Free Response to Proposed Findings of Uncontroverted Fact - District Court of Federal Claims - federal

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No. 00-697C (Senior Judge Merow) _____________________________________________________________________________ IN THE UNITED STATES COURT OF FEDERAL CLAIMS WISCONSIN ELECTRIC POWER COMPANY, Plaintiff, v. UNITED STATES, Defendant. ______________________________________________________________________________ DEFENDANT'S RESPONSE TO PLAINTIFF'S PROPOSED FINDINGS OF FACT ______________________________________________________________________________

JEFFREY S. BUCHOLTZ Acting Assistant Attorney General OF COUNSEL: JANE K. TAYLOR Office of the General Counsel U.S. Department of Energy 1000 Independence Ave., S.W. Washington, D.C. 20585 ALAN LO RE Senior Trial Attorney STEPHEN FINN SONIA M. ORFIELD RUSSELL A. SHULTIS Trial Attorneys Commercial Litigation Branch Civil Division Department of Justice March 25, 2008 JEANNE E. DAVIDSON Director HAROLD D. LESTER, JR. Assistant Director SHARON A. SNYDER Trial Attorney Commercial Litigation Branch Civil Division Department of Justice Attn: Classification Unit 8th Floor 1100 L Street, N.W. Washington, D.C. 20530 Tele: (202) 305-9640 Fax: (202) 307-2503 Attorneys for Defendant

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TABLE OF CONTENTS PAGE I. II. INTRODUCTION AND OVERVIEW OF WE'S DAMAGES . . . . . . . . . . . . . . . . . . . . . 1 BACKGROUND . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 A. B. III. IV. WISCONSIN ELECTRIC POWER COMPANY . . . . . . . . . . . . . . . . . . . . . . . . . 4 POINT BEACH NUCLEAR POWER PLANT . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

WE TRIAL WITNESSES (IN THEIR ORDER OF TESTIMONY) . . . . . . . . . . . . . . . 20 THE NWPA AND THE STANDARD CONTRACT . . . . . . . . . . . . . . . . . . . . . . . . . . . 45 A. WE CLOSELY FOLLOWED THE FEDERAL GOVERNMENT'S DISCHARGE OF ITS RESPONSIBILITY TO DISPOSE OF SPENT NUCLEAR FUEL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45 DEVELOPMENT OF THE NWPA AND THE STANDARD CONTRACT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51

B.

V.

THE STANDARD CONTRACT AND THE PARTIES' UNDERSTANDING . . . . . . 59 A. DOE'S POST-CONTRACT CONDUCT CONFIRMED THE PARTIES' UNDERSTANDING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88 WE'S POST-CONTRACT EXECUTION ACTIVITIES . . . . . . . . . . . . . . . . . 105

B. VI.

BY THE END OF 1987, WE BECAME EXTREMELY CONCERNED WITH THE DOE'S IMPLEMENTATION OF THE NWPA . . . . . . . . . . . . . . . . . . . . . . . . . . 115 BY 1988, WE'S CONCERN WITH DOE'S LACK OF PERFORMANCE HAD INCREASED, AND WE BEGAN INVESTIGATING LONG-TERM SNF STORAGE PLANNING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 131 IN 1989, WE IDENTIFIED DRY STORAGE OF SNF AS THE MOST COST-EFFECTIVE AND FLEXIBLE POTENTIAL SOLUTION TO THE LONG-TERM UNCERTAINTY OF DOE'S PERFORMANCE . . . . . . . . . . . . . . . . . 146 WE CONTINUED TO PURSUE DRY STORAGE IN 1990 BECAUSE OF DOE'S LACK OF PROGRESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 159

VII.

VIII.

IX.

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TABLE OF CONTENTS (Cont'd) PAGE X. THE 1991 ACR USED AN ANNUAL ACCEPTANCE RATE OF 900 MTU THAT WAS ILLEGAL UNDER EXISTING LAW . . . . . . . . . . . . . . . . . . . . . . . . . . . 164

XI.

IN 1991, WE APPLIED TO THE PSCW FOR AUTHORITY TO IMPLEMENT DRY STORAGE BECAUSE DOE WOULD NOT PERFORM UNTIL WELL AFTER 1998, IF AT ALL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 178 DURING THE 1990S, DOE'S PLANS FOR AN MRS FAILED, DOE ANNOUNCED THAT IT HAD NO OBLIGATION TO TIMELY PERFORM, AND DOE SUSPENDED THE DCS/FDS PROCESS . . . . . . . . . . . . . . . . . . . . . . . . . 226 IN 1995, WE COMMITTED TO DRY STORAGE BY CONSTRUCTING AN ISFSI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 235

XII.

XIII.

XIV. IN 1996, WE EXPERIENCED A VSC-24 CASK LOADING INCIDENT AND DEVOTED SUBSTANTIAL RESOURCES TO RECOVER THE ABILITY TO USE DRY STORAGE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 245 XV. IN 2000, WE APPLIED TO THE PSCW FOR ADDITIONAL CASKS AND SELECTED THE NUHOMS SYSTEM FOR WE'S FUTURE STORAGE NEEDS . . 267

XVI. IF DOE HAD PERFORMED, WE WOULD NOT HAVE BUILT A DRY STORAGE FACILITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 283 A. WE COULD HAVE OPERATED AT LEAST INTO 1998 AND, IF NECESSARY, INTO 1999 WITHOUT DRY STORAGE . . . . . . . . . . . . . . . . 288 WE HAD THE ABILITY TO MAKE 1500 POOL SPACES AVAILABLE . . 315 DOE'S ACCEPTANCE OF SPENT FUEL IN THE NON-BREACH WORLD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 322 WE REGARDED FULL CORE RESERVE AS A GOOD OPERATING PRACTICE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 331 WE WOULD LIKELY HAVE USED A TEMPORARY RACK IN THE CASK LAYDOWN AREA TO MAINTAIN FCR . . . . . . . . . . . . . . . . . . . . . 343

B. C.

D.

E.

XVII. WE INVESTIGATED PRIVATE FUEL STORAGE AND RELATED OPTIONS . . 393 -iii-

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TABLE OF CONTENTS (Cont'd) PAGE XVIII. THE NRC LEVIED LICENSING, INSPECTION, AND GENERIC FEES ON POINT BEACH . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 400

XIX. WE ESTABLISHED ITS DAMAGES TO A REASONABLE CERTAINTY . . . . . . . 426 A. B. C. D. INTERNAL LABOR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 437 GENERAL AND ADMINISTRATIVE COSTS . . . . . . . . . . . . . . . . . . . . . . . . 444 WEIGHTED AVERAGE COST OF CAPITAL ("WACC") CLAIM . . . . . . . 449 WE CALCULATED THE TEMPORARY RACK OFFSET IN THE NON BREACH WORLD WITH REASONABLE CERTAINTY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 461

XX.

WE MAY REASONABLY RELY UPON REBUTTAL EVIDENCE . . . . . . . . . . . . . 465

XXI. DOE CASK LOADING OFFSET . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 477 XXII. ADDITIONAL FINDINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 481

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IN THE UNITED STATES COURT OF FEDERAL CLAIMS WISCONSIN ELECTRIC POWER COMPANY, Plaintiff, v. UNITED STATES, Defendant. ) ) ) ) ) ) ) ) ) )

No. 00-697C (Senior Judge Merow)

DEFENDANT'S RESPONSE TO PLAINTIFF'S PROPOSED FINDINGS OF FACT Defendant, the United States, submits the following responses to the proposed findings of fact filed by plaintiff, Wisconsin Electric Power Company ("WEPCO or WE or Wisconsin Electric") on December 21, 2007. I. INTRODUCTION AND OVERVIEW OF WE'S DAMAGES 1. As required by the Nuclear Waste Policy Act of 1982, Pub. L. No. 97-425, 96

Stat. 2201 (1983) ("NWPA") (codified as amended at 42 U.S.C. §§ 10101-10270), the U.S. Department of Energy ("DOE") entered into Contract No. DC-CR01-83NE44425 ("Contract" or "Standard Contract") with WE. In return for very substantial fees, DOE assumed responsibility for storage and disposal of WE's spent nuclear fuel ("spent fuel" or "SNF") and high-level radioactive waste ("HLW") "beginning not later than January 31, 1998." WE has paid all fees due under the Standard Contract, a total of $215.2 million as of December 31, 2006. Tr. 2610:2-5 (Farron) ($215 million in fees paid as of 9/25/07). Nuclear Waste Policy Act of 1982, Pub. L. No. 97-425, 96 Stat. 2201 (1983) (codified as amended at 42 U.S.C. §§ 10101-10270). PX 41 (Standard Contract).

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RESPONSE: This proposed finding of fact is not a finding of fact, but a conclusion of law about which testimony is inadmissible. Berry v. City of Detroit, 25 F.3d 1342, 1353 (6th Cir. 1994). The Government does not dispute that fees paid by WEPCO pursuant to the Standard Contract are required in order to fund current Department of Energy ("DOE") activities. However, WEPCO also pays its fees to fund the costs of constructing a repository that will store spent nuclear fuel ("SNF") safely for more than 10,000 years. Furthermore, the Government states that, as of December 31, 2006, WEPCO had paid fees totaling $213.46 million, not as WEPCO states, $215.2. 2. DOE breached its contractual obligation to WE to commence acceptance of spent

fuel and HLW by January 31, 1998 and thereafter. In fact, DOE has failed to accept any of WE's spent fuel and now indicates that its "best-achievable" schedule for commencement of accepting SNF is 2017 or 2018. Wis. Elec. Power Co. v. United States, No. 00-697C, Order (Fed. Cl. Oct. 8, 2004). Northern States Power Co. v. United States, 224 F.3d 1361 (Fed. Cir. 2000); Maine Yankee Atomic Power Co. v. United States, 225 F.3d 1336, 1342 (Fed. Cir. 2000) ("The breach involved all the utilities that had signed the contract-the entire nuclear electric industry."). PX 719 (July 19, 2006 Statement of Edward F. Sproat III, Director, Office of Civilian Radioactive Waste Management ("OCRWM"), U.S. Department of Energy, Before the Subcommittee on Energy and Air Quality, Committee on Energy and Commerce, United States House of Representatives). Statement of Edward F. Sproat III, Director for Civilian Radioactive Waste Management, U.S. Department of Energy, FY 2008 Appropriations Hearing, March 7, 2007, available at

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www.ocrwm.doe.gov/info_library/program_docs/testimonies/Testimony_3-07-20 07.pdf (last visited Dec. 7, 2007). RESPONSE: This proposed finding of fact is not a finding of fact, but a conclusion of law about which testimony is inadmissible. Berry v. City of Detroit, 25 F.3d 1342, 1353 (6th Cir. 1994). The Government does not dispute that DOE has to date not accepted any of WEPCO's SNF and did not begin SNF acceptance by January 31, 1998.1
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Southern Nuclear Operating Co. v. United States, 77 Fed. Cl. 396, 402 (2007).

We did not contest at trial the existence of a partial breach of the Standard Contract. However, the Government has been specifically enjoined, via a writ of mandamus issued by the United States Court of Appeals for the District of Columbia Circuit, from relying upon the "Unavoidable Delays" clause of the Standard Contract to excuse its delayed performance. See Northern States Power Co. v. United States Dept. of Energy, 128 F.3d 754, 760 (D.C. Cir. 1997). That provision states that "[n]either the Government nor Purchaser shall be liable under this contract for damages caused by failure to perform its obligations hereunder, if such failure arises out of causes beyond the control and without the fault or negligence of the party failing to perform." 10 C.F.R. § 961.11, Art. IX.A (emphasis added). The effect of the writ of mandamus upon our ability to defend the liability phase of this case cannot be overstated. The D.C. Circuit has eliminated one of the central provisions of the Standard Contract that governs the parties' liability in the event of delays in SNF acceptance. With this clause, DOE would have had the ability to present an absolute defense to liability in this case. Without it, DOE now faces billions of dollars in damages claims. The writ of mandamus wholly changes the nature of the Standard Contract, essentially and inappropriately creating a contract (one without an "Unavoidable Delays" clause) between the parties to which DOE never agreed, and preventing us from relying upon CP&L's own written acknowledgment that DOE's delays in acceptance would be "unavoidable." We have consistently argued that the D.C. Circuit overstepped its jurisdiction and authority in issuing this writ of mandamus (given that the judicial review provision of the NWPA, 42 U.S.C. § 10139, does not permit the D.C. Circuit to review contract administration matters). Recently, in Nebraska Public Power District v. United States,73 Fed. Cl. 650, 673 (2006) (Allegra, J.), this Court determined that the writ of mandamus was void because, in issuing the writ, the D.C. Circuit "operated in excess of its jurisdiction and, specifically, without an appropriate waiver of sovereign immunity." This Court subsequently certified its decision for interlocutory appeal to the United States Court of Appeals for the Federal Circuit, Nebraska 3

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3.

Because of the Government's breach, WE has incurred very substantial damages

for investigation, licensing and construction of alternative SNF storage. As detailed below, DOE's partial breach of the parties' Contract has caused WE to incur damages in the amount of $96,541,000 through the time of trial. Tr. 4661:19-4662:11 (Metcalfe). PDX 61-Metcalfe 22 (Summary of Total Past Damages, By Category (Through 2/2007) Including Trial Adjustment).

RESPONSE: The Government disputes WEPCO's contention that it has incurred and is continuing to incur damages related to the on-site storage of SNF. As detailed in the Government's proposed findings, of the $96,541,000 damages that WEPCO seeks to recover in this litigation, only $10.2 million are costs that it would not have incurred if DOE had commenced performance under the Standard Contract by January 31, 1998. See DPFOF ¶ 654. II. A. BACKGROUND WISCONSIN ELECTRIC POWER COMPANY 4. Wisconsin Electric Power Company is a wholly owned subsidiary of Wisconsin

Energy Corporation ("WEC"). WEC is listed on the New York Stock Exchange. WE provides electricity to residential and commercial customers in Wisconsin and the Upper Peninsula of

Public Power District v. United States, 74 Fed. Cl. 762 (2006), and, on March 1, 2007, the Federal Circuit issued an order granting Nebraska Public Power's petition for permission to appeal. Nebraska Public Power District v. United States, Misc. Docket No. 843, 2007 WL 779291 (Fed. Cir. Mar. 1, 2007). On December 3, 2007, after the completion of the trial in this matter, the United States Court of Appeals for the Federal Circuit heard oral argument in Nebraska Public Power District v. United States, No. 2007-5083 (Fed. Cir.). The Government reserves the right to challenge any determination of liability with respect to the Standard Contract if the writ of mandamus is lifted or otherwise deemed inapplicable. 4

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Michigan. WE conducts business as We Energies and also is known as Wisconsin Electric. WE is regulated by the Federal Energy Regulatory Commission ("FERC"), the Public Service Commission of Wisconsin ("PSCW") and the Michigan Public Service Commission. RESPONSE: The Government does not dispute this proposed finding of fact. 5. In 1970, the Nuclear Regulatory Commission ("NRC") issued a license to WE to Tr. 102:21-103:13 (Baumann). Tr. 4550:14-25 (Metcalfe). PX 801 (WEC Forms 10-K).

operate the first unit at Point Beach Nuclear Power Plant ("Point Beach" or "PBNP") for 40 years, expiring in 2010. In 1973, the NRC licensed WE to operate the second unit, expiring in 2013. In 2005, the NRC subsequently relicensed each unit for an additional 20 years. RESPONSE: The Government does not dispute this proposed finding of fact. 6. The Point Beach Nuclear Plant is a two-unit pressurized water reactor nuclear Tr. 108:10-16 (Baumann). PX 1, p. 5 (Facility Operating License). PX 2, p. 5 (Facility Operating License).

power plant. It is located approximately 100 miles north of Milwaukee and 35 miles southeast of Green Bay, adjacent to Lake Michigan. The Point Beach dry storage facility is located approximately one-half mile west of the power plant. Tr. 107:24-108:5; 110:8-22; 116:17-19 (Baumann). 5

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RESPONSE: The Government does not dispute this proposed finding of fact. 7. Each Point Beach nuclear power unit has one pressurized water reactor. Each unit

is rated at approximately 517 megawatts of power. The latest plant upgrade increased the power generation capacity of each unit to 535 megawatts. Nuclear-generated power supplies approximately 25 percent of WE's power requirements. RESPONSE: The Government does not dispute this proposed finding of fact. 8. Until 2000, WE managed Point Beach through its Nuclear Power Department Tr. 108:2-9 (Baumann). Tr. 108:17-21 (Baumann).

with personnel located in Milwaukee and at Point Beach. In 2000, WE, along with several other Midwest nuclear power utilities, formed the Nuclear Management Company ("NMC") to operate their nuclear power plants. Besides Wisconsin Electric, initial NMC members included Wisconsin Public Service, Iowa Electric, Northern States Power, and Consumer's Energy. In 2000, WE transferred the Point Beach operating licenses to NMC but continued to own Point Beach through September 2007. WE also continued to handle Point Beach's regulatory affairs. Tr. 104:17-24 (Baumann). Tr. 2536:19-24; 2537:7-11 (Farron) (NMC doesn't "have a state regulatory affairs group . . . for . . . work related to Point Beach." Instead, "[i]t was all coordinated or done by Wisconsin Electric.").

RESPONSE: The Government does not dispute this proposed finding of fact. 6

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B.

POINT BEACH NUCLEAR POWER PLANT 9. Point Beach uses uranium fuel. Uranium oxide pellets (little-finger sized) that are

composed of U-235 are placed into 12-14 foot metal rods and bundled into assemblies, approximately nine inches square. Assemblies are placed in the reactor core, where fission produces heat, which is converted to steam, which drives turbines and generates electricity. RESPONSE: The Government disputes this proposed finding of fact to the extent that it implies that uranium oxide fuel pellets are composed entirely of uranium-235 ("U-235"). The amount of U235 that is in nuclear fuel is referred to as the enrichment. The current NRC limit on enrichment is 4.95 percent. Tr. 122:9-21 (Baumann). The spent fuel storage racks at Point Beach are limited to fuel with enrichments less that 4.75 percent. PX 346 at WISC 00003651. 10. Once spent fuel assemblies are discharged from the reactor core, they are highly Tr. 116:20-123:20 (Baumann). PDX 4 (Model: nuclear fuel assembly).

radioactive and very hot from decay heat. The spent fuel assemblies are discharged from the reactor core into the spent fuel pool, where the spent fuel assemblies cool for a minimum of five years. Tr. 115:4-116:19; 128:22-131:17 (Baumann). PX 346, p. WISC00003550, Figure C (Aug. 1994 Final Environmental Impact Statement ("FEIS")).

RESPONSE: The Government does not dispute this proposed finding of fact.

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11.

Each reactor core at Point Beach can hold 121 fuel assemblies, a "full core."

Some of the fuel in the core is replaced during periodic refueling activities. Point Beach operated on 12-month refueling cycles prior to 1998 but currently operates on an 18-month refueling cycle. Refuelings for the two reactors are staggered over time, and the two reactors are refueled at different times. The length of the refueling cycle affects the number of assemblies removed in a given refueling. The current discharge size is typically 36 assemblies for the 18-month cycle and was typically 28 assemblies for a 12-month cycle. Tr. 100:9-11; 123:2-125:22 (Baumann). Tr. 125:9-12 (Baumann) (explaining that, for annual refueling cycles, 28 assemblies are discharged per year per reactor). PX 236, ESR p. 59 (Nov. 1991 ISFSI application and ESR) (28 assembly discharges for 12-month cycles). Tr. 646:15-24 (Zabransky) (28 assembly discharges).

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RESPONSE:

The Government disputes this proposed finding of fact and objects to it as vague and misleading. Plaintiff cites 28 assemblies as the "typical" discharge size for a 12-month fuel cycle at Point Beach Units 1 and 2. WEPCO achieved that discharge size only during the last years that the facility operated using a 12-month fuel cycle. Mr. Zabransky testified that the "typical" discharge at Point Beach for a 12-month cycle started at 36 fuel assemblies, then went to a discharge of 32 fuel assemblies for a period of time, and then finally to 28 fuel assemblies. Tr. 1141:4-13 (Zabransky); see also DX 441 at HQR364 0013 (Unit 1); DX 442 at HQR364 0037 (Unit 2). The 1985 RW-859 forms predicted continued operation through plant life discharging 32 fuel assemblies per unit per year. See DX 443 at HQR364 0054; DX 444 at HQR364 0068 8

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(comparable forms for 1986, also showing 32 assemblies per unit per year); DX 445 at HQR364 0089; DX 446 at HQR364 0116 (1987 RW-859 forms show one year at 28 fuel assemblies discharged, then returning to 32 fuel assemblies discharged, per reactor per year). Mr. Baumann testified that planned discharges reported to the PSCW in 1995 were 32 for a 12-month cycle (Tr. 252:6-11 (Baumann); DX 73), and 44 fuel assemblies discharged for an 18-month cycle. Tr. 262:13-25 (Baumann); DX 73. Similarly, WEPCO's assertion that a "typical" discharge size is 36 assemblies is pure hindsight. WEPCO projected that 36 fuel assemblies would be discharged at Point Beach Unit 1 in 1999, after the cycle length had changed to 18 months. See PX 554 at WISC 00098776 (showing projected discharges of 40 assemblies for Unit 1 for the next five cycles from 2001 to 2007). However, WEPCO's projections also showed that the change in reload/discharge size to 36 fuel assemblies would only occur after several cycles of operation at 18-month cycles. Id. Similarly, for Unit 2, projected reloads/discharges were 40 fuel assemblies per cycle for the five cycles from 2000 to 2006. Id. at WISC 00098802. Reload/discharge sizes of 36 fuel assemblies per reactor per unit per cycle were far from common during operation on an 18-month cycle. In fact, during the 12 cycles from 1998 to 2006 when WEPCO operated on an 18-month cycle it achieved reload/discharge sizes of 36 assemblies only twice. PX 1029 at KRGWE003839 (showing discharges in 2007 of 76 assemblies, or 38 per unit on average). 12. Point Beach has one spent fuel pool located between the two power units in the

Auxiliary Building. The spent fuel pool is about 68 feet by 18 feet and 25 feet deep. Spent fuel assemblies are placed in egg crate like racks in the pool, and the pool is filled with borated water. The boric acid in the borated water is used to control the reactivity, or criticality, of the spent fuel 9

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assemblies stored in the pool. The racks in the PBNP pool also contain a poison, known as Boraflex, to address criticality concerns. WE used to have mandatory, periodic testing of the effectiveness of the Boraflex periodically. Point Beach, however, no longer relies on the Boraflex for criticality protection and, therefore, no longer conducts Boraflex testing. Point Beach also could have deleted this requirement earlier. Tr. 132:7-135:9; 143:2-150:13 (Baumann). Tr. 1714:7-24 (Becka). Tr. 821:6-823:16; 824:18-830:16; 893:8-12; 909:25-910:17 (Hennessy). Tr. 830:17-831:4 (Hennessy) ("Q: Do you have to test Boraflex at Point Beach currently? A: Currently, we do not test the Boraflex at Point Beach. We used to have to test the Boraflex, but we have a new analysis for our spent fuel pool that does not rely on use of Boraflex for criticality, so we don't test our Boraflex anymore. Q: Is there any reason why you could not have done that change earlier, to not test Boraflex? A: No, that change could have been done earlier."). PX 318, Figure 2.3 (Dec. 1993 Facility Waste Transportation Services Planning Document). PX 346, p. WISC00003627, Figure 6-1 (Aug. 1994 FEIS). PX 640, p. WISC00060265-67, section 3.1.2 (Oct. 8, 2002 Point Beach Nuclear Plant, DBD-05 Fuel Handling System Design Basis Document, Rev. 2). PX 727 (Drawing 128-57, Point Beach Spent Fuel Pool). PX 728.9 (Drawing of Point Beach Nuclear Plant Spent Fuel Pool). PX 728.28 (Drawing of Point Beach Nuclear Plant Spent Fuel Pool). PX 740.034 (Point Beach Nuclear Plant Photo - Spent Fuel Pool with Racks and Fuel Handling Tools). PX 740.040 (Point Beach Nuclear Plant Photo - Spent Fuel Pool with Cask Pit Laydown Area).

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RESPONSE:

PX 728.1 (Drawing of Point Beach Spent Fuel Pool).

The Government disputes and objects to this proposed finding of fact as misleading. First, the Point Beach spent fuel pool is not 25 feet deep, it is approximately 40 feet deep. DX 397 at WISC 00025304. While the Government does not dispute that the spent fuel racks at Point Beach contain a neutron poison, Boraflex, to prevent the fissionable material in the spent fuel pool from achieving criticality, there is no evidence in the record to support a finding that Point Beach could have deleted this requirement earlier. See, e.,g., DX 54 at WISC 00003436 (WEPCO identified the need to maintain full core reserve "FCR" for Boraflex testing). One of the reasons WEPCO gave the PSCW for the need to build on-site storage at Point Beach before 1995 was to maintain at least one FCR to conduct periodic surveillance of the SNF storage racks as required by the Nuclear Regulatory Commission ("NRC"). Id. The periodic surveillance was needed to "verify the continued performance of the neutron absorbing material used in the racks [Boraflex]." Id. There is no evidence in the record that WEPCO ever notified the Citizens Utility Board or the PSCW that its response in DX 54 had changed. a. "Pool capacity" refers to the maximum number of SNF assemblies that can be

stored in the pool. Point Beach is licensed to store 1502 SNF assemblies in its spent fuel pool, and there are currently 1500 usable SNF spaces in the Point Beach pool. WE gained access to spaces previously blocked by catwalks overhanging the pool through the use of an offset fuel handling tool. Two spaces in the pool are not considered accessible without modifications to hinges on the fuel transfer canal doors. Point Beach has had 1500 usable spaces since the early 1990s. 11

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PFF 168-172. PX 381, p. HQR3640809 (Nuclear Fuel Data Form RW-859 for Point Beach Unit 1). Tr. 138:6-139:12; 142:18-143:1 (Baumann) (discussing PX 381). Tr. 144:22-145:5 (Baumann). PX 674 (Point Beach Nuclear Plant Operating Instructions, Offset Spent Fuel Handling Tool, OI 4A Safety Related, Revision 2) ("The offset fuel handling tool is a unique fuel handling tool that allows movement of fuel assemblies 3 rows beyond normal bridge travel. This tool is only used for rows 1, 2, 76, 77, and 78."). Tr. 856:14-857:2; 858:3-16; 895:23-896:5 (Hennessy). Tr. 1230:5-12; 1231:20-22 (Shimon). PX 740.047 (Point Beach Nuclear Plant Photo - Entrance to Transfer Canal).

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RESPONSE:

The Government disputes this proposed finding of fact. While the Government does not dispute that WEPCO is licensed to store 1,502 SNF assemblies in its SNF pool, the evidence does not support a finding that WEPCO ever had 1,500 available. In fact, PX 381 at HQR3650870, to which WEPCO cites, is a 1997 RW-859 which indicates that there are 34 spaces in the SNF pool that either are occupied by something other than SNF or are damaged. Moreover, WEPCO completed the last re-rack of its SNF pool in 1980. With that rerack, storage locations for 1,502 spaces were installed. However, not all of the spaces were usable. Catwalks located on the north and south sides of the pool made some spaces inaccessible. DX 397; Tr. 144:22-145:1 (Baumann). In 1989, the year WEPCO initiated its dry fuel storage project, there were 1,387 spaces in the spent fuel pool that were available to store fuel

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assemblies. DX 15. This number of available spaces remained the same through the end of 1990.2 DX 15; DX 53 at HQR364 0241; DX 51 at WISC HQR364 0405. In 1991, when WEPCO applied for authorization to construct its ISFSI, there were 1,415 spaces in the spent fuel pool that were available to store fuel assemblies. In its application, however, WEPCO assumed that most of the spaces that were then unusable could be made available. WEPCO's judgment was that 20 spaces was a reasonable estimate of the number of spaces that would remain inaccessible after WEPCO took additional actions to make spaces available. Tr. 647:4-24 (Zabransky); 2210:19-2211:11 (Porter); DX 171 at WISC 00014753; DX 50 at HQR364 0465. By 1994, the year of the PSCW hearings on the dry cask storage project, 1,4683 spaces had been made available in the spent fuel pool for storage of fuel assemblies. DX 450 at HQR364 0688. After PSCW approval of the dry cask storage facility, the number of usable spaces in the spent fuel pool remained at 1,468. Tr. 137:24-138:23 (Baumann); PX 381 at HQR364 0809. Even as late as 1997, when WEPCO was unable to load VSC-24 casks, only 1,484 spaces had been made available for storage of fuel assemblies in the spent fuel pool. Tr. 2112:23-2113:1 (Holzmann), DX 75 at WISC 00059463. In 1996, WEPCO's annual inventory records indicate that 12 pool

Other documents contemporaneous with WEPCO's decision to implement dry storage at Point Beach demonstrate that less than 1,500 spaces were available for storage of SNF in the SNF pool. See, e.g., DX 28 at WISC 00002797 (1994 decommissioning estimate assumption stated "[o]nly 36 of the 1502 spaces in the spent fuel pool are unavailable"); DX 73 at WISC 00001317 (1995 response to PSCW stated 1,466 spaces currently available); DX 214 at WISC 00009835 (1995 analysis excludes 37 spaces leaving 1,465 usable spaces); DX 58 at HQR364 0809 (1997 RW-859 reported 1,468 assemblies currently available). The Final Environmental Impact Statement prepared by the PSCW, and issued in August, 1994, using data provided by WEPCO, assumed that 1,457 spaces were available in the spent fuel pool for storage of fuel assemblies. Tr. 2759:20-2760:3; 2760:19-2761:14 (Anundson); PX 346 at WISC 00003759. 13
3

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spaces were damaged and should not be used for insertion or removal of fuel assemblies. Tr. 929:19-930:8 (Hennessy); DX 206; DDX 1-8; see also DX193 (1997 fuel inventory); PX529 (1998 fuel inventory); PX559 (1999 fuel inventory); PX585 (2000 fuel inventory); PX591 (2001 fuel inventory); DX305 (2002 fuel inventory). By 2003, WEPCO's annual inventory records indicate that six spaces were damaged, including some new spaces that were not listed as damaged in the 1996 inventory. Tr. 937:20-938:6 (Hennessy); PX653 (2003 fuel inventory); DDX 1-8. b. "Full core reserve" or "FCR" refers to the maintenance of sufficient unused space

in the pool to discharge all assemblies from a reactor core. WE does not have a policy of preserving FCR, nor is FCR a requirement, and Point Beach has operated without FCR on numerous occasions. PFF 178-181. Tr. 1977:9-1978:9 (Becka). Tr. 2091:3-22 (Holzmann). Tr. 893:13-894:15 (Hennessy). Tr. 1531:10-1532:2; 1614:17-20 (Krieser). PDX 60-Sieracki 17.

RESPONSE: The Government does not dispute the definition of "full core reserve" or "FCR" set forth by WEPCO. While WEPCO never had a written "policy" to maintain FCR, WEPCO's desire and practice was to maintain FCR. Tr. 675:10-21; 770:16-771:9 (Zabransky); see also DPFOF at 14

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¶¶ 136-158. WEPCO understood that maintaining at least one FCR is "a good operating practice because of the flexibility that this reserve affords during normal operations and maintenance activities." DX 54 at WISC 00003436; DX 171 at WISC 00014727; Tr. 1613:17-19 (Krieser); 2186:18-22 (Becka). Moreover, one rationale identified by WEPCO in its application to the PSCW for dry fuel storage was maintaining two FCRs. DX 171 at WISC 0014753. c. A section of the Point Beach pool known as the cask pit area, or cask laydown

area, is used for the loading and unloading of casks. The cask pit area does not contain permanent spent fuel racks. RESPONSE: The Government does not dispute this proposed finding of fact. d. Point Beach can move heavy loads in and out of the spent fuel pool with the use Tr. 133:18-20; 146:4-20 (Baumann). Tr. 1761:20-1762:5 (Becka). Tr. 826:9-14 (Hennessy). PX 740.034 (Point Beach Nuclear Plant - Cask Pit Laydown Area). PX 740.040 (Point Beach Nuclear Plant Photo - Cask Pit Laydown Area).

of the primary auxiliary building's crane, which is a single failure-proof crane. Such loads include the NUHOMS transfer cask, for which WE has a calculation qualifying the cask loading area for the weight of that load. Tr. 831:5-834:13; 835:4-837:20; 846:4-22 (Hennessy). PX 740.58 (Point Beach Nuclear Plant Photo - Auxiliary Building Crane).

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PX 1045, pp. WISC1045-0006 to 0010 (Dec. 28, 2005 Point Beach Nuclear Plant Calculation No. 2003/0069).

RESPONSE: The Government disputes this proposed finding of fact. In 1978, the spent fuel pool was analyzed for a cask weight of 136,000 lbs. DX 351 at WISC 00064415. This calculation, conducted by Bechtel Power Company, concluded that some of the piles supporting the spent fuel pool were overstressed by seven percent with respect to the design yield stress. Id at WISC 00064412. A new calculation was performed by WEPCO in 1994 to support use of the VSC-24 cask. This calculation was subsequently revised in 1995. DX 350. The calculation was revised again in 2005. PX 1045. No evidence was presented at trial that any of these calculations was provided to the NRC for approval. While the evidence supports the contention that calculations were performed, there is no evidence cited by plaintiff or in the record that the cask loading area was approved by the NRC or any other relevant regulatory entity. 13. The Point Beach spent fuel pool is a part of the plant Fuel Handling System

("FHS"). The spent fuel pool stores spent nuclear fuel assemblies discharged from the reactors. Point Beach's Reactor Engineering group is responsible for the FHS, spent fuel cooling, and purification and flux map systems. With regard to dry fuel storage, Reactor Engineering selects the fuel assemblies to be loaded into the dry storage casks and plans and assists Operations staff with the actual loading of the fuel assemblies. Tr. 815:9-816:24; 818:8-821:5; 822:14-19; 823:17-21; 834:12-24 (Hennessy). PX 652, p. WXE0011043 (Point Beach Nuclear Plant Units 1 & 2 Final Safety Analysis Report).

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PX 640, p. WISC00060265 (Point Beach Nuclear Plant, DBD-05 Fuel Handling System Design Basis Document, Rev. 2).

RESPONSE: The Government does not dispute this proposed finding of fact. 14. Point Beach was designed based on the assumption that SNF generated at the

plant would only be stored on-site for a short time prior to shipment off-site for reprocessing. Reprocessing of SNF involves separating the reusable fuel products from the waste products, storing or disposing of the waste products, and making the reusable products available for new fuel. As a result of the then-use of reprocessing, the initial storage capacity of the original Point Beach pool was relatively low - only spaces for 208 assemblies in the entire pool. Southern Nuclear, 77 Fed. Cl. at 401. Yankee Atomic Elec. Co. v. United States, 73 Fed. Cl. 249, 253-55 (2006). Tr. 2163:18-25 (Porter) ("[W]ith the expectation of reprocessing, Point Beach had relatively limited capacity in its spent fuel pool, it was expected that the fuel would remain on-site for only a short period of time before it would be shipped off-site for reprocessing."). Tr. 1226:8-1227:9; 1228:24-1229:1 (Shimon).

RESPONSE:

The Government disputes WEPCO's proposed finding of fact and states that it is not supported by the documents cited. First, neither Southern Nuclear Operating Co. v. United States, 77 Fed. Cl. 396 (2007), nor Yankee Atomic Elec. Co. v. United States, 73 Fed. Cl. 249 (2006), specifically addressed the design basis of Point Beach. Further, neither Mr. Shimon's nor Mr. Porter's testimony support the finding that WEPCO assumed that, because SNF would be reprocessed, it would only be stored at the Point Beach site "for a short time." 17

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15.

In 1977, President Carter suspended U.S. commercial reprocessing of SNF,

causing an enormous spent fuel storage problem for nuclear power utilities. When President Carter suspended reprocessing, he announced that the Government would take full responsibility for spent fuel, and, in fact, the Government undertook the development of a solution for the disposition of SNF from commercial nuclear power plants. In the meantime, given President Carter's suspension of reprocessing, WE was unable to reprocess any spent fuel. Therefore, WE sought and received the NRC's approval to rerack the Point Beach spent fuel pool - increasing the licensed pool capacity to 1502 assemblies. Reracking is the replacement of existing SNF storage racks in the spent fuel pool with new racks capable of holding more spent fuel assemblies. WE had reracked the pool once previously from 208 to 351 spaces. At the time of WE's second rerack, WE also increased the cooling capacity of the Point Beach spent fuel pool to accommodate the increased licensed pool capacity. PX 1052 (Mills Trial Desig. Yankee Atomic Tr. 274:14-275:23 ("[I]n 1977, President Carter at the time stated in April of 1977 that reprocessing of civilian nuclear fuel would be indefinitely deferred.")). PX 1052 (Mills Trial Desig. Pac. Gas & Elec. Co. v. United States Tr. 125:24-127:18 (noting the nuclear utility industry's "considerable anxiety" in response to the moratorium because there was "no good alternative" for the storage and disposition of SNF, and noting the federal program to develop a solution for disposal of SNF in response to the suspension of reprocessing)). Tr. 1228:12-1229:4; 1229:18-1230:12 (Shimon). Tr. 2164:24-2166:3 (Porter) (explaining the impact of reprocessing on the design of Point Beach and the impact of the suspension of reprocessing on Point Beach's planning for SNF storage). Tr. 313:11-314:6 (Link) (discussing increased cooling capacity).

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PX 11 (April 4, 1979 Letter from NRC to WE transmitting amendments no. 35 and 41 to Facility Operating License).

RESPONSE: The Government disputes this proposed finding of fact to the extent that it suggests that the moratorium on reprocessing imposed by President Carter caused an "enormous spent fuel storage problem for nuclear power utilities." The citations do not support such a finding. Further, WEPCO fails to mention that President Reagan subsequently lifted the ban on reprocessing. The Government does not dispute this finding of fact with respect to WEPCO's request to the NRC to rerack its spent fuel pool to increase the SNF pool to a licensed capacity of 1502 spaces. 16. In 1995, WE constructed and placed into operation the dry storage facility at Point

Beach, sometimes referred to as an Independent Spent Fuel Storage Installation ("ISFSI"). As of the time of trial, WE had loaded and placed in service 16 Ventilated Storage Container ("VSC") -24 dry storage casks and nine NUHOMS dry storage systems at the ISFSI. RESPONSE: The Government does not dispute this proposed finding of fact. Tr. 44:20-45:1 (Baumann). Tr. 2745:16-2746:17 (Anundson). PX 1029, p. KRGWE003846 (ISFSI Plan View).

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III.

WE TRIAL WITNESSES (IN THEIR ORDER OF TESTIMONY) 17. Michael Baumann provided an overview of Wisconsin Electric and the Point

Beach Nuclear Plant and discussed fuel management options used and considered by Wisconsin Electric over the years. He has a B.S. in nuclear engineering from the University of Wisconsin in Madison and has worked for Wisconsin Electric or NMC since 1986. During his tenure with Wisconsin Electric and NMC, Mr. Baumann has continuously been involved with the Point Beach plant, first as a radiological engineer, then with responsibilities for nuclear licensing, then as Manager of Nuclear Fuel Services, then as Manager of HLW issues, and ultimately as Manager of Nuclear Fuel Commodities and Supply. RESPONSE: Although the Government does not dispute or object to this proposed finding of fact, the Government notes that Mr. Baumann's direct participation with the dry storage project at the Point Beach Nuclear Station was limited to the years, 1994-1996. He was not involved in the dry storage project at Point Beach in the late 1980s, at or about the time the project began, and was not personally involved in the decision to use dry storage at Point Beach before 1994. After the hydrogen ignition event in 1996, Mr. Baumann no longer had oversight of the dry storage project. Tr. 211:4-17; 214:24-215:21 (Baumann). Further, this proposed finding of fact is irrelevant to any issue in the above-captioned case. 18. Robert Link was the Vice President of WE's Nuclear Department from May 1992 Tr. 96:8-99:8; 105:23-106:22 (Baumann).

to late 1996. Mr. Link attained a B.S. in nuclear engineering from Kansas State University. Mr. Link also participated in continuing education courses in finance and business from the 20

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University of Wisconsin and in strategic marketing courses at Harvard University. Mr. Link worked at Wisconsin Electric from the time he graduated from Kansas State University until he left WE in late 1996, except for a short stint at Impell Corporation. Mr. Link testified extensively regarding his continuing evaluation of the best course of action for WE to take in response to DOE's expected failure to begin accepting spent fuel from Point Beach in 1998. RESPONSE: The Government disputes this proposed finding of fact and objects to it as not supported by evidence in the record and misleading. First, Mr. Link's testimony regarding his continued evaluation of the best course of action for WE in response to DOE's expected failure to begin accepting spent fuel from Point Beach in 1998 is not supported by any evidence. There are no contemporaneous documents that support Mr. Link's testimony that he evaluated other options. In fact, the contemporaneous documents indicate that Mr. Link was planning for dry fuel storage when he started his employment with WEPCO. For example, Mr. Link, in an August, 1992 memorandum, announced the appointment of Kevin Anundson to head the effort to implement the dry fuel storage project at Point Beach after it was authorized. DX 22; Tr. 1087:12-1089:5 (Zabransky). Mr. Link confirmed the 1994 operation date in that 1992 memorandum: The dry fuel storage facility planned for Point Beach Nuclear Plant is scheduled for operation in June 1994. The Public Service Commission of Wisconsin (PSCW) is reviewing our application for a Certificate of Authority to allow us to construct this facility. Current estimates call for a PSCW ruling in May 1993. DX 22 at WISC 00056029. As of August 1992, Mr. Link had not proposed any alternatives to the dry fuel storage project to address the need for additional at-reactor storage at Point Beach. 21 Tr. 312:19-313:1; 315:16-316:23; 323:17-324:7 (Link).

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Tr. 1089:17-20 (Zabransky). Moreover, when Mr. Link testified before the PSCW in 1994 at the hearing regarding authorization for WEPCO's dry fuel storage project, he explicitly testified that WEPCO needed to load 12 casks to the proposed dry storage in order to continue to operate the Point Beach facility until 1998, he testified that: We still need an ISFSI prior to 1998 which is the first date by which we believe DOE is obligated to take fuel. Yes, we considered DOE obligated to take fuel starting in 1998. That does not negate the need for the ISFSI. PX907B (emphasis added). Furthermore, Gary Krieser testified that WEPCO did not discuss the possibility of using temporary racks as an option instead of an ISFSI until 1998. Tr. 1590:21-1593:7 (Krieser). Mr. Krieser also testified that WEPCO did not consider using racks in the transfer canal until sometime after the hydrogen ignition event on May 28, 1996. Tr. 1593:14-1594:21 (Krieser). To the extent that WEPCO later evaluated other options, these were not formal studies and did not result in any documentation. Tr. 1587:16-1588:14 (Krieser). Moreover, the evidence demonstrates that Mr. Link did not participate in the decision in 1988 to adopt dry fuel storage at Point Beach nor was Mr. Link involved in the early planning for dry fuel storage. When Mr. Link and Mr. Krieser were preparing for the PSCW hearings, they contacted Mr. Zabransky and requested his assistance, even though Mr. Zabransky had taken a position with DOE. Tr. 713:13-714:11 (Zabransky). Mr. Link was paid to testify on behalf of WEPCO during the course of this litigation, including at trial. Tr. 437:17-438:3 (Link). When Mr. Link left his employment with WEPCO, he was given a severance package of approximately one million dollars. Tr. 438:4-13 (Link).

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Finally, this proposed finding of fact is irrelevant to any issue in the above-captioned case. 19. David Zabransky has been a DOE employee since July 1994 and was the

Government's representative at trial. Mr. Zabransky served as the Contracting Officer's Technical Representative from approximately 1995 to 2002 and has served as the Contracting Officer for the Standard Contract since mid-2002. Mr. Zabransky has testified on behalf of DOE in seven prior trials and in more than 30 depositions. Prior to his employment with DOE, Mr. Zabransky received a B.S. in Civil Engineering from Marquette University. He then worked at WE from 1978 until June 1994 in various engineering and contract administration roles. Mr. Zabransky worked in the Nuclear Department from 1984 until 1994. Tr. 567:2-17; 586:24-587:1; 5661:18-22 (Zabransky). Tr. 585:17-586:23 (Zabransky) (trials and depositions at which Mr. Zabransky has previously testified).

RESPONSE: The Government disputes this proposed finding of fact and objects to it as misleading in that it completely ignores the major contributions Mr. Zabransky made to WEPCO generally and to the dry fuel storage project specifically. Mr. Zabransky was responsible for the demonstration project at WEPCO that involved work on the VSC-17 demonstration cask. Tr. 1329:17-1331:20 (Shimon) ("this was largely Dave's doing"). The goals of the R&D project included, among other things, providing "licensed dry fuel storage technology for implementation at Point Beach Nuclear Plant." DX 40 at WISC 00061016. In 1988, one of the considerations at WEPCO in participating in the R&D project was the need for additional at-reactor storage by approximately

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1994. Id. at WISC 00061017 ("The spent fuel storage demonstration project will develop a technology that can provide storage of spent fuel at Point Beach Nuclear Plant from approximately 1994 through the delivery of spent fuel to the DOE geologic repository."); Tr. 975:8-976:23 (Zabransky). In 1989, Mr. Shimon believed WEPCO would have to shutdown Point Beach in 1994 or 1995 to avoid encroaching on FCR. Tr. 1368:14-24 (Shimon). Furthermore, WEPCO made Mr. Zabransky the project manager for the ISFSI project. Mr. Zabransky, the project manager and administrator for the dry fuel storage project, made the presentation to senior management at the major project review committee to gain approval of the ISFSI project in 1989. DX 41; Tr. 980:19-984:7 (Zabransky). Messrs. Shimon, Baumann, Farron, Link, and Hennessy were not involved in the presentation of the dry fuel storage project to the major project review committee. Id. Mr. Fay sent a Work Order Requisition, prepared by Mr. Zabranksy, to senior management, Messrs. Britt and McNeer, on May 3, 1989, requesting authorization for a work order that would capture all the costs for the design, licensing, construction and operation of dry fuel storage at Point Beach. DX 15; Tr. 998:22-999:20 (Zabransky). Moreover, Mr. Zabransky provided technical input to Mr. Steven Parker, WEPCO's supervisor of regulatory affairs, for the application WEPCO submitted to the PSCW on November 15, 1991 for authorization to construct an ISFSI and place it into service. DX 171; Tr. 1021:10-1022:4 (Zabransky). Mr. Zabransky was the primary drafter of the Environmental

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Screening Report ("ESR") attached to the application. DX 171 at WISC 00014734-825; Tr. 1023:10-1023:24 (Zabransky).4 Furthermore, Mr. Zabransky received promotions and awards throughout his career with WEPCO. DX 283; Tr. 711:7-713:6 (Zabransky). After Mr. Zabransky left WEPCO to work for DOE, he was asked by Mr. Link and Mr. Krieser to appear before the PSCW during the hearings on the WEPCO ISFSI on behalf of WEPCO because of his prior involvement with the ISFSI. Further, this proposed finding of fact is irrelevant to any issue in the above-captioned case. 20. William Hennessy testified regarding the spent fuel pool at Point Beach based on

his extensive experience in Point Beach's Reactor Engineering group, where he served as Supervisor for many years. Mr. Hennessy has been employed at Point Beach since September 1989. He has a B.S. and a master's degree in nuclear engineering from Iowa State University. He has been a licensed professional engineer since approximately 1986. RESPONSE: This proposed finding of fact is irrelevant to any issue in the above-captioned case. a. Mr. Hennessy has numerous plant operating certifications and has worked on Tr. 810:1-23 (Hennessy).

spent fuel pool issues at three other nuclear plants (Plant Vogtle in Georgia, the Duane Arnold plant in Iowa, and the Seabrook plant in New Hampshire) prior to his employment at Point Beach. Initially, he was a trainer at Point Beach.
4

Mr. Baumann provided radiological calculations to Mr. Zabransky for the ESR. Tr. 1023:16-24 (Zabransky). Mr. Zabransky testified that he received no assistance from Messrs. Shimon, Link, Hennessy, Krieser, Farron, or Conry in preparing the ESR. Tr. 1023:25-1024:10 (Zabransky); see also Tr. 460:18-461:6 (Link); 2615:22-2616:6, 2620:23-2623:11 (Farron); 2829:4-24 (Conry). 25

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RESPONSE:

Tr. 810:24-815:8 (Hennessy).

This proposed finding of fact is irrelevant to any issue in the above-captioned case. RESPONSE: This proposed finding of fact is irrelevant to any issue in the above-captioned case. 21. Howard Shimon was responsible for spent fuel storage at WE from 1976 to 1990.

Mr. Shimon has a B.S. in industrial engineering and an M.B.A. from Cornell University. He joined WE in September 1971 and continued with WE until February 1995. He was the Manager of Nuclear Fuels and Administrative Services from approximately 1985 until 1990. In that capacity, he was responsible for departmental budgets and administrative services, including issues related to the Standard Contract. Mr. Shimon testified regarding WE's two rerackings of the Point Beach spent fuel pool; his involvement and leadership in nuclear industry groups, particularly regarding enactment of the NWPA and promulgation and implementation of the Standard Contract; WE's SNF management considerations and decisions in the late 1980s; and the composition of WE's Nuclear Power Department from the late 1970s until the early 1990s. RESPONSE: The Government disputes this proposed finding of fact and objects to it as misleading and not supported by the evidence. First, the evidence showed that Mr. Shimon was not responsible for spent fuel storage at WEPCO for the entire period from 1976 to 1990. Mr. Shimon testified Tr. 2161:12-2162:6 (Porter). Tr. 1219:20-1221:5 (Shimon).

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that the only involvement he had with the dry fuel storage or ISFSI project was with the budgeting of the project: Q: Mr. Shimon, what was the extent of your involvement with the dry cask storage project at WEPCO? My only involvement was with incorporating it into the Department's budget. When you were manager of planning. Yes And what did that involvement entail ...... . . . Simply a request for funds to support the project.

A:

Q: A: Q: A:

Tr. 1352:15-1353:15 (Shimon) (emphasis added). Mr. Shimon did not participate in the decision to implement dry fuel storage at Point Beach, he did not participate in the presentation of the project to the major project review committee, he did not assist, except from a budgetary perspective, in drafting the work order requisition. Indeed, based on a review of the contemporaneous documents, it appears that Mr. Shimon had very little to do with dry fuel storage during the period when WEPCO was making its decisions. With respect to WEPCO's SNF management considerations and decisions in the late 80s, Mr. Shimon testified that he had no involvement in the preparation of key memoranda at WEPCO specifically addressing spent fuel storage needs. See, e.g., Tr. 1350:6-1351:16; 1365:25-1366:22; 1371:5-1372:23 (Shimon).

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Mr. Shimon was paid to testify on behalf of WEPCO throughout this litigation, including his testimony at trial. Tr. 1346:21-1347:6 (Shimon). Finally, this proposed finding of fact is irrelevant to any issue in the above-captioned case 22. Gary Krieser received a B.S. in nuclear engineering from the University of

Wisconsin at Madison in 1972. Mr. Krieser began working at Wisconsin Electric in the summer of 1977. Mr. Krieser served as the Manager of Industry and Regulatory Services from 1992 until late 1996 and reported directly to Mr. Link in that position. Mr. Krieser also was the Director of Nuclear Fuel Services for NMC from 2000 until July 2002, at which time he joined Wisconsin Electric Power as Manager of Project Quality Assurance. Mr. Krieser testified regarding WE's spent fuel management activities from 1992 through 2000. RESPONSE: The Government objects to this proposed finding of fact to the extent that it suggests that Mr. Krieser was involved in spent fuel storage issues during the relevant time period. In fact, Mr. Krieser's own testimony shows that WEPCO made the decision to proceed with dry storage in the late 1980s, prior to his involvement with spent nuclear fuel issues. Tr. 1511:20-1512:4; 1595:24-1596:25 (Krieser); PX 406. Finally, this proposed finding of fact is irrelevant to any issue in the above-captioned case. 23. James Becka, who has worked at Point Beach since 1992, is currently the Project Tr. 1506:18-22; 1509:5-9; 1511:20-1512:4; 1514:3-19; 1515:11-1518:4 (Krieser).

Manager, Dry Fuel Storage Group. In that position, he supervised the fabrication of VSC-24 Cask Nos. 13-16 and the procurement of all of the NUHOMS units at Point Beach. Mr. Becka has been involved in the loading of all dry storage units in place at the Point Beach dry storage 28

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facility except for the first two VSC-24 casks. Mr. Becka has a B.S. in civil engineering from Purdue University and has been a licensed professional engineer since 1986. He has attained the rank of Captain in the U.S. Navy Reserve and has commanded several units, including a nuclear submarine squadron and nuclear submarine base. Mr. Becka testified regarding WE's and NMC's dry storage groups, VSC-24 and NUHOMS cask loading campaigns, and the reasons why PBNP decided to shift to the NUHOMS dry storage system. Tr. 1679:3-1681:15; 1683:21-1685:3; 1699:13-1700:3; 1771:19-1774:23; 1790:20-1802:23 (Becka).

RESPONSE: Although the Government does not object to this proposed finding, it is important to note that Mr. Becka testified that he became the supervising engineer of the dry fuel storage group, which was formed to recover dry storage operations following the hydrogen ignition event in May 1996, in April 1999 after WEPCO had resumed loading VSC-24 casks. Tr. 1684:241685:19 (Becka). Additionally, Mr. Becka stated that, even though he might not prefer a particular dry storage system, if he was told to use that system, he would do so. Tr. 1974:151975:1 (Becka). Therefore, Mr. Becka could only testify as to his understanding of the reasons WEPCO management changed SNF storage systems yet could not provided direct testimony as to the actual reasons WEPCO management decided to make the change. Finally, this proposed finding of fact is irrelevant to any issue in the above-captioned case. 24. Michael Holzmann is currently PBNP Shift Manager in the Operations group. In

1985, Michael Holzmann graduated from the University of Wisconsin, Eau Claire, with degrees in math and physics. Mr. Holzmann then served 6.5 years in the U.S. Navy as a Nuclear

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Submarine Officer. He then took a position at Point Beach and has worked there since 1992. Since 1999, he has also served as Dry Cask Loading Supervisor. He testified regarding fabrication of dry storage casks, VSC-24 and NUHOMS cask loadings, problems PBNP encountered with the use of the VSC-24, the impact of those problems on PBNP's operations, PBNP's recovery efforts in connection with the VSC-24, and costs WE incurred in its cask loading campaigns and VSC-24 cask recovery efforts. RESPONSE: Although the Government does not object to this proposed finding, the Government notes that WEPCO failed to mention that Mr. Holzmann was the first dry fuel storage engineering supervisor following the hydrogen ignition event in 1996 and that he continued in that position until April 1999. Tr. 2024:14-20; 2090:13-19; 2129:3-6 (Holzmann). Finally, this proposed finding of fact is irrelevant to any issue in the above-captioned case. 25. David Porter, after serving in the Navy nuclear program, joined WE's nuclear Tr. 2002:1-2017:24 (Holzmann).

projects office in 1969. He worked at WE until he retired in 2002. During his tenure at WE, Mr. Porter served as an inside director of Wisconsin Electric from 1989 to 2000 and on other Boards of Directors. As Senior Vice President at WE in 1991, Mr. Porter signed WE's PSCW dry storage project application. He had responsibility at that time for the Corporate Planning Department, which was the economic regulatory interface for WE to the PSCW and other regulatory bodies. Mr. Porter testified about WE decision-making leading to dry storage, the process of preparing the 1991 application to the PSCW, and the contentious and lengthy process before the PSCW granted WE authority to build dry storage. 30

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RESPONSE:

Tr. 2149:5-2160:13 (Porter).

The Government disputes the characterization of the process before the PSCW for authority to implement dry fuel storage at Point Beach suggested by WEPCO in this proposed finding of fact. For instance, contrary to WEPCO's characterization the record demonstrates that when WEPCO returned to the PSC to add additional casks to the ISFSI, WEPCO did not find it necessary to simultaneously pursue alternate storage options. Tr. 2240:3-2245:15 (Porter). Finally, this proposed finding of fact is irrelevant to any issue in the above-captioned case. 26. Scott Vance received an engineering degree from Idaho State University in 1985

and master's degrees in nuclear engineering and technology and public policy from the Massachusetts Institute of Technology in 1988. Mr. Vance worked for various contractors performing OCRWM contracts from 1988 to 2000, and assisted in the preparation of documents required by the Standard Contract. Mr. Vance principally reported to Mr. Alan Brownstein who worked at DOE. As a DOE contractor at the Pacific Northwest Nuclear Laboratory, Mr. Vance worked on development of the DOE acceptance rate for the 1991 Annual Capacity Report ("ACR"). Mr. Vance later received a law degree and now works as a nuclear licensing attorney for the Tennessee Valley Authority. Mr. Vance testified about the annual DOE spent nuclear fuel acceptance rate in the 1991 ACR, and his inquiries of DOE regarding the acceptance rate that he was instructed to use in the 1991 ACR. Tr. 2288:9-2291:20; 2295:9-15; 2356:14-2357:12 (Vance).

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RESPONSE: The Government disputes this proposed finding of fact and objects to it as misleading. Mr. Vance testified that the work he did as a contractor was from a technical, not a legal, perspective. Tr. 2325:21-2326:2 (Vance). Mr. Vance testified that his work on the Standard Contract and other DOE documents was very limited, and that he did not have contact with DOE personnel that would, for example, make the decision regarding the acceptance rate that would be included in the 1991 Acceptance Capacity Report ("ACR"). Tr. 2301:18-2303:7 (Vance). In fact, Mr. Vance admitted during his testimony that the acceptance rate set forth in the 1991 ACR did not constitute a breach of DOE's obligation to accept spent fuel from contract holders. Tr. 2307:1-8 (Vance). Mr. Vance considered the acceptance rates set forth in the 1991 ACR to meet the requirements of both the NWPA and the Standard Contract. Tr. 2307:14-22 (Vance). Finally, this proposed finding of fact is irrelevant to any issue in the above-captioned case. 27. Jack Gadzala worked for Wisconsin Electric and then NMC at the Point Beach

Nuclear Plant from 1998 to 2007 as a licensing engineer. Mr. Gadzala managed the Point Beach Licensing Group's budget and personally reviewed and approved NRC fee invoices for payment. Mr. Gadzala testified regarding his knowledge of the dry storage-related fees that the NRC charged Point Beach. Prior to joining WE, from 1988 to 1997, Mr. Gadzala worked for the NRC and was a resident NRC inspector at Point Beach from 1989 until 1994. Mr. Gadzala testified regarding his knowledge of the Point Beach spent fuel pool gained while he was an NRC inspector at Point Beach.

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Tr. 2361:7-2362:1; 2362:9-2364:4; 2364:10-18; 2366:14-22; 2394:18-2395:17; 2398:18-2399:2; 2399:5-19 (Gadzala).

RESPONSE: The Government objects to this proposed finding of fact as irrelevant. In addition, the Government notes that Mr. Gadzala's testimony regarding the amount of spent fuel in the Point Beach spent fuel pool was entered into the record of trial as an offer of proof because of plaintiff's failure to notify the Government that Mr. Gadzala would testify on that subject. The Government has been prejudiced by this testimony to the extent that its preparation was focused on Mr. Gadzala's testimony regarding NRC fees, the testimony that plaintiff notified the Government that Mr. Gadzala would offer. Although the Government conducted cross examination on Mr. Gadzala regarding the status of the spent fuel pool, the Government's preparation was significantly hampered by time constraints during trial. The fact that Mr. Gadzala testified to the status of the spent fuel pool in discovery does not overcome the prejudice to the Government by the plaintiff's failure to notice this as a subject of Mr. Gadzala's testimony at trial. Further, the basis for Mr. Gadzala's testimony regarding the status of the spent fuel pool was almost entirely hearsay to which the Government objected at trial. As Mr. Gadzala conceded, he himself made only general observations of the spent fuel pool and did not count spaces or calculate when the pool would be filled to capacity. Regarding Mr. Gadzala's NRC fees testimony, at trial Mr. Gadzala conceded that he did not have responsibility for the NRC fees at WEPCO prior to 1999, the basis of his knowledge on the NRC fee issue was limited to NRC notices in the federal register, and he has never reviewed the NRC work papers regarding fees. Tr. 2373:5-2377:24; 2379:9-2381:13; 2383:11-2384:5; 2437:6-18; 2438:22-2439:3; 2439:15-

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2440:16; 2452:9-2453:17 (Gadzala). Finally, this proposed finding of fact is irrelevant to any issue in the above-captioned case. 28. Paul Farron, who has extensive regulatory and nuclear plant operations experience

from work at Commonwealth Edison, the NRC and