The Supreme Court, in a major setback for the already reeling nuclear power industry, ruled yesterday that states may slow or stop the development of nuclear plants.
Upholding a California moratorium on power plant construction, the court unanimously held that regulation of nuclear power is not the exclusive preserve of the federal government, as previously had been viewed to be the case.
Justice Byron R. White, writing for the court, said the Atomic Energy Act gives the federal government exclusive responsibility for nuclear safety. But the states, the court held, can regulate nuclear power on economic grounds and in terms of land use and need for electricity. In addition, White said the courts could not question a state's explanation of its rationale for passing laws.
The justices thus licensed the states to regulate nuclear power side by side with the federal government and to move against the further growth of nuclear power in response to local sentiments.
Rep. Edward J. Markey (D-Mass.), a leading congressional critic of the nuclear industry, immediately hailed the decision as "an affirmation that state governments and their citizens ought to be in primary control of their energy future."
"The Supreme Court has reinforced the truth of Albert Einstein's dictum that 'decisions about atomic power should be made in the village square,' " Markey said.
Eight states already have broad laws similar to the California measure at issue yesterday. Many more states have less far-reaching regulations and others are contemplating them, as evidenced by the fact that 30 states had joined in support of California in the Supreme Court case resolved yesterday.
This injection of a major new element in the atomic power licensing and regulatory process was the worst possible news for the nuclear industry. Its lawyers had told the court that such a decision could "sound the death knell" for future power plant construction.
The Atomic Industrial Forum, the association that represents the nuclear industry, yesterday tried to put the best possible face on the ruling, terming it a "very narrow decision" that would "not have any direct impact on the roughly 80 nuclear plants now operating or the 57 plants that are under construction."
But Reagan administration officials, who have been trying to revive an industry that has seen 48 plants canceled and no new plants ordered since 1978, made it clear they were both stunned and disheartened by the ruling.
"We're trying to figure out whether this is the end of the road for nuclear power," said one official who asked not to be identified. "Some think even plants in the pipeline could be held up until there is a decision whether a nuclear waste system exists. And how do you decide that?"
The nuclear waste question, which was the immediate issue involved in the California case, arose from a 1976 state law that said no more atomic power plants could be constructed until an adequate system existed nationally for the disposal of high-level nuclear waste.
Spent fuel from the plants remains radioactive for thousands of years. The problem of how to permanently dispose of this waste has taken on an increasing urgency, because some atomic power plants already have begun running out of space in the pools where spent fuel is temporarily stored next to reactors.
President Reagan in January signed a law to establish a permanent geologic repository where nuclear waste would be permanently buried, and the Energy Department has begun to study sites in six states in preparation for presidential selection of an initial repository by March 31, 1987.
But residents of Nevada and Washington, where public hearings were held in late March, turned out en masse to oppose selection of their states. Hearings will be held in the next few weeks in Texas, Louisiana, Utah and Mississippi.
Even if the process for selecting and constructing the nation's first high-level nuclear waste repository remains on schedule, it will not be ready to begin accepting spent fuel from atomic power plants until the late 1990s.
The state of California argued that it adopted the moratorium on further construction until the waste disposal problem was solved because of the "uncertainties" over where spent fuel could be stored, and the possibility that atomic power plants might have to shut down when temporary storage space was exhausted.
This prospect, California argued, made nuclear power "an uneconomical and uncertain source of energy." While the nuclear industry argued that California's concerns really centered on radiation dangers, the 9th U.S. Circuit Court of Appeals agreed that the state's arguments were based on economics.
The question for the Supreme Court yesterday thus was whether the Atomic Energy Act and the regulatory apparatus of the Nuclear Regulatory Commission left room for state authority in the nuclear area.
Under the "supremacy clause" of the Constitution, Congress may completely preempt the states from legislating in certain areas by "occupying the field." Traditionally, the court has gone along when the federal government claims preemption, as the Reagan administration did in this case. Yesterday, the justices refused, in Pacific Gas and Electric vs. State Energy Resources Conservation and Development Commission Et Al.
Affirming the appeals court, White said that Congress "has preserved the dual regulation" of all electricity generation. States have traditionally exercised authority over the need for generating capacity, licensing of facilities, land use and rate-making, he said.
In nuclear legislation, White said, Congress has continued this tradition, reserving issues of national security, radiation hazards and public health to federal regulations but specifically declining to go further. As recently as last session, Congress specifically declined to preempt state regulation when considering that law, he wrote.
The "legal reality remains that Congress has left sufficient authority in the states to allow the development of nuclear power to be slowed or even stopped for economic reasons," he concluded.
Yesterday's decision constituted a dramatic overnight reversal in fortunes for the nuclear industry. Only the day before, the industry was elated by the Supreme Court's ruling that regulators did not have to consider psychological stress in deciding whether to allow an atomic plant at Three Mile Island--site of the nation's worst nuclear accident--to resume operation.