By Robert Gehrke The Salt Lake Tribune - 12/09/05

WASHINGTON - Another partner in the coalition trying to bring nuclear waste to a Utah Indian reservation is dropping out of the group, and a second formalized a decision not to provide any more money to the project.

The announcements marked a continued unraveling of the coalition - a defection of partners that became apparent in early September when six of the eight members of Private Fuel Storage said they no longer needed the planned Utah facility and were pursing their own storage options.

In the latest development, Southern Company, an Alabama-based nuclear utility, said in a letter to Sen. Orrin Hatch released Thursday that it was withdrawing entirely from Private Fuel Storage.

The largest partner in the consortium, Xcel Energy, based in Minnesota, affirmed in a separate letter it no longer needed the storage and would halt is financial support.

"After a great deal of consideration and internal review, Southern Company has determined that Private Fuel Storage, LLC (PFS) cannot be successfully developed as a spent fuel repository in a time frame to meet Southern's needs. Therefore, Southern will no longer support PFS," wrote company chairman, J. Barnie Beasley Jr.

"This is a sure sign that the PFS partnership is crumbling," Hatch said. "PFS has just one small company with a minority shareholder. At least someone will be there to turn out the lights."

Hatch had pressured the partners to abandon PFS, and said he was working with the Bush administration to address their storage concerns.

The PFS consortium had consisted of eight companies that sought to store 44,000 tons of radioactive material from nuclear reactors on the Skull Valley Goshute Indian Reservation, 50 miles southwest of Salt Lake City, until a permanent waste dump can be built at Yucca Mountain, Nev. The Nuclear Regulatory Commission voted to issue PFS a license in September.

Sue Martin, spokeswoman for PFS, said the companies' announcements are not major setbacks.

"Individual utilities' needs change over time and they have to make a business decision based on what their needs are at the time," she said. The industry has changed since the project petitioned for a license in 1997, she said, but other reactor operators could still want to contract with PFS for waste storage.

The company is required to have commitments for the cost of constructing and decommissioning the site before work can begin. If there is not adequate support for opening the facility, it won't open. "This project is going to be market driven," she said.

She would not say if PFS has any signed contracts yet.

"I will say that we're optimistic that there is an existing, immediate need for safe economic, temporary storage and that that need is going to increase in the future," she said.

Charles Bomberger, general manager of nuclear asset management at Xcel, indicated to The Tribune three months ago his company's interest was lagging, since Xcel had "plenty of our own on-site storage."

Bomberger on Thursday said when it became clear PFS wouldn't be opened before Xcel had to renew its license on a Minnesota reactor, it opted to pursue state and NRC approval of interim on-site storage.

"From a financial standpoint we couldn't really support both initiatives," Bomberger said. "There's recognition, through the opposition of Utah and others, there are still significant hurdles to go through in order to be successful with PFS."

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