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Case 1:98-cv-00126-JFM Document 791-10 Filed 04/16/2004 Page 1 of 17
i//
IN THE U. S. COURT OF FEDERAL CLAIMS
- x
YANKEE ATOMIC ELECTRIC CO,,
\,\)~"t
MINE Y~E ~OOIC P~R
m., ,
CONNECTICUT YANKEE ATOMIC POWE
CO. ,
Plaintiffs:
vs.
UNITED STATES OF AMERICA
: No. 98-126C
98- 474C 98- 154C
Defendant.
Washington ,
D. C.
Tuesday, August 26,
2003
Deposition of:
DR. JOHN BARTLETT
called for examination by counsel for the
defendant, pursuant to notice and
agreement,
commencing at 9:30 a. m., at Department of Justice,
1100 L Street N. W.,
before Virlana Kardash, RPR,
CSR, a Notary Public in and for the District of
Columbia, when were present on behalf of the
~"- 7);'
respective parties:
1825 I Street , N. Washington , D.
20006
JABS REPORTING , INC www.jabsreporting. com
(202) 296- 6102 (888) 805- 5227
0124
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Page 2 of 17
No.
Do you know,
accept one MTU sir, if
if DOE were to
let me clarify.
You know what I
mean when I say MTU?
metric tons uranium.
Yes.
My definition of that i
Is that yours as well?
Uh- huh.
I need yeses and noes from you, by the
way.
A friendly reminder.
Sorry.
Yes.
If DOE were to accept one MTU of spent
nuclear fuel in 1998 by January 31st, 1998, would i
have been in compliance with the contract?
I don't know whether it would be
considered in compliance or not.
Do you know why the standard con trac
doesn I t
t
give a date by which all the spent fuel mus
be accepted?
No.
You
also indicate in this sentence that
we I re talking about in your report that the contrac
doesn I t
speci fy a sequence in which spent fuel
should be accepted.
Do I have that right?
0125
1825 I Street , N. Washington , D.
JABS REPORTING , INc. www.jabsreporting.com
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That 1 S right.
Can you explain that opinion?
Which opinion?
Your opinion that the contract does not
specify a sequence in which spent fuel should be
picked up.
Oh.
Well, it describes the OFF
approach,
as it is called.
Explain for us what you mean by the OFF
approach.
Oldest Fuel First is a protocol that it
describes as a basis for receipt of spent
fuel.
And is the OFF method not -- do you not
consider that a sequence by which spent fuel should
be accepted?
It is a sequence.
It is a sequence, yes.
Then what do you mean when you say that
the contract does not specify a sequence?
It specifies the OFF concept, which it
could interpreted as a sequence if it was followed
rigorously.
Can it be interpreted in another way?
0126
1825 I Street , N. Washington , D.
JABS REPORTING , INC
156
20006
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CERTIFICATE OF NOTARY PUBLIC
I, Michelle Bulkley,
the reporter before
whom the foregoing deposition was taken, do hereby
certify that the witness whose testimony appears in
the foregoing deposi tion was duly sworn by me; that
said depos
i tion is
true
record
of
the tes t imony
of
gi ven by said witness,
for, related
to, nor employed by any
that I am nei ther counsel
the parties
to the action in which this deposition was
taken;
and, further, that I am not a relative or employee
of
any at torney or counsel
of
employed by the parties
hereto, nor financially or otherwise interested in
the outcome
the ac
tion.
1Jid~
Notary Public in and for the
District of
Columbia
My Commission Expires;
April 14,
2007
;~l~
0127
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Page 5 of 17
. 8, 14
Case 1:98-cv-00126-JFM
Document 791-10
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, jb~\13 IkL
A,.
Department of Energy
Washington, DC 20585 September 28 , 1995
$IJ~
Jyf?
Or. Andrew C. Kadak President and Chief Executive Officer Yankee Atomic Electric Company 580 Main Street Bolton, Massachusetts 01740- 1398
Dear Or. Kadak:
Thank you for your letter of September 7, 1995, expressing your thoughts on the viability of the exchange process for Delivery Commitment Schedules and restating your position on the Department. s obligation to afford priority waste acceptance to the spent fuel from Yankee Atomic Electric Company s Rowe
power station.
While your letter describes circumstances that you believe will impede the exchange of delivery commitment schedules, we continue to believe that once the Federal waste management system is operational, the~xchange provision will be exercised by Purchasers as OriginallY anticipated. Article V. E of the Contract for the Disposal of Spent Nuclear uel and/or Hiqh Level Radioactive Waste (Standard Contract) grants Purchasers the right to exchange. DOE concurrence, approved delivery commitment schedules. This provision was included in the Standard Contract in response to comments received during the Standard Contract rulemaking, in order to allow Purchasers greater flexibility in managing their inventories of spent fuel. We believe the exchange provision will allow industry to optimize the allocation of waste acceptance capacity to meet individual utility needs, without the overt
~th
involvement of the Department.
. With respect to the Department' s ability to grant priority acceptance of the letter of July 13, spent fuel from your Rowe power station, as I noted in mY 1995, to State Representative Herren. there are statutory limits on the amount of spent fuel that the Department can accept prior to the opening of a permanent reposi tory. Consequent ly . the Department does not have the abi 11 to grant priority acceptance to shutdown reactors without adversely affecting other utiJities. The Congress is Qebating the issue of centralized interim storag~ of spent nuclear l1:1e GuLcu;'ae of this debate may invo1ve , new policy direction for this program, and may include policy guidance on the pri ori ty acceptance of spent fuel from shutdown reactors.
Fuel.
Sincerely.
i&.
0128
Office of Civilia Ra ioactive Waste Management
Printed with IlOY ink an recycled paper
YDK- 006- 1064
y,
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Case 1:98-cv-00126-JFM
Document 791-10
Filed 04/16/2004
Page 6 of 17
Ef?IS
&nsulting,
LLC
Expert Report of R. Larry Johnson
Yankee Atomic Electric Company
United States of America
Federal Claims
In the
S. Court
of
No. 98- 126C(Senior
Judge Merow)
Prepared By:
R. Larry Johnson , CPA
-"'f/
February 19, 2004
0129
U710 Plaza America Drive , Suite 300 . Reston , VA 20190-4745 Phone (703) 654- 1400 . Fax (703) 796- 1200
20H01 Bisclyne Blvd. , Suite 301 . Avemura , FL 33180- 1422
Phone 005) 705- 9960 . Fax (305) 705-9961
www. verisconsuiting. com
7500 Old Georgetown Rd" Suite 700 . Bethesda, MD 20814- 6133 Phone 001) 656- 0040 . Fax 001) 656- 0518
..............................,.....,......... ............................................ ................................... .". ~.""..""""""". .,..:...... ,............................ ... ..........:............. ~. ..... .......... ...,.. ... ........................................................' .....~..... ~.,..........................,........ ....... .......................... """'.'.." ..... ...... .... .................................. :... .... ..,..,.................................................................. "............ ~............. ...............,................................. " ............. ............................. ~...... .................. ;............. ......... "....,...................,.............. ;..............................,. ;......... : ...... .. .......... ....................,............................................ ...... ,......,........,................ :....... " ;.... .............,................. ................
Case 1:98-cv-00126-JFM
Document 791-10
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Page 7 of 17
TABLE OF CONTENTS
Introduction ..............,..........................
1-4
...... 5-
Summary Conclusions ..""".'.....'.'...."'..
Detailed Findings:
Scenario 1.................. .............."...,.........,..
Scenario , 2............... ..... .......... ..
~ ..... 9- 10,
Scenario 3 ...............................................................
Scenaiio 4.... o". - Scenario ' 5
~.o"". ..... .
11. 13-22 '
: 23
Alternative Acceptance Models for GTCC and Failed Fuel ......................................... 24-27 ~....... 28 Discounting ..............
Summary Calculations ...............................,.....,....
Exhibits .".. ............................
""""""".".""'.."'" 30-
Documents Considered. ..........,..........,................................,
Cuuiculum Vitae ofR Larry Johnson..,.......
Compensation ............................................................."..,...
........ 103
04- 11 0
,.... 111
0130
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DETAILED FINDINGS
Scenario
It is assumed that in the ' non-breach w.orld , ~e DOE would have picked
which the DOE' s acceptance is based on the 1998 DOETSLCC.
Maine
yankee s s,peilt fuel in accordance With the 1995ACR rates as contrasted to the breach world in
Mr. Abbott has reported that Wldertheseassumptions , and 1:Urther assuming the wet
storage of the Spent fuel ,.
there would be no incremental costs of storage of spent . fuel in
the
breach world over that experience in the non-breach world, arid consequently, no damagesasa
res1.l1t of the DOE partial breach. '
Mr. Abbott has further reported that under these assumptions , and further assuming the
, dry storage of the spent fuel , there might be ' greater costs in the breach world th~ that
experienced in the non-breach
world. However;, in -recognition
of the results of Mr: Abbott'
occur in the \wet storage
analysis that no incremental costs (and, therefore no -damages)
decision to dry store and not as a result of the DOE partial breach.
assumption , as reported above, any such costs in the dry storage assumption are as a result of the
0131
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Case 1:98-cv-00126-JFM Document 791-10 Filed 04/16/2004 Page 9 of 17
Scenario
Yankee Atomic could have Stored the Spent Fuel in the Viet Pool for the duration of the
period prior
to DOE acceptance. Dr. Wise s calculatioftS of damages are founded upon the
~sertioIi that the partial, breach by DOE required thatYankee Atomic construct an ISFSI. Dr.
Wise s 2003 Report reflects the following:
But for the failure of DOE to accept an~ remove Yankee Atomic s spent fuel in
" accordance with the contract, Yarucee Atomic would not have incurred costs related to the design and construction of the ISFSl'
,6
Dr. Wise then measured damages as the differente betwee~ w~at Yankee.Atomic asserted it ,
would cost to construct and operate its ISFSI as well as to fe-rack and operate its Wet Pool-prior
to transfer of the spent fuel from the Wet Pool to the ISFSI, as contrasted with what it is asserted it would have cost Yankee Atomic to operate theW et Pool , prior to a non-breach fuel-out date of
January 1999.
However, Mr. Abbott has opined that Yankee Atomic could have simply continued to
store the spent fuel in its Wet Pool from the non-breach fuel out schedule through the date the
DOE removes the spent fuel. Mr. Abbott' s conclusions in that regard are detailed in his 2004
report.
Accordingly, under this scenarIO , the damages
that Yankee Atomic incurred
as a
consequence of the DOE partial breach are limited to the duration of additional years for which
the spent fuel would have continued to be stored in the Wet Pool at the annual operating cost of
the Wet Pool.
6 Page 4 of Dr. Wise Expert Report dated March 28 , 2003
0132
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Page 10 of 17
SUMMARY CALCULATI9NS '
I have prepared the foll~wing table to summarize the damage scenarios I have describe4
in this report in both constant dollars and 2003 present value dollars. I have prepared" this table
by, applying the same ~sk~adj~ed discount rates and' inflation assumptions as Dr. Wise; with
, the exception that I have applied theserates' on a pre~tax basis.
Mid-2002
Scenario
.'Scenario 1 .
Constant Dollars
Present Value in 2003 Dollars
" Wet Storage , Dry Storage
, Scenario 2
, With Non-Acceptance
-zero";
-zero- '
, -zero-
-zero$ 56, 243
, $74 160 242
of GTCC
-zerozero- '
with Non-Acceptance ofGTCCand Failed Fuel
938 -zero-zero- ,
Scenario 3
with Noll-Acceptance of GTCC with Non-AcceptanceofGTCC and Failed ,Fuel
'i.
942 154 ' 161 908 161 908
333 368 256 631 360 780
89, 565 195 831 107 120 293
Scenario 4
with Non-Acceptance of GTCC with Non- Acceptance of GTCC and Failed Fuel
Scenario 5
220; 955 43,204 088 37,443 543
693 669 533 427 227 118)
with Non-Acceptance of GTCC with Non-Acceptance ofGTCC and Failed Fuel
813 528 569 590 948, 668
These calculations have been made using only the risk~adjusted
discount rat~. It
is my
opinion that the risk,.adjustedrate is appropriate to the measurement of damages; this opinion is
shared by Dr.
Wise , as reflected in the following testimony:
These cash flows are, not , 100
flows.
theoretical finance perspective , you should apply a risk adjusted rate to these cash
32
percent devoid of market risk. So; from
a strictly
In the event that it is determined that the risk- free rate should be applied to detennme the present
value measurements of damages , Exhibit' 39 presents the alternative measurement of damages on
that basis.
32 Wise
Deposition, 8/26/02 p, 212
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UNITED STATES COURT OF FEDERAL CLAIMS
YANKEE ATOMIC ELECTRIC COMPANY,
t~tP'V
: No. 98-126 C
vs.
Plaintiff,
UNITED, STATES OF AMERICA,
Defendant.
Senior
: Judge Merow)
CONNECTICUT YANKEE ATOMIC POWER:
COMPANY,
vs.
Plaintiff,
: No. 98- 154 C
UNITED STATES OF AMgRICA, De f endan t .
MAINE YANKEE ATOMIC POWER
1 0
COMPANY
Senior
: Judge Merow)
, 11
vs.
Plaintiff,
Defendant.
: No. 98-474 C
(Senior
UNITED STATES OF AMERICA,
: Judge Merow)
VOLUME I
'l/3;' ',i,,
, 14
PAGES 1 - 235
Deposition of Frank C. Graves
Washington, D. C.
Monday, November 12, 2001
20
Reported by:
J;, "
Deborah Larson Hommer , RPR
iI"i'~
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. 202- 296- 6102
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disapprove a swap because of the location of
the fuel, the spent fuel?
MR.
SHAPIRO:
Obj ection.
I don
I t
Vague.
THE WITNESS:
know what
constitutes a sufficient criterion for them
to wi
thhold.
I assume it would have to be a
material inconvenience to the program
creating costs greater than the savings
would have been achieved by the private
that
parties for their preferred
they'
re making total system
order, otherwise costs go up for
the sake of minimizing their portion of the
costs.
I don't think that be would be a
legitimate execution of the
BY MS.
POWELL:
program.
You don't know the criterion under
which DOE would approve or disapprove
exchanges?
MR.
SHAPIRO:
Obj ection.
Vague.
THE WITNESS:
I don't know 0
any formal description of the decision
criteria that DOE would
apply.
I do know
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that Daniel Dreyfus wrote that letter to
Dr. Kadak explaining that he expected it to be a bias toward approval of utility swaps,
not a bias against them.
meaning they won
1 t
So I interpret
that
be unreasonably
disallowed.
BY MS.
POWELL:
And, again, Ilm not sure the recor4
is clear on your response when I asked you
about whether access to railways or ports or
highways, whether that would have any impact
on DOE' s decision to approve or disapprove an
exchange.
Again, you gave me a long
answer,
but I guess I I m
or " no.
Would
looking for the simpler " yes" acces s, again, to highways,
would that impact DOE I
ports, railways,
exchange?
MR.
decision whether to approve or disapprove an
SHAPIRO:
Obj ection.
Vague.
THE WITNESS:
It'
s hard for me
to make a distinction between fuel location
and access to
highways,
et cetera.
So I
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CERTIFICATE OF NOTARY PUBLIC
I, Deborah' Larson Hommer, RPR,
the officer
witness
tha t
before whom the foregoing deposition was
taken, do hereby certify that the
whose testimony appears in the foregoing
deposi tion was duly sworn by me;
the
testimony of said witness was taken by me
stenotype and thereafter reduced to
typewri ting under my direction;
deposition is a true
gi ven by said
wi tness
said record of the testimony that I am nei ther
tha t
counsel for
related to, nor employed by any
of the parties to the action in which deposition was
this
taken; and,
further, ~hat I am
not a relati~e or employee of any attorney counsel employed by the parties hereto, nor financially or otherwise interested in
outcome of the
the
action.
Notary Public in and for the District of Columbia
My Commission Expires:
ug us t 3 1,
2 0 0 3
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UNITED STATES COURT OF FEDER
k~~
~C~
\8) (lJ)
YANKEE ATOMIC ELECTRIC COMPANY,
.X
: No. 98- 126 C
vs.
Plaintiff
UNITED STATES OF AMERICA,
Defendant.
Senior
: Judge Merow)
CONNECTICUT YANKEE ATOMIC POWER:
COMPANY,
vs
Plaintiff,
: No. 98-:-
UNITED STATES OF AMERICA,
, Defendant.
Senior
154 C
: Judge Merow)
MAINE YANKEE ATOMIC POWER
COMPANY,
vs.
Plaintiff,
Defendant.
VOLUME
: No.
98.;..474 C
, (Senior
UNITED STATES OF AMERICA,
: Judge Merow)
PAGES 236 - 444
Deposition of Frank C. Graves
Washington, D. C .
Tuesday, November 13, 2D
01
Reported by:
Deborah Larson Hommer, RPR
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Connecticut Yankee and Maine Yankee
and they
get out around 2001 and 2002.
So if they had to wai t ten
years I they would get out 2006 and 2007.
I guess Yankee Atomic gets out in 1980 to
1 9 9 9 'I
And
and that 1 s a
couple of years beyond
their two- year cooling
period,
they would
have probably gotten out about 2001 with a
ten- year cooling period.
shut down in 1991.
And I believe they
How would specifically the results
of your '
analysis
MR.
change in this hypothetical?
S KALABAN :
Obj ection.
Vague.
Asked and
answered.
The resul t
THE WITNESS:
produce is the out- dates for those
that I units,
which are all before 2002, on or before 2002
under the five- year cooling assumption.
Under the ten- year
BY MS.
cooling assumption
only
Yankee Atomic would get out before 2002.
POWELL:
Would the change in the cooling
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period from five to ten years in this current
hypothetical, would that also affect the
other utilities
the other participants
equenca model?
and,
there fore, your economic
MR.
S KALABAN :
Obj ection.
Vague.
THE WITNESS:
Your predicate was
that Yankee Atomic had this problem.
fact,
I actually extended it to Maine and
connecticut in my
answer.
So perhaps I
overanswered.
BY MS. POWELL: '
No.
Actually my hypo was each of
the Yankee plants,
so -ones, then
But if they' re the only
it wouldn 't affect the other'
s willingness to
get out.
So they I
re
it would have no
impact whatsoever, the cooling period,
for
the Yankees
MR.
SKALABAN:
Obj ect ion.
Vague.
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