Free Response to Supplemental Brief - District Court of Federal Claims - federal

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fee assessment. (Motion at 12-13.) Respondentsagain misapprehendthe bases of Petitioners' claims under § 302(a)(4). Petitioners' allegations regarding DOE's calculation, collection and use of the fees are not based on the content of the 1996or t998 fee adequacyreports. Rather, Petitioners' challenges are based upon Respondents'persistent overcollection of fees in the face of DOE's failure to begin disposing of spent nuclear fuel by January31, 1998, its uncertalnt3, with regard to whenand how~t will begin d~sposm~ Pet~tmners fuel, the nuclear waste program of expenditure plan DOE published on May18, 1998, and DOE'sJuly 15:1998 refusal to reduce Petitioners' fees. Accordingly, because Petitioners' fee challenges were filed within 180 days of DOE's April 30 and July 31, 1998 quarterly fee overcollections, within 180 dab's of Respondents'failure to begin movingfuel consistent with its unconditional obligation, and within 180 days of DOE's publication of its May18, 1998 expenditure plan and July 15, I998 refusal to reducefees, Petitioners' fee challenges are timely filed. Evenif Petitioners' claims were based on ',.he deficiencies in DOE's 1996fee adequacy report or DOE's failure to issue a 1997fee adequacyreport, Petitioners' fee challengas nevertheless wouldbe timely filed under the reopening and ripeness docttines. Accordingly, Respondents' motion should be denied. A. Petitioners' Fee Challenges WereTimely Filed Within 180 Days of Petitioners' Notification of the UnlawfulConduct I. The Petition was filed witltin 180 days of January 31.1998

Petitioners' fee challenges were timely filed within 180 days of January 31, 19~8, the date upon which Petitioners first "knewthat DOE would not heed Congress' mandateto begin disposing of fuel by that date and would not heed this Court's repeated admonitions that DOE had an unconditional obligation to do so. Petitioners had no quarrel with the fees DOE collected

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over the prior fifteen years in accordancewith the successive annual written assurances of DOE Sec~-etaries that such fees were sufficient to meet programfunding needs. Indeed. Petitioners presumein the absence of information to the contrary that the approximately$I5 billion collected (half of whichremainsunspent) wilt ultimately prove sufficient to fulfill DOE's disposal obligations, albeit not on a timely basis. At the end of January 1998, however, two things happened: DOE not begin to did dispose of spent nuclear fuel; and DOE collected the accustomed$8 million from Petitioners alone. In May, DOE notified Petitioners of an expected expenditure plan demonstrating DOE's intent to continue collecting twice as much year as it spends, and suggesting ~eat uncertainty per for the programover the next ten years. (Petition ¶ 60.) Basedon these facts, Petitioners asked DOE reconmaend reduction in the fee; it refused. (Letter from DOE Consolidated Edison to a to of 7/15/98.) In other words, despite ~'emendous future uncertainty, DOE no intention of bad modifying fee collection activities. This is one of the DOE its actions Petitioners challenge. The earliest date on whichPetitioners had Naowledge this actian was January 31, of 1998. Since that date Petitioners alone have been assessed, and have paid under protest. approximately $30 million in fees. This fee has been calculated at the one rail rate. DOE's 1998 fee adequacy report asserts that the one nail rate is in fact sufficieut to fund the much more expensive program upon which DOE,by virtue of its failure to commence disposing of spent nuclear fuel in a timely fashion, has embarked.The Act does not require Petitioners to pay for this more expensive program. Because DOE recommended fee adjustment on January 31, no 1998, DOE overoollected on the April and July dates. Petitioners' challenges were clearly filed within 180 days of those dates.

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2.

The Petition was filed within 180 days of Secretary Peha's letter of Mav 18. 1998

Petitioners" fee challenges were timely filed within 180 days of May18, 1998, the date upon which Secretary Pena published the nuclem- waste program expenditure plan for amounts to be collected and appropriated going forward. (Petition ¶¶ 40-41.) Secretary Pena's letter revealed to Petitioners that the Nuclear WasteFundhad a balance already sufficient to fund the Nuclear WasteProgram through the Year 2010. I(Ld~-) The letter also indicated that, notwithstanding this balance, DOE intended to collect an additional $600million in fees per year until 2010but wassufficiently unsure of the form and timing of the required repository that it wouldnot spend sufficient funds to build the repository witltin the next ten years. Prior to the May 1998 letter, Petitioners "knewneither howlittle DOE 18, intended to progress on the programnor howmuch intended to collect from Petitioners Xndother utilities. it Subsequentto

receipt of that Ietter, Petitioners neededless than 90 days to file challengesalleging that "in light of the excess amountscurrently in the Nuclear Waste Fund, the waste programexpenditure plan announcedby Secretary Pena on May18, 1998, and DOE's inability to state with certainty when. and in what form, it will constract a repository,," DOE~s continued collection of fees at the one nail rate was arbitrary and capricious, unla~v~l, and contrary to the Act. ~ Petitian ¶ 62.) The Petition is timely. 3. The Petition was filed within 180 days of DOE's July 15. 1998 letters to utilities

Petitioners' fee challenges were also filed within 180 days of DOE's July 15, 1998 rejection of Petitioners' demandthat DOE recommend reduction in the fee. In response to the a May18, t 998 expenditure plan, several Petitioners wrote to DOE noting that "excess revenues exist in the fund" and demanding, light of projected expenditures and collections, that the fee in be reduced in compliancewith Section 302(a)(4) to avoid "a Fund balance even 14

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disproportionate

to appropriations

needs." ~ Petition,

Ex. I.) On July 15, 1998, DOE

responded, makingno adjustment in the fee and indicating that "the reviews showthat no adjustmentin the I milfl(wh fee is necessaryor appropriate." (See. e.o_., Petition, Ex. 2.) Petitioners timely filed challenges to DOE's refusal to recommend reduction of the fee within a 16 days of that refusal. 4. The Petition was timely filed within 180 days of the date uoon which DOE'sfailure to publish a 1998 fee adequacy report becameunreasonable

Petitioners' fee challenges were timely flied within 180 days of the point at whichDOE's failure to publish a 1998 fee adequacy report becameunreasonable.4 Section 302(a)(4) makes prevision for retroactive adjustment of fees accompanied reimbursement the utilities by to over-collected amounts. Rather, the express function of Section 302(a)(4) of the NWPA is requireprospecth,e adjustments to the fees paid into the Nuclear Waste Fund. Anyfee adequacy reports DOE publishes after payment the utilities in the year for whichthe report is intended by thus does not accomplishits sole function and is per se unreasonable. In the instant case, Petitioners were required to makea paymentof approximately $8.000.000 into the Nuclear Waste Fund at the end of January 1998. Petitioners also madepaymentsof nearly $8,000,000 to Respondentson April 30, 1998, July 31, I998, and October 31, 1998 -all before DOE issued the "I 998 Fee AdequacyReport" intended to recommend adjustment to these payments if an appropriate. As to each paymentDOE collected without having madethe requisite fee assessment, DOE'sdelay in performing the assessment was unreasonable. Petitioners' fee challenges were timely filed within 180 days of these failures. of

DOE's subsequent attempt to remediate this defect through publicatioo of a fee adequacy report in December 1998does not affect the status of Petitioners" timely filed Petition, nor make it premature.

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B.

Petitioners' Doctrines

Fee Challenges Are Timely Under The Ripeness And Reopening

Evenif this Court were to determinethat Petitioners' fee challenges are based solely on DOE's flawed 1996 fee adequacy report or DOE's failure to publish a 1997 fee adequacy report, Petitioners' claims would be timely. This Court long has recognized circumstances in which objections to agencyregulations are timely, even after the statutory reviewperiod has ended. Raton Gas Transmission Co. v. FERC,852 F.2d 612, 615 (D.C. Cir. 1988). This is so when claim remains unripe for judiciat review throughout the statutory review period, Ea~te-Picher Indus.. Inc. v. EPA,759 F.2d 905, 913-14 (D.C. Cir. t985); Gelter v. FCC,610 F.2d 973 (D.C. Cir. 1979); Functional Music. Inc. v. FCC,274 F.2d 543 (D.C. Cir. 1958); or whenan agency reopens an issue previnusly resolved by a final agency action. Ohio v. EPA,838 F.2d 1325, 1328-29 (D.C. Cir. 1988). Pdpenessmayarise after a statutory period has mnwhena recent event or new information "create[s] a challenge that did not previously exist" or when, by precedent, claims are not ripe for review during the statutory period. Ea~,le-Picher, 759 F.2d at 9 t 3-14. Moreover, "the calendar does not run until the agency has decided a question in a mannerthat reasonably puts aggrieved parties on notice of the rule's content." RCA Global Communications. Inc. v. FC~, 758 F.2d 722, 729 (D.C. Cir. 1985); Functional Music, 274 F.2d at 546 (statutory time limit does not foreclose subsequentexan~inationof furfl~er agencyaction applying rule). Even if this Court required Petitioners to rely uponDOE's 1996 fee adequacyreport and its failure to issue a 1997report, Petitioners' fee challenges wouldbe timely filed under the ripeness doctrine. DOE's failure to begin.disposing of spent nuclear fuel by January 31, 1998, created a basis for chalIenging DOE's failure to promulgate the 1997 fee adequacyreport which did not exist prior to that time. DOE's failure to begin disposing of Petitioners' fuel created a

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statutory imperative that DOE recommend reduction in the fee. When a Petitioners demanded this adjustment, the Secretary flatly refused. (Letter of 7/15/98.) In light of Congress'mandate that DOE begin movingthe fuel by January 31, 1998, and this Court's repeated admonishments that DOE's duty was unconditional, DOE's failure to movethe fuel was unforeseeable. Petitioners filed their fee challenges "within 180 days of DOE's failure to be~n moving fuel. Accordingly,Petitioners' fee challenges are timely. Similarly, an agency mayreopen a statutory time period "'when the agency.., by some new promulgation creates the opportunity for renewed comment and objection." Ohio v. EPA, 838 F.2d at 1328. A "reopening" exists where an agency proposes changes to rules or policies, " requests comments new provisions while explaining unchangedportions, or responds to a on comment regarding a previously decided issue. [d. In detemair'/ing whefller a matter has been reopened, courts consider "all relevant proposals and reactions of the agencyto determine whether an issue was in fact reopened." Public Citizen v. NRC, F.2d 147, 150 (D.C. Cir. 901 I990) (citing Ohio v. EPA,838 F.2d. at 1328); Edison Elec. Ins. v. EPA.996 F.2d 326, 332 (D.C. Cir. 1993) (agency reopened statutory review period whenit solicited comments existing regulations and tendered "alternative approaches"). In the instant case, DOE "reopened"the statutory period for challenging the fee by acknowledging economicimpact of its failure to begin disposing of spent nuclear fuel by the January 31, 1998. In the May18, 1998letter, Secretary Pena requested Petitioners' participation in a negotiated restructuring of the statutory contract, invited input fromPetitioners regarding mitigation of the consequencesof DOE's default, and suggested modification of the contract's

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fee paymentprovisions, s Petitioners filed their fee challenges within 180 days of DOE's reopening of any statutory review period associated with DOE's 1996 fee adequacy report or failure to punish a report in 1997. Accordingly,Petitioners' claims are timely. IV. PETITIONERS' CHALLENGEOF DOE'S FAILURE TO PUBLISH V, rRITTEN TERMS AND CONDITIONS IS TIMELY Respondents contend that DOE promulgated the 1983 Standard Contract and the 1995 ArmualPriority Ranldng & Annual Capacity Report to implement the mandate in Section 302(a)(6). Respondents claim that, as a result, Petitioners' assertion that DOE failed promulgate binding terms and conditions is barred because it was filed more that 180 days from publication of both the statutory contract and the 1995Annual Priority Ranldng& Annual Capacity Report. (Motion at 17-t8.) Such "temls and conditions," however, even if formerly compliant with the NWPA, best remained in effect only until January 3 i, 1998, whenDOE at failed to commence disposing of spent nuclear fuel pursuant to the programCongresshad required. Since that time, Petitioners have been faced with the problemof planning for, paying for, and operating interim fuel storage facilities never intended under the Act, with no idea how

long DOE's default xvill require them to store this waste. Petitioners have no guidance on what plans they should makebecause DOE failed to comply with the NWPA's has requirement to establish criteria, including a schedule, for the disposal of their spent nuclear fuel. OnJune 15, 1998, Consolidated Edison and other utilities wrote to Secretary Pena

demanding that DOE establish, in writing, criteria setting forth the terms and conditions under which spent nuclear fuel disposal services would nowbe madeavailable. (Letter from

DOE ofcourse did not propose to recommend reduction in the fee. The agency merely a proposedto delay someportion of the fees to be paid, with accrued interest, whenthe repository finally opens.

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ConsolidatedEdison to Sec. Pena of 6/15/98.) ConsolidatedEdison's letter stated that as a result of DOE's failure to perform beginning January 31, 1998: no valid terms an.d conditions "currently exist." The utility also stated that DOE proposedno alternate plan, and requested had that DOE issue terms and conditions no later than July 10, 1998. OnJuly 15, 1998, DOE responded, asserting that the statutory contract, whichidentified January 3 I, 1998(six monthsearlier) as the scheduled start date, coupled with the 1995Annual Priority Ranking& AnnualCapacity Report, remainedthe written criteria establishing terms and conditions including schedule. Under the contract, schedules have never been confirmed. And, DOE already missed the scheduled start date. Petitioners filed their challenges regarding had DOE's failure to establish binding terms and conditions within 180 days both of DOE's violation of the earlier terms and conditions and of their receipt ofDOE:s JuIy 15, 1998Ietter. Accordingly,Petitioners' challenges were timely filed. Even if this Court were to determine that DOE previously issued NWPA-compliant written terms and conditions, Petitioners' challenges wouldbe timely. As noted above, this Court has long recognized exceptions under the reopening and ripeness doctrines by which objections to agencyactions maybe timely, even ai'ter the statutory review period' has ended. Raton Gas Transmission Co.~ 852 F.2d at 615; Ea~le-Picher, 759 F.2d 905; Geller, 610 F.2d 973; Functional Music, 274 F.2d 543; Ohio v. EPA, 838 F.2d at 1328-29. Petitioners' challenges regarding DOE's failure to establish terms and conditions would be timely under the ripeness doctrine. DOE's failure to begin disposing of spent nuclear fuel by January 31, ~ 998, created a newchallenge to DOE's terms and conditions whichdid not exist as long as DOE, its election, could have compliedwith Congress'and this Court's directives. at DOE's failure to begin disposing of Petitioners' fuel created a statutory imperative that terms and

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conditions, including schedule and rate of acceptance again be established. When Petitioners demanded that DOE establish these criteria, DOE refused. (Letter of 7/15/98.) In light

Congress' mandate that DOE begin movingthe fuel by January 31, 1998, and this Court's repeated admonishments that DOE's duty was unconditional, DOE'sfailure to movethe fuel was unforeseeable. Petitioners filed their challenges to DOE's failure within 180 days of DOE's failure to begin movingfuel. Accordingly,Petitioners' challenges are timely. In the instant case, DOE "reopened"the statutory period for challenging its failure to also establish terms and conditions whenit admitted that, due to its delay, it wasunable to finalize schedules, and invited Consolidated Edison and other petitioners to pursue discussions with DOE regarding amendment the statutory contract. U__G)of Petitioners filed their challenges to DOE's failure to establish terms and conditions within 180 days of DOE's reopening of the statutory review period. Accordingly, Petitioners' claims are timely. CONCLUSION For the reasons stated above, the Departmentof Energy's Motionto Dismiss should be denied. Respecffully~tted/ ~,~

Tami Ly~Azorsk~¢~ David A. Churchill Stephen E. guscus MC~A & C~O, L.L.P. 1900 K Seeet, N.W. Washington, D.C. 20006 202-496-7500

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Attorneys for Consolidated Edison Company NewYork, Inc. of ConsumersEnergy f/"k/a Consumers Power Company, Illinois Power Company, Pacific Gas and Electric Company, Rochester Gas and Electric and Corporation Dated: January 29, 1999 Of Counsel: C. Stanley Dees, Esq. Herbert L. Fenster, Esq. MCKENNA CUNEO, L.L.P. & 1900 K Street, N.W. Washington, D.C. 20006 202-496-7500 Brent L. Brandenburg, Esq. Arunas T. Udrys, Esq. Jeffrey R. Clark, Esq. Christopher J. Warner, Esq. Leah ManningStetzner, Esq. *Counsel of Record

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CERTIFICATE OF SERVICE I hereby certify t~at onthis 29a' day of January, 1999, a true copyof the foregoing was served by first-class mail on:

John Bryson, Esq. Departmentof Justice Environmental and Natural Resources Division Appellate Section 601 D Street, N.W., Floor 8 Washington, D.C. 20004

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CERTIFICATE OF FILING I hereby certify that, on this 23rd day of November, 2004, a copy of the foregoing "DEFENDANT'S RESPONSETO PAGES 12 AND13 OF 'PLAINTIFF BOSTONEDISON COMPANY'S POST-HEARING REPORT'" filed electronically, was in accordance with this

Court's order dated November 2004. I understandthat notice of this filing will be sent to all 23, 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.