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Waste firm may pull $500M offer to state

The state could miss out on an estimated $500 million if it loses a legal appeal to block Italian radioactive waste from coming into Utah.

Speaking during a conference call to reporters Thursday, EnergySolutions Inc. chairman and chief executive officer Steve Creamer said his company will likely pull its offer to share half of the net revenues produced by contracts to store foreign-generated waste at its Clive disposal location.

Salt Lake City-based EnergySolutions operates a 439-acre, low-level radioactive waste-handling facility in Tooele County's west desert, where company officials have said the Italian waste would occupy no more than 4.3 acres of the total disposal area during a 10-year period.

In February, the company offered to pay the state 50 percent of an estimated $100 million a year for 10 years to allow low-level waste from overseas to be stored in Utah.

Critics, including Gov. Jon Huntsman Jr., balked at the proposal, saying that doing so would violate the Northwest Compact — a regional coalition of states tasked with overseeing low-level radioactive waste management.

State lawmakers took no action during the most recent legislative session, and the matter went to U.S. District Court.

In May, a federal court upheld the company's contention that its efforts to bring waste into the state fall outside of the regulatory purview of the compact. After the ruling, the Utah Attorney General's Office appealed the decision, which is now pending.

Creamer said the company believes it is on sound legal footing in the case but would prefer to settle the matter sooner and split the revenues with the state rather than pursue a protracted legal solution. If the company does prevail, the company's $500 million offer to the state likely will not be available, he said.

"If we win the suit, I have … shareholders out there that would say to me, 'How are you justifying doing it?' " Creamer said.

He added that if he were to attempt to honor the original proposal under the circumstance of a legal victory, then he would risk being sued by disgruntled shareholders.

"It's a position that I was hoping I wouldn't be put into, and I still hope that I won't be put into," Creamer said. "But right now, that's where I am being pushed."

The proposal to share the revenue is still available if the state would be willing to accept the deal before the next court decision, he said. However, a ruling in the company's favor without an agreement would pretty much tie his hands.

"The reality of having a settlement done is good for our shareholders," Creamer said, "and I think I can justify (sharing the net revenues) to our shareholders. If we don't have a settlement, it's extremely difficult to justify to shareholders that you're (giving that much money away)."

One of the most outspoken opponents of the proposal has been environmental advocacy group Healthy Environment Alliance of Utah. Executive director Vanessa Pierce said how this scenario plays out could potentially have a profound effect on how the state is able to govern itself in the years to come.

"This lawsuit goes far beyond that foreign nuclear waste," Pierce told the Deseret News. "It is about our sovereignty and us having a voice over how much waste is dumped in Utah."

Pierce said accepting EnergySolutions' "bribery attempt" under any circumstance would be a monumental mistake. "I would hope that the state would never even consider compromising that fight," she added.

While Huntsman vowed to block the import of foreign waste, Lt. Gov. Gary Herbert has yet to publicly weigh in on the matter. Herbert is slated to become the next governor Tuesday upon Huntsman's expected confirmation as U.S. ambassador to China.

With the case under review, Scott Troxel, spokesman for the Utah Attorney General's Office, declined to comment on the pending litigation.

Considering the state's previous legal defeat, getting a favorable verdict on the appeal is "an uphill battle," said Sen. Sheldon Killpack, R-Syracuse, Senate majority leader. Killpack described the proposal as a sensible alternative rather than having to accept the foreign waste anyway while receiving a greatly reduced economic benefit.

"Considering the fact that they don't really have to make the offer, I think it's a reasonable offer," he told the Deseret News.

Jill Sigal, executive vice president of communications and government relations for EnergySolutions, told the Deseret News that despite the rather contentious opposition by some state and environmental leaders, the company remains hopeful that a settlement can be reached before it's too late. Sigal also said the company and its top executive are still more than willing to abide by the terms of the original proposal.

"Steve Creamer wants to settle and wants to share revenue with the state," she said.

Contributing: Amy Joi O'Donoghue

e-mail: jlee@desnews.com