Appeal from the United States District Court for the Central District of Illinois, Springfield Division. No. 95 C 3230 Richard Mills, Judge.
Before CUMMINGS, DIANE P. WOOD, and EVANS, Circuit Judges.
Under the Low-Level Radioactive Waste Policy Amendments Act of 1985, 42 U.S.C. sec. 2021b et seq., states or interstate compacts which were able to "provide for" the disposal of all low-level radioactive waste generated within their borders from January 1, 1993, to January 1, 1996, were entitled to certain monthly incentive payments. The payments were made from an escrow account funded by surcharges imposed on waste generators and held in trust by the Secretary of Energy. 42 U.S.C. sec. 2021e(d)(2)(A). If a state or compact was unable to provide for full disposal for any part of the 3-year period, the corresponding monthly payments were refunded to the generators. sec. 2021e(d)(2)(C)(ii). The Central Midwest Interstate Waste Commission, which oversees a compact signed by Illinois and Kentucky, claimed it met the "provide for" requirement and was entitled to the incentive payments because it allowed generators to ship their waste out of the region. The Secretary of Energy disagreed, finding that the phrase "provide for" required the Commission to do more than simply permit generators to export their waste. Unhappy with that decision, the Commission sued the Secretary in district court. Illinois Power and Commonwealth Edison, two waste generators who had been receiving refunds, intervened and sided with the Secretary. The district court granted summary judgment for the Secretary, Illinois Power, and Com-Ed, and this appeal followed.
Millions of cubic feet of low-level radioactive waste are generated by power companies, industry, the government, universities, and hospitals each year. See New York v. United States, 505 U.S. 144, 149-50 (1992). The main problem with this type of waste, which comes in forms ranging from luminous watch dials to nuclear power plant hardware, is that it often needs to remain isolated for hundreds of years before it no longer poses any health risk.
In the late 1970's, as some of the dangers associated with the disposal of the waste came to light, half of the nation's disposal facilities closed their doors. By late 1978 only three sites -- those in Washington, Nevada, and South Carolina -- remained open. Then, in 1979, following a series of transportation and packaging mishaps, Washington and Nevada temporarily shut down their facilities. Less than eager to serve as the nation's dumping ground for radioactive waste, South Carolina severely cut back on the amount of waste it was willing to accept at its site. A crisis was at hand.
In 1980 Congress reacted to the crisis by enacting the Low-Level Radioactive Waste Policy Act, Pub. L. 96-573, 94 Stat. 3347. The 1980 Act announced a federal policy of holding each state responsible for "providing for the availability of capacity . . . for the disposal of low-level radioactive waste generated within its borders." Because Congress concluded that disposal could be managed most efficiently at a regional level, the 1980 Act encouraged states to form interstate compacts. Starting in 1986, these compacts, after being ratified by Congress to take the dormant Commerce Clause out of the picture, could prohibit outside waste from entering their regions' disposal facilities.
The 1980 Act was largely a flop. By 1985, although most states had joined compacts, only the three formed around Washington, Nevada, and South Carolina -- the states with facilities in operation before the Act was passed -- had disposal sites. Congress realized that if it ratified the compacts as planned, the three sited compacts could have started excluding outside waste in 1986, and as many as 31 states would have been left without access to a disposal facility.
To head off a second disposal crisis, Congress passed the Low-Level Radioactive Waste Policy Amendments Act of 1985. The 1985 Act was largely the product of a compromise worked out by the nation's governors, and part of the legislation took a familiar tack. For example, like its predecessor, the 1985 Act declared that "[e]ach State shall be responsible for providing, either by itself or in cooperation with other States, for the disposal of . . . low-level radioactive waste generated within the State." sec. 2021c(a)(1)(A). Similarly, the 1985 Act made clear that Congress thought regional compacts would be the safest and most efficient way to increase disposal capacity and ensure uniform distribution of disposal sites. See sec. 2021d(a).
However, part of the legislation took an aggressive approach absent in the 1980 Act. Under the new act, the three sited states were required to accept low-level radioactive waste generated outside of their borders until 1992. sec. 2021e(a)(2). In exchange, the sited states were allowed to assess graduated surcharges on outside waste. sec. 2021e(d)(1). Then, when the 7 years were up, the sited states would be allowed to exclude out-of-state waste. In order to encourage unsited states to meet their responsibility for disposing of their own waste by 1992, the 1985 Act set forth three different types of incentives --monetary, access, and a take-title requirement. See New York, 505 U.S. 144 (describing the incentives and striking down a provision requiring noncomplying states to take title to all waste generated within their borders).
This case deals with one of the monetary incentives. Under the 1985 Act, the sited states were required to forward 25 percent of the surcharges they collected from outside generators to an escrow account held in trust by the Secretary of Energy. sec. 2021e(d)(2)(A). The Secretary was then to use the funds to make incentive payments to states meeting four statutory "milestones." These milestones followed a "natural progression" toward the development of regional disposal facilities. Appalachian States Low-Level Radioactive Waste Comm'n v. O'Leary, 93 F.3d 103, 106 (3d Cir. 1996). First, by July 1986, each state electing to work with its neighbors needed to ratify a regional compact. Second, by January 1988, each unsited compact was to have designated a host state for a regional disposal facility. Third, by January 1990, each compact needed to either apply for a disposal license or certify that the compact would be able to dispose of its region's waste by 1992. See sec.sec. 2021e(d)(2)(B)(i)-(iii), 2021e(e)(1)(A)-(C).
That brings us to the fourth milestone -- the one at issue in this case. Under that provision the Secretary was to disburse the remaining escrow funds to compacts which, by January 1, 1993, were "able to provide for the disposal of all low-level radioactive waste generated" within their borders. sec. 2021e(d)(2)(B)(iv). If a compact was unable to provide for full disposal it could either take title to the region's waste or forfeit the incentive payments back to the generators who originally paid them. sec. 2021e(d)(2)(C)(ii). Finally, if an initially non-complying compact became able to provide for full disposal of its waste during any part of the 36-month period between January 1, 1993, and January 1, 1996, it was entitled to a pro rata share of the remaining surcharges. sec. 2021e(d)(2)(C).
In September 1992 the Secretary published a notice in the Federal Register proposing criteria for determining whether a compact had demonstrated compliance with the fourth milestone. See 57 Fed. Reg. 45248 (1992). The Secretary suggested that a compact could provide for disposal by either operating a disposal facility or pointing to a valid contract with another state or compact for disposal of the region's waste. Id. The notice also invited interested parties to comment on the criteria. Many of the parties commenting on the Secretary's proposed interpretation explained that a number of compacts had entered into identical 18-month ...