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

Case 1:02-cv-01894-EJD

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IN THE UNITED STATES COURT OF FEDERAL CLAIMS CONSUMERS ENERGY COMPANY, Plaintiff, v. THE UNITED STATES, Defendant. ) ) ) ) ) ) ) ) )

No. 02-1894C (Chief Judge Damich)

DEFENDANT'S PROPOSED FINDINGS OF UNCONTROVERTED FACT Pursuant to Rule 56(b) of the Rules of this Court, defendant, the United States, respectfully submits these proposed findings of unconverted fact, in support of its motion for summary judgment in this case. 1. On or about June 3, 1983, Consumers Power Company, the predecessor of

plaintiff, Consumers Energy Company ("Consumers"), executed a contract with the Department of Energy, which was titled "Standard Contract For Disposal Of Spent Nuclear Fuel And/or High-Level Radioactive Waste" ("Standard Contract"). Compl. ¶.1 The Standard Contract that Consumers executed related to the Big Rock Point Nuclear Power Plant in Charlevoix, Michigan, and Palisades Nuclear Plant, located near Covert, Michigan. Compl. ¶ 3. 2. provision: (b) No later than October 1, 1983, the Purchaser [Consumers] shall provide DOE [Department of Energy] with specific information on: (1) Total spent nuclear fuel inventory as of April 7, 1983; "Compl. ¶ " refers to plaintiff's complaint, filed December 16, 2002. "Compl. Att. A" refers to the attachment to that complaint. "App. " refers to the appendix to defendant's motion for summary judgment upon Counts I and II of plaintiff's complaint.
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The Standard Contract that Consumers executed contained the following

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(2) Total number of fuel assemblies removed from the particular reactor core prior to 12:00 A.M. April 7, 1983 for which there are plans for reinsertion in the core, indicating the current planned dates for reinsertion in the core. Estimates of the burned and unburned portion of each individual assembly are to be provided. (c) In the event that the Purchaser fails to provide the annual forecast in the form and content required by DOE, DOE may, in its sole discretion, require a rescheduling of any delivery commitment schedule then in effect. Compl. Att. A, Art. IV(A)(1); see 10 C.F.R. § 961.11, Art. IV(A)(1). 3. Article VIII(A) of the Standard Contract, which was included in Consumers'

Standard Contract, includes the following contract language: A. Fees 1. Effective April 7, 1983, Purchaser shall be charged a fee in the amount of 1.0 mill per kilowatt hour (1M/kWh) electricity generated and sold. 2. For SNF, or solidified high-level radioactive waste derived from SNF, which fuel was used to generate electricity in a civilian nuclear power reactor prior to April 7, 1983, a one-time fee will be assessed by applying industry-wide average dollar per kilogram charges to four (4) distinct ranges of fuel burnup so that the integrated cost across all discharged (i.e. spent) fuel is equivalent to an industry-wide average charge of 1.0 mill per kilowatt-hour. For purposes of this contract, discharged nuclear fuel is that fuel removed from the reactor core with no plans for reinsertion. In the event that any such fuel withdrawn with plans for reinsertion is not reinserted, then the applicable fee for such fuel shall be calculated as set forth in this paragraph 2. The categories of spent nuclear fuel burnup and the fee schedule are listed below:

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[In 1982 dollars] ------------------------------------------------------Nuclear spent fuel burnup range Dollars per kilogram ------------------------------------------------------0 to 5,000 MWDT/MTU ............................ $80.00 5,000 to 10,000 MWDT/MTU ....................... 142.00 10,000 to 20,000 MWDT/MTU ...................... 162.00 Over 20,000 MWDT/MTU ............................. 184.00 ------------------------------------------------------This fee shall not be subject to adjustment, and the payment thereof by the Purchaser shall be made to DOE as specified in paragraph B of this Article VIII. 3. For in-core fuel as of April 7, 1983, that portion of the fuel burned through April 6, 1983 shall be subject to the one-time fee as calculated in accordance with the following methodology: [a] determine the total weight in kilograms of uranium loaded initially in the particular core; [b] determine the total megawatt-days (thermal) which have been generated by all of the fuel assemblies in the said core as of 12:00 A.M. April 7, 1983; [c] divide the megawatt-days (thermal) generated in the said core by the total metric tons of initially loaded uranium in that core and multiply the quotient by the conversion factor 0.0078 to obtain a value in dollars per kilogram; and [d] multiply the dollars per kilogram value by the kilograms determined in [a] above to derive the dollar charge for the one-time fee to be paid for the specified in-core fuel as of 12:00 A.M. April 7, 1983. For purposes of this contract, in-core fuel is that fuel in the reactor core as of the date specified, plus any fuel removed from the reactor with plans for reinsertion. That portion of such fuel unburned as of 12:00 A.M. April 7, 1983 shall be subject to the 1.0 mill per kilowatt-hour charge. Compl. Att. A, Art. VIII(A); see 10 C.F.R. § 961.11, Art. VIII(A). -3-

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4.

Article VIII(B) of the Standard Contract, which was included in Consumers'

Standard Contract, included the following contract language: 2. For SNF discharged prior to April 7, 1983, and for in-core burned fuel as of 12:00 A.M. April 7, 1983, the Purchaser shall, within two (2) years of contract execution, select one of the following fee payment options: (a) Option 1 ­ The Purchaser's financial obligation for said fuel shall be prorated evenly over forty (40) quarters and will consist of the fee plus interest on the outstanding fee balance. The interest from April 7, 1983, to date of the first payment is to be calculated based upon the 13-week Treasury bill rate, as reported on the first such issuance following April 7, 1983, and compounded quarterly thereafter by the 13-week Treasury bill rates as reported on the first such issuance of each succeeding assigned three-month period. Beginning with the first payment, interest is to be calculated on Purchaser's financial obligation plus accrued interest, at the ten-year Treasury note rate in effect on the date of the first payment. In no event shall the end of the forty (40) quarters extend beyond the first scheduled delivery date as reflected in the DOE-approved delivery commitment schedule. All payments shall be made concurrently with the assigned three month period payments. At any time prior to the end of the forty (40) quarters, Purchaser may, without penalty, make a full or partial lump sum payment at any of the assigned three month period payment dates. Subsequent quarterly payments will be appropriately reduced to reflect the reduction in the remaining balance in the fee due and payable. The remaining financial obligation, if any, will be subject to interest at the same ten-year Treasury note rate over the remainder of the ten year period. (b) Option 2 ­ The Purchaser's financial obligation shall be paid in the form of a single payment anytime prior to the first delivery, as reflected in the DOE approved delivery commitment schedule, and shall consist of the fee plus interest on the outstanding fee balance. Interest is to be calculated from April 7, 1983, to the date of the payment based upon the 13-week Treasury bill rate, as reported on the first such issuance following April 7, 1983, and compounded quarterly thereafter by the 13-week Treasury bill rates as reported on the first such issuance of each succeeding assigned three-month period until payment. -4-

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(c) Option 3 ­ The Purchaser's financial obligation shall be paid prior to June 30, 1985, or prior to two (2) years after contract execution, whichever comes later, in the form of a single payment and shall consist of all outstanding fees for SNF and in-core fuel burned prior to April 7, 1983. Under this option, no interest shall be due to DOE from April 7, 1983, to the date of full payment on the outstanding fee balance. Compl. Att. A, Art. VIII(B)(2); see 10 C.F.R. § 961.11, Art. VIII(B)(2). 5. On or about May 31, 1985, Consumers, through its representative, Eugene R.

VanHoof, Director of Nuclear Fuel Supply, Consumers Power Company, notified DOE as follows: Dear Mr. Jedrey: Pursuant to Article VIII.B.2 of our Contract for Disposal of Spent Nuclear Fuel and/or High-Level Radioactive Waste dated June 3, 1983, (DE-CR01-83NE44374), Consumers Power Company selects as its fee payment, Option 2, the single payment prior to delivery of the spent nuclear fuel. App. 1. 6. Subsequently, Consumers submitted delivery commitment schedules ("DCS") to

DOE, for DOE's approval, through which DOE, in 1999, would accept SNF from Consumers' Big Rock Point facility and, in 2000, would accept SNF from Consumers' Palisades and Big Rock Point facilities. App. 18-25. Consumers also submitted DCSs to DOE for acceptance of 2.7 Metric Tons Uranium ("MTUs") of SNF from Big Rock Point in 2001 and 21.8 MTUs of SNF from Palisades in 2002. App. 26-28. DOE approved all of these DCSs. App. 18-25, 27-28.

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7.

To date, Consumers has not paid its fee for DOE's disposal or acceptance under

the Standard Contract of its pre-April 7, 1983 SNF and/or HLW. App. 30.2 8. The principal amount of Consumers' one-time fee is $44,286,408.32. App. 30.3

Pursuant to Article VIII.B.2(b) of the Standard Contract, interest upon that amount runs "from April 7, 1983, . . . to be calculated based upon the 13-week Treasury bill rate, as reported on the first such issuance following April 7, 1983, and compounded quarterly thereafter by the 13-week Treasury bill rates as reported on the first such issuance of each succeeding assigned three-month period until payment." Compl. Att. A, Art. VIII.B.2(b); see 10 C.F.R. § 961.11, Art. VIII.B.2(b). DOE's current calculations indicate that the total amount of principal plus interest, through March 31, 2004, totaled approximately $139,445.944. App. 30. Respectfully submitted, PETER D. KEISLER Assistant Attorney General s/ David M. Cohen DAVID M. COHEN Director

Consumers' payments of its fees for its pre-April 7, 1983 SNF are identified in the columns labeled "Total SNF Principal Paid to Date" and "Total SNF Interest Paid to Date." App. 30. The amount of the one-time fee that Consumers owes, prior to the application of interest, is identified in the column labeled "SNF Principal Due thru Prior Quarter." App. 30. The amount of the one-time fee, including interest, that DOE calculates is owed through March 31, 2004, is identified in the column labeled "Total SNF Principal & Interest Due." Id. -63

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OF COUNSEL: JANE K. TAYLOR Office of General Counsel Department of Energy 1000 Independence Avenue, S.W. Washington, D.C. 20585

s/ Harold D. Lester, Jr. HAROLD D. LESTER, JR. Assistant Director Commercial Litigation Branch Civil Division Department of Justice Attn: Classification Unit 8th Floor 1100 L Street, N.W. Washington, D.C. 20530 Tele: (202) 305-7562 Fax: (202) 307-2503 Attorneys for Defendant

July 9, 2004

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CERTIFICATE OF FILING I hereby certify that on this 9th day of June 2004, a copy of foregoing "DEFENDANT'S PROPOSED FINDINGS OF UNCONTROVERTED FACT" was filed electronically. I understand that notice of this filing will be sent to all parties by operation of the Court's electronic filing system. Parties may access this filing through the Court's system.

s/Harold D. Lester, Jr.