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The Joint Legislative Committee on Oversight of the Low Level Radioactive Waste Compact Facility met on September 6 to consider and make recommendations relevant to costs, fees, and any other matters the committee determines are relevant to the compact facility and its oversight.

 

This report is intended to give you an overview and highlight of the discussions on the various topics the committee took up. It is not a verbatim transcript of the hearing, but is based upon what was audible or understandable to the observer and the desire to get details out as quickly as possible with few errors or omissions.

 

Panel 1 – Compact Commission & Andrews County

Leigh Ing, Texas Low Level Radioactive Waste Disposal Compact Commission

  • Gives overview of compacts in general, e.g. when two states come together on a particular issue
  • Radioactive Waste Compact designates a disposal facility in one state & other states can dispose of radioactive waste at that facility
  • Once compact has been formed, it is exempt from Interstate Commerce Clause, thus can restrict waste from certain sources
  • Not for disposal of high level waste like spent nuclear fuel, more resins and trash that could come out of a waste facility, also potentially material from x-ray machines
  • Provides background on this facility, developed for disposal as a result of increasing low level waste from nuclear development after World War II, current facility became important after closures of multiple waste facilities over decades
  • This facility is able to import waste from outside of the compact itself, e.g. all 50 states, Puerto Rico, and D.C.
  • Commission authorizes import of waste from these outside sources, meets 6 times/year to discuss these imports
  • Vermont paid $25 million to TX for disposal rights, also export some material, but not much
  • Commission is also developing contingency plan should the facility ever close, important to allow facility to re-open safely and quickly, Commission is ready to work with TX and whoever they feel is appropriate to develop plan according to TX’s wishes

 

Judge Richard Dolgener, Andrews County

  • Andrews County partnership was driven be County personnel involved in economic development
  • County is very versed in oil and gas development, County in general is knowledgeable of hazardous waste management
  • Community in Andrews has always been behind this, Andrews used a GO bond mechanism, received $75 million to build this facility
  • Bond passage was litigated, court allowed bonds to go continue & facility was developed
  • Facility provides an important place for waste disposal, before development there was not and waste lingered in areas around the state

 

Questions for Panel 1

  • Pickett – Are you talking about Class A or B & C for the contingency plan?
    • Ing – We would envision it being for Class A, B, & C, but important to work with TX for their vision of the contingency plan
  • Pickett – I’ve been told Class A is a losing money proposition
    • Contingency plan we envision is for Compact Facility only, which is Class A, B, & C
    • Some of the thinking in this would be if any material would go to other facilities
  • Pickett – Obviously contingency plan has to do with dollars, would need bonding now, are you going to have specific recommendations to this body or the legislature on changes to the contingency plan?
    • Contingency plan developed so far is limited, currently covers halt of import and import agreements; have not spoken to what replacement would look like, etc. until discussed with TX
  • June Tierney, Committee Member – Your facility has statutory mandate to develop a contingency plan, you have done some work, but not developed completely, & one of the challenges is what will go into it correct?
    • Yes, we do have a legal mandate to develop the plan
  • Pickett – Do you have any access to the funding that we hold for this?
    • We do not,
  • Pickett – So it is still two-step, you need to discuss with TX over funding before this can proceed
    • Correct, we do not have access to funding held
  • Tierney – As far as the statute, TX does not have a role in developing this plan, important that Compact Commission understands need to work with the state
  • Seliger – Why has the plan not been composed and put into place if the facility was already created
    • We have been in process of developing this plan, felt that it was important to discuss with TX on areas that would involve TX funding like reopening of the facility
  • Seliger – TX holds all of the responsibility regardless, mandate is not a grey area & I’m surprised that in 13 years since creation this has not been more conclusively addressed
  • Seliger – What parts have been decided?
    • Halt all imports, no more import agreements, decided to put reopening portions on hold
  • Seliger – 13 years later we have not had this substantive discussion, have not heard of this in my office & my district contains Andrews County
    • Part of this is that while the statute was created in 2005, the facility was created in 2012 & there was no need for a plan
    • Part of the thinking is that this is something this committee would look at, difficult to identify appropriate people in TX to speak with
  • Seliger – Are you prepared to make recommendations on who ought to be involved?
    • Can make suggestions, but ultimately TX will decide who is party to this
    • Area leadership would be key
  • Brandon Hurley, Committee Member – We have tried to identify who is important to this conversation, did not want to overstep bounds and dictate to TX who should be involved
  • Seliger – While I realize you don’t have the authority to dictate to state agencies, you do have the authority to look at this comprehensively, would hope that between now and Jan 1 you would determine how you would address the contingency plan
  • Seliger – No one has contacted me to determine appropriate place and time, I would like to see elements of the contingency plan by Jan 1; if there needs to be some statutory authority to do this then I would hope you are ready to discuss this
  • Hurley – Ready to speak whenever the legislature is, have been sensitive to stepping on any toes
  • Huffines – Tell me about the bonds that are up, how much capacity, etc.?
    • Judge D – TCEQ and the operator has these
  • Huffines – My understanding is about $70 million is available to be called on bond
    • Ing – TCEQ and operator should be able to respond this
  • Birdwell – A compact finds it itself between federal and state constitutions in authority, my concern is that we’ve given you authority, e.g. you are already supreme to the individual state of TX and the individual state of Vermont
  • Hurley – I don’t know that there is consensus on this, clearly states ceded authority to compact, but there is a financial aspect to the contingency plan & we do not have access to state funds; TCEQ will need to decide on fund use for closure & continued operation of the site
  • Seliger – It is my understanding that the Compact Commission has precisely the authority granted in the statute and no other authority; responsibility of the state to develop the contingency & my concern is who is going to take the lead?
  • Seliger – TCEQ could develop, but should include Commission
  • Pickett – My recommendation to the Commission would be to put together a very definitive contingency plan and let us review; could identify in footnotes where Commission authority is lacking, etc.
  • Tierney – Speaking here about comity, Commission has taken steps they are comfortable with; unanswered question is who will take lead on reviewing the contingency plan, incumbent on TX and Vermont to decide who the Commission should be discussing this plan with
  • Birdwell – My feeling is that there is no issue of closure of facility due to public safety concerns, more that closure could occur due to financial concerns
  • Birdwell – I think the major issue is how capacity is continued close to perpetuity in regard to TX and Vermont
    • Ing – We do take into consideration capacity for Vermont and TX generators when discussing import authorizations from areas outside of the state
  • Birdwell – How do we balance unlimited access to compact states given that we have granted import authorizations? Are we trading time for space?
    • Unlimited is not a realistic term when you discuss capacity, but fortunately this is not an immediate concern; facility is new and currently at low volume
    • Also understands that facility will not need unlimited capacity as you cannot generate unlimited waste
  • Birdwell – I assume the facility is arrayed to segregate Class A, B, & C waste
    • Would need to differ to TCEQ and facility operator
  • Birdwell – Is there any probability that radioactive waste decays enough to be disposed of as regular waste?
    • 275k curies/year by TX limits, have not needed to dispose of decayed waste elsewhere & so have not contemplated this yet
  • Seliger – Important to distinguish that there is a distinction between disposal and storage, in some cases we are speaking of half-life of 24,000 years; not everything will be able to be disposed elsewhere
  • Huffines – Did you have a role in reviewing or approving the facility operator when the license changed hands?
    • No
  • Birdwell – Hopes that Judge D does not consider being called to Austin a punitive measure
    • Judge D – Can have conversations now, important to remember facility is a secure disposal site & technology can change; not concerned from a health & safety standpoint
  • Seliger – Invites committee members to visit the site; there is a lot going into this facility to ensure safe disposal

 

Panel 2 – Texas Commission on Environmental Quality

Brent Wade, Texas Commission on Environmental Quality

  • Primary role of TCEQ is establishing requirements the facility operator, WCS, must meet

 

Bobby Janecka, Texas Commission on Environmental Quality

  • Briefly discusses TCEQ’s radioactive licensing and oversight authority

 

David Timberger, Texas Commission on Environmental Quality

  • Contract review process is being changed currently, currently looking at how operator meets requirements

 

Greg Yturralde, Texas Commission on Environmental Quality

  • Facility is required to remit 6 fees on an annual basis mostly based on waste received
  • Facility is required to have financial assurance for 5 different permittees or licenses
  • Gives overview of corrective actions ad bond actions that can be taken, money drawn from low level storage would be deposited into perpetual Environmental Account

 

Questions for Panel 2

  • Seliger – Are you going to be prepared by Jan to give input on the contingency?
    • Wade – Absolutely we can, path of continued operation is a much larger conversation; have discussed securing the site
  • Pickett – Who takes action on the assurance bond? TX is named here; does TX immediately step in and drawn down the assurance dollars?
    • TCEQ has the authority and would step in
    • Yturralde – TCEQ draws down assurance all the time, have done similar in this past
  • Pickett – and the fact that you have personnel on site means you would know and take action
    • Yturralde – We can draw down money and get it in state possession in a day or two
  • Tierney – You have environmental quality expertise, but you don’t have management expertise for disposing low level waste, correct?
    • Wade – This is probably accurate
  • Tierney – You have drawn down assurance for cleaning up contaminated sites, but not necessarily for operation of a disposal site
    • Yturralde – Correct, dollars cannot be drawn for operations
  • Tierney – Where in the TX government would the requisite competency exist to manage the facility if the operator walked away?
  • Birdwell – You have discerned the challenge facing us; there is no safety question for the facility, more the financial business model of having WCS operate this facility
  • Birdwell – If WCS cannot be financially solvent TX has 2 choices, one is to operate the site with TX as the primary operator; contingency question revolves on what TX does if WCS cannot operate the facility
  • Tierney – Have never had questions of safety at the site, contingency language does speak to all aspects however; would like the regulatory framework to be tailored for any actor who may operate the facility and not just one
  • Huffines – These surety bonds, are these a federal requirement?
    • Yes, requirement for the maximum that can be held is federal, TX can narrow it down through statute
  • Huffines – Bonds can only be used for closure, correct?
    • Yes, or for corrective actions
  • Huffines – So in a bankruptcy we would not be able to use these bonds to continue operations?
    • We would not be able to sue them for operations, only available to close facility eventually
  • Huffines – What is the cost of TCEQ oversight for this facility?
    • Wade – FY17 @360k
  • Huffines – Facility is operated well and certainly isn’t a safety issue; important to remember that TX would not be required to step in and operate the facility, could temporarily close the facility until another operator is found
  • Tierney – Not sure about this, Vermont is certainly expecting to be able to continue to store the waste at the facility; not clear that TX alone has authority to close
  • Huffines – This is something we should be more involved in as a state
    • Yturralde – Had to go through initial bond approval for the site
  • Huffines – Bonds are just done through a bonding company; asks after the license holders
    • We want to ensure that we have financial surety in place to close facility upon permit transfer
    • Wade – Most of our oversight focused on ability to continue safe operations & comply with license conditions
    • Janecka – WCS owned the license, but owners shifted; no change from our perspective
  • Huffines – Contingency plan takes on a whole different perspective if we are charged to continue operations
  • Seliger – TX has an obligation to fulfill contract requirements; contractors may change, but the obligation doesn’t
  • Seliger – Important to remember there is a lot of material here that is not compact waste
  • Tierney – There are questions here about who would step in and operate the facility
  • Hurley – Is it TCEQ’s position that they state of TX has the authority to contract with a third party to operate the site?
    • Wade – Haven’t had discussions on this, should be part of the ongoing discussion
  • Hurley – Is it TCEQ’s position that TCEQ does not have the capacity to operate site in any long-term way?
    • This is correct
  • Hurley – IS there capacity at the site to store Vermont waste until these questions could be determined if operator needed to change?
    • Not sure this has been contemplated, would need to look at how much room & what is available
  • Hurley – There is storage capacity at this site, so it is mostly a question of if there is enough at the site to handle this contingency
  • Huffines – Do you know if these bonds could be changed and what they could be used for?
    • Yturralde – As of now the bonds cannot be changed
  • Pickett – Could the perpetual accounts be used for operations?
    • Account 88 can be used, about $30 million, perpetual care account could be changed to allow for operations
  • Pickett – Seems like we are working on the contingency plan now, resources are available; would be surprised if some of this language wasn’t in the compact itself
  • Pickett – We do have funds available
    • Yes, in addition to accounts, there is ~$13 million sequestered in GR
  • Tierney – Getting some clarity that these are conversations that Commission needs to have with controllers of these accounts, have some concern that funds generated from this site are not site aside for facility operations in case of emergency; my understanding is these accounts can be depleted
  • Pickett and Tierney discuss interests of Vermont and TX, both assume each other’s states would enter into preferable agreements for their states
  • Seliger – Were the funds for the contingency set out in statute?
    • Based on federal NRC, set out in TX statute
  • Tierney – Getting muddled in my mind, asks for explanation of funds
    • Janecka – WCS is required to provide some assurance if they walk away, Perpetual Environmental Care account is contingency money set aside & WCS pay ins, also a 5% fee on every radioactive licensee that flows into this as well; this is for clean up
  • Pickett – But we also have surety bonds, my point is that there is contingency money available; wondering is any funds outside of surety bonds can be used for operations, if no then this should be considered as part of the contingency plan
  • Birdwell – Does TCEQ establish rates aside from disposal at the compact facility, how does TCEQ establish the rate
    • Wade – TCEQ was directed to establish the rate and put it into rule, was originally based on a variety of assumptions; interim rate was established and contemplated that hearings would determine final rate
    • Interim rate became the final rate, have now had benefit of time to see actual effect of rate & have found that rate should likely be different for some categories or removed for others; can provide copy of proposed rate change
  • Birdwell – So we’ve been waiting on contingency plan for 12 years, rates were set 10 years; just as adaptive as contingency needs to be, rates need to be as well
  • Birdwell – TCEQ sets the rate & TX has the ability to accept out of compact waste has placed us in a competitive market, compact does not bind TX facilities necessarily; so you are setting the rate with an eye to other markets around the country, correct?
    • Correct
  • Birdwell – Asks after rate setting
    • Rate establishes a ceiling for in compact waste and a floor for out of compact waste
  • Birdwell – Other storage facilities can immediately create a rate in response to our rate setting, can lead to competitive market where Texas has too high a rate & would lead to a situation where facility is not financially solvent
    • Janecka – Constrained to set rates based on anticipated waste and costs
  • Tierney – Compact is modeled on a utility-style regulation; rate is set with he assumption that there is not a wider market
  • Seliger – Rate was set with the idea that one of the biggest drivers would be industrial/environmental safety; market is very small & electric generators have capacity to store material on their sites
  • Birdwell – Is there a remedy in place for low out of compact rates?
    • Timberger – Had a situation with shipments from out of compact sources that feel below the rate, put a process in place for WCS to look at 10 past shipments and ensure average does not dip below compact rate
    • We are requiring in contract a process to reach back and ensure rates are above this threshold
  • Tierney – How frequently have you not approved contracts?
    • Have not rejected any, but 6-12 have been withdrawn, some resubmitted
  • Tierney – Do you feel you enough experience in this review process that you have been able to rough out template contracts?
    • We don’t dictate contract terms, but there are certain requirements that must be built in
  • Tierney – Could be benefit in standard from contract with input from industry, has there been any discussion on standard contract to curtail review time?
    • We shy away from dictating terms of contracts, in midst of changing contracts
  • Tierney – In changing the process, have you discussed a standard from contract?
    • No
  • Pickett – Asks after how rates are incorporated into contracts
    • WCS determines rates in contract negotiation
  • Pickett – I think the rate setting portion will be the toughest portion, trying to find a way for vendors to pay as little as possible and operators to make as much as possible, with state interfering as little as possible
  • Birdwell – Floor is such that we have essentially incentivized retaining these materials
  • Seliger – Pretty complicated as this is not a dynamic or large market
  • Hurley – Commission’s main purpose is to protect capacity at the facility, this is why we regulate imports
  • Pickett and Hurley discuss capacity, WCS facility could potentially handle the waste needs of the US
  • Tierney – Capacity is a concern, but there is a bigger concern in financial solvency and continued operations; should be some in-depth factfinding on capacity and expected inflow
  • Tierney – Is there any reason why WCS couldn’t be cut lose from rate regulation if there were some adjustment provision put into contracts that would allow for free market adjustments for in-compact rates
    • Wade – At the beginning I think we are bound statutorily to set the rates, but not the right person to answer these questions
  • Tierney – So it could be done, should determine who can answer these
  • Landgraf – What oversight does TCEQ have over the storage of these materials
    • Bill gives use ability to ask specific questions from generators regarding capacity; has been some internal discussion on what can be changed
  • Landgraf – Asks after contract review process and time length at TCEQ
    • TImberger – TCEQ is looking at rates that are often very different from TCEQ rates, timeline varies between contracts
    • Average length of time for non-party state contract is 140.2 days, party state is 28.7
    • As we review contracts, we would work with WCS to determine priorities & have not moved forward with contracts if they did not match priorities
  • Seliger – Compact acts similarly to public utility, rates are traditionally regulated; our focus is a rate that meets requirements of WCS and generators
  • Tierney – This seems to be a situation where something was foreseen as a monopoly, but there are now competitive factors in play, i.e. facility in Utah is taking some business; important to consider how the landscape has changed; Vermont has a real need for compact to continue

 

Panel 3 – Operator & Industry

David Carlson, Waste Control Specialists

  • Regarding contingency plan, we have bonding in place for closure and continued surveillance of site, roughly $156 million, but does not cover continued operations
  • In a normal situation, fees taken in at site would cover continued operations, but currently there are not adequate fees coming in to cover cost of operations
  • WCS funded the licensing & construction of facility with no cost to Texas or Vermont, generated $58 million in revenue to state and county
  • WCS has never had a profitable year in operating facility, high cost of compliance; cost of Compact Waste Facility is about $34 million/year, revenue is roughly $24 million & loss is covered by WCS
  • Cost would be much greater if we didn’t have other activities on the site that subsidize the operations
  • JF Lehman purchased WCS earlier this year, fully bonded and in a low-risk position now, committed to long-term operation of site; have plan for continued operations
  • If we are able to compete in the new market, could have a profitable facility
  • Commercial pricing is set by rulemaking, Utah facility competitor is able to freely see price and set slightly lower
  • Limitations on capacity are not reasonable with the amount of capacity available
  • Surcharges to county are also excessive
  • Requesting that statute be changed to allow WCS to negotiate rates for out-of-compact generators
    • Licensed for 9 million cubic feet of low level radioactive waste, initial envisioned as a monopoly and price controls were put in place based on this, but today there are many competitors for all classes of waste
    • Dilution, release to other types of landfills, reduced waste generation, etc. have taken waste that could go to the WCS facility out of the marketplace; market price has declined and expecting it to continue to decline
    • Purpose is to provide disposal for Texas & Vermont, 20% of disposal has come from these states
    • Average price charged to out-of-compact generators is around 4x in-compact price
  • Requesting that unnecessary review process be removed from statute
    • Primary reason for review of contracts is to ensure compliance with rate rule, becomes no longer necessary with removal of rate rule; shipment-by-shipment basis compliance review is very complex
  • Requesting that limits on waste be removed
    • Current capacity used is roughly 1% of total, roughly 8% of 9 million cubic feet capacity can come from other states
    • However, due to changing disposal practices on 10% of assumed material will actually go to the Compact Waste Facility
    • TCEQ study proposed that roughly 1 million cubic feet capacity would be needed for Texas and Vermont generators; between the 8% out-of-compact generator use and 11% compact use, roughly 80% of facility capacity would remain unused
  • Requesting that surcharges fort the Compact Waste Facility be reduced to a competitive marketplace level
    • Surcharges applying to Utah facility are around 10%,
    • Texas and Vermont only lead to 5% of the profit generated, need out-of-compact activity to remain profitable

 

Edward Selig, Advocates for Responsible Disposal in Texas

  • Advocates for Responsible Disposal in Texas (ARDT) is an association of radioactive waste generators supporting safe & responsible disposal in Texas; committed to long-term success of facility
  • Supports WCS’s goals for long-term viability, so long as it does not affect guarantee of low in-compact rates
  • Do not oppose removing out-of-compact rate limits, curie limit, re-containering restrictions, concrete barrier requirements, etc. as presented to ARDT and legislature earlier this year
  • ARDT is concerned with
    • Maintaining process to guarantee lowest price for in-compact generators
    • Establishing triggers to maintain as-built capacity for in-compact generators; could be a trigger for 80% capacity to require building new disposal cells
    • Establishing trigger for curies for operator to obtain new curie capacity
    • Establishing always available decommissioning space for 2 nuclear plants in Texas
  • Currently in agreement with WCS for trigger for always available as-built capacity
  • Generators agree that contingency plan is critical, willing to participate in formulating plan

 

Questions for Panel 3

  • Seliger – A lot of the agreed upon areas can be done, what do you think of proposals from ARDT, specifically guarantee for always available decommissioning capacity
    • Carlson, WCS – Issue is that the proposal would set aside 70%/6.3 million cubic feet of total capacity for Texas and Vermont, but cannot see any way Texas and Vermont could generate more than 1 million cubic feet
    • Unreasonable to say that 6.3 milli8on cubic feet should be reserved for Texas or Vermont
  • Seliger – Regarding concrete barrier, is this part of statute or determined by WCS
    • It is in statute and in the license, but concrete barrier provides no benefit given presence of red clay
  • Seliger – Regarding trigger for operator to increase cells when certain capacity is reached, to what extent are operators going to guarantee waste will go into these new cells given that the operator will incur a cost for this
    • Selig, ARDT – Based on historical and forward-looking use
    • Carlson – Support these measures if WCS is given the ability to compete in the market, unreasonable if WCS is not
    • Selig – Regarding the limits, ARDT is concerned that the out-of-compact waste would fill all capacity; previous operator threatened bankruptcy & leaving us with nothing
    • Carlson – We have no intention of filing bankruptcy, have alternatives like competitive markets or Texas markets; most would probably prefer WCS to operate at a profit
  • Seliger – This was formulated under the idea that the state would not fund it, should begin exploring alternatives
  • Seliger – How do you guarantee in-compact generators obtain the lowest rate possible?
    • Difficulty currently is the shipment-by-shipment comparison which puts us out of compliance when one company’s shipment might be at a lower rate than compact companies
    • In general, superior pricing for compact facilities is fine, but mechanism is difficult; part of the reason we wish to get rid of TCEQ review process
    • Selig – When we say we want the lowest price, we want a low price over the course of the year for instance & could true up at that point
    • Might be a good idea to let technical personnel from each stakeholder to identify overall price charged to out-of-compact generators & give in-compact an opportunity to review
  • Seliger – But at the end of the day if you do not reach an agreement, who decides the fair price? We don’t want a situation where every shipment is litigated
    • Can come up with weighted factors at the beginning of the process
  • Seliger – We need clarity on how this will be decided, what is the answer if you don’t have a regulatory framework?
    • Regulatory framework is not always the best solution
  • Pickett – Regarding numbers, in-compact is about 5% of revenue?
    • Carlson – Yes, roughly 5% of total revenue is in-compact
  • Pickett – If your recommendations are changed today, would income still be around 5% or would this change?
    • Ultimately it would be less than 5% because intent is to increase receipts of waste
  • Pickett – So if there was a rate settle-up, would be talking about less than 5% of revenue?
    • Agrees, but wants this to be simple
  • Pickett – Currently you estimate 600 years of capacity, but my concern is who determines future capacity projections, who would you suggest we ask?
    • Currently in statute, TCEQ goes to generators & input is put into TCEQ report
  • Pickett – Do both of you agree with what TCEQ has reported to date
  • Selig – Yes
  • Pickett – Regarding surcharges, if the numbers change, would you be confident to say to TX that the overall dollar amount would be the same even if percentage lowers due to increased receipts of waste
    • Not opposed to them being lower
    • Carlson – Surcharges provided under this scenario would be far greater than under a TX-operated site
  • Pickett – Would you consider some provision that makes us whole rather than a dollar amount?
    • 31.25% surcharge is a very high number, large margin to try and recoup
  • Pickett – Wondering if you’re willing to take the risk that, if surcharges are lowered, then increased receipts would lead to similar dollar amounts
    • Would need to go back and look at the data
  • Pickett – Agency is already recommending that we don’t continue reduced fee due to balances in state accounts
    • When the alternative is having the state und the sites, not sure it is a benefit to Texas
  • Huffines – How much do you think your top line would increase if you didn’t have limits
    • Looking at increases in Class A market, potentially in tens of millions
  • Huffines – So potentially the revenues to state would go up given increased volumes
  • Huffines – Regarding the payments from the planning implementation fees, do you have any type of documentation that you were entitled to receive that payment?
    • Richard Adams, Comanche Peak – Not aware of documentation that would define out of the $50 million in planning fees or what state of Vermont is entitled to out of $25 million
  • Huffines – Given failure of past operator, fair to say that the money you paid in did not go to the previous operator
    • Money paid in flowed into the state effort for the previous state-run site; TCEQ did not approve license for this facility
  • Huffines – So the state did not approve the state’s license, was there partial construction, land purchase, etc.?
    • Yes, some digging and land purchase, stopped after TCEQ denied license
  • Huffines – And this was a Texas-run facility?
    • Yes, was the original
  • Huffines – And it was the industries assumption that this would rollover to the private company operating the compact facility?
    • Yes, this was the assumption
  • Huffines – Regarding cheapest rates, is this industry-wide or is it Texas rates?
    • Speaking about cap for Texas and Vermont rates at the facility in Texas
  • Huffines – In-compact, have you always disposed of waste at this facility?
    • For B&C waste it has always been disposed at Andrews facility, part of Class A waste is disposed there and part is exported to the Utah facility
  • Huffines – So you want reserved capacity/guaranteed development, but also the ability to export waste to any facility you choose
    • Rates paid by Comanche Peak for Class A waste are quite low, but it is on record that WCS did not want the Class A waste as it would be a financial hardship
  • Huffines – Understand this, but if there is going to be reserved capacity, then should you not pay for the reservation
    • Something that could be considered
  • Huffines – Asks after curie limit
    • Selig – There is currently a curie capacity limit, with the current limit we are concerned that out-of-compact imports could bring per year imports close to limit, asking for operator to obtain an amendment to raise limit
    • Carlson – Having curies in statute is the wrong place for it, more of a technical question; sure that TCEQ would grant increases given demonstration of safety
  • Huffines – Seems to me there is no capacity issue, available whenever compact generators want it; my biggest concern is that the state of Texas doesn’t pay anything
    • Selig – This is one of the reason planning and implementation fees were established in the 90s
  • Tierney – Have not heard any testimony opposing lowering surcharge; would it be possible to craft a mechanism where upfront surcharge floats with what is competitive in other jurisdictions & some adjustment after the fact
  •  Seliger – Surcharges are different for in-compact than out-of-compact
  • Seliger – Asks WCS if they maintain the position that they do not want all of the Class A waste?
    • Carlson – No, we would take all of it if we could
    • Selig – In the past they were not able to take this waste, understands that owners and operators have changed
  • Seliger – Asks Mr. Rick Jacoby to be called to address Sierra Blanca
    • Rick Jacoby, Consultant to WCS – I don’t think the current operator is responsible for what happened in Sierra Blanca
    • When the Low Level Radioactive Waste Authority was established it was based on GR, Legislation later changed this to planning & implementation fees
    • Statute later determined that those fees were reasonable & necessary for ratemaking purposes and could be recovered, but utilities are not the entity that should be made whole, it is the ratepayers
    • Does not agree that utilities paid for Sierra Blanca
  • Landgraf – Under the threshold established, how quickly are you anticipating capacity being filled?
    • Selig – Sister company to WCS is anticipating decommissioning plants every year for the next five years and shipping that waste to the Compact Facility, trigger designed to ensure capacity is available for compact generators as-built
    • Want to ensure there is adequate discussion of planning & implementation fees and recognition that utilities were required to pay for operations of Low Level Radioactive Authority
    • Adams – Whether or not the fees were picked up by utilities or ratepayers would need to be discerned from decade-old rate cases; my suspicion is some of these fees were paid by ratepayers and some were not
    • Even disregarding the fees, Texas and Vermont have interest in a successful compact & Comanche Peak, STP, and Vermont Yankee were instrumental in creating the compact
  • Landgraf – Do you have any suspicion on how those fees would be apportioned between ratepayers or utilities
    • Would guess that utilities paid early fees during test years and ratepayers later
    • Would argue that there is cause for ratepayers and utilities to get a break from the Compact Facility now
  • Pickett – With the original compact, did Vermont and Texas enter this to secure a location for radioactive waste, a lower rate, or both, or neither?
    • Jacoby – Texas was going to build a disposal site only for Texas, Congress allowed waste from other states to be excluded if Texas entered into a compact with another state; purpose was to control amount of waste going into such a facility
  • Pickett – Seems to be arguments made by ARDT that we deserve or demand lowest rate
  • Pickett – I think this is a good time to get this settled
  • Tierney – In ratemaking, generally speaking the cost does go to ratepayers, when utilities share the cost it is generally due to some level of imprudence in management; better odds that development fees were charged to ratepayers in Texas
  • Tierney – That said, when the Sierra Blanca failed, having in-compact payers pay lower values would be a way to recoup lost investment
  • Tierney – Vermont needs and insists on the price break
  • Seliger – How much do the generators pay for development of the current site?
    • Selig – have paid for none of the development of the current site, only paid for development of a compact facility
  • Seliger – But you paid money in for a site, it is different from what you expected
    • We were the early adopters, we feel that WCS benefits from our efforts in the early 90s
  • Seliger – But this is not the question
    • We got a site that was not what we expected and in a different position, so we feel we should get a low rate
  • Seliger – But regarding development costs, you ended up getting a site
    • Agrees that they got a site
  • Birdwell – At what point if you start accepting out-of-state deposits will you need to decide on a trigger to cease out-of-state deposits to ensure capacity for in-compact generators?
    • Carlson – After the million cubic feet expected for in-compact waste, the expected 500k cubic feet from the plant decommissioning, the remainder is more than enough
  • Birdwell – With floating ranges, I assume the assumption is that the in-compact generators would pay a lower rate
    • What I’m most interested in is a mechanism or averaging process that works & is not so restrictive as today’s TCEQ rule
  • Birdwell – Would your ability to set rates always distinguish between in-compact and out-of-compact if you get to set those rates?
    • If we have some mechanism to average long-term rates, this becomes more practical
  • Birdwell – As you are currently under the rate process with TCEQ, there is a 9 month to 1 year advance notice to competitors about your rates; would TCEQ still approve rates? Don’t want a situation where there is no validation of rates?
    • Does not want TCEQ review of rates, but proposes keeping in-compact rates in rule to give in-compact generators a voice in that process
  • Birdwell – So what you charge in state would not be proprietary, but what you charge out of state would be?
    • Correct