Kansas utilities awarded fee for Wolf Creek nuclear storage

The U.S. Court of Appeals for the Federal Circuit has largely upheld a lower court ruling that granted several million dollars in damages to owners of the Wolf Creek nuclear plant due to the Department of Energy’s (DOE) continuing failure to take control of nuclear waste from Wolf Creek.

The Kansas companies that own Wolf Creek are part of a long line of nuclear utilities that have successfully sued DOE over failure to take control of spent nuclear fuel and store it long-term. Early in the Obama Administration DOE elected to stop its efforts to permit the Yucca Mountain nuclear waste repository in Nevada.

The split decision on July 12 affirmed in part the earlier ruling Judge Christine Miller in the U.S. Court of Federal Claims.

Wolf Creek is a pressurized water reactor near Burlington, Kan., with a rated capacity of roughly 1,150 MW. Wolf Creek is 47% owned by Westar Energy (NYSE: WR) subsidiary Kansas Gas and Electric (KG&E), and 47% by Great Plains Energy (NYSE: GXP) unit Kansas City Power & Light (KCPL), and 6% by Kansas Electric Power Cooperative.  

In June 2010, the U.S. Court of Federal Claims conducted a nine-day trial and awarded the Kansas companies $10.6m.

In determining the amount of damages, the trial court correctly did not award damages for cost of capital and for the costs associated with researching alternative storage options for spent nuclear fuel (SNF) and high level radioactive waste (HLW), the Federal Circuit held. The trial court also appropriately reduced the Kansas companies’ damages by the value of the benefit they received as a result of their mitigation activities.

However, the trial court erred by not accepting the Kansas companies’ reasonable method for calculating overhead costs, the Federal Circuit panel ruled in a majority decision.

The 1980s-era Nuclear Waste Policy Act required nuclear power utilities and their ratepayers to finance long-term storage of spent fuel. The act required DOE to begin to dispose of the material no later than Jan. 31, 1998.

Re-rack project helped Wolf Creek reactor

Wolf Creek was forced to create more available space in its wet storage pool for used fuel rods. An engineering report concluded that the best three options were re-racking the storage pool, dry cask storage, or a combination of the two. Wolf Creek ultimately decided to re-rack.

As a result of the changes Wolf Creek was able to achieve the same energy output from the reactor with fewer fuel assemblies.

The Kansas companies appealed the trial court’s reduction in damages for the supposed benefit they received from the new fuel racks.

The Kansas companies claim the trial court erred in reducing their damages by $800,000 for the benefits they received from the re-rack project. The project enabled the owners to use higher-enrichment fuel and purchase fewer fuel assemblies.

The Federal Circuit said the trial court was correct in reducing the damages for the side benefit.

The Federal Circuit case number is 2011-5044, -5045.

About Wayne Barber 4201 Articles
Wayne Barber, Chief Analyst for the GenerationHub, has been covering power generation, energy and natural resources issues at national publications for more than 20 years. Prior to joining PennWell he was editor of Generation Markets Week at SNL Financial for nine years. He has also worked as a business journalist at both McGraw-Hill and Financial Times Energy. Wayne also worked as a newspaper reporter for several years. During his career has visited nuclear reactors and coal mines as well as coal and natural gas power plants. Wayne can be reached at wayneb@pennwell.com.