National Ass'n of Regulatory Utility Com'rs v. U.S. Dept. of Energy, s. 87-1483

• Decision Date: 28 June 1988
• Docket Number: 87-1566,Nos. 87-1483,s. 87-1483
• Citation: 851 F.2d 1424
• Parties: , 271 U.S.App.D.C. 197, 57 USLW 2043 NATIONAL ASSOCIATION OF REGULATORY UTILITY COMMISSIONERS, Petitioner, v. U.S. DEPARTMENT OF ENERGY and United States of America, Respondents. ARKANSAS POWER & LIGHT COMPANY, et al., Petitioners, v. DEPARTMENT OF ENERGY and United States of America, Respondents, The National Association of Regulatory Utility Commissioners, Intervenor.
• Court: U.S. Court of Appeals — District of Columbia Circuit

Page 1424

851 F.2d 1424

27 ERC 2161, 271 U.S.App.D.C. 197, 57

USLW 2043

NATIONAL ASSOCIATION OF REGULATORY UTILITY COMMISSIONERS, Petitioner, v. U.S. DEPARTMENT OF ENERGY and United States of America, Respondents.

ARKANSAS POWER & LIGHT COMPANY, et al., Petitioners, v. DEPARTMENT OF ENERGY and United States of America, Respondents,

The National Association of Regulatory Utility

Commissioners, Intervenor.

Nos. 87-1483, 87-1566.

United States Court of Appeals, District of Columbia Circuit.

Argued May 13, 1988.

Decided June 28, 1988.

Jay E. Silberg, Washington, D.C., for petitioners Arkansas Power & Light Co., et al.

Charles D. Gray, with whom Paul Rodgers, Washington, D.C., was on the brief, for petitioner Nat. Ass'n of Regulatory Utility Com'rs.

Michael P. Healy, Atty., Dept. of Justice, with whom Roger J. Marzulla, Acting Asst. Atty. Gen., and John A. Bryson, Atty., Dept. of Justice, Washington, D.C., were on the brief, for respondents.

Paul Rodgers and Charles D. Gray, Washington, D.C., entered appearances for intervenor, Nat. Ass'n of Regulatory Utility Com'rs, in No. 87-1566.

Before WALD, Chief Judge, and BUCKLEY and D.H. GINSBURG, Circuit Judges.

Opinion for the Court filed by Circuit Judge D.H. GINSBURG.

D.H. GINSBURG, Circuit Judge:

These cases arise out of a "Notice" published in the Federal Register by the Department of Energy. The Notice tentatively establishes a method for allocating the costs of developing, constructing, and operating nuclear waste repositories between the government and commercial producers of such waste. The National Association of Regulatory Utility Commissioners (NARUC) and Arkansas Power & Light Co. (AP & L), petitioners in these consolidated cases, challenge the Notice on both substantive and procedural grounds.

In addition, these parties appeal from the denial of their petitions for rulemaking, which urged the agency to use substantive rulemaking procedures to determine its allocation methodology and to develop payment schedules and establish interest charges for deferred payment of the government's waste disposal fees. For the reasons stated below, we find that the petitioners' challenge to the Department's "Notice" is not presently ripe for review and that the Department did not abuse its discretion in denying the petitions for rulemaking.

I. BACKGROUND

Congress enacted the Nuclear Waste Policy Act of 1982, 42 U.S.C. Sec. 10101 et seq. (1982), to establish a comprehensive program for the disposal of high-level radioactive waste and spent nuclear fuel (HLW/SNF) generated by civilian nuclear power reactors. The Act contemplates that such wastes will eventually be stored in permanent federal repositories "that will provide a reasonable assurance that the public and the environment will be adequately protected" from the hazards they pose. See 42 U.S.C. Sec. 10131(b)(1). To ensure that the costs of designing, constructing, and operating such repositories are borne by those generating the waste, the Act provides for a Nuclear Waste Fund "composed of payments made by the generators and owners of such waste and spent fuel." Id. at Sec. 10131(b)(4); see id. at Sec. 10222.

Congress delegated primary responsibility for developing and administering the waste disposal program to the Department of Energy (DOE), and more particularly, to the Office of Civilian Radioactive Waste Management (OCRWM), which the Act established within the Department. Id. at Sec. 10224. Section 302(a) of the Act, 42 U.S.C. Sec. 10222(a)(1), authorizes the Secretary of DOE to enter into contracts with generators of HLW/SNF to provide for its transportation and disposal, and specifies that "[s]uch contracts shall provide for payment to the Secretary of fees ... sufficient to offset expenditures" connected with the waste disposal program. With respect to electricity generated after April 6, 1983, the Act provides that the fee payable to the agency for waste disposal "shall be equal to 1.0 mil per kilowatt-hour." Id. at Sec. 10222(a)(2). For HLW/SNF from the generation of electricity before that date, the Act requires the Secretary to establish a one-time fee "in an amount equivalent to an average charge of 1.0 mil per kilowatt-hour" of electricity. Id. at Sec. 10222(a)(3); see General Electric Uranium Management Corp. v. Department of Energy, 764 F.2d 896 (D.C.Cir.1985) (upholding DOE's rule for computing this one-time fee).

Pursuant to this statutory authorization, DOE has entered into a standard contract with all civilian entities that generate or hold title to HLW/SNF. See 10 C.F.R. Sec. 961.11 (1988). The provisions of this contract address, among other things, schedules for the delivery of HLW/SNF to repositories, the timing of payments into the Nuclear Waste Fund, and interest on late payments. Under the terms of their individual contracts, civilian utilities paid more than $2.6 billion into the Nuclear Waste Fund from 1983 to the end of fiscal year 1986. See 52 Fed.Reg. 31508 (1987).

The Act requires the Secretary annually to evaluate "whether collection of the fee [specified in the statute] will provide sufficient revenues to offset the costs" of the waste disposal program. 42 U.S.C. Sec. 10222(a)(4). In the event that the Secretary concludes that the fee is either insufficient or excessive relative to costs, he must submit a fee adjustment proposal to Congress. The Act provides that the Secretary's proposal will become effective 90 days after it is transmitted unless either House of Congress adopts a resolution disapproving the adjustment. Id. All parties to this litigation agree that the provision allowing for a one-House "legislative veto" of the Secretary's recommendation is invalid in light of the Supreme Court's decision in Immigration and Naturalization Service v. Chadha, 462 U.S. 919, 103 S.Ct. 2764, 77 L.Ed.2d 317 (1983).

Each year since 1983, the Secretary has published an annual "Fee Adequacy Report" concluding, not unlike Goldilocks, that the statutory fee is not too high, and not too low, but just right. Perhaps in tribute to that considered judgment, no generator of HLW/SNF has ever sought judicial review of that conclusion in any of the Secretary's annual Fee Adequacy Reports.

When it passed the Act, Congress did not decide whether high-level radioactive waste resulting from atomic energy defense activities (DHLW) should be stored in the repositories developed under the Act or, alternatively, in a separate facility for such wastes alone. See 42 U.S.C. Sec. 10107(b)(1). Instead, it directed the President to evaluate the issue, taking account of "cost efficiency, health and safety, regulation, transportation, public acceptability, and national security." Id. Unless the President found, after such evaluation, that a separate repository for defense wastes was required, the Act instructed the Secretary to "proceed promptly with arrangement for the use of one or more of the [civilian] repositories" to be developed under the Act. Id. at Sec. 10107(b)(2).

The relatively simple scheme, set out above, for financing the waste disposal program was complicated on April 30, 1985, when the President determined that there was no basis for establishing a separate repository for DHLW, and directed the Secretary of DOE to arrange for the disposal of such government wastes in the repositories being developed for civilian HLW/SNF. As a result of this Presidential directive, the Secretary was obliged, under Sec. 8 of the Act, to "proceed promptly with arrangement for the use of one or more of the [civilian] repositories" for the disposal of DHLW. Id. The Act specifically provides that "[s]uch arrangements shall include the allocation of costs of developing, constructing, and operating this repository or repositories. The costs resulting from permanent disposal of [DHLW] shall be paid by the Federal Government, into the [Nuclear Waste Fund]." Id.

In the wake of the President's decision to use the civilian repositories for defense wastes, the electric utility industry has urged DOE to establish a methodology for allocating the program costs between civilian and defense users. On December 2, 1986, DOE responded by publishing a "Notice of Inquiry" setting forth its preferred method (and two alternative methods) for allocating disposal costs. 51 Fed.Reg. 43566. The Notice of Inquiry invited comments from interested parties; among the many who accepted this invitation were petitioner NARUC, and two industry associations, the Edison Electric Institute (EEI) and the Utility Nuclear Waste Management Group (UNWMG), of which petitioner AP & L is a member.

Insofar as pertinent to this case, these commenters (1) called for DOE to institute substantive rulemaking on the cost allocation methodology; (2) criticized the Department for failing to address fee payment mechanisms, interest charges, and delivery schedules for DHLW; and (3) set forth an alternative cost allocation methodology that was, in the commenters' view, more "equitable" than DOE's preferred approach. They also filed separate petitions for rulemaking, which urged DOE to establish, through substantive rulemaking, both a cost allocation methodology and procedures governing such other matters as "the timing of payments, interest charges, acceptance rates and delivery schedules," not addressed in the Notice of Inquiry. The Department denied these rulemaking petitions in letters dated August 14, 1987.

Six days later, on August 20, 1987, DOE published a Notice presenting "the Department's method for calculating the appropriate allocation of costs for the disposal of [DHLW]." 52 Fed.Reg. 31508. While this Notice set forth a general method for allocating costs, it did not include any schedule for payment of fees by the government. The agency reasoned that "[f]unding of the costs of disposal of DHLW by payment into the [Nuclear Waste Fund] must be addressed by Congress during the normal budgetary and appropriation process." Id. at 31510. The...