MINUTES

(Verified with meeting transcript)

CENTRAL INTERSTATE LLRW COMMISSION

SPECIAL MEETING

July 14, 2005, Thursday, 9:00 A.M.

July 15, 2005, Friday, 8:00 A.M.

In compliance with Commission Bylaws and Rules, a meeting notice announcing the date, time, location and agenda availability was mailed to the interested public June 30, 2005.

The Special Meeting of the Central Interstate LLRW Commission was held Thursday, July 14, 2006, and July 15, 2005 in Little Rock, Arkansas. The purpose of the two day meeting was for the Commission to discussion with the possibility of taking action on the following items: future compact roles and alternatives, claims submitted for consideration, finance issues and investment consultant, negotiations for disposal access and administrative budget adjustments, and all other business to come before the Commission.

The Chair called the meeting to order at approximately 9:10 a.m. and roll was called. Responding to the roll call was: Oklahoma Commissioner, Catherine Sharp; Kansas Commissioner, Joseph Harkins; and Arkansas Commissioner and Chair, Laura Gilson. The Louisiana Commissioner, Michael Henry, had flight delays and joined the meeting mid-morning.

Also present were Kansas Alternate Commissioner, Ron Hammerschmidt; Administrator, Rita Houskie; the court reporter, and interested members of the public.

No members of the public spoke during the public comment period.

The Chair indicated that the meeting was a result of the Kansas Commissioner's request to explore compact roles and alternatives at the Annual Meeting, held June 29, 2005. The Chair introduced the Executive Consultant who was contracted to assist the Commission in determining its future obligations.

The Chair called on the Kansas Commissioner to begin the discussion on the future compact roles and alternatives. The Kansas Commissioner stated that, first, the Commission should be in agreement as to the future of the compact and that would then frame the other issues.

The Chair acknowledged that the compact landscape had changed and speaking as Commissioner from Arkansas felt that a thorough and thoughtful approach is necessary in making decisions on the future of the compact. The Chair went on to explain that the compact system, flawed as it was, still provided some protection from the possibility of a company building a facility within one of the states and that facility becoming a nationwide dumping ground.

The Kansas Commissioner stated that the general acceptance in Kansas is to idle the compact down to a minimal level of activity until such time as federal legislation abolishes the compact system or the compact is needed again.

The Oklahoma Commissioner explained that her state had been heavily involved in the compact since its beginning; however, her state's perception was a little different from the other member states due to the absence of a nuclear utility but that the compact had some reason to exist and some viability.

Discussion continued among the Commissioners. The Chair then asked to hear from the generators as to their thoughts on the compact and what role the compact should or could play in light of the current disposal availability. Entergy's attorney volunteered to speak for the generators.

The Chair called for a short break of the proceedings at approximately 9:40 a.m. to give the generators, US Ecology's representative and the representative from the Southeast Compact time to prepare statements. The Chair called the meeting back to order at 10:05 a.m.

The Commissioner from Louisiana joined the meeting during the break.

Entergy's attorney, Travis McCullough, began with a statement addressing the perceived failure of the compact and the compact system. Entergy believes that the only failure was the failure in siting the Nebraska facility and is not ready to conclude that either the compact system or this compact are failures. As a major generator, Entergy stated that radioactive waste is a constant and throughout the long siting process the major generators were and continue to be responsible for the disposal of their waste. They believe that the commercial disposal facilities now in operation will continue to be available for the foreseeable future. They do not see that abandoning the compact or the compact system would be a good idea. With the compact still in place there remains a framework should disposal availability become a problem. He indicated that the major generators could endorse a “standby” approach, where a system is in place should a problem with disposal develop. He also responded to questions from the Commissioners regarding the change in public acceptance of nuclear energy and its waste; the economics of volume-driven waste disposal business; and the availability of class B & C waste disposal.

US Ecology's representative, Steve Romano, addressed the Commissioners next. He began with a brief history of the LLRW disposal industry noting that 25 years ago three privately owned facilities accepted the nation's waste, Richland Washington, Barnwell South Carolina and Beatty Nevada. Today there are still three facilities serving the nation—all privately operated sites, Richland Washington, Barnwell, and Envirocare of Utah. He went on to address questions raised earlier in the meeting by the Commissioners—specifically, the protection of the compact system and expressed his opinion that Congress would probably not proactively abolish the LLRW Policy Act because there is no crisis at present. He also responded to an earlier question on the value of compacts. He pointed out that the Rocky Mountain Compact gained access to the Northwest Compact's site in Richland, Washington. A good demonstration of how compacts can work together. The US Ecology representative expressed a personal opinion when he stated that should this compact negotiate access to a future disposal site it would be an enhancement to come to the table with less rather than more waste needing disposal. Speaking for US Ecology, he stated that the company supported the compact system both for public policy reasons and for practical business reasons.

The Southeast Compact representative, Kathryn Haynes, spoke to the issue of the role of the compact and the compact's future. She repeated words used earlier in the meeting—“a quarter of a century without success” and “admitting defeat.” From her own observations, she felt that the compact system was a success in that since 1980 there has been disposal access for the nation. She stated that even though our compact language is different the overall consensus in the beginning was to build regional disposal facilities. However, due to time and events, the Southeast Compact has once again looked at the compact language and feels the overall mission was and is to provide continuous access to reliable waste management services for the purpose of protecting public health and safety as well as the environment of the region. She pointed out that the disposal availability success is a result of compacts working with and within the policies and decision-making processes of the states in which the existing facilities are located. She also shared information gleaned from a survey of the Southeast Compact generators that will be forthcoming in a report.

The Commissioner from Louisiana was given the opportunity to express his state's views on the future compact roles and alternatives. The Commissioner indicated that his state showed no interest in initiating the development of another site or abandoning the compact. The Commissioner did express concern for the small generators—the universities, industries and hospitals that are more focused on providing a product or service than they are concerned with long-term storage of LLRW.

The Commissioners continued their discussion on future roles and alternatives for the compact and how the Executive Consultant could be of assistance in providing the Commission with pertinent information on the future needs of the smaller generators and to help better define what a relatively inactive status might mean to the Commission as well as other items of ongoing Commission business. The distribution of the settlement funds became part of the discussion as well as the escrow commitment for the Texas—Nebraska efforts.

The Chair tasked the Executive Consultant to draft resolutions that reflected the Commissioners positions on several issues from the discussion. The Chair then called for a lunch break at approximately 11:30 a.m.

The Chair called the meeting back to order at approximately 1:40 p.m. The morning's discussion resulted in the following Resolutions:

Resolution I amended

The Commission, having received and considered information regarding the availability and adequacy of options for the processing, storage and disposal of low-level radioactive waste, has determined that no need currently exists for the siting, construction and operation of a disposal facility in the Compact region.

Therefore, it is hereby Resolved that no currently available or anticipated funds shall be utilized in pursuit the siting of a disposal facility within the region, but that the Commission will defer active efforts to site a disposal facility until such time as it determines that the needs of the low-level radioactive waste generators in the region and the public interest justify pursuit of such a facility.

Motion (Resolution I) by Kansas, second by Louisiana, to approve Resolution I with amended language change.

Motion passed 4-0

Resolution II

It is hereby Resolved that the Commission shall take all appropriate and necessary steps to ensure that its activities are organized, staffed and financed at a level which will provide optimal efficient use of resources while providing for (a) ongoing monitoring of developments in the national and regional low-level radioactive waste generation and disposal fields; (b) an annual review of the activities of the Compact to assure that the needs of generators and the public are met; and (c) the establishment and annual review of a business plan for the activities and services of the Compact.

Motion (Resolution II) by Oklahoma, second by Louisiana, to approve Resolution II.

Motion passed 4-0

Resolution III

The Commission has actively and diligently carried out contract negotiations with Envirocare of Utah over the past 12 month period for use of Envirocare's facility by generators in the Compact region and in Nebraska in accordance with the terms of its Settlement Agreement with Nebraska. Having now determined that existing disposal options are available and adequate to the needs of the region, it is Resolved that said negotiations shall be indefinitely suspended, to be reopened only upon the subsequent authorization of the Commission.

The Chair read the above Resolution III into the record and discussion ensued. The Chair expressed concern that by passage this Resolution may undo progress that may have been made in the negotiations. The Commissioner from Louisiana reminded the Commission that a Committee had been formed to work on this issue and that the Commission represented the minor generators in this issue. A major generator representative expressed concern of the exact nature of the role the Commission would play in the contract with Envirocare. The Kansas Commissioner expressed concern over administration duties and the expense of Commission's involvement. Commission's Outside Legal Counsel gave a brief update on the talks with Envirocare and indicated that the Commission may well be needed.

A brief recession was called for. The Chair reconvened the meeting at 2:20 p.m.

The Chair asked for a motion on Resolution III. The Kansas Commissioner made a motion based on Resolution III with the following modification: . . . shall be indefinitely suspended pending a determination of needs of small generators and the inclusion of such a contract in an approved business plan.

The Commissioners continued their discussion on Resolution III. Commission's Outside Legal Counsel went in to more detail on the talks with Envirocare and the Chair felt that the continued talks with Envirocare would be an issue for the Commission's committee on disposal access and the Executive Consultant to look into before the Commission adopted any type of resolution that would suspend or end the talks.

Motion (Resolution III) died for lack of a second.

Resolution IV amended

The Commission, having now determined that options for the processing, storage and disposal of low-level radioactive waste are currently adequate to the needs of the region and having pursued arrangements for access to the proposed disposal facility in the State of Texas during the preceding 12 month period, it is hereby resolved that the 10% escrow of funds for the settlement of the claims against Nebraska is deemed to be no longer required or appropriate, that it shall not be established or maintained and that active pursuit of arrangements regarding the Texas facility shall be indefinitely suspended, to be resumed only upon authorization by the Commission.

Discussion followed among the Commissioners. The Executive Consultant suggested the additional language and the maker of the motion and the seconder were in agreement. Outside Legal Counsel gave a brief history of the issue.

Motion (Resolution IV) by Louisiana, second by Kansas to adopt Resolution IV with additional language (of low-level radioactive waste).

Motion passed 4-0

Resolution V

The Commission's Consultant is hereby directed to carry out a review of the disposal needs and practices of small generators of low-level radioactive waste in the member states and to report the results of said review to the Commission not later than its January 2006 meeting.

Motion (Resolution V) by Oklahoma, second by Louisiana to adopt Resolution V.

Motion passed 4-0

The Chair indicated that the future role of the Commission was still without definition and that additional information was needed. The Commissioner from Kansas brought up the topic of the Commission's office location and felt it should remain in Lincoln for now. The other Commissioners agreed that there was still business to conduct from its current location.

A short break was called for and the Chair called the meeting back to order at approximately 3:17 p.m.

The Chair then introduced the next agenda item relating to claims submitted for consideration against the expected settlement funds with a brief history. She opened the floor for discussion on the topic.

The first claim addressed by the Commissioners was the repayment to the member states of monies contributed for the Community Improvement Fund. The ensuing discussion and attempts to draft the appropriate resolution language resulted in the Commissioner from Kansas suggesting that the Commissioners make concept ional motions to address the claims and then allow time for Counsel to make the calculations and write the resolutions. The calculations were to include the deduction of the court costs awarded to the Commission. The other Commissioners agreed.

The next claim for discussion was submitted by the Major Generators group. There was extensive discussion on what amount to return to the Major Generators. The Commissioners were in agreement that the principal (i.e., the actual damages awarded before the pre-post judgment and post-settlement interest) amount should be returned immediately, however concerns were expressed over the idea of retaining the interest for future needs yet to be determined. The Commissioners expressed an interest in hearing from the Major Generators who requested time to caucus amongst themselves.

The Chair then called for discussion of the settlement and contract termination offer submitted by US Ecology. US Ecology's representative responded to questions regarding the offer. The Chair asked if a motion was forthcoming or if the Commissioners wished to wait until the numbers had been checked by Commission's Counsel. The Commissioner from Kansas moved that a resolution be prepared and the Commissioner from Louisiana seconded the motion. The motion passed 4-0.

The Chair asked if the Major Generators were ready to address the Commission on the claim issue. The representative indicated that more time was required and that they would be ready to address the Commission on the next day of the meeting.

The Commissioner from Kansas brought up the claim submitted by the Village of Butte and moved that the claim be rejected. Through discussion it was brought out that there may be some validity in the claim with regard to the build out of the village water system. Mention was also made of the possibility of deeding the Butte facility land directly to the village. The Chair indicated a desire for the Executive Consultant to look further into the village claim and disposition of the site. There was no second to the Kansas Commissioner's motion.

The meeting was recessed at approximately 4:28 p.m. by the Chair.

The Chair reconvened the meeting at approximately 8:06 a.m., on July 15, 2005. Roll was called and all Commissioners responded.

The Chair gave the Major Generator representative the floor. Mr. McCullough recapped the events of the previous day and indicated that the Major Generators were appreciative of the substantial decisions made by the Commissioners. The representative expressed concern over the Commission's discussion of withholding pre-judgment, post-judgment and post-settlement interest from the major generator claimants for the purpose of possible future claims or future mission. He made a proposal to the Commission that would leave $4 million in the Commission's control for future claims and future mission. The Chair responded that future claims may be relevant but in a larger scope disposal opportunity and statutory obligation with respect to the compact deserved more emphasis. She pointed out that the smaller generators were not at the meeting and that the Commissioners may not know everything they need to know to make the correct decision on the interest distribution question and that giving the Executive Consultant and Outside Legal Counsel time to review the information would be beneficial to all. The Commissioner from Kansas asked for an executive session with Counsel to be advised of any legalities of the major generator proposal and the Commission's legal authority.

Motion by Arkansas, second by Oklahoma to enter into executive session to receive advice from Outside Legal Counsel with respect to the Major Generator proposal.

Motion passed by acclamation

The Chair called for executive session at approximately 9:45 a.m. The Chair called the meeting back to order at approximately 10:16 a.m.

The Chair asked to hear from the Major Generators and Commissioners regarding a counter proposal to hold a smaller portion of the settlement funds than was initially discussed. The Louisiana Commissioner indicated that he would prefer no strings attached to the funds. The Major Generators requested a brief recess to caucus. The recess was granted. The Chair called the meeting back to order at approximately 10:30 a.m.

The Major Generator representative indicated that they felt the larger portion suggested by the Commission was out of proportion to the scope of the Commission's future role and activities laid out by the resolutions adopted on the previous day. They modified their proposal to come closer to the Commissioner from Louisiana's preference of no strings attached. The Kansas Commissioner moved to ask counsel to prepare a resolution that would pay the Major Generators the amount of the principal, pre-, post-judgment and post-settlement interest with a hold back of $4 million for Commission's use for future claims and operations with no strings attached. The suggested motion did not receive a second.

The Chair again expressed her opinion that the issue would be settled ultimately but that making a final decision on the Major Generator claims today was not necessary and that the Commission needed time to look at options. The Major Generator's attorney came forward to explain their concern for the 60-day limitation set by Commission's Rules to aggrieve a final decision of the Commission. The Kansas Commissioner asked if the Major Generators would feel comfortable with an escrow account and a time provision set to expire after a five-year period. The attorney stated that authorization to negotiate was not his but that Commission's resolution and vote on this issue would determine the amount of risk for this clients and the risk factor would determine how they would respond.

Commission's Executive Consultant recommended that the Chair call for an executive session to receive advice from Outside Legal Counsel regarding the implied litigation possibilities.

Motion by Oklahoma, second by Louisiana to enter into executive session to receive legal advice.

Motion passed 4-0

The Chair called the meeting back to order at approximately 11:10 a.m. A motion was made by the Chair to which the other Commissioners added that would return to the Major Generators their principal investment amount and all interests with a hold back of $15 million and at the January 2006 meeting a decision would be made on the hold back amount after Executive Consultant reported to the Commission. The motion passed 3-0 with Oklahoma absenting.

The Chair read the following Resolutions into the record:

Resolution—US Ecology Claim

The Commission anticipates receiving a substantial payment from the State of Nebraska on or about August 1, 2005, pursuant to the Settlement Agreement between Nebraska and the Commission. Assuming timely receipt of such payment, the Commission Resolves to pay to US Ecology, Inc. the total sum of $11,804,739.16 in resolution of the claim submitted by US Ecology, Inc. This resolution also incorporates the terms set out in the letter from Steve Romano to Laura Gilson dated July 8, 2005, except that the Commission reserves the right to direct US Ecology to dispose of or otherwise deal with the real property owned by US Ecology near Butte, Nebraska in a manner different from that set out in said letter.

Motion (Resolution—US Ecology Claim) by Arkansas, second by Louisiana to approve payment of US Ecology's claim as read.

Motion passed 4-0

Resolution—Community Improvement Funds Claim

The Commission anticipates receiving a substantial payment from the State of Nebraska on or about August 1, 2005, pursuant to the Settlement Agreement between Nebraska and the Commission. Assuming timely receipt of such payment the Commission Resolves to pay to the States of Arkansas, Kansas, Louisiana and Oklahoma the total sum of $4,223,058.70 to be divided equally among them in resolution of the claim held by those States relating to their payments of Community Improvement funds. The Commission has been instructed by Louisiana that its share of the total sum should be paid to Entergy Louisiana, Inc. The Commission has been instructed by Kansas that its share of the total sum should be paid as follows; 60% to Wolf Creek Nuclear Operating Company; 30% to the State of Kansas; and 10% to Coleman Corp., now known as Jarden Corp. The specific distributions per this resolution will be:

Arkansas $1,055,764.66

Oklahoma $1,055,764.66

Entergy Louisiana, Inc. $1,055,764.66

Wolf Creek Nuclear Operating Co. $633,458.79

Kansas $316,729.40

Jarden Corp $105,567.47

Motion (Resolution—Community Improvement Funds) by Arkansas, second by Kansas to approve payment to contributing states as read.

Motion passed 4-0

The Chair asked if there were any other claims ready for consideration. The Commissioners agreed to give the Executive Consultant time to review and make recommendations on the remaining claims.

The Kansas Commissioner asked some administrative questions regarding the expected settlement monies. He moved that a resolution be drafted to require Commission action before monies may be used from the Settlement Funds retained by the Commission and that the Executive Consultant be a signer on the account. The Louisiana Commissioner seconded the motion. The motion passed 4-0.

A Major Generator representative asked if the Commission would be providing a statement for the record on their claim indicating the amounts to be paid and entities to receive the funds. The Chair asked Outside Legal Counsel to draft a resolution.

The Chair introduced the next agenda item pertaining to the use of an investment consultant. She indicated that the issue would be better left for evaluation by the Executive Consultant given the amount and time limitations. No action was taken by the Commission on this item.

The Chair went on to the next agenda item of administrative budget adjustments. With the Commission's approval of payment of the US Ecology claim all funding would cease for the developer. And, funding was needed for the addition of the Executive Consultant.

Motion by Arkansas, second by Oklahoma to strike line-item Butte Site Maintenance / US Ecology and add line-item Executive Consultant for $75,000.00 to the administrative budget for fiscal year 2006.

Motion passed 4-0

The Chair called for a recess for lunch at 11:30 a.m. She called the meeting back to order at approximately 1:10 p.m.

The Chair read the following into the record and called for a motion to adopt:

Resolution—Major Generator Claims

The Commission anticipates receiving a substantial payment from the State of Nebraska on or about August 1, 2005, pursuant to the Settlement Agreement between Nebraska and the Commission. The Commission acknowledges receipt of a joint claim submitted by the Major Generators. The Commission has previously resolved to investigate study and consider its future role and obligations, and has tasked its consultant to initiate such investigation and report to it concerning the same. The Commission Resolves to withhold, for the time being, the sum of $15,000,000.00 from the amount the Major Generators claim to be owed by the Commission, until such investigation and report is completed, and it can be determined whether or not it has any need for the retention of the substantial funds. The Commission Resolves that it is presently making no final decision regarding disposition of the $15,000,000.00 it is retaining pursuant to this resolution. Assuming timely receipt of the anticipated payment by Nebraska, the Commission Resolves to pay to the Major Generators at this time the total sum of $114,745,716.10 on their claim, and reserves final decision on payment of the $15,000,000.00 retained by it. The total sum to be paid pursuant to this resolution shall be divided among the Major Generator claimants as follows:

Entergy Arkansas (20.57%) $23,603,193.80

Entergy Gulf States (17.30%) $19,851,008.88

Entergy Louisiana (16.07%) $18,439,636.58

Nebraska Public Power District (16.07%) $18,428,162.01

Omaha Public Power District (13.48%) $15,467,722.53

Wolf Creek Nuclear Operating Company (16.52%) $18,955,992.30

Motion (Resolution—Major Generator Claims) by Louisiana, second by Kansas to approve payment of the Major Generator Claims as read.

Motion passed 3-0-1 (Oklahoma abstaining)

The Chair read into the record the following resolution:

Resolution—Administration of Settlement Funds

The Commission has established an account at Union Bank in Lincoln, Nebraska for the purpose of receiving, distributing and managing certain proceeds of the Settlement of the Commission's case against the State of Nebraska. The Commission will control and manage those funds with extreme care and with the attention of the entire Commission.

Therefore, it is hereby

RESOLVED, that no funds in that account may be withdrawn, transferred out, or expended except with the express authority of the Central Interstate LLRW Commission in the form of a resolution passed by a majority vote of the Commission authorizing such withdrawal, transfer out, or expenditure, and then by two authorized signators on any such transaction.

It is further hereby RESOLVED that the Commission selects and authorizes as its only two authorized co-signators (1) its Chairperson, Laura Gilson of Little Rock, Arkansas, and (2) its Executive Consultant, James O'Connell of Shawnee, Kansas. Their authority in this regard begins on this date, and shall continue until changed or withdrawn by Resolution of this Commission. They are also authorized by this Resolution to take any and all administrative steps necessary to setting up and managing the account, including but not limited to signing signature cards for the Union Bank's use and making certain that the account reports from the bank are reconciled and checked.

Motion (Resolution—Administration of Settlement Funds) by Arkansas, second by Kansas to adopt the Resolution regarding the administration of the Settlement Funds as read.

Motion passed 4-0

The Chair asked for a motion to adjourn.

Motion by Louisiana, second by Oklahoma to adjourn the meeting.

Motion passed by acclamation

The meeting was adjourned.

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