- Associated Press - Friday, May 2, 2014

COLUMBIA, S.C. (AP) - South Carolina dropped a lawsuit Friday aimed at saving a nuclear reactor fuel project at the Savannah River Site after the Obama administration agreed to keep funding the plant through the current fiscal year.

The state sued the U.S. Energy Department earlier this year, seeking to keep the government from defunding a multi-billion dollar project near Aiken to turn weapons-grade plutonium into commercial reactor fuel. The project’s price tag has ballooned over the years to nearly $8 billion, and the Obama administration said earlier this year it intended to mothball the entire effort.

But the project, known as MOX, is part of a nonproliferation agreement between the United States and Russia, with each country agreeing to dispose of 34 tons of weapons-grade plutonium - an amount that officials have said is equal to 17,000 warheads. It would be the first of its kind in the United States and is slated to open in 2016.

The administration said it would look for another way to dispose of the plutonium and thereby honor that agreement, like immobilizing it in glass or processing it in different kinds of reactors.

But in its lawsuit, South Carolina said the federal government had made a commitment to the state and shouldn’t shutter the effort, which would result in lost jobs. The lawsuit also said the administration couldn’t use money intended to build the plant to shut it down.

Earlier this week, the National Nuclear Security Administration said it would continue to fund construction at the site through the fiscal year that ends Sept. 30. As such, South Carolina Attorney General Alan Wilson said the state had no reason to continue with the lawsuit.

“Although I am disappointed that, once again, the state was forced to seek redress from the courts to protect the citizens of South Carolina from a federal government ignoring the rule of law, we are pleased with the outcome in this case,” Wilson said in a statement provided to The Associated Press. “The federal government will continue moving forward, at least for now, on this project that is critical to security of our state and country.”

The stipulation to dismiss the case was signed both by Wilson and attorneys representing the Energy Department.

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Kinnard can be reached at https://twitter.com/MegKinnardAP

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