Free Response to Motion - District Court of Federal Claims - federal

Case 1:98-cv-00126-JFM

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IN THE UNITED STATES COURT OF FEDERAL CLAIMS

YANKEE ATOMIC ELECTRIC COMPANY,

Plaintiff
No. 98- 126C

(Senior Judge Merow)

UNITED STATES OF AMERICA
Defendant.

YANKEE ATOMIC' S RESPONSE TO DEFENDANT' PROPOSED FINDINGS OF UNCONTROVERTED FACTS
The " Standard Contract for Disposal of Spent Nuclear Fuel and/or High- Level

Radioactive Waste" (the " Standard Contract" ) executed by Yankee Atomic Electric Company
Yankee Atomic ), Maine Yankee Atomic Power Company ("Maine Yankee ), and

Connecticut Yankee Atomic Power Company (" Connecticut Yankee ) required DOE to issue an
acceptance priority ranking

APR") of SNF and/or HL W , through which SNF and/or HL W

would receive acceptance priority based generally upon its age.
RESPONSE: Yankee Atomic agrees that the parties ' contract required DOE to issue an

Acceptance Priority Ranking. However, that ranking was only an initial allocation of priority
and was for planning purposes only.

See Opposition to Motion for Summary Judgment

and

evidence cited therein , particularly at pp. 18- 21.

The Standard Contract contains the following contractual provision:

Acceptance Priority Ranking.

Delivery commitment schedules for SNF and/or
The following acceptance

HL W may require the disposal of more material than the annual capacity of the

DOE disposal facility (or facilities) can accommodate . priority ranking will be utilized.

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(a) Except as may be provided for in subparagraph (b) below and Article V. D. of this contract acceptance priority shall be based upon the age of the SNF and/or HL W as calculated from the date of discharge of such material from first accept from Purchaser the the civilian nuclear power reactor . DOE will oldest SNF and/or HL W for disposal in the DOE facility, except as otherwise provided for in paragraphs Band D of Article V.

(b) Notwithstanding the age ofthe SNF and/or HLW , priority may be accorded any SNF and/or HL W removed from a civilian nuclear power reactor that has reached the end of its useful life or has been shut down pennanently for whatever reason.
10 C.

R. 9961.11 , Art. VI.B.1 (emphasis added).
RESPONSE: Yankee Atomic agrees the quoted provision appears in the parties

contract. To the extent the government attributes any special significance to the language it
emphasizes , Yankee Atomic objects , but because the government does not specify any such

significance , Yankee Atomic cannot respond further.
On June 22 , 1983 , Yankee Atomic executed the Standard Contract. " Yankee

Atomic s 2003 Statement of Relevant Facts in the Fonn of a Proposed Stipulation of Facts
-,r33.

" at

RESPONSE: Yankee Atomic agrees.

In February 1992 , Yankee Atomic announced it would pennanently cease
operation of its plant.

Id. at -,r 18.

RESPONSE: Yankee Atomic agrees.

As of February 1992 , all fuel assemblies from Yankee Atomic s reactor had been
moved into the fuel pool.

at -,r 17.

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RESPONSE: Yankee Atomic agrees , but objects that this fact is irrelevant to the
government' s motion.
On June 30 , 1983 , Connecticut Atomic executed the Standard Contract.

Connecticut Yankee s 2003 Statement of Relevant Facts in the Fonn of a Proposed Stipulation
of Facts " at -,r 36.
RESPONSE: Yankee Atomic agrees.

In December 1996 , Connecticut Yankee pennanently eased operation of its plant.
Id. at -,r 18.

RESPONSE: Yankee Atomic agrees.

On June 6 , 1983 , Maine Yankee executed the Standard Contract. "Maine

Yankee s 2003 Statement of Relevant Facts in the Fonn of a Proposed Stipulation of Facts
-,r33.

" at

RESPONSE: Yankee Atomic agrees.
Id.

Maine Yankee last operated its nuclear power plant in December 1996.

at -,r

16.

RESPONSE: Yankee Atomic agrees.

10.

The Department of Energy has consistently maintained a policy that no priority
See

would be granted to shutdown reactors under the tenus of the Standard Contract.

Deposition of Lake Barrett , May 15 , 2002 , at 323:19- 23; Deposition of David Zabransky , June 6
2002 , at 305:19- 306:14; Deposition of Thomas Pollog, May 15 , 2002 , at 204:20- 205:13.

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Rudolph Grube , the fonner Director of Fuel Management for Maine Yankee and Yankee
Atomic , concurred with the assessment that DOE did not grant priority to shutdown reactors.
See Deposition of Rudolph Grube , November 7 2001 , at 39:17- 40:4 , 45:14- 19 and 182:9- 14.

RESPONSE: Yankee Atomic disagrees that the Department of Energy ("DOE") has
consistently maintained a policy under which no priority would be granted to shutdown reactors

and also disagrees that any such policy would be relevant to the issue before the Court , which is

the detennination of Yankee Atomic s damages resulting from DOE' s breach of contract.

a. DOE policy has not been as stated by the government , and certainly has not been
consistently" so. For example , at the time DOE drafted the parties ' contract , DOE rejected suggestions from several operating utilities that the provision for shutdown plant priority be removed from the contract , stating, " (t)his type of priority is
necessary

to prevent reactors from
48 Fed.

waiting 20 or 30 years to be decommissioned after they finish generating electricity. "

Reg. 16590 , 16593 (April 18 , 1983) (emphasis added). Even today, DOE has not foreclosed the
possibility of granting priority to shutdown plants. See

Al2 (Klein , 30(b)(6) Dep. Tr. at 516).

Moreover , how to implement the contract's provision for shutdown plant priority was one of

more than 30 issues addressed in DOE' s issue resolution process in the late 1980' s and early
1990'
s. See

A83- 90 (discussing issue resolution process). Evidence shows that DOE never
See

reached a final position on this issue in that process.

A93 (Slater- Thompson Dep. Tr. at 149)

(referring to paper on the issue resolution process , A83-

, and using "the priority for shutdown

plant issue as an example "

stating "

(t)his was our first cut at defining the nature and scope of the

issue without proposing a resolution ); AI02 (Cole Dep. Tr. at 485) (discussing opposition of
operating utilities to granting priority to shutdown plants , and noting "we felt we still need to

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leave that door open and (DOE) may want to do that (grant priority) to help them in the
decommissioning process
Thus, DOE' s claim of a " consistent" policy is not supportable. In addition , the policy

views mentioned in some of the deposition testimony the government cites were articulated at a
time when DOE' s inability to commence contract perfonnance in 1998 seemed (or was) clear.

Policy views articulated in those circumstances shed little , if any, light on the likely behavior of

DOE and the utilities in the "non-breach" world , where DOE would have commenced spent fuel
removal in 1998 and " continued" removal thereafter
Commonwealth Edison Co. v.

United

States 56 Fed. Cl. 662 , 664 (2003), "without qualification or condition Indiana Michigan
Power Co. v.

DOE 88 F. 3d

1272 , 1276 (D. c.

Cir. 1996).

See

A18 (Klein 30(b)(6) Dep. Tr. at

524- 25) (DOE " could have given" priority to shutdown plants if DOE had commenced

perfonnance in 1998 at a reasonable spent fuel removal rate); Expert Report of Frank C. Graves;
see also

AI00- 02 (Cole Dep. Tr. at 483- 85).
Finally, the government's assertion that a fonner Yankee Atomic employee , Mr. Grube,

concurred with the assessment that DOE did not grant priority to shutdown reactors " is not

only beside the point for reasons discussed above but is not supported by the deposition
testimony the government cites.
b. In any event ,

the basic issue with respect to Yankee Atomic ' damages is whether costs

that Yankee Atomic has incurred to store spent fuel and GTCC waste would have been incurred

by Yankee Atomic in the "non-breach" world , where DOE would have commenced contract
perfonnance in 1998 and "continued" thereafter " without qualification or condition. "
In

deciding that issue , the Court must give appropriate weight to the explicit contract provision

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allowing DOE to grant shutdown plant priority, which the evidence shows was considered by
both parties to be an important contract provision. See generally

Yankee Atomic

accompanying opposition to the government's motion for partial summary judgment regarding
priority for shutdown reactors. See also

AI06- 07 (Barrett Dep. Tr. at 364- 65) (" Q. . . . I take it

you would agree that granting priority to a shutdown reactor can be shown, at least in some
circumstances , to avoid the establishment of otherwise unneeded reactor site storage facilities?"
A. Yes.

Respectfully submitted

s/Jerry Stouck

Dated: April 6 , 2004

JERRY STOUCK Spriggs & Hollingsworth 1350 I Street , N. , Ninth Floor Washington , D. C. 20005 (202) 898- 5800 (phone) (202) 682- 1639 (facsimile)
COUNSEL FOR PLAINTIFF YANKEE ATOMIC ELECTRIC COMPANY

Of Counsel:

Robert L. Shapiro SPRIGGS & HOLLINGSWORTH

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