Opinion ID: 4289552
Heading Depth: 2
Heading Rank: 2

Heading: obligations under federal law

Text: Even if we assume NextEra could prevail on the first prong of its argument, it would not qualify for a refund because Section 172(f) requires that losses be incurred “in satisfaction of a liability under a Federal or State law requiring [nuclear decommissioning].” Our review has disclosed no law requiring NextEra or any nuclear facility to engage in decommissioning. 12 Case: 17-12304 Date Filed: 06/28/2018 Page: 13 of 16 NextEra argues it bears the burden of decommissioning because, as a matter of law, decommissioning cannot take place until all spent nuclear fuel is removed. Perhaps, but no law requires NextEra to ever decommission its plants. Granted, every nuclear plant operator must provide the NRC with a decommissioning plan and must maintain funds sufficient for decommissioning. See 10 C.F.R. § 50.75(a). But currently, nuclear plants may lawfully remain operational in perpetuity, and any operational plant needs to dispose of spent nuclear fuel on an ongoing basis. Therefore NextEra’s NWPA contract fee payments are not made pursuant to a “law requiring . . . the decommissioning of a nuclear power plant.” 26 U.S.C. § 172(f)(1)(B)(i)(II) (2012) (emphasis added). NextEra also argues it is ultimately responsible for the decommissioning of a plant because it pays the costs of permanent disposal of spent nuclear fuel. In support, NextEra relies on this circuit’s only case that addressed the NWPA in any detail: Alabama Power Co. v. U.S. Department of Energy, 307 F.3d 1300 (11th Cir. 2002). In Alabama Power, this Court ruled on an amendment to the standard NWPA contract, which allowed the DOE to settle outstanding claims with nuclear facilities by offsetting their fee amounts. Id. at 1306. The Court held that the amendment exceeded the DOE’s statutory authority. 5 Id. at 1312–13, 1316. 5 The Court also struck down the “legislative veto” provision of the NWPA, 42 U.S.C. § 10222(a)(4), after similar regulatory provisions were found unconstitutional in INS v. Chadha, 462 U.S. 919, 103 S. Ct. 2764 (1983). Ala. Power, 307 F.3d at 1307–08, 1316. 13 Case: 17-12304 Date Filed: 06/28/2018 Page: 14 of 16 While the core holding of Alabama Power is not at issue here, the opinion included a general discussion of the regulatory scheme of the NWPA. In two instances, the Alabama Power opinion described the NWPA’s apportionment of responsibility for disposing of nuclear waste. It said: “[Under the NWPA,] the U.S. Government would take responsibility for disposing of the waste, and the utilities that produced the waste would bear the cost. The NWPA thus established a quid pro quo; the Government would provide a valuable service and utilities would pay money for this service.” Id. at 1302. The opinion also described how “[t]he NWPA provides that the entities owning and operating nuclear power plants, as generators and owners of nuclear waste, will pay the full cost of disposing of the waste.” Id. at 1303. NextEra relies on this language to argue that it fully pays for the permanent disposal of the spent nuclear fuel, meaning it is responsible for the decommissioning. But funding is only part of the responsibility of decommissioning. Alabama Power recognized that the “responsibility for disposing of the waste” belongs to the DOE. Id. at 1302. As the District Court noted, the DOE’s obligation to dispose of nuclear waste and the plant’s obligation to pay funds to the Nuclear Waste Fund are “two separate legal obligations.” Despite NextEra’s arguments to the contrary, Alabama Power offers only a general overview of the NWPA. The things the opinion said about the Nuclear Waste 14 Case: 17-12304 Date Filed: 06/28/2018 Page: 15 of 16 Fund were not necessary to decide the case before it. Thus, our ruling here that fees paid to the Nuclear Waste Fund do not place the burden of disposing of spent nuclear fuel on the power plants—even if those fees constitute the “full cost of disposing of the waste,” id. at 1303—is not in conflict with Alabama Power. The District Court also correctly held that NWPA fees are tied to the production of electricity and not to the direct cost of nuclear waste disposal. NextEra argued the “act” giving rise to the liability for decommissioning was either the initial start-up of the nuclear power plant or the “insertion and irradiation of the nuclear fuel assemblies in the reactor core.” However, the NWPA contracts determine the fee based on the amount of electricity generated in the preceding quarter. See 42 U.S.C. § 10222(a)(1)–(2); see also 10 C.F.R. § 961.11. If NextEra had constructed nuclear power plants, but never produced electricity, then it would have incurred no NWPA contract fees. The NWPA contract fees were therefore incurred for the production of electricity, as opposed to any law requiring decommissioning. And because the acts giving rise to the liability happened in the quarters immediately preceding the months in which the fees were paid, those acts did not occur more than three years prior to the claimed loss. See 26 U.S.C. § 172(f)(1)(B)(ii)(I) (2012). For these reasons, NextEra’s NWPA fee payments were not made pursuant to a law that requires nuclear decommissioning. 15 Case: 17-12304 Date Filed: 06/28/2018 Page: 16 of 16