Indiana Michigan Power Co. v. Department of Energy, s. 95-1279

Decision Date23 July 1996
Docket NumberNos. 95-1279,95-1321 and 95-1463,s. 95-1279
Citation88 F.3d 1272,319 U.S.App.D.C. 209
PartiesNuclear Reg. Rep. P 20,578, 43 ERC 1033, 319 U.S.App.D.C. 209, 65 USLW 2092, 170 P.U.R.4th 564, 26 Envtl. L. Rep. 21,406 INDIANA MICHIGAN POWER COMPANY, et al., Petitioners, v. DEPARTMENT OF ENERGY and United States of America, Respondents, Northern States Power Company (Minnesota), et al., Intervenors.
CourtU.S. Court of Appeals — District of Columbia Circuit

On Petitions for Review of an Order of the Department of Energy.

Jay E. Silberg, argued the cause, for utility petitioners/intervenors, with whom Michael A. Carvin, Vincent J. Colatriano, George L. Edgar and Michael A. Bauser, Washington, DC, were on the briefs. Don L. Keskey, argued the cause, for state petitioners, with whom Thomas L. Casey, Henry J. Boynton, Lansing, MI, Lester M. Bridgeman Mobile, AL, Patricia M. French, Providence, RI, Jocelyn F. Olson, St. Paul, MN, Robert S. Golden, Jr., Hartford, CT, John W. Malley, Jr., Lawrence F. Barth, North of Harrisburg, PA, John F. Povilaitis, Harrisburg, PA, Edward W. O'Neill, San Anselma, CA, Roger W. Steiner, Altamonte Spg. FL, Barbara E. James, Madison, WI, Lawrence G. Malone, Albany, NY, John S. Gillig, Frankfort, KY, Robert D. Vandiver, Jackson, TN, Richard C. Bellak, Tallahassee, FL, Mary W. Cochran, Paul R. Hightower, Little Rock, AR, John W. Campbell, L. Steven Grasz, Lincoln, NE, Michael A. Gross, Judith S. Yogman, Boston, MA, Bryan G. Moorhouse, Baltimore, MD, Susan S. Miller, Kevin P. Maloney, Buffalo, NY, Charles F. Walker, Wilmington, DE, Diane Munns, Des Moines, IA, Michael B. Hare, Baltimore, MD, Charles L. Moulton, Little Rock, AR, Wynn E. Arnold, Concord, NH, Caroline Vachier, Helene S. Wallenstein, Newark, NJ, James E. Ryan, Jr., Richmond, VA, James R. Carroll and Ben Stead, Des Moines, IA, were on the briefs. Robert T. Stephan, Wichita, KS, Larry G. Watterworth, Lansing, MI, Jeffrey A. Keevil, Jefferson City, MO, James E. Weging, Chicago, IL, Robert W. Parnacott, Topeka, KS, Douglas E. Eidahl, Pierre, SD, Harvey Y. Morris, San Francisco, CA, and James R. Anderson entered appearances.

John A. Bryson, Attorney, United States Department of Justice, argued the cause, for respondent, with whom Lois J. Schiffer, Assistant Attorney General, Martin W. Matzen, Attorney, and Marc Johnston, Deputy General Counsel, Washington, DC, United States Department of Energy, were on the brief.

Before: WILLIAMS, GINSBURG and SENTELLE, Circuit Judges.

Opinion for the Court filed by Circuit Judge SENTELLE.

SENTELLE, Circuit Judge:

The Nuclear Waste Policy Act ("NWPA") of 1982 authorized the Secretary of Energy ("Secretary") to enter contracts with owners and generators of high-level radioactive waste and spent nuclear fuel ("SNF") under which the private parties were to pay the Secretary statutorily imposed fees in return for which the Secretary, "beginning not later than January 31, 1998, will dispose of the high-level radioactive waste or [SNF] involved...." 42 U.S.C. § 10222(a)(5)(B) (1994). Petitioners are utilities and state commissions who paid fees to the Secretary under the statute. They seek review of the Department of Energy's ("DOE") final interpretation declaring that the Department has no obligation to perform its part of the contractual bargain. We conclude that the Department's interpretation is not valid and we therefore allow the petition for review.

Background

In the NWPA, Congress created a comprehensive scheme for the interim storage and permanent disposal of high-level radioactive waste generated by civilian nuclear power plants. NWPA establishes that, in return for a payment of fees by the utilities, DOE will construct repositories for SNF, with the utilities generating the waste bearing the primary responsibility for interim storage of SNF until DOE accepts the SNF "in accordance with the provisions of this chapter." 42 U.S.C. § 10131(a)(5).

The NWPA requires the utilities to enter into standard contracts with DOE for the disposal of the waste. According to the statute, the contracts shall provide that:

(A) following commencement of operation of a repository, the Secretary shall take title to the high-level radioactive waste or spent nuclear fuel as expeditiously as practicable upon the request of the generator or owner of such waste or spent fuel; and

(B) in return for the payment of fees established by this section, the Secretary, beginning not later than January 31, 1998, will dispose of the high-level radioactive waste or spent nuclear fuel as provided in this subchapter.

42 U.S.C. § 10222(a)(5). The final standard contract adopted by DOE, following notice and comment, states that "[t]he services to be provided by DOE under this contract shall begin, after commencement of facility operations, not later than January 31, 1998 and shall continue until such time as all SNF ... from the civilian nuclear power reactors specified ... has been disposed of." 10 C.F.R. § 961.11, Art. II (1996).

In 1993, several states and utilities became concerned about DOE's ability to meet its obligations under the NWPA. Therefore, they requested DOE to address its responsibilities under the NWPA, particularly section 302(a)(5), 42 U.S.C. § 10222(a)(5), and the January 31, 1998 deadline. Daniel Dreyfuss, Director of DOE's Office of Civilian Radioactive Waste Management, responded in a letter that DOE "does not have a clear legal obligation under the [NWPA] to accept [SNF] absent an operational repository or other facility." In February 1994, DOE's Secretary, Hazel O'Leary, indicated that, while at the time NWPA was enacted DOE "envisioned that it would have a waste management facility in operation and prepared to begin acceptance of [SNF] in 1998," DOE subsequently concluded it did not have "a clear legal obligation under the [NWPA] to accept [SNF] absent an operational repository or other facility constructed under the [NWPA]."

To address this issue, on May 25, 1994, DOE published a Notice of Inquiry on Waste Acceptance Issues ("NOI"), requesting the views of affected parties on matters relating to the continued storage of SNF at reactor sites beyond 1998. 59 Fed.Reg. 27,007 (1994). DOE presented its preliminary finding that it had "no statutory obligation to accept [SNF] beginning in 1998 in the absence of an operational repository or other facility constructed under the [NWPA]." Id. at 27,008. DOE did note, however, that the terms of the Standard Contract may have created such an expectation. Id.

On June 20, 1994, utility petitioners ("utilities") and state petitioners ("states") filed petitions for review against DOE. This Court dismissed the petitions, finding that the NOI did not constitute final agency action. Northern States Power Co. v. DOE, Nos. 94-1457, 94-1458, 94-1574, 1995 WL 479714 (D.C.Cir. July 28, 1995) (order granting motion to dismiss case).

On April 28, 1995, DOE issued its Final Interpretation. Final Interpretation of Nuclear Waste Acceptance Issues, 60 Fed.Reg. 21,793 (1995). In the Final Interpretation, DOE stated that it would not be able to begin taking SNF by January 31, 1998, the date established by the NWPA. Id. at 21,793-94. DOE concluded that it did not have an unconditional statutory or contractual obligation to accept high-level waste and spent fuel beginning January 31, 1998 in the absence of a repository or interim storage facility constructed under the NWPA. Id. The agency also determined that it had no authority under the NWPA to provide interim storage in the absence of a facility that has been authorized, constructed and licensed in accordance with the NWPA. Id. at 21,797. Finally, DOE declared that, even if it did have an unconditional obligation under the statute, the Delays Clause of the Standard Contract would provide an administrative remedy for DOE's failure to satisfy an obligation under the statute. Id.

Petitioners and intervenors then filed their petitions for review of the Final Interpretation.

Analysis

In reviewing an agency's construction of a statute entrusted to its administration, we follow the two-step statutory analysis established in Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 842-43, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984). First, we ask whether Congress has spoken unambiguously to the question at hand. If it has, then our duty is clear: "We must follow that language and give it effect." Wisconsin Elec. Power Co. v. DOE, 778 F.2d 1, 4 (D.C.Cir.1985). If not, we consider the agency's action under the second step of Chevron, deferring to the agency's interpretation if it is "reasonable and consistent with the statute's purpose." Nuclear Info. Resource Serv. v. NRC, 969 F.2d 1169, 1173 (D.C.Cir.1992) (quoting Chemical Mfrs. Ass'n v. EPA, 919 F.2d 158, 162-63 (D.C.Cir.1990)). We now apply that review to the Department's interpretation of section 302(a)(5)(B).

Section 302(a)(5)(B) states that "in return for the payment of fees ... [DOE], beginning not later than January 31, 1998, will dispose of the [SNF]...." The states and utilities contend that this provision means what it says: in return for the payment of fees to the utilities, DOE will begin accepting SNF not later than January 31, 1998. DOE argues that this language does not in fact require it to begin to dispose of SNF by January 31, 1998; rather, the agency contends that this obligation is further conditioned on the availability of a repository or other facility authorized, constructed, and licensed in accordance with the NWPA. DOE contends that this is the only interpretation possible when one examines the statute as a whole.

To support this interpretation, the Department first argues that Congress's use of the term "dispose" in section 302(a)(5)(B), which provides that DOE "will dispose of the high-level radioactive waste or spent nuclear fuel involved as provided in this subchapter," presupposes the availability of a...

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