Since 1998, the federal government has paid nuclear reactor owners more than$10.6 billion in court-ordered damages over a broken contract of its own making. The tab grows by roughly $2 million a day, and total federal exposure may eventually reach $39.2 billion. The cause isn’t a safety failure or a market collapse but rather political failures. 

The Nuclear Waste Policy Act of 1982 imposed a legal obligation on the federal government to take custody of commercial used nuclear fuel by January 31, 1998, and to dispose of it permanently. The law designated Yucca Mountain in Nevada as the repository site, a choice the state’s leaders fought from the start. However, residents and local politicians in Nye County, home to Yucca Mountain, have consistently voiced support for the licensing process. 

Even so, in response to sustained opposition from Nevada’s congressional delegation, the Obama administration moved to withdraw the Yucca Mountain license application in 2010. The Government Accountability Office (GAO) later concluded that the decision rested on no safety or technical finding against the site, but was driven by politics rather than science. 

No replacement plan was offered. The fuel stayed where it was, at reactor sites never designed for long-term storage. Ratepayers had already paid into a federal fund for disposal and now had to spend their own money to store the waste the government was supposed to take care of. The courts have ordered the government to cover those costs, meaning the bill for taxpayers keeps growing as long as Washington fails to live up to its obligation for a long-term storage option. 

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In the meantime, the private sector is helping to address the change. Holtec International and Interim Storage Partners (ISP) each secured licenses from the Nuclear Regulatory Commission for privately funded interim storage facilities. Both had the support of their host communities and cleared federal regulatory review. State-level political challenges then worked their way into federal court, and the Fifth Circuit Court of Appeals vacated ISP Texas’slicense in August 2023 and Holtec New Mexico’s license in March 2024.

In June 2025, the Supreme Court held that the challengers lacked standing to contest the NRC’s licensing decision, thereby clearing the way for both licenses. But the Court decided the case on procedural grounds and left the underlying question of NRC’s statutory authority unsettled. That unresolved question is precisely why a legislative fix is still needed. Holtec canceled its New Mexico project anyway in October 2025, citing an untenable path forward amid continued state opposition. That a fully licensed project could still collapse is clear evidence that the current framework is too fragile.

The Trump administration is steering policy in the right direction. In May 2025, President Trump signed executive orders directing DOE to evaluate the transfer of commercial used fuel to a government-owned, privately operated reprocessing facility and to develop a national policy for used fuel management. That policy report was due in January 2026, but it has not been publicly released.

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Two steps could turn this into a concrete policy solution. The first is amending the 1982 law to establish a stable statutory footing for waste repositories. For example, a consent-based siting framework requiring affirmative agreement from the host state and community, with the federal licensing decision as the final determination and no legal avenue for outside actors to relitigate after the fact. 

The bipartisan Nuclear Waste Administration Act of 2024, introduced by Representatives Pfluger and Levin, proposed exactly this framework, drawing on recommendations from the Blue Ribbon Commission on America’s Nuclear Future, the National Academies of Sciences, and the GAO. Holtec and ISP had the community support that the model requires. What they lacked was a legal foundation stable enough to survive litigation.

The second is for Congress to press the administration to release the overdue spent fuel policy report and use it as a basis for updating the 1982 law. The administration has framed the problem correctly. Congress can add permanence with a statutory fix that future administrations cannot reverse. 

Any future nuclear buildout needs a real solution for spent fuel. Ultimately, comprehensive policy reform should shift full responsibility for the private sector to pay for and manage spent fuel. The private sector has shown it is ready to build one, and the administration has shown a willingness to address the problem. Congress should provide a durable foundation to help those solutions stick. 

The views and opinions expressed are those of the author’s and do not necessarily reflect the official policy or position of C3.