DOE agrees to pay $23.6 million to Energy Northwest

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The Department of Energy has agreed to pay Energy Northwest almost $23.6 million in damages for its continued failure to accept used nuclear fuel.

It also has agreed to an annual claims process to continue to pay costs through 2016 without requiring Energy Northwest to prove damages in federal court.

"This has been a long journey for our legal team," said Bob Dutton, Energy Northwest attorney.

The agreement should save more than $1.2 million in legal costs by keeping the matter out of court, according to Energy Northwest.

Earlier, DOE was required to pay Energy Northwest $48.7 million in damages for the construction and licensing of a used fuel storage area at its nuclear power plant near Richland, the Columbia Generating Station. That award was for fuel storage costs from 1998 through August 2006.

The new $23.6 million settlement covers costs from August 2006 through June 2012.

DOE agreed in 1983 to dispose of used commercial nuclear fuel from Energy Northwest and other U.S. nuclear utilities starting in January 1998. Energy Northwest has paid more than $100 million in fees since 1983 to cover spent fuel disposal by DOE.

The proposed Yucca Mountain, Nev., national repository was scheduled to begin accepting used fuel in 1998. But when it became clear by 2001 that DOE would not have a federal repository for many years to come, Energy Northwest began building a secure, outdoor storage for its used fuel.

"We can safely store the fuel indefinitely on site — it takes up little space," said Mark Reddemann, Energy Northwest chief executive. "That doesn't lessen the federal government's legal obligation to nationally develop and manage a used fuel process."

The $23.6 million settlement from DOE announced Thursday by Energy Northwest stems from a July 2011 lawsuit filed by Energy Northwest.

It requested $24.9 million in costs for storing fuel from August 2006 through June 2012 and was awarded $19.3 million by a court ruling, with the difference to be determined at trial.

Instead, DOE agreed to pay almost $4.3 million more, bringing the settlement for the almost six years ending in June 2012 to almost $23.6 million.

"This is another big win for Northwest ratepayers," Reddemann said.

Energy Northwest now will begin submitting annual claims for fuel storage costs to DOE, with the first claim for July 2012 through June 2014. If DOE and Energy Northwest disagree on allowable costs, the matter will be decided through binding arbitration.