Starting next year, Pacific Gas and Electric Co. customers could see a modest decrease in their electricity bills as a result of a $266 million settlement received from the federal government.
The utility received the payment from the U.S. Department of Energy in November after prevailing in a lawsuit. PG&E filed the suit over the agency’s failure to open a national repository for the storage of high-level nuclear waste.
The savings will vary from customer to customer, but if PG&E's plan is approved by the California Public Utilities Commission, the average household in San Luis Obispo could pay 46 cents less a month, or $5.57 a year, from 2014 through 2016, said Blair Jones, PG&E spokesman.
Like all nuclear utilities, PG&E pays a per-kilowatt-hour fee into the federal Nuclear Waste Fund to cover the cost of storing highly radioactive used reactor fuel assemblies at a centralized location. However, the federal government missed its deadline to begin taking spent fuel by 1998, and a planned national storage facility at Yucca Mountain in Nevada was canceled.
As a result, all of Diablo Canyon nuclear power plant’s spent fuel is stored onsite, most of it in pools, but some of it in large above-ground dry cask storage containers. The utility also stores a small amount of fuel in casks at its defunct Humboldt Bay plant in Northern California.
PG&E joined other nuclear utilities in suing the federal government to recover the costs associated with storing fuel onsite that should have been sent to a national repository.
PG&E’s settlement totaled $266 million and covers the period from 1998 through 2010, Jones said. After litigation costs, the amount returned to ratepayers will be just under $250 million.
With the cancellation of Yucca Mountain, the Department of Energy embarked upon a process of finding one or more new locations for storing fuel. That process is expected to take decades to complete.
A claims process has been set up for utilities to recover fuel-storage costs incurred from 2011 through 2013, Jones said. According to the Nuclear Energy Institute, the industry’s lobbying group, utilities pay $750 million annually into the Nuclear Waste Fund, which contained an unspent balance of more than $26 billion as of 2012.
A rebate for PG&E customers
When: Rebates will be given from 2014 through 2016
Why: Rebate program was created after PG&E prevailed in a lawsuit against the federal government over nuclear waste storage