Free Motion for Leave to File - District Court of Federal Claims - federal

Case 1:99-cv-00447-CFL

Document 209-7

Filed 10/26/2004

Page 1 of 12

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 1998fee adequacyreports. Rather, Petitioners' challenges are based uponRespondents'persistent overcollection of fees in the face of DOE's failure to begin disposing of spent nuclear fuel by January 31, 1998, its uncertainty with regard to whenand howit will begin d~spos~n,, of Pet~tmnersfuel, the nuclear waste program expenditure plan DOE published on May18, 1998, and DOE'sJuly 15, 1998 refusal to reduce Petitioners' fees. Accordingly,becausePetitioners' fee challenges were filed within t 80 days of DOE's April 30 and July 31, 1998 quarterly fee overcollections, within 180 days of Respondents'failure to begin moving fuel consistent with its unconditional obligation, and within 180 days of DOE's publication of its Mayt8, 1998 expenditure plan and July 15, 1998 refusal to reducefees, Petitioners' fee challengesare timely filed. Evenif Petitioners' claims were based on the deficiencies in DOE's 1996 fee adequacy report or DOE's failure to issue a 1997fee adequacyreport, Petitioners' fee challenges nevertheless wouldbe timely filed under the reopening and ripeness doctrines. Accordingly, Respondents' motion should be denied. A. Petitioners' Fee Challenges Were Timely Filed Within 180 Days of Petitioners' Notification of the UnlawfulConduct 1. ThePetition wasfiled within 180 days of January 31. 1998

Petitioners' fee challenges were timely filed within 180 days of January 31, 1998, the date upon which Petitioners first knewthat DOE would not heed Congress' mandateto begin disposing of fuel by that date and wouldnot heed this Court's repeated admonitionsthat DOE had an unconditional obligation to do so. Petitioners had no quarrel with the fees DOE collected

Case 1:99-cv-00447-CFL

Document 209-7

Filed 10/26/2004

Page 2 of 12

over the prior fifteen years in accordancewith the successive annual written assurances of DOE Secretaries that such fees were sufficient to meet programfunding needs. Indeed. Petitioners presumein the absence of information to the contrary that the approximately$15 billion collected (half of whichremainsunspent) will 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 great uncertainty per for the program over the next ten years. (Petition ¶ 60.) Basedon these facts, Petitioners asked DOE recommend reduction in the fee; it refused. (Letter from DOE Consolidated Edison to a to of 7/15/98.) In other words, despite tremendousfuture uncertainty, DOE no intention of had modifying fee collection activities. This is one of the DOE its actions Petitioners challenge. The earliest date on whichPetitioners had knowledge this action 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 mil rate. DOE's 1998 fee adequacy report asserts that the one nail rate is in fact sufficient to fund the much more expensive programupon which DOE, virtue of its failure to commence by 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 3 t, no 1998, DOE overcollected on the April and July dates. Petitioners' challenges were clearly filed within 180 days of those dates.

13

Case 1:99-cv-00447-CFL

Document 209-7

Filed 10/26/2004

Page 3 of 12

2.

ThePetition wasfiled within 180 days of Secretary Pena's letter of Mav 18, 1998

Petitioners' fee challenges were timely filed within 180 days of May 1998, the date 18, upon which Secretary Pena published the nuclear waste programexpenditure plan for amountsto be collected and appropriated going forward. (Petition ¶¶ 40-41 .) Secretary Pena's letter revealed to Petitioners that the NuclearWasteFundhad a balance already sufficient to fund the Nuclear WasteProgramthrough the Year 2010. I(~.) 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 spendsufficient funds to build the repository within the next ten years. Prior to the May 1998letter, Petitioners "knewneither howlittle DOE 18, intended to progress on the programnor howmuchit intended to collect from Petitioners and other utilities. Subsequentto

receipt of that letter, Petitioners neededless than 90 days to file challengesalleging that "in light of the excess amountscurrently in the Nuclear WasteFund, 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 construct a repository," DOE's continued collection of fees at the one mil rate wasarbitrary and capricious, unlawful, and contrary to the Act. (See Petition '~ 62.) The Petition is timely. 3. The Petition wasfiled within 180 days of DOE's July 15. 1998letters to utilities

Petitioners' fee challenges were also filed within 180 days of DOE's July 15, 1998 rejection of Petitioners' demand that DOE recommend reduction in the fee. In response to the a May18, 1998expenditure plan, several Petitioners wrote to DOE noting that "excess revenues ~' exist in the fund and demanding, light of projected expendituresand collections, that the fee in be reduced in compliance with Section 302(a)(4) to avoid "a Fundbalance even 14

Case 1:99-cv-00447-CFL

Document 209-7

Filed 10/26/2004

Page 4 of 12

disproportionate to appropriations needs." (_See. e.~, Petition, responded, making no adjustment in the fee and indicating

Ex. 1.) On July 15, 1998, DOE

that "the reviews show that no

adjustment in the I mil/kwhfee is necessary or appropriate." (,See. e.~=, Petition, Ex. 2.) Petitioners timely filed challenges to DOE'srefusal 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 upon which DOE's failure to publish a 1998 fee adequacy report became unreasonable fee challenges were timely filed within 180 days of the point at which DOE's

Petitioners' failure

to publish a 1998 fee adequacy report became unreasonable. 4 Section 302(a)(4) makes of

provision for retroactive adjustment of fees accompaniedby reimbursement to the utilities over-collected anaounts. Rather, the express function of Section 302(a)(4) of the NWPA is

require prospective adjustments to the fees paid into the Nuclear Waste Fund. Any fee adequacy reports DOE publishes after paymentby the utilities in the year for which the report is intended

thus does not accomplish its sole function and is per se unreasouable. In the instant case, Petitioners were required to make a payment of approximately $8,000,000 iuto the Nuclear also made payments of nearly $8,000,000 to

Waste Fund at the end of January 1998. Petitioners

Respondents on April 30, 1998, July 31, 1998, and October 31, 1998 - all before DOE issued the "1998 Fee Adequacy Report" intended to recommendan adjustment to these payments if appropriate. As to each payment DOE collected without having made the requisite f~e fee

assessment, DOE'sdelay in performing the assessment was unreasonable. Petitioners' challenges were timely filed within 180 days of these failures.

DOE'ssubsequent attempt to remediate this defect through publication of a fee adequacy report in December1998 does not affect the status of Petitioners' timely filed Petition, nor make it premature.

15

Case 1:99-cv-00447-CFL

Document 209-7

Filed 10/26/2004

Page 5 of 12

B.

Petitioners' Fee Challenges Are Timely UnderThe Ripeness AndReopening Doctrines

Evenif this Court were to determinethat Petitioners' fee challenges are based solely on DOE's flawed 1996 fee adequacyreport or DOE's failure to publish a 1997 fee adequacy report, Petitioners' claims wouldbe timely. This Court long has recognized circumstances in which objections to agencyregulations are timely, evenafter 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~le-Picher Indus.. Inc. v. EPA,759 F.2d 905, 913-14(D.C. Cir. 1985); Geller 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 previously resolved by a final agency action. Ohiov. EPA.838 F.2d 1325, 1328-29(D.C. Cir. 1988). Ripeness mayarise after a statutory period has run whena 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 913-14. Moreover. "the calendar does not run until the agencyhas decided a question in a mannerthat reasonably puts aggrieved parties on notice of the rule's content." RCA Global Communications. Inc. v. FCC,758 F.2d 722, 729 (D.C. Cir. 1985); Functional Music, 274 F.2d at 546 (statutory time limit does not foreclose subsequentexanaination of further agencyaction applying rule). Evenif this Court required Petitioners to rely upon DOE's 1996 fee adequacyreport and its failure to issue a 1997report, Petitioners' fee challengeswouldbe timely filed under the ripeness doctrine. DOE's failure to begindisposingof spent nuclear fuel by January 3 t, 1998, created a basis for challenging DOE's failure to promulgatethe 1997 fee adequacyreport which did not exist prior to that time. DOE's failure to begin disposing of Petitioners' fuel created a

16

Case 1:99-cv-00447-CFL

Document 209-7

Filed 10/26/2004

Page 6 of 12

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 move fuel xvas unforeseeable. the Petitioners filed their fee challenges \vithin 180 days of DOE's failure to begin moving fuel. Accordingly,Petitioners' fee challenges are timely. Similarly, an agency mayreopen a statutory time period "whenthe agency.., by some new promulgation creates the opportunity for renewed comment objection." Ohio v. EPA, and 838 F.2d at 1328. A "reopening" exists wherean agency proposes changes to rules or policies. requests comments newprovisions while explaining unchangedportions, or responds to a on comment regarding a previously decided issue. Id. In determining whether a matter has been reopened, courts consider "all relevant proposals and reactions of the agencyto determine whether an issue wasin fact reopened." Public Citizen v. NRC, F.2d 147, 150 (D.C. Cir. 901 1990) (citing Ohiov. 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 ac "knowledging economic the impactof its failure to begin disposing of spent nuclear fuel by January 31, 1998. In the May 1998letter, Secretary Pena requested Petitioners' participation 18, 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

17

Case 1:99-cv-00447-CFL

Document 209-7

Filed 10/26/2004

Page 7 of 12

fee paymentprovisions." Petitioners filed their fee challenges within 180 days of DOE's reopening of any statutory review period associated with DOE's 1996 fee adequacyreport or failure to punish a report in 1997. Accordingly,Petitioners' claims are timely. IV. PETITIONERS' CHALLENGEOF DOE'S FAILURE TO PUBLISH WRITTEN TERMS AND CONDITIONS IS TIMELY Respondents contend that DOE promulgated the 1983 Standard Contract and the 1995 Annual Priority Ranking& Annual Capacity Report to implementthe mandatein Section 302(a)(6). Respondents claim that, as a result, Petitioners' assertion that DOE failed promulgatebinding terms and conditions is barred because it was filed morethat 180 days from publication of both the statutory contract and the 1995 AnnualPriority Ranking& A~mual Capacity Report. (Motion at 17-18.) Such "terms and conditions," however, even if formerly compliant with the NWPA, best remained in effect only until January 31, 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 will require themto 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, includinga 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 wouldnowbe madeavailable. (Letter from

5

DOE course did not propose to recommend reduction in the fee. The agency merely of a

proposedto delay someportion of the fees to be paid, with accrued interest, whenthe repository finally opens.

18

Case 1:99-cv-00447-CFL

Document 209-7

Filed 10/26/2004

Page 8 of 12

ConsolidatedEdison to Sec. Pena of 6/15/98.) ConsolidatedEdison's letter stated that as a result of DOE's failure to performbeginning January 31, 1998, no valid terms and conditions "currently exist2' Theutility 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 scheduledstart date, coupled with the 1995Annual Priority Ranking& AnnualCapacity Report, remainedthe written criteria establishing terms and conditions including schedule. Underthe 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 of DOE's July 15, 1998letter. 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 after 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 Musiq, 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, i 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

19

Case 1:99-cv-00447-CFL

Document 209-7

Filed 10/26/2004

Page 9 of 12

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' mandatethat DOE begin movingthe fuel by January 31, 1998, and this Court's repeated admonishments that DOE'sduty was unconditional, DOE's failure to movethe fuel was unforeseeable. Petitioners filed their challenges to DOE's failure within 180 days of DOE's failure to begin moving fuel. Accordingly,Petitioners' challenges are timely. In the instant case, DOE "reopened"the statutory period for challenging its failure to also establish terms and conditions when admittedthat, due to its delay, it wasunable to finalize it schedules, and invited Consolidated Edison and other petitioners to pursue discussions with DOE regarding amendment the statutory contract. (Id.) Petitioners filed their challenges to DOE's of failure to establish terms and conditions within 180 days of DOE's reopeningof the statutory review period. Accordingly,Petitioners' claims are timely. CONCLUSION For the reasons stated above, the Departmentof Energy's Motionto Dismiss should be denied. Respectfullyytted/ Tafni LyffAzorsk¢~ David A. Churchill Stephen E. Ruscus MCKENNA CLrNEO, L.L.P. & 1900 K Street, N.W. Washington, D.C. 20006 202-496-7500

20

Case 1:99-cv-00447-CFL

Document 209-7

Filed 10/26/2004

Page 10 of 12

Attorneys for Consolidated Edison Company NewYork, Inc. of ConsumersEnergy f/"k/a ConsumersPower 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. ArunasT. Udrys, Esq. Jeffrey R. Clark, Esq. Christopher J. Warner,Esq. Leah ManningStetzner, Esq. *Counsel of Record

21

Case 1:99-cv-00447-CFL

Document 209-7

Filed 10/26/2004

Page 11 of 12

CERTIFICATE OF SERVICE a' I herebycertify that on this 29 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 th D Street, N.W.,Floor 8 601 Washington, D.C. 20004

2

Case 1:99-cv-00447-CFL

Document 209-7

Filed 10/26/2004

Page 12 of 12

CERTIFICATE OF FILING I hereby certify that, on October 26, 2004, a copy of the foregoing "DEFENDANT'S RESPONSETO PAGES 12 AND13 OF 'PLAINTIFF BOSTONEDISON COMPANY'S POST-HEARING REPORT'" filed electronically. was 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.