July 19, 1998, The StateLegislature shouldn't bail out Chem-Nuclear
We've heard it all before. The state will lose vital tax revenues, and we'll all be exposed to a dangerous proliferation of unregulated mini-nuclear storage facilities unless the Legislature bails out Chem-Nuclear.First we extended the deadline to close the state-owned radioactive-waste landfill the company operates in Barnwell. That action was propelled by a combination of worry over what S.C. businesses would do with their nuclear waste and the lure of the almighty dollars the facility sends to Columbia.
Then, in 1995, we walked away from two decades of state and federal policy -- and our only chance of ever getting out of the nuclear-waste business -- with an ill-conceived plan to pull out of a regional compact and open the Barnwell site to the nation. In return, Chem-Nuclear, Gov. David Beasley and the Legislature promised the state would receive $140 million a year to build schools and send poor and moderate-income students to college.
The money never materialized. From the start, the state's $235-per-cubic-foot burial fee scared off customers. Those who weren't scared were smart: They compacted their nuclear trash, taking advantage of the Legislature's ignorance. The tax is based on volume instead of radioactivity. And the result of that is grim; projections last year indicated the facility would take 60 percent more radioactivity before it fills up than initially expected.
In 1996, Chem-Nuclear sent the state $92 million. In 1997, it was $77 million. That drop led legislators to demand the company make up the difference if the 30 percent portion of the fee that pays for scholarships didn't total at least $22 million. (That goes up to $24 million in 1999.)
Volume was down so much that the company couldn't meet the minimum it had signed off on just five months earlier. So Chem-Nuclear floated a plan last fall to essentially sell space in the landfill on the futures market. The company would guarantee the state a $1 billion education trust fund in return for a legislative guarantee that the landfill would remain open. Remarkably, the governor and the Legislature showed no interest, and the company instead convinced utilities to kick in the extra $8.5 million it needed to meet its 1998 obligation.
Now Chem-Nuclear says it will probably be $10 million short next year. So it's negotiating with waste generators in hopes of coming up with another legislative proposal. Any plan is likely to involve lowering the $235 fee and guaranteeing companies space into the next century -- a guarantee almost certain to lead eventually to expansion of the landfill.
Senate Finance Chairman John Drummond has indicated he might be willing to lower the tax. But the Senate has always been in Chem-Nuclear's pocket. The real test is the reaction of the company's new allies, Gov. Beasley and the House.
So far, reaction has been chilly. Gary Karr, the governor's spokesman, calls fee reductions and guarantees "nonstarters" for the governor. (Democratic challenger Jim Hodges opposes even the concessions the state has already made.)
House Speaker David Wilkins predicts the Legislature won't be interested in any deals. And Ways and Means Chairman Henry Brown said it would suit him fine if Chem-Nuclear had to bail out of Barnwell. "The state probably would take it over to serve in-state uses," he said.
That's the first sensible suggestion we've heard since problems first developed with the plan to rotate nuclear storage duties through the region. If the goal is to make sure S.C. companies don't let nuclear waste pile up on their property, then the most the state should be willing to do is provide a disposal facility for those companies. There is no reason we should prop up Chem-Nuclear's attempts to salvage its bottom line by attracting waste from other states.
By raising the burial tax in 1995 and adding minimum funding requirements in 1997, the state established the price for Chem-Nuclear to do business in South Carolina. The last thing the Legislature needs to do is lower the price or make any guarantees. If Chem-Nuclear can't pay the price it agreed to, it doesn't need to be here.