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WISCONSIN ELEC. POWER, CO. v. HODEL

July 17, 1984

WISCONSIN ELECTRIC POWER, COMPANY, et al., Plaintiffs,
v.
DONALD P. HODEL, Secretary, Department of Energy, Defendant


Oberdorfer, U.S.D.J.


The opinion of the court was delivered by: OBERDORFER

OBERDORFER, U.S.D.J.

 This matter is before the Court on a motion to dismiss and on cross-motions for summary judgment. Plaintiffs are a number of electric utility companies who use or plan to use nuclear reactors to generate electric power in conformity with the Nuclear Waste Policy Act, 42 U.S.C. § 10101 et seq. ("the Act"). They seek judicial review of the standard form of nuclear waste disposal contract adopted by the Secretary pursuant to the Act after notice and comment in the rulemaking proceeding. Specifically, they challenge as unlawful, arbitrary, capricious, and an abuse of discretion contract provisions for calculation of the fee they must pay to the Department of Energy for the cost of removing nuclear waste that they create because the fee base would include electricity generated by a utility's reactor system, but consumed by the utility to operate its own plant and not sold directly to customers of the utility.

 I.

 Section 10222(a)(1) of the Act authorizes the Secretary ("in the performance of his functions under this chapter") to contract "with any person who generates or holds title to high-level radioactive waste, or spent nuclear fuel . . . for the . . . disposal of such fuel." Under this section the contracts must provide for payment to the Secretary of fees sufficient to offset expenditures incurred with respect to disposal.

 The portion of the statute specifically at issue here (42 U.S.C.A. § 10222(a)(2)) provides that

 
For electricity generated by a civilian nuclear power reactor and sold on or after the date 90 days after January 7, 1983, the fee under paragraph (1) shall be equal to 1.0 mil per kilowatt hour.

 The legislative history is substantially as follows. In 1983, Congress enacted the Nuclear Waste Policy Act, 42 U.S.C. § 10101 et seq. Findings stated by Congress as its predicate for the Act, include, among other things, the following:

 
While the Federal Government has the responsibility to provide for the permanent disposal of high-level radioactive waste and . . . spent nuclear fuel . . ., the costs of such disposal should be the responsibility of the generators and owners of such waste and spent fuel.

 42 U.S.C.A. § 10131(a)(4). Part A of Subchapter I of the Act states one of its purposes to be the establishment of

 
a Nuclear Waste Fund, composed of payments made by the generators and owners of such waste and spent fuel, that will ensure that the costs of carrying out activities relating to the disposal of such waste and spent fuel will be borne by the persons responsible for generating such waste and spent fuel.

 42 U.S.C.A. § 10131(b)(4).

 To develop a form of standard contract, as contemplated by section 10222(a), the Secretary turned to rulemaking "because this process presents the best opportunity to interested persons, particularly the affected parties, to participate . . . ." 48 Fed. Reg. 5459 (1984). To that end, the Secretary published a proposed rule. He recited as an element of the legislative background that:

 
The key concept in the statutory financing mechanism is that owners and generators . . . are required to bear the full costs of nuclear waste disposal activities by paying fees into ...

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