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IN THE UNITED STATES COURT OF FEDERAL CLAIMS : YANKEE ATOMIC ELECTRIC COMPANY, : : Plaintiff, : : v. : : UNITED STATES OF AMERICA, : : Defendant. : __________________________________________: __________________________________________

No. 98-126 C (Senior Judge Merow) Filed electronically January 13, 2005

YANKEE ATOMIC'S RESPONSE TO THE GOVERNMENT'S PROPOSED FINDINGS OF FACT

JERRY STOUCK Spriggs & Hollingsworth 1350 I Street, N.W., Ninth Floor Washington, D.C. 20005 (202) 898-5800 (202) 682-1639 (facsimile) Counsel for Plaintiff, YANKEE ATOMIC ELECTRIC COMPANY Of Counsel: Robert L. Shapiro SPRIGGS & HOLLINGSWORTH Dated: January 13, 2005

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Table of Contents Page I. II. III. IV. V. Government Proposed Findings Regarding Schedule Issues Reflect Rejected Legal Arguments...................................................................................................2 Government Proposed Findings Regarding Graves' Economic Sequence Model Are Either Immaterial or Without Merit ................................................................12 Government Proposed Findings Regarding GTCC Waste Are Without Merit...................................................................................................................................32 Government Proposed Findings Regarding Other Than Standard Fuel Are Without Merit.....................................................................................................................44 Government Proposed Findings Regarding Plaintiffs' Decisions to Use Dry Storage in Light of DOE's Failure to Remove Their SNF Are Without Merit...................................................................................................................................47 Government Proposed Findings Regarding Plaintiffs' Use of Dry Storage Canisters Are Without Merit..............................................................................................58 Government Proposed Findings Regarding Year of Anticipated DOE Performance Are Without Merit ........................................................................................61 Government Proposed Findings of Fact Regarding a Bad Faith Claim is a Straw Man..........................................................................................................................61 Government Proposed Findings Regarding Taking Claims Are Without Merit...................................................................................................................................61 Government Proposed Findings Regarding Plaintiffs' Reracking Projects Are Without Merit..............................................................................................................62

VI. VII. VIII. IX. X.

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IN THE UNITED STATES COURT OF FEDERAL CLAIMS : YANKEE ATOMIC ELECTRIC COMPANY, : : Plaintiff, : : v. : : UNITED STATES OF AMERICA, : : Defendant. : __________________________________________: __________________________________________

No. 98-126 C (Senior Judge Merow) Filed electronically January 10, 2006

YANKEE ATOMIC'S RESPONSE TO THE GOVERNMENT'S PROPOSED FINDINGS OF FACT Yankee Atomic submits the following response to the government's post-trial Proposed Findings of Fact ("GPF"). 1 Most of the government's proposed findings can be efficiently addressed in categories, and the Yankees' response is organized accordingly. Plaintiffs also provide some additional responses to a number of the individual government proposed findings. However, plaintiffs will not burden the Court with a comprehensive recitation of every disagreement and criticism they have with the government's proposed findings, especially since many of the proposed findings are immaterial. The absence of such a comprehensive treatment should not be interpreted as agreement with either the substance or materiality of the government proposed finding to which individual responses are not provided.

As the government filed one set of proposed findings of fact applicable to this case and to Connecticut Yankee v. U.S., No. 98-154C and Maine Yankee v. U.S., No. 98-474C, this response should be deemed applicable to all three cases.

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I.

Government Proposed Findings Regarding Schedule Issues Reflect Rejected Legal Arguments The government devotes a substantial portion of its proposed findings to repetition of

legal arguments regarding the rate of spent fuel acceptance that this Court rejected. In particular, the government still maintains that the parties' Contract provides mechanisms to set the rate and sequence of spent fuel acceptance. See GPF 14-15, 53-54. Of course, this Court has already rejected these arguments in its Order of June 26, 2003. Similarly, the government continues to maintain that the Contract's Disputes Clause, see P1YA, Art. XVI.A., is available to resolve disputes between the parties concerning DCSs. GPF 60, 100. But in Maine Yankee v. U.S., 225 F.3d. 1336, 1340 (Fed. Cir. 2000), the Federal Circuit made clear that the Disputes Clause is only applicable where the contract "also provides a specific administrative remedy for a particular dispute." And no such administrative remedy is available to address DCS disputes. The government sets out a number of proposed findings for the proposition of law that the approved DCSs create "binding" obligations between the parties that presumably limit DOE's obligations to pick up plaintiffs' spent fuel to the amounts set out in those DCSs. See, e.g., GPF 71.d., 80, 81, 86, 90, 105. This Court rejected that interpretation of the parties' Contracts in its June 26, 2003 Order adopting most of Commonwealth Edison Co. v. United States, 56 Fed. Cl. 652 (Fed. Cl. 2003). Moreover, the trial record is replete with evidence indicating that the parties did not view the DCSs as creating binding, much less limiting, commitments for DOE's acceptance of utilities' spent nuclear fuel and high-level radioactive waste (together "SNF"): Nancy Slater Thompson, the Technical Representative for DOE's Contracting Officer during the period when DCSs began, testified unequivocally that DCSs were not intended or understood by the contracting parties to be binding, see July 7, 2004 Designated 2

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Deposition Testimony at Ex. 11: Dep. 6/13/02 at Tr. 94:16-95:18 (explaining that it was recognized "that not only was the ACR for planning purposes only, but that in fact their DCSs were for planning purposes . . ."); id. at Tr. 95:25-96:16 ("I don'know how one t would perceive a DCS as anything other than for planning purposes."); id. at Tr. 98:9-21 ("[DCSs] were for planning purposes only and in fact were completed in such a way that not much but planning could be done based on the information contained in them. In addition, given the fungibility of the DCSs, that' why there is a final delivery schedule s which is somewhat more than a planning document. And I do recall siting across the table from numerous utility representatives, clearly recognizing that the DCSs were for planning purposes, and they in fact did not view themselves as binding themselves to deliver specifically what was described on the DCS."); id. at Tr. 98:22-99:6 (agreeing that no one "within DOE. . . thought that the delivery commitment schedules were binding on either industry or the department."); id. at Tr. 109:3-110:13 (stating that approved DCSs are not binding). Testimony at trial further indicates that DCSs were not intended or understood by the contracting parties to be binding: Tr. 4159:2-4160:16 (Zabransky) (stating that approved DCSs "support[ing] operations beginning in 1998 [are not] valid for use supporting operations in 2010" in light of the new ACR and DCS Instructions issued by DOE in July 2004 (see P1952, P1953).); Tr. 3953:23-3956:20 (Pollog) (testifying that Alan Brownstein, a DOE official who "had principal responsibility for the DCS process," had the view in 1990-1991 that "the DCS was not binding if a [DOE] facility hadn't commenced operations in 1998."); see also Tr. 4002:13-4004:14 (Pollog) (agreeing that during his deposition he testified that DOE personnel held the view "[DCSs] submitted

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and approved by the Department pursuant to these instructions . . . did not create any binding obligations."). P295MY (3/4/92 Letter from DOE to Maine Yankee with Instructions for Completing the Appendix C DCSs) at 1 (explaining "[t]he DCS provides the Purchaser with the opportunity to inform the Department of plans regarding its allocations of projected Federal waste acceptance capacity"), at ¶7(c) ("The annual acceptance rates in the 1991 ACR provide an approximation of the FWMS acceptance capacity and are for planning purposes. The process described herein assumes that the FWMS will be able to accept the Purchasers' SNF beginning in 1998 according to the acceptance rate reflected in the ACR. In the event that such circumstances change, all DCSs previously approved by DOE may need to be reevaluated by DOE and the Purchasers.") (emphasis added). D30.018 (6/14/95 Letter from DOE to Yankee Atomic approving Yankee Atomic DCSs) ("[t]he proposed delivery date [in the approved DCS] is dependent upon the existence of an operational repository or an interim storage facility constructed under the act.") (emphasis added). The ACRs upon which the DCSs were to be based pursuant to the instructions distributed by DOE make clear that they cannot support binding commitments. Consistent with the Contract language that ACRs are for "planning purposes," see P1MY at Art. IV.B.5(b) (Maine Yankee's 6/6/83 Contract for Disposal of Spent Nuclear Fuel and/or High-Level Radioactive Waste), each ACR issued by DOE from 1987-1995 explicitly states DOE's own interpretation that the Standard Contracts do not make ACRs contractually binding, see e.g., D27 (1995 Acceptance Priority Ranking and Annual Capacity Report) at 1.0 ("As specified in the Standard Contract, the ACR is for planning purposes only and,

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therefore, is not contractually binding on either the Department or the Purchasers."); see also D16 (1987 Annual Capacity Report) at 2 (same); D17 (1988 Annual Capacity Report) at 1 (same); D18 (1990 Annual Capacity Report) at 2 (same); D24 (1991 Annual Capacity Report) at 1 (same); D26 (1992 Annual Capacity Report) at 1-2 (same); P63 (1995 Acceptance Priority Ranking and Annual Capacity Report) at 1 (same). Each ACR also states explicitly that its acceptance rate projections are subject to change. E.g., D27 (1995 Acceptance Priority Ranking and Annual Capacity Report) at 4 ("This table [titled, "Projected Nominal Waste Acceptance Rates for Spent Nuclear Fuel"] provides only an approximation of the system throughput rates and is subject to change depending on Congressional action regarding the conditions for the siting, construction, and operation of an interim storage facility, if any, the repository, and the system design and configuration. The Department will further define and specify the system operating and waste acceptance parameters as the Program progresses, and inform the Purchasers accordingly."). The July 2004 ACR also states that ACRs are not binding. See P1952 (July 2004 Acceptance Priority Ranking and Annual Capacity Report) at 1.0 ("As specified in the Standard Contract, the ACR is for planning purposes only and, thus, is not contractually binding on either DOE or the Purchasers") (emphasis added). The DCS Instructions issued July 28, 2004, see P1953, state at ¶7(a): The annual acceptance rates in the 2004 APR/ACR provide an approximation of the CRWMS acceptance capacity and are for planning purposes. The process described herein assumes that the CRWMS will be able to accept a Purchaser's SNF beginning in 2010 according to the acceptance rates reflected in the 2004 APR/ACR. DOE recognizes that many Purchasers have submitted and DOE has approved DCSs based upon the January 31, 1998 operations date included in the Standard Contract. Purchasers 5

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should submit new DCSs based upon the currently planned operation date of 2010. (emphasis added). Subsequently, by letters dated December 1, 2004 signed by Mr. Zabransky as Contracting Officer, see, e.g., Exhibit A attached hereto, DOE stated that its "resumption of the DCS process [as reflected in P1953] was premature," and it returned DCS forms submitted in response to P1953 and stated that "[a]fter the Department has determined a revised date for the initial operation of the Yucca Mountain repository, it will resume the DCS process in accordance with the provisions in the Standard Contract." Plaintiffs provide the following further responses to certain individual findings proposed by the government: 61.b. This proposed subfinding realleging that the minimum period covered by ACRs

serves as a maximum period in which spent fuel acceptance allocations can be exchanged misreads the parties' Contract as explained fully below at pp. 15-16. 70. Plaintiffs agree that the parties' Contracts do not set out particular rates for DOE's

acceptance of utilities' SNF, minimum, maximum or otherwise. Rather, as set out in plaintiffs' proposed findings, see, e.g., Yankee Atomic Proposed Findings of Fact ("YAPF") 61, the parties recognized that the rate of DOE's acceptance of utilities' SNF should achieve two objectives: to prevent utilities from having to construct or maintain additional at-reactor storage facilities for spent fuel after January 31, 1998, and (2) to accept spent fuel at a rate that permitted DOE to keep up with the rate of production of spent fuel and reduce the existing spent fuel backlog. 71. In this proposed finding concerning the 1985 Mission Plan, P95, the government

goes to great lengths to argue that the Mission Plan did not create binding contractual obligations. This argument is a straw man. Plaintiffs have never asserted that the Mission Plan creates contractual obligations. However, the 1985 Mission Plan is persuasive evidence that a 6

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3000 MTU per year acceptance rate "at least" would have been reasonable and consistent with the parties' shared understandings. See, e.g., YAPF 75 and 77. 73. In this proposed finding, the government wrongly asserts that in the 1987 Mission

Plan Amendment, D12, "DOE recommended deferral" of the date for operation of the first repository to 2003. In fact, as reflected by the portion of the 1987 Mission Plan Amendment quoted by the government, the document acknowledges that the program was already well behind schedule. 80. The government's characterization of language in ACRs as stating that DOE

would issue "a firm waste acceptance schedule" in 1991 is not supported by the language quoted by the government. In the cited language, DOE merely says that "the ACR acceptance ranking will be converted into an Annual Priority Ranking" beginning in 1991. To this day, DOE has not issued a "firm" schedule, and the Contracts are not designed to "set" a schedule at any time. 81. This proposed finding, alleging that the nuclear utility industry understood the

significance of the 1991 ACR for the development of acceptance schedules for individual utilities, is vague and misleading. The proposed finding is vague because no particular significance to the 1991 ACR is set out in the proposed finding. Moreover, the language from the utility industry document, D109, quoted by the government merely indicates that certain members of the utility industry were aware of a hearsay description (based on unnamed OCRWM contacts) of "OCRWM's concept and planned approach on the Annual Capacity report." 84. The last sentence of this proposed finding wrongly implies that DOE had determined in the 1989 Reassessment of the Civilian Radioactive Waste Management Program, P101, that a MRS should open by 1998 even though a repository would not be available until 2010. In the

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1989 Reassessment, DOE noted its support for the development of an MRS, see P101 at 17; however, DOE also acknowledged statutory schedule linkages that would need to be lifted in order to enable the MRS to start operating significantly prior to the repository. Id. at 11, 18. 93. The last sentence of this proposed finding alleging that DOE "anticipated that it

would receive relief from the `construction linkage'" in the 1987 NWPA Amendments is incorrect and not supported by the cited evidence. In the cited testimony from Mr. Pollog, he testifies merely that DOE "hoped" that it would receive such relief. Also at trial, Mr. Milner admitted that the DCSs that were submitted following publication of the 1991 ACR, P60, were based on a schedule that was inconsistent with the schedule linkages, therefore, making the DCSs conditional upon the timely approval of the repository (as reflected explicitly on some of the approved DCS forms themselves). Tr. 4765:13-4769:17 (Milner). 97. This proposed finding wrongly attempts to impeach Dr. Bartlett's testimony as a

fact witness with a straw man argument. Although Dr. Bartlett testified that DOE was planning to receive utility spent fuel at an annual rate of 3000 MTU, he did not state that DOE was planning to achieve this acceptance rate "soon after 1998" as the government states. Although Dr. Bartlett authorized publication of the 1991 ACR, P60, as noted in the response to GPF 93 above, Mr. Milner admitted that the acceptance rates in that ACR were contrary to the 1987 NWPA Amendments. In fact, DOE was not planning to accept any SNF until 2010. See YAPF 92. DOE has cited no evidence for the proposition that DOE was actually planning to receive SNF at the rates set out in the 1991 ACR. Conversely, plaintiffs presented substantial evidence reflecting DOE's actual plans to accept utility spent fuel at a 3000 MTU annual rate. See, e.g., YAPF 75.

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100.

This proposed finding is disingenuous. In the second sentence, although it

correctly notes that the Contracts intended that utilities have the option of seeking approval of any amount of spent fuel acceptance, as noted above, the Disputes Clause is not applicable to disputes between utilities and DOE regarding approval of DCSs. Also, characterization as a "recommendation" of the contracting officer's direction to use the allocations in the 1991 ACR, P60, as the basis for DCS submissions is not a reasonable reading of those instructions. See, e.g., P295MY at 1 and instructions at 2 ("The allocations in the 1991 Annual Capacity Report (ACR) should be the basis for the DCS submittals."). The mandatory nature of DOE's instruction is also shown by Yankee Atomic's experience where DOE refused to accept DCSs that did not conform to the 1991 ACR. See GPF 112.b.-e. The last sentence, that the instructions were consistent with the original intent of the Standard Contract is not supported. In fact, the instructions, resulting in uselessly small allocations for utilities, were contrary to the intent of the parties as noted in plaintiffs' proposed findings of fact. See, e.g., YAPF 52-63. 103. This proposed finding, asserting that failure to submit a DCS would result in a

utility's loss of a spent fuel acceptance allocation is wrong and not supported by the cited documents. The Contracts say nothing about loss of allocations. And although the Contracts specify that DCS forms should be submitted 63 months prior to the applicable delivery date, that requirement has not yet had effect, since DOE has not yet come close to accepting utility spent fuel and made clear years before distribution of the 1991 ACR and DCS instructions that it would not be accepting spent fuel until at least 2010. See Response to GPF 93 above. The memoranda cited by the government merely reflect plaintiffs' repetition of DOE's statements of the government's position regarding the mandatory nature of DCSs. See, e.g., D34 at 2 ("The

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Contracting Officer, Tomasoni, indicated that if we don't submit revised DCSs in 30 days, she could mandate an allocation or possibly eliminate our slot in the first year of WMS operation."). 105. As originally contemplated by the parties in their Contracts, in the context of a

functioning DOE program, approved DCSs may have created heightened expectations that DOE would pick up at least the amount of SNF set out in the DCS. But nothing in the DCSs or the evidence cited by the government indicates that plaintiffs believed that DCSs set a maximum level of DOE performance consistent with the parties' obligations under the Contracts. Further, as noted in the response to GPF 93, DOE made clear by the time of distribution of the 1991 ACR and DCS instructions that the SNF acceptance would not proceed as originally intended by the Contract, as it would not begin until at least 2010. As also noted above at pp. 2-6, ample evidence indicates that the parties did not intend for DCSs to be contractually binding. 107 and 109. The allegations in these proposed findings that Connecticut Yankee and Maine Yankee respectively "accepted" DOE's DCS instructions is vague. To the extent the allegation is that plaintiffs in any way agreed that the instructions were consistent with the parties' obligations under their Contracts, the allegations are wrong and unsupported. As set out and supported in plaintiffs' proposed findings, see, e.g., YAPF 53-63, the instructions are inconsistent with the parties' understandings of their contractual obligations to the extent that they purport to limit DOE's acceptance of utilities' spent fuel to uselessly small amounts and to the extent they give DOE discretion to determine the rate at which it could accept SNF from utilities. 115. This proposed finding is misleading to the extent it implies that the Standard

Contract provides an appeal process for denials of requests for priority acceptance of SNF. As noted above at p. 2, the Disputes Clause does not provide such a remedy through which to obtain

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relief for denials of requests for priority acceptance. Moreover as explained by Mr. Grube in his testimony cited by the government, resort to further "appeals" to the DOE contracting officer would have been futile. Tr. 3840:9-23 ("As I understand the disputes article, you go back to the contracting officer and ask her again, or him, her, whatever, and it seemed like a bit of a waste of time when somebody says no. Are they going to come back and say, Hell, no? It didn't seem like a fruitful undertaking."). 116. The allegation in the proposed finding, that Yankee Atomic recognized and

understood that the nuclear utility industry opposed the grant of priority acceptance of Yankee Atomic's SNF, is not supported by the cited evidence. The cited evidence, e.g., D146, indicates that the nuclear utility industry could not reach a consensus position on the issue of priority acceptance for shutdown reactors. Moreover, any utility industry position regarding priority for shutdown reactors is of limited significance, since the Contracts provide DOE, and not the utility industry, with discretion to grant priority. See, e.g., P1YA, Art. VI.B.1.(b). 119. The allegation in the proposed finding that Yankee Atomic understood that

pursuant to the rates set out in the 1991 through 1995 ACRs, Yankee Atomic's SNF would not be accepted for 20 years after the beginning of waste acceptance absent the grant of priority of acceptance is wrong and not supported by the cited evidence. In fact, as noted in response to GPF 127 below, the acceptance rates in those ACRs do not ever provide for the acceptance of all of Yankee Atomic's SNF. The last sentence in the first paragraph of the proposed finding asserting that documents establish that Yankee Atomic planned to construct a dry storage facility based upon the rates in the 1991 through 1995 ACRs is misleading. The totality of the evidence, see, e.g., YAPF 90-106, makes clear that Yankee Atomic decided to use dry storage for its SNF

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based on the overall failure of DOE's SNF program, and the ACRs published in 1991 through 1995 reflect that failure. 119b. The implication that Yankee Atomic linked construction of an ISFSI to store its SNF to DOE's refusal to grant Yankee Atomic priority for the acceptance of its SNF is incorrect and not supported by the cited evidence. The cited evidence, and the broader evidence explaining Yankee Atomic's decision to implement dry storage, see YAPF 90-106, makes clear that Yankee Atomic's decision was based on the expected overall duration of DOE's failure to pick up Yankee Atomic's SNF. 121. The implication of this proposed finding, that the ACRs published in 1991

through 1995 indicated that DOE was planning to accept SNF at a MRS is wrong and not supported by the cited evidence. As noted in the response to GPF 84 and 93 above, DOE recognized that it has been precluded by statute from constructing a MRS. II. Government Proposed Findings Regarding Graves' Economic Sequence Model Are Either Immaterial or Without Merit Mr. Graves testified in detail regarding his reasonable economic estimate of the sequence of utility spent fuel acceptance that would have occurred absent DOE's breach. Tr. 797-865 and 7503-7537. That testimony addressed all of the criticisms raised by the government in its proposed findings. Importantly, the government did not present an alternative sequence model (based either on economic or other principles). See Order of June 28, 2004, slip op. at 11, 2004 WL 1535686 at *7 (inviting such alternative evidence). In its proposed findings, the government has not alleged that, absent DOE's breach, DOE would have completed removal of plaintiffs' spent fuel at any times other than those shown by Mr. Graves' testimony and set forth in plaintiffs' proposed findings of fact. Nor has the government proposed findings to the affect that, absent DOE's breach, exchanges would not have occurred or that DOE would have 12

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accepted spent fuel from utilities in an oldest-fuel-first sequence. The government's failure to offer any such evidence is telling. Instead, the government devotes a remarkably large portion of its proposed findings, GPF 122-208, to criticisms of Frank Graves' economic sequence model. These criticisms are either immaterial or without merit (and frequently both). First, many of the government criticisms suggest that even absent DOE's breach, problems "might" or "could" have arisen with the formation of a robust market for exchanges. See, e.g., GPF 155 (some utilities with early allocations "could" have acted "strategically"); GPF 154 (some utilities with early allocations "might" retain, rather than exchange, them); GPF 159 (sequences of trades "might unravel"); GPF 161-62 ("non-economic considerations" would be motivating factors for potential participants in a market for exchanges); GPF 163 (local communities and ratepayers "might" cause utilities to behave in an economically inefficient manner); GPF 164 ("if" non-economic factors entered a utility's analysis, the entire market for exchanges would "unravel"). But even taken at face value (and the lack of merit of many of the government's proposed findings will be addressed paragraph-by-paragraph below), these government proposed findings are immaterial. The government does not even propose as findings that any of these possible problems with exchanges would have happened or were even likely to have happened absent DOE's breach. Second, many of the criticisms are based on the notion that Mr. Graves' economic sequence model depends upon a finding that absent DOE's breach, the market for exchanges would have been characterized by "perfect competition." See, e.g., GPF 142, 144 (model assumes that exchange market would be analogous to a perfectly competitive market); GPF 145, 149 (requirement of government approval of exchanges is inconsistent with perfect competition); GPF 156 (unlike perfectly competitive market, exchanges market would have high transaction

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and information costs); GPF 160 (perfect information would not exist). These criticisms are misplaced. Mr. Graves made clear that his opinion that DOE would have completed removing Yankee Utilities' SNF at the times set out in his testimony does not depend on a finding of "perfect competition." Tr. 7522:11­7523:19 (has not "assumed that the spent nuclear fuel trading process would be perfectly efficient, or that I need that in order to understand the outcome of what the trading would probably be like."). Moreover, these criticisms are ineffectual, because the government does not even propose as findings of fact that the various potential market imperfections it identifies would have existed or would have been of sufficient scale to actually preclude the market for exchanges from producing the results shown in Mr. Graves' economic sequence model. In addition, as explained by Mr. Graves, the potential costs of the potential market imperfections noted by the government are likely to be small relative to the approximately two billions dollars in benefits of exchanges for utilities shown by Mr. Graves' analysis. Tr. 7515:20­7517:19. Third, a number of the government's criticisms are simply areas where additional complexity could have been added to Mr. Graves' model. See, e.g., GPF 203 (complaining that Mr. Graves did not model total system costs); GPF 204 (complaining that Mr. Graves did not model transportation modes other than rail); GPF 205 (complaining that Mr. Graves did not include the possibility of adding spent fuel storage space through reracking in his analysis); GPF 206 (complaining that Mr. Graves did not analyze failed fuel distinctly from other spent fuel); GPF 207 (complaining that Mr. Graves did not model exchanges of GTCC waste); see also GPF 154 (complaining that model fails to account for possibility that contract holders might retain early year allocations); GPF 161-64 (arguing that "non-economic" factors "need to be taken into account in determining what the non-breach exchanges market would have looked like"); GPF

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172-73 (complaining that Mr. Graves did not identify specific trades or trading utilities); GPF 179-84 (complaining that Mr. Graves did not model risk and uncertainty regarding DOE's performance in the first years of the SNF removal program). Missing from these criticisms, however, is any evidence or claim that the absence of such additional complexities in Mr. Graves' model systematically leads to earlier "fuel out dates" for plaintiffs, a higher damage claim for plaintiffs, or indeed, any material difference in the results of the model. Given the absence of evidence or claims about the materiality of these additional complexities, the government's mere recitation of them should be accorded little, if any, weight. Fourth, the government argues that the financial benefits to utilities engaging in exchanges of acceptance allocations absent the breach is overstated by Mr. Graves and is relatively small compared with the revenue generated by nuclear utilities for electricity generation. GPF 166-67. The government's argument, however, which focuses on the revenue to be generated by utilities trading away early acceptance allocations (when exchanges are of greatest value), misses the thrust of Mr. Graves' analysis. The benefits to engaging in exchanges include the billions of dollars saved in spent fuel storage costs during the entire period of government performance. Tr. 831:19-841:23 (Graves); Graves Demonstrative 84. These benefits also include far fewer trips by DOE to pick up spent fuel (and thus far fewer disruptions to operating reactors) than an oldest-fuel-first acceptance sequence. Id. and Graves Demonstrative 91. Fifth, the government argues that a technical problem with the exchange process would have prevented it from working as set out in Mr. Graves' analysis. GPF 187-89. Specifically, the government argues that allocations for spent fuel acceptance would not have existed for more than 10 years into the future. Id. The government misreads the Contracts, see, e.g., P1YA. The

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Contracts do not set a 10-year maximum on spent fuel acceptance allocations. Rather, it sets a 10-year minimum for the duration of ACRs. See P1YA, Art. IV.B.5.b. In fact, nothing in the contract prevents utilities from proposing and DOE from approving DCSs more than 10 years into the future. It is true that, given its impending breach, DOE operated the DCS process in a manner not to provide acceptance allocations beyond 10 years into the future, and Yankee Atomic recognized this shortcoming in DOE's operation of the program. See GPF 188. But this breach-induced behavior provides little guidance as to how the parties' performance under the SNF contracts would have operated absent the government's breach. As set out and supported in plaintiffs' proposed findings of fact, see, e.g., YAPF 81-85, substantial incentives would have influenced both utilities and DOE to cooperate to make sure that the acceptance allocation exchange process worked as intended, to enable utilities to optimize the allocation of waste acceptance capacity to meet individual utility needs. In addition, a number of the government's criticisms of Mr. Graves' analysis stem from confusion between the breach and non-breach worlds. See, e.g., GPF 131-37 (discussing plaintiffs' planning documents and analyses of potential exchanges of spent fuel acceptance allocations); GPF 165 (noting "non-economic factors" that have discouraged utilities from exchanging spent fuel acceptance allocations in the breach world); GPF 178, 192-93 (discussing hesitance that utilities may have to exchange acceptance allocations in the future). These criticisms are misplaced, because, as noted above and as Graves testified, breach-world incentives differ markedly from those that would have influenced utilities and DOE absent DOE's breach, and the non-breach world incentives would have powerfully influenced utilities and DOE to have made the exchanges process work as intended. Tr. 839:25-841:23 (Graves).

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Furthermore, many of the government's criticisms of Mr. Graves' economic sequence model depend primarily on the opinions of Daniel Fischel. The Court should accord Mr. Fischel's opinions little weight, because he was not a credible witness in this case. For example, notwithstanding the Court's clear requirements for advance disclosure of expert opinions, the opinions offered by Mr. Fischel at trial differed sharply from those in his expert witness reports. See Tr. 4306:9-4308:9 (comparing two opinions offered at trial to two opinions listed in pre-trial expert witness reports). In addition, Mr. Fischel did not prepare his own expert witness reports; they were prepared by someone else, under his supervision. Tr. 4308:15-20. Indeed, Mr. Fischel spent little time preparing "his" expert witness reports. Tr. 4309:4-19 (probably less than 50, and possibly less than 20 hours were spent on the initial draft of the report). Importantly, Mr. Fischel failed to review many of the basic DOE documents regarding operation of the program and the "schedule issues" to which Mr. Fischel testified, including ACRs, APRs, Total System LifeCycle Cost studies, Fee Adequacy studies, the 1985 Mission Plan, OCRWM Program Requirements Documents and annual reports. Tr. 4359:8-4360:22. In addition, notwithstanding the requirement provided by the Court's pre-trial Orders and applicable rule to list all documents relied upon in reaching his opinions, Mr. Fischel testified that his opinions were supported by five publications, yet only one of these was disclosed in his expert witness reports. Tr. 4334:164339:6. Similarly, notwithstanding the requirement that the expert list all cases in which he has testified as an expert in the past four years, Mr. Fischel failed to list in his expert witness report a case where he testified at trial in U.S. District Court (indeed, even though this omission was raised at his deposition and Mr. Fischel testified regarding an updated resume provided to plaintiffs a few days prior to his testimony in Court, Mr. Fischel's updated resume also fails to

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list this case). Tr. 4340:7-4341:22. This omission is significant, because, in this undisclosed case, Mr. Fischel provided expert testimony supporting a claim for damages (lost earnings damages on behalf of his own firm, Lexecon) which testimony was contrary in various ways to his criticisms of plaintiffs' damage claims. Tr. 4342:4-4344:8. It is also significant that Mr. Fischel lacks experience with utilities in general and nuclear utilities in particular. See Tr. 4242:9-4250:10 (recitation of Mr. Fischel's background including no such experience). Indeed, Mr. Fischel's educational background in economics is limited to an undergraduate minor. Mr. Graves, in comparison, has substantial utility and nuclear utility experience. Tr. 742:7-743:17 (Graves). And Mr. Graves has a graduate degree from MIT's Sloan School. Tr. 741:23-742:6. Plaintiffs provide the following further responses to certain individual findings proposed by the government: 122. This finding is wrong to the extent it claims that plaintiffs rely "exclusively upon

the exchanges model" presented by Mr. Graves to establish that DOE would have completed removal of their spent fuel by 1999 for Yankee Atomic, 2001 for Connecticut Yankee and 2002 for Maine Yankee. Mr. Graves' testimony is an important and persuasive part of the proof presented by plaintiffs, but it is not exclusive. As set out in their proposed findings of fact, see, e.g., YAPF 64-89, plaintiffs presented substantial additional evidence setting out what reasonable DOE performance would have been absent the breach, including a reasonable industry-wide acceptance rate, the intent of avoiding the need for additional at-reactor storage, the use of exchanges to enable utilities to optimize their acceptance allocations, and the provision of priority acceptance to permanently shutdown reactors, if necessary, to avoid prolonged storage of spent fuel at reactor sites post-shutdown. Also, as elsewhere recognized by the government,

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Mr. Graves did not model exchanges; he presented an economic sequence model to estimate when plaintiffs' spent fuel would have been removed absent the breach. See GPF 169. 125. This finding is misleading in that it states that Mr. Graves "assumes" that DOE

was "obligated" to accept spent fuel from utilities in particular amounts. First, Mr. Graves did not focus on what DOE was legally "obligated" to do (and the cited evidence does not support the government's contrary contention). Instead, Mr. Graves focused on what reasonable performance would have been. Tr. 777:14-778:10 (Graves). In addition to his own analysis of "must-move fuel," Mr. Graves relied on DOE documents and other evidence as to what reasonable DOE performance would have been absent its breach. Tr. 778:11-785:3 (Graves). a. The implication that the "ramp-up" rate used in Mr. Graves' economic sequence

model comes exclusively from P254, a 1999 OCRWM Program Requirements Document, is wrong. As set out in his testimony, that ramp up rate is also consistent with other DOE documents and Mr. Graves' economic analysis that fixed costs should be used liberally once they are expended. Tr. 783:4-785:3 (Graves). See also YAPF 78 noting additional evidence supporting this "ramp-up rate." 127. The second sentence of this proposed finding, alleging that under the acceptance

rate in the 1991 ACR, the last of Yankee Atomic's spent fuel would not be removed until at least 2018, is incorrect and not supported by the cited evidence. The 1991 ACR, P60 at 5, only sets out rates of acceptance for the 1998-2007 period and only covers 8,200 MTU of spent fuel. See also GPF 91, 94 and 95. Moreover, the total acceptance allocated to Yankee Atomic under that ACR, 56.1 MTU, see P60 at 9, would not have been enough to provide for removal of all of Yankee Atomic's 127 MTU of spent fuel on an oldest-fuel-first basis (so the "last" of Yankee Atomic's fuel would never be removed). See P207 at B.22, noting Yankee Atomic's inventory

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of 127 MTU of spent fuel. The evidence cited by the government, D150, is a 1992 decommissioning cost study performed for Yankee Atomic by a private contractor. That cost study does not purport to interpret DOE's 1991 ACR. The specific page cited by the government notes that the cost estimate for spent fuel storage costs is premised, in part, on an estimate of when DOE would remove the last of Yankee Atomic's spent fuel and that this time estimate is based on "the lower rate of fuel acceptance published by DOE in the Annual Capacity Report until the opening of a repository in 2010. Thereafter, accelerated shipment of YNPS SF is assumed until 2018 . . ." The specific ACR being referred to is not identified, but it does not appear to be the 1991 ACR, as that ACR did not include a "lower rate of acceptance." Instead, the 1992 decommissioning cost study, D150, is likely referring to the 1990 ACR, P59 at 7, which does have a higher and a lower rate of acceptance. See also GPF 85. And the decommissioning cost estimate simply reflects a conservative estimate of when DOE might complete removal of Yankee Atomic's spent fuel based upon the ACR rates and DOE's various statements. 128. The second sentence of this finding applies the same conclusion as the second

sentence of GPF 127 to Connecticut Yankee and Maine Yankee and is similarly wrong for the reasons noted in response to GPF 127 above. In addition, like D150 noted in response to GPF 127 above, D157 is a 1992 Decommissioning Cost Study prepared for Connecticut Yankee by an independent contractor that does not purport to interpret either DOE's 1991 ACR or the acceptance rates used by Mr. Graves. Likewise, D196 is a 1993 Decommissioning Cost Study prepared for Maine Yankee by an independent contractor. And while that study assumed that DOE would complete removal of Maine Yankee's spent fuel by 2018, the basis for the use of this date is not made clear in the study. And the decommissioning cost estimate simply reflects a

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conservative estimate of when DOE might complete removal of Yankee Atomic's spent fuel based upon the ACR rates and DOE's various statements. 129. Subparts a. and b. referencing the 1991 ACR contain the same errors as GPFs 127

and 128 explained above. 131. The implication of this GPF that there is an inconsistency between Mr. Graves'

opinions of when plaintiffs' fuel would have been removed absent the breach and the companies' historical documents is wrong and unsupported by the cited evidence. As noted in response to GPF 127 above, the companies' documents reflect plaintiffs' need to deal with DOE's impending breach. b. and c. The characterizations of the cited decommissioning cost studies as assuming "timely DOE performance" are wrong. The studies assume that DOE performance starts in 1998, but the studies do not purport to determine whether the acceptance rates and sequence used would have been reasonable performance under the parties' contracts. 141. This proposed finding is inconsistent with the cited trial testimony. Mr. Graves'

economic sequence model set forth his opinion that an "economic solution something like mine" would have occurred, but his model does not purport to estimate "exactly what would have transpired:" Q Mr. Graves, I want to ask how you characterize ultimately what you' trying to show when you ­ with your ultimate opinion, re in terms of the dates upon which each of the three Yankee companies would have had their fuel removed and the cost that Yankee Atomic would have borne for that. Do your models purport to describe exactly what the nonbreach world would have looked like? A No. I' not offering my analysis as a structural photograph or m description of exactly what would have transpired. What my model shows is ­ what my models show is that, in the first instance, there is a must-move problem, which has a certain size 21

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that' quite easy to anticipate and roughly estimate with pretty high s accuracy. And any reasonable program has to be scaled at about that level to avoid imposing at-reactor storage cost. So that ­ and that result doesn'rely on anything except for analysis anybody t could have done. The second point is, given a program of a reasonable size, there is an enormously ­ there' an enormous s opportunity to pursue that program efficiently by allowing swaps or by utilities arranging for deals amongst themselves, for intermediaries arising who will provide brokerage services. And the value of that is extremely high. And it' extremely simple to s develop both the proof and the mechanisms for the ­ to show that that' worthwhile. Given that, I think an economic solution s something like mine would occur. Whether or not it occurred through an auction mechanism that used the same pricing algorithm as I have shown is really not relevant. All I' saying is m there is so much compelling economic attraction to pursuing an efficient solution and so little barrier to doing so, that something like that would have been a reasonable thing for utilities to expect. And that not only is that good for the utilities, it' good for the s program. So I end up seeing no big barriers on any side to going in that direction. But, again, whether the precise processes are the same as I' shown is not part of my testimony. I' not opining ve m that this is the only way it could be done. Tr. 862:7-864:3. 142. As reflected in the testimony quoted in response to GPF 141 above, Mr. Graves'

economic sequence model does reflect his opinion of what the results would have been for plaintiffs absent the breach. As also explained above, Mr. Graves made clear that his opinion that DOE would have completed removing plaintiffs' SNF at the times set out in his testimony does not depend on a finding of "perfect competition." Tr. 7522:11­7523:19 (has not "assumed that the spent nuclear fuel trading process would be perfectly efficient, or that I need that in order to understand the outcome of what the trading would probably be like."). In this same transcript reference, Mr. Graves explained his understanding of the "invisible hand" concept as reflecting the tendency of markets to arrive at efficient solutions, not one of "perfect competition." Id. The government goes on to misstate the "invisible hand" concept as reflected by Mr. Fischel's

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testimony, Professor Samuelson's treatise (and for that matter, Adam Smith's The Wealth of Nations (1776)). Neither Fischel nor Samuelson nor Smith claimed that the "invisible hand" results in perfectly competitive markets. Rather, Samuelson quotes Smith as follows and analyzes the quote as seeing the "harmony between private interest and public interest:" "By pursuing his own interest [every individual] frequently promotes that of society more efficiently than when he really intends to promote it." P. Samuelson & W. Nordhous, Economics (15th Ed. 1995) at 27. 144. Contrary to the parenthetical following the first sentence, Mr. Graves did not

assume "total and complete participation by all entities" for purposes of his economic sequence model. Rather, his testimony reflects his belief that "by and large, most utilities would participate." Tr. 859:3-25 (Graves). And even if half of all potentially participating utilities declined to participate, the results of his analysis would not change. Id. 151. The government appears to confuse the breach and non-breach worlds. The

proposed finding refers to what each plaintiff presently "has" to do as opposed to what would have happened absent DOE's breach. c. This finding is misleading to the extent it implies that there is a single sequence of

transactions that could lead to the results reflected in Mr. Graves' testimony. In fact, Mr. Graves explained in his testimony (and was not disputed by the government in this regard at trial) that literally millions of trading patterns could have been pursued that would have produced the results shown in his economic sequence model. Tr. 874:10-875:14 (Graves). And as Mr. Graves testified in the passage quoted by the government, while "[t]here are ways that you could disapprove things that would block transactions from being worth pursuing, [i]t would be hard to think of why DOE might want to do that." Tr. 7556:5-15.

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153.

This proposed finding, that "any refusal by contract holders to trade down in the

acceptance queue would affect the Yankee's fuel-out dates" also confuses the breach and nonbreach worlds. If the government intended to refer to the non-breach world, this proposed finding is wrong and is not supported by the cited evidence. The cited transcript references refer to half of all potential sellers of acceptance allocations refusing to participate, not "any" refusal to participate. In fact, Mr. Graves testified that even if it is assumed that half of all potentially participating utilities would have declined to participate, the results of Mr. Graves' analysis would not change. Tr. 859:3-862:6. More fundamentally, Mr. Graves explained that there is no reason to believe that a substantial portion of utilities would not have participated in the exchanges market absent DOE's breach: It' not the case that some utilities win and some lose by s participating. Everyone wins by participating in this. You avoid the inconvenience of premature pickups and disruptions at your facility if you don'yet have a must-move situation. And you have t the opportunity to gain some money by participating in a sale. Conversely, you obviously benefit if you can move ­ accelerate your rights and get them to match an early must-move problem. So this is jointly beneficial. It' not something where winners have s to compensate losers. There' two kinds of winners out of the s process. And that' very auspicious for markets to evolve. s Tr. 859:10-25. 154. This proposed finding, that Mr. Graves' economic sequence model does not

account for the possibility that utilities with future must-move fuel requirements might have retained early year allocations or seek to trade up in the acceptance queue absent the breach is not supported by the cited testimony. In that testimony, Mr. Graves states that he did not simulate the possibility that utilities might have retained early allocations. Tr. 984:9-23. As noted above, response to GPF 153, there would have been significant disincentive to doing so.

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Moreover, Mr. Graves explains that unless "lots of parties do that, again, it won't fundamentally change the pattern." Id. 156. It is true that an exchanges market would have had higher transaction and

information costs than a perfectly competitive market. But Mr. Fischel neither quantified those nor testified that they would have prevented an exchanges market from operating in a reasonably efficient manner absent the breach. Conversely, Mr. Graves explained that the cost savings from exchanging would have been both large in nominal terms and large relative to the transaction costs of making such a market work absent the breach, and that for these and other reasons (including the inherent culture and infrastructure in the industry to support exchanges, and the lack of impediments to the market working), he is confident that the market would have worked absent the DOE breach. Tr. 839:25-841:23. 161. This proposed finding alleges that in an exchanges market, "non-economic

considerations would be motivating factors." This proposed finding appears to confuse the breach and non-breach worlds, as it literally refers to considerations that "would" be motivating factors, not considerations that "would have been" motivating factors absent the breach. Moreover, it is not clear, and Mr. Fischel's testimony does not clarify, what is meant by "noneconomic considerations." Furthermore, the reliance on Mr. Bennet's testimony is misplaced. In this testimony, Mr. Bennet is merely reading an exhibit, D272 (a March 1998 memorandum from Frank Quinn to Mr. Bennet). D272 at 1 refers to possible reluctance of utilities to trade away early slots because of concerns with incurring "political wrath." But this concern is a reflection of the breach world in which DOE had not (and has not) preformed. There is no reason to believe that such concerns would have been significant if DOE had actually performed and would have been taking the necessary steps in order to perform. Indeed, even Mr. Fischel

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acknowledged that incentives to trade would have been greater in the non-breach world than they have been in the breach world. Tr. 4333:1-7 (Fischel); see also Response to GPF 178b. below. 162. This proposed finding similarly appears to confuse the breach and non-breach

worlds. On the one hand, it argues that non-economic factors need to be taken into account in determining what the non-breach world would have looked like. But there is no evidence that the factors mentioned ­ political opposition to exchanges from various groups ­ would have been significant, or even existed, in the non-breach world. 164. The proposed finding that if non-economic concerns entered a utility's analysis

concerning trading down in the queue, then the entire market would unravel is not supported by the cited evidence. Mr. Fischel does not claim that any consideration of non-economic factors would cause the market to "unravel." He states merely that it "could" cause the market to unravel. Tr. 4281:23-4282:16. Absent evidence that any such non-economic factors would even exist in the non-breach world, this proposed findings is immaterial. 165. The proposed finding that evidence was presented that non-economic factors

govern utility behavior on spent fuel-related issues confuses breach and non-breach world. It is also unclear. As noted above in response to GPF 161, it is unclear what the government means by non-economic factors. To the extent the government is referring to political reluctance to exchange acceptance allocations or to move spent fuel in the absence of DOE performance, there is no reason to believe that this reluctance would have existed if DOE had performed and had been taking actions in preparation to perform. See also Response to GPF 178b. below. 168. This proposed finding, that the water rights and emission allowance markets have

not performed consistently with the assumptions underlying Mr. Graves' economic sequence model, is wrong and not supported by the subparts to the proposed finding. For the most part,

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this proposed finding is based on the straw man debunked above that Mr. Graves' economic sequence model depends upon perfect competition. Subpart b. even acknowledges that the "water pollution trading markets have worked in the real world." In fact, Mr. Graves explained well that the water and emissions allowance markets have worked and that their success is analogous to the market for exchanges of spent fuel acceptance allocations that would have formed absent DOE's breach. Tr. 841:24-846:13 (Graves). 169d. This subfinding wrongly asserts that Mr. Graves' economic sequence model assumes that utilities with must-move fuel will have a "preference" to have their waste removed by DOE first over utilities without must-move fuel. The cited transcript reference does not support this assertion. Mr. Graves made clear in his testimony that the economic sequence model identifies the utilities that would bear the greatest avoidable costs from not having their spent fuel removed and concludes that those utilities would have the greatest willingness to pay for spent fuel removal rights. Tr. 814:12-815:11 (Graves). 177. This proposed finding, that if the market for exchanges did not develop perfectly

by 1998, the fuel-out dates for plaintiffs would be delayed, is wrong and not supported by the cited transcript reference. The cited transcript references note Mr. Graves' unremarkable acknowledgment that the economic sequence model does not attempt to simulate "disruption," "suspension" or other DOE failures to perform. And as noted above, Mr. Graves explained that perfect competition did not have to develop in the non-breach world in order to produce the results shown by his economic sequence model. See Tr. 7522:11­7523:19 (has not "assumed that the spent nuclear fuel trading process would be perfectly efficient, or that I need that in order to understand the outcome of what the trading would probably be like."); Tr. 859:3-862:6

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(explaining that results of economic sequence model would not change materially even if half of utilities did not participate). 178.b. The proposed finding that utilities would not have had confidence in the DOE program in the non-breach world and would ration their participation is wrong and not supported by the cited testimony. Concerns with confidence in DOE's performance is a reflection of the breach ­ DOE's statements and actions (and lack of actions) over most of the years of the program making clear to utilities that it would not get the job done on a timely basis, and perhaps not ever. See, e.g., YAPF 91-94. There is no reason to believe and certainly no evidence, that substantial concerns with the likelihood of timely performance by DOE would be a part of the non-breach world. There were not technical impediments to robust DOE performance. See, e.g., Tr. 1376:23-1377:17 (Stuart). In Mr. Graves' testimony cited by the government, he did not, as the government implies, voice an opinion that confidence problems would exist in the nonbreach world. Rather, he testified that a core part of his analysis is that "in the nonbreach world, DOE would have set up a program whose capacity and performance quality was sustainable and expected to be sustainable by participants, so that they wouldn't feel any reticence to participate in improving their economic opportunities." Tr. 860:1-861:16. Moreover, Mr. Graves opined that the sort of confidence issues that might have arisen in a reasonable view of the non-breach world would not be material to his analysis: "So I think that the reticence or hesitancy that might occur in the nonbreach world is of the character of a tax or a little extra cost that might be involved, not a decision not to participate. So I think it would have transpired essentially the same way." Id. 179-83. The government's allegations regarding "risk" created by the limited "headroom" between the amount of industry-wide must-move fuel and the amount of reasonable

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spent fuel acceptance used in Mr. Graves' model misses the mark, because it does not relate to the non-breach world. The acceptance rate used by Mr. Graves in his economic sequence model reflects what reasonable DOE performance would have been absent DOE's breach. See YAPF 68-78. Lesser DOE performance, the "risk" of which is the subject of these proposed findings, would be another form of breach of DOE's obligation to provide reasonable performance. 184. The second sentence of this proposed finding, that confidence sufficient to

support a robust exchanges market cannot be gained until DOE is well along to picking up spent fuel is wrong and not supported by the cited testimony. The Frank Quinn trial testimony cited is contrary to the proposed finding. Mr. Quinn notes his view of the non-breach world that "if DOE was meeting its milestones and its schedule, you might have confidence in doing a swap before 1998. I think." Tr. 5822:11-19. The deposition testimony from Mr. Quinn read by government counsel at trial did not contradict Mr. Quinn's trial testimony. The deposition testimony noted Mr. Quinn's opinion that he doesn't think a swap market "can happen" in the breach world until DOE is well along to picking up spent fuel. Tr. 5823:3:13. Given the extent and duration of DOE's failure to perform, it is reasonable to believe that a greater extent of performance will be necessary to provide confidence sufficient to facilitate swaps of acceptance allocations in the breach world than if DOE had not breached in the first place. Mr. Quinn made this clear later on in his testimony: Q. Mr. Quinn, I think we just have one cleanup question right from the end of your direct examination. I want to make sure that an issue didn'get confused. As you may recall, Mr. Ekman read t from part of your deposition and noted it, out in the future, the expectation that Department of Energy would have to actually start picking up spent nuclear fuel from utilities before utilities would have enough confidence to exchange allocations. But then you also said that, in the 1990s if DOE was hitting its milestones, that they might have swapped at that point even before Department of

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Energy started picking up spent fuel. Can you explain for us what accounts for that difference in view from those two time frames? A. Well, it' confidence in the program. If DOE is hitting its s milestones and delivering its MPC containers and doing the scheduling and all that other stuff that has to happen well before beginning accepting spent fuel, if you have confidence that everything is going along as planned, then I think it' possible to s engage in swaps among some of the utilities. I mean, they don' t have to perform. They just have to think they' going to perform. re But once they, when they haven'performed, when they failed to t perform, you know, you' a little more skeptical and a little less re likely to do that. Tr. 5826:19-5827:21 (Quinn). 186. The evidence supporting this proposed finding, that the early results from the

trading of emissions allowances were disappointing, is weak and contradicted by other evidence. The cited testimony from Mr. Fischel is merely his reading of articles by relatively undistinguished authors in undistinguished journals (e.g., the Woodward article cited by Mr. Fischel is by an Assistant Professor at Texas A&M University published in the Journal of Agricultural Economics). Mr. Graves noted that another article by "extremely well-known economists" (the Dean of the Sloan School and the Economics Department Chair at MIT) and published in "probably the most prestigious journal in the profession" reaches "a very different conclusion about the quality of performance of the emission allowance market" ­ "that this market became extremely efficient rather quickly." Tr. 7517:21-7519:21 (Graves). Mr. Graves went on to explain that a key part of the difference in the analyses among the articles is that those finding less satisfying performance "ignored the strong activity in private trading of allowances and focused almost exclusively on the EPA's auctions itself." Id. 186A. This proposed finding's (and Mr. Fischel's) assertion, that Mr. Graves' economic sequence model assumes that the market and acceptance program "will be perfect

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instantaneously," is wrong. The errors in the "perfect" allegations have been discussed thoroughly above, and the "instantaneously" allegation is also unsupported by the record. The NWPA was signed into law on January 7, 1983; DOE had more than 15 years from that time to the January 31, 1998 performance due date in the parties' contracts to develop reasonable performance of spent fuel acceptance. Similarly, the Contracts were signed in June of 1983, see P1YA, P1CY, P1MY, and consistent with the contracts, DOE started publishing ACRs in June of 1987, see P52, and AP