. DOE/RW-0186(1988). Department eor~idered a mtmber The alternative storage methods,potential sites, and transportation arrangements;it analyzed the need for FIS; and it developeda plan fOr deployment FIS, including estimated costs of and schedules. Nuclear WtL~tePOliCY Project Office, DO~ Am Federal Interim S~orage Fee Stud~/for Civilian Spent Nuele-ar Fuel: A Technical and EconomicAnalysis, DOE/S0023(1983). No utility elected to participaze in this pmgranL Thus. the program terminated in accordance with the NWPA January 1, 1990. on B. Monitored Retrievable Storage. In 1987, DOE recognized that it could not begin to dispose of spent fuel in a repository before 2003. In light of the statutory and contractual provisions calling for spent fuel acceptance to begin in 1998, the Departmentannounced that its preferred strategy was "to meet the terms of the contract ... based nn a wastemanagement system that includes an intb~ral MRS [monitored retrievable storage] facility." However,DOE prevented from siting, ennstrueting and operating an MRS was facility, first as the result of litigation initiated by the State of Tennessee, which temporarily blocked submissionof a proposal to Congressto locate a storage facility in that State, and ~bsequently by action of Congress in the 1987 amendments the NWP.A_ to Section 141 Co) of the NWPA directed DOE complete a detailed study of the need for to and feam'bility of an MRS to submit to Congresson or before June 1, 1985, a proposal and for construction madoperation of one or more MRS facilities for receiving and storing spent nuclear fuel. Pursuant to this direction, DOE completeda study on the need for an MRS timely prepared a proposal to Congressfor authorization to construct and and operate a licensed MILS Oak Ridge, Tennessee. Congressional Proposal EC-1022, at 100th Congress. The schedule proposed by DOE called for an MRS facility to be_ licensed, constructed, and operational at the OakRidge site by January 31, 1998. In !985, Tennesseesued to block the submission of the proposal to Congress. In 1986, the U.S. District Court in Tennesseegranted an injunction preventing submission of the MILS proposal to Congress. That decision was subsequently overturned in Tennessee VHerringkg.~ 806 F.2d 642 (6th Cir. 1986). The SupremeCourt denied review in 1987. Twoyears were lost in litigation. Moreover,by that time, Congressstepped in to permanently block use of the Oak Ridge site for an MKS to impose new restrictions and with respect to siting an MP~ fac'flity at any other site, thus virtually assuring that DOE would not have an operational MRS fa~ity by January 31, 1998. First, Congress nullified DOE'sproposal to site, construct and operate an MILS Oak Ridge, Tennessee. Section at

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142(a) of the amendedNWPA. Second, Congres~ linked authority to site, construct and opea-ate an MRS significant progress on the geologic repo. sitory, and provided that no to MRS could be constructed in the State of Nevada. Sections 142 and 14g of the Amended

The 1987 amendmems the NWPA to established within the Executive Branch the Offkm oftbe Nuclear Waste Negotiator, which was authorized for frye years to attempt to locate and recommend Congressional approval a voluntary eandidute site for an NIRS. for Althoughthe Negotiator's Office was reauthorized for one more year afa~ its original expiration data,/t never a~hievedits purpos~of finding a voluntary catufidam sire. The f~lure to site an MR~ likely due in part to the provision in DOE's 1994 was l;X appropriations (Energy and Water Dgvdopme~ Appropriations Act, 1994, Pub_ I. l~Io. 103-126, October 28, 1993) that prohibited DOE from providing grants to States and Tribes for the purpose of studying the fess~ty of siting an MRS. 4. Funding

OCKWlvrs waste dispo~ and storage program actlvitias are funded through fees p~id by Standard Contract holders to the Nuclear Waste Fund. The Nuclear Waste Fund ~ras established to ensure that funds would be available as needed to implementcommitments the NWPA. in I-LIL Rep. No. 785, 97th Cong~ Sass., pt. 1, at 77(1982). Congressional appropriations are 2d required, however, as a prerequisite for OCKWM expenditure of Nuclear Waste Fund monies. Congressionalappropria~ons matched t:-ndhug requests during *.-he first several years of the Program. However,deficit control legislation enacted in 1985, the Caamn~Kudman-Hollings deficit control legislation, beganto constrain funding requests and appropriations, thus resulting in unavoidable delays in the program. The Waste Fund was not exempted from the unified budget of the U.S. Governmentas a whole. FromFY 1986 through FrY 1990, DOE requested increased appropriations for site eharacterimfion, but appropriations declined from $499million to $295 million. Passage of the Omnibus Budget Reconciliation Act of 1~90 resulted in additional budget p~ssuras on the OCR.W/vI~s prograrrL Under th~s legislation, overall budget constraints on DOE dL~cretionary funds resulted in amountsrequested for OCKWM operations at levels well below amounts needed to maintain OCRW/vfs planned schedules. Further exacerbating the funding " problem, Congressappropriated amountssignificantly belowthe requested levels. The total appropriations shortfall from FY 1988 through FY1994 amountedto about $850 million. Fromtime-to-tlme, Congresshas also restricted spending on particular activities. For example, in an attempt to meet the 1998 deadline, DOE initiated innovative approaches to repository had development,such as the integration of the e~p|oratory shafts into the cons~uefionof the repository. However,the conference report accompanyingthe Department's FY 1987 - 12

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3une 3, 1997 appropriationsdirected the Department to spendany FY"1987fundsfor drilling exploratory not shm~.I-LR. l~p. No. 99-1005,99th Cong., 2d Sess. 651 (1986). This single action alorm ~lded a ~ to the schedule for sinking shaft. In 1994, OCRWM onfigured its programplanning under a methoddasignated tim Program rec, Approach orflcr to moree.ffeed, vdy deal with tim budget¢onstndms. in Congress supportedit with an b"Y1995appropriation 0f$522ir~lion. (The Administrationhad requested $532 million.) :For FY 1996, the A~onrequested $630 m~onfor OCRWM continue ~o the n~wProgramApproach,b~t Congressappropriated only $400miRionand earmarked$~5 mRlion of that for interim storag~Because themis no statutory authority to sits and constmot storage a fanilhy, the ~e FY1996 funding level was $315 million, which r~presmt~a forty percent r~dugtion the level of e.ffort fromb"Y"1995.In r~'ponse,DOE requiredto rccluc~ in was OCRWNPs Mountainoperations by on~-third. Workon wasmaccaptanc¢ activities and Yucca interim storage fa~ity desiga efforts werealso reduce. Litigation Delays As desaibedabove, someof the regulatory ddayshavealso entailed litigation_ Thespent fuel and high level radioactive waste management program been subje~ to approximately has two dozendifferent lawsuits. Many-but all-of those lawsuits werebrought by Nmrad~ not refleoting its su'~ngandcontinuing opposition the s'rfing of a spent fuel end high level radioactivewaste to disposal facility withinits borders.Regardless who of initiated the suits, however, have they .~ ,~ed considerablemanagement attention, thus diverting resources that could otherwisehave been devoted to programprogress. 1. ~Wisconsin Electric Power v, DOE, F.2d 1 (D.C. Cir. 1985) Held: Thefee Co. 778 chargedbyDOE disposal of nuclear wasteapplies only to electricity generatedby a for civilien nuclear power reaotor and sold on or aider April 7, 1983.Thefee doesnot apply to electricity that a generatingplant consumes itsd£ 2. General Electric Uranium ManagemcntCo. v. DOE. F. Supp. (D.D.C. 584 234 1984), 764 ~ F.2d (D.C. 1985) 896 Cir. Heldi court appeals exclusive The of has jurisdiction toreview adopted roles pursuantthe to NWPA:, one-time based DOE's fee on nuciear burnup disposal fuel for ofnuc!~_r fuel togenerate spent used electricityto prior April 1983 rensonable ofdiscretion. 7, was exercise 3. Nevadaex tel. Louxv. Herrington, 777F.2d529(9thCir. 1985) The Court employed e~ansive reading of NWPA an funding provisions to grant State of Nevada fundingfor pre-site characterization studies. 4. Texas v. DOEs F.2d 278 (5th Cir. 1985), cert. ~ 474 U.S. 1008 (1985) 764 Held:Designation the Seeretaryof Energy twosites in Texasas potentially by of - 13 SMUD061154

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ac~ptable ~ite~ for a nuclear w'a~erepository was not a "final order" for purposes of review under the NWPA. Court noted that desi_anation of sites would be revisited in The the repository nominationprocess. 5. Tennessee.v. HerrinNon, 806 F.2d 642 (6th. Cir. 1986) Held: The court appeals has exclusive and original jurisdiction to review actions ofthe Se~a3' of Energy regarding compliance with National Environmental Policy Ae~I)OE was not required to consult with Tennesseebefore sending Congressits proposal for location and construction of an MILS facility. 6. Nevadav, Herrin~oa, $27-F.2d 1394(9their. 1957) Hdd: The NWPA does not require that DOE provide funding to financo litigation by Nevada. 7. National Assn. ofRegulatorv Utilit~ Commissioners v, DOE,85I F.2d 1424 (D.C. Cir. 1988) Held: DOE not abuse its discretion in denying petitions for role.making for did a "notice" tentatively establishing a methodfor allocating waste disposal costs between government defense and commercial waste producers. 8. Consolidated Edison Co. of N.Y.v. DOE,870 F.2d 694 (D.C. Cir. 1989) Held: The fee payable on electricity generated and sold on or after April 7, 1983 maynot include a charge for deetricity lost in transmissionand distribution_ 9, Common.Wealth Edison Co. v. DOE,877 F.2d 1042 (D.C. Cir. 1989") Held: The court of appeals has original and exclusive jurisdiction to hear Nuclear WasteFund eases; ¯ DOE's determination that the formula calculating interest paid by utilities into the Nuclear Waste Fund is to be based on market or investment yidd of Treasury Bills instead of the lower "discount rate" was lawful. 10. Nevada v, Watldns, 914 F.2d 1545 (9th Cir. 1991), cert. denied 111 S. Ct. 1105 (1991) Held: The Secretary of Energy's decision to continue site characterization of potential radioactive waste repository in Nevadawas not unconstitutional or otherwise contrary to law;, Nevada's auempted legislative v~to of the Secretary's site charactefimtion activities stood as an obstacle to the accomplishment Congress' of purposes and objectives under the NWPA was preempted under the Supremacy and Clause. 11. Nevada v. Jamison, 918 F.2d 854 (gth Cir. 1990), cert. ~ 111S. Ct. 2052 (1991) Held: Nevadadid not have standing to challenge BLM's 1988 gram of a 13 yearright-of-way over public lands near YuccaMountain s'rte characterization. for

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