Free Notice (Other) - District Court of Federal Claims - federal

Case 1:98-cv-00614-JFM

Document 312-3

Filed 10/17/2005

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Yankee Atomic Electric

v U.S Nos.: 98-126C, 98-154C, 98-474C August 2, 2004

Heritage Reporting Corporation

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CONDENSED TRANSCRIPT AND CONCORDANCE PREPARED BY: HERITAGEREPORTING CORPORA TION 1220L Street, N.W. Suite 600. Washington, DC 20005 Phone: 202-628-4888 FAX: 202-371-0935

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Document 312-3

Yankee Atomic Electric v U.S Nos.: Page3626 way (1) normal of doingbusiness. QDoyourecall that it translatedinto any (2) that of? (3) specific requirements youare aware j~4) A No. No, sir. QAll right, sir. Mr. Morgan, yourecall do discussing Mr.Millstheutilities' beliefthat with (7) the contract I'm sorry, I already asked that (8) question. you (9) I believe testifiedthat Mr.Mills with (10) discussed youhis belief that the utilities (11) I'msorry,theutilities' beliefthat thecontract contain acceptance is that correct? an rate; (12) should correct. (13) A That's myunderstanding, (14) Q Anddo you recall howhe conveyed that idea (15) to you? (16) A Correctly. to (17) Q Okay.Face face? (18) A Yes. Q In discussions youin youroffice? with (19) include a (2o) A Well,hesaidthat, yes,it should t (21) rate, and saidno. (22) Q Andwhydid you tell him no? that wascontrary to whatwasin the (23) A Because process. Thatwas severalof the (24) rule-making from that. And in (25) comments utilities hadrequested

XMAX(63/63) 98-126C, 98-154C, 98-474C August 2, 2004 Page3628 formulated, youhave plan, a specific plan did a (1) were (2) to beableto dothat? (3) A No. (4) QAll right, sir. Mr. Morgan, Mills Mr. earlier this trial thatafterhis in (5) testified with youandother program leaders,you (6) discussion that rate the (7) agreed the acceptance under contract (8) would sufficient to cover rate of the be the (9) generation spent of nuclear fuel at the timeplus some (10) amount work the backlog. youagree to off Did to that? (11) (12) A No. (13) QDid you make representationsto any of (14) Mr.Mills or anyotherrepresentativetheutilities 15) concerning specifica 16) A No. 17) Q - rate? 118) A No. (19) Q Didyouevertell Mr.Mills or anyone else (20) that, even though contract the itself would not (21) containa specific acceptance nonetheless, rate, you (22) agreed that the rate the utilities wanted would the be (23) rate that DOE wouldbeginto use? (24) A No. MR. SHAPIRO: Objection. Leading. (25)

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Page3627 (1) the process resolution prior to publishing of and the (2) final rule-making, was that denied. QAll right, sir. Doyourecall why was it (3) that that wasdenied? (4) A Because the uncertainties. We of didn't (5) know that time whatanacceptance would or at rate be (6) couldbe, andthat wehadno conceptual designof (7) were (8) facilities, We lookingat threedifferent media. (9) One basalt, onewas was tuff, andonewassalt. And that (10) there'snoquestion the activities in a salt dome be less problem in than (11) would much of a construction the other media. youcouldactually run the And (12) (13) drifts fasterin a salt media. aboutplansfor (14) QAll right, sir. What (15) transportation the timethe contractwas at formed? (16) Didyouhave plansfor transportation the timethe at being- I'm sorry, when sayat the 1 (17) contractwas formed,I mean between time the (18) time the contract was published the timethe and (19) that the draft contractwas published. (2o) contractwas (21) A I wasawarethat there wereinadequate (22) commercial licensedcasksavailable for whatwouldbe (23) needed, that wehadto establisha program get and to (24) NRC certified casks. (25) QAll right. Soduringthe time the contracts

Page3629 THE COURT: Well, I take it that you are (1) about specific- I'll overrule objection. the (2) asking (3) Theanswer stand.I think it was no. can a (4) BYMR. MILLER: QMr. Morgan, when weredirector of the you (5) (6) program, you ever make representations did any to (7) utility representativesprivate in that were different (8) thanthe publicpositionst~at youtookon the (9) program? (10) A No. (11 QAndconversely, did you make public any (12) announcements respectto the program then in with and (13) privategive different assurances? A No. (14) QMr.Mills testified earlierin this trial, (15) that officials (16) Mr. Morgan, youandother DOE written communications him aboutthe with (17) discouraged of that with (18) variousaspects the program youdiscussed (19) him.Doyou- did youdo that? (20) A That's simply not true. QWhat about your staff? Are you awarethat (21) yourstaff did that? (22) A No. (23) QAll right. After publication the draft of (24) contract the Federal in Register, EElgive you did (25)

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Yankee Atomic Electric v U.S Nos.: Page3630 writteninputontheir position? A Yes. QAll right. I would like to show what's you been identified as Defendant's Exhibit2.034. MR.MILLER: Your Honor, I havea paper copy for theCourt youwould it. if like THE COURT: Thankyou, Mr. Miller. MR.MILLER: Morgan,do you needa paper Mr. copy? THEWITNESS: thank.you. No, BY MR. MILLER: Q Mr. Morgan, I'm showing you nowon the screen what'sbeen admitted Defendant's as Exhibit 2.034. I'tl askyouif yourecognize And that. A Yes, do. I Q What it? What yourecognize to be? is do it A It's a letter from Edison ElectricInstitute to me the projectdirectoron - the subjectbeing as the standard contract. QAll right, sir. And yourecognize do this to beEEl's comments the draft contract? on A Yes. QAll right. Specifically, refer youto I'll page of that letter in the first paragraph. you 8 Do seethat?

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Page3632 contractdid not commit to acceptany given DOE quantity of SNF? A That's correct. QAll right, sir. 1'11next refer you to page of appendix which anattachment this 2 A, is of letter. And you'll lookat the second if paragraph, please, sir. All right. Doyouseethat blown onthe up screen you,sir? for A .Yes. QAll right, sir, beginning the sentence in in the middle the page begins of that whilethe contract, do you seethat? A Yes. you sir? Q Would readthat, please, not A Whilethe contractmay be the appropriate placeto commit to a specific, DOE numerical receivingrate, DOE shouldrecognize, at least quantitatively,the need have to adequate annual receivingcapacity handle to industryneeds. QAll right, sir. Please on. go A This wouldbe consistentwith the direction of section 302(a)(5) the act that DQE of will title to spent nuclear and fuel high-levelwaste as expeditiously practicableupon and request the of

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Page3631 A Yes. QAll right, sir. It's been blown onthe up screen youthere. Can seeit? for you A Yes. QAll right, si~. If youwould, readthe sir, first sentence the record, into please, It sir. begins with although. A Althoughthe contract is generally comprehensive complete, and there are twosignificant issueson which proposed the contractis silent, DOE performance standards purchaser and remedies. Article 2 states that the disposal servicesshall commence not later thanJanuary 1998,a provisionconsistent 31, with the Nuclear Waste Policy Act. QAll right, sir. I'm sorry. Would goon you andjust readthe next twosentences? A However, other milestones no are included. Nordoesthe contract commit to acceptany given DOE quantity of SNF/HLW, period. Q All right, andSNF refers to spent nuclear fuel? A Yes. AndHLW high-level waste. is QAll right, sir. And yourecall that do statement betrue, that last statement you to that read,that is, that thedraft does - thedraft not

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Page3633 generator owner. or Q All right. That's expeditiously"? "as A Expeditiously practical. Right. Excuse as me. Q That's right, sir. Startwith all the sentence begins that with "a newclause." A A newclause should be added,and then there'sa clause. Q. AI! right, sir. Would just read you that? A Whereas recognizes DOE that its ability to takethe deliveryof spent nuclear fuel and/or high-level radioactivewastemustbe commensurate with the amount such of ft~el andwaste then being generated, togetherwith the amount suchfuel and of waste previously generated, consistentwith its and obligation taketitle to such to fuel and waste as expeditiously practicable as upon request the the of owner generator suchfuel andwaste. or of QAll right, sir. Now, yourecall that to do be the acceptance that Mr. Mills discussed rate with youwhen came talk to youaboutthe contract he to acceptance rate? A Yes. QAnd,sir, when published final rule you the in April of 1983, youinclude qualitative did that

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Page 3634 (1) whereasclause that wasrequested? (2) A No. (3) Q And why? For what reason did you take (4) that - did younot includeit, if youwill? A Becausethe entire program had not been (5) (6) defined. Wedid not knowwhat the acceptancerate (7) wouldbe. Andwefelt that that shouldbe included in (8) the missionplan. Q All right, sir. We'll talk aboutthe (9) (10) (11) (12) (13) (14) (15) (16) (17) (18) (19) (20) (21) (22) (23) (24) (25)

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Yankee Atomic Electric v U.S Nos.: 98-126C, 98-154C, 98-474C August 2, 2004
Page 3636 (1) mission plan. Q All right, sir. Now,did you ever agree (2) (3) with Mr. Mills that the 1-mill fee wasbeing paid by (4) the utilities in return for a 3,000MTU acceptance rate? (5) A No. No. (6) Q All right, sir. In the contextof the (7) contract, do yourecall the concept oldest fuel of (8) (9) first or OFF? (10) A Yes. 11) Q And what was that concept? A Theconceptwasto take the oldest fuel 12) 113) firstQAll right, sir. (14) (15) (16) (17) (18) (19) (20) (21) (22) A - from the utilities. In other words, first out of the reactorwould the priority of be acceptance the repository. to Q All right. Do yourecall, sir, whyyou indicated that there needed be a priority of to

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mission plan a little bit later. Butdid you- even thoughyoudidn't put an acceptance rate in the final contract, did you give anydifferent assurances to anyoneabout someunwritten agreementon acceptance rates in the contract? A No. Q In that regard, Mr. Morgan,do you recall Mr. Mills assertingto youthat the 1-mill fee be paid - that wasbeing paid underthe contracts wasin return for a specific rate of performance DOE's on part? A I don't knowthat I can say that waswhat wasspecifically said, but that wascertainly part of the - what I understandthe message that he was transmitting. Q Okay. And did you ever agree with Mr. Mills

acceptance? A Well, becauseeverybody would like to get rid of their fuel as quickly as possible. Andwefelt (23) that weshouldtake the oldest fuel first. Andof (24) coursethat wouldbe the fuel that had the greatest (25) decayso it wouldhaveless heat load on the

Page 3635 (1) that the 1-mill fee wasbeing paid in return for some performance under the contract? (2) level of DOE (3) A No. I did not agree with that. Q All right. Thequestion of - I'm sorry. (4) (5) I'll start again. this. If (6) I'm sorry, you mayhave answered (7) youdid I apologize.Doyourecall if Mr. Mills ever rate, the acceptance rate that the (6) equated~the (9) (lO) (11) ( 12} (13) (14) (15) (16) (17) (18) (19) (20) (21) (22) (23) (24) (25) utilities wanted the contract to some in specific number metric tons of uraniumper year? of A I don't really recall. Q All right, sir. Evenif he had doneso, would a specific number havemattered to you at the time the contract wasformed? A No. Q Why is that? A It was premature. Q Why was it premature? A Again, becauseof the status of the program, in the contract, which was, you know,happening immediately after myarrival, that process,that I felt it wasinappropriateto - for us to commit to anyreceipt rates at that time. Q All right. A Andthat it wasto be dealt with in the

Page 3637 (1) (2) (3) (4) (5) repository. QAll right, sir. Did youbelieve at the time the contracts were formedthat you wouldbe able to

accepteverythingutilities wanted to take all at you once? A No. (6) Andwhywasthat, sir? Q (7) A It wasimpossible.It couldn't be done. (8) for (9) One the reason that you're going to haveto have a certain rate of acceptance a repository, which at (10) wouldnot meetthe - whatthe utilities wouldlike to (11) (12) releaseto us. Q All right, sir. Doyou recall a provision (13) in the contract that allowedutilities to exchange (14) (15) their allocations of acceptance? A Yes. (16) Q Do you recall if that was requested by the (17) utility? (18) (19) A Yes. And then there were - during the process,there wereutilities that thought (20) rule-making (21) that should be removed.And in the process, we (22) resolvedthat by leaving that provision in. Q All right, sir. I'll show you now Yankee (23) 30. (24) Exhibit Number MR. MILLER:All right, Your Honor, I'm (25)

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Case 1:98-cv-00614-JFM

YankeeAtomic Electric v U.S Nos.: 98-126C, 98-154C, 98-474C August 2, 2004

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Page 3642 BY MR. MILLER: Q Can you see that okay, Mr. Morgan? C2) A Yes. (3) Q The cover page of this documentsays that (4) of (5) it's the proceedings the 1983Civilian Radioactive Waste Management information meeting, December 12th to the 15th, 1983. (7) (8) Do you see that? A Yes. (9) (lO) Q All right. Doyou recall this proceeding, (11) Mr. Morgan? (12) A Yes. QAll right. Specifically, I'll refer youto (13) (14) page 11. And do you recognize - recognize page 11, (15) Mr. Morgan?Canyou see it? (16) A Yes. (17) Q I've got a papercopy. (18) A No, I canseeit. Q Doyou recall making presentation at this a ~ '83 (20) December information meeting? A Yes. (21) QAll right. I'll refer youspecifically to (22) column I'm sorry, to the right-hand (23) the second (24) column,the secondparagraph.And I believe this refers to your having just received a (25) document

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Page 3644 (1) Andlong about the middle of the paragraph (2) where says the basic strategy, do yousee that? it A Yes. (3) Q Would you read that, please, sir? (4) Thebasic strategy which we've outlined in (5) A in utilities (6) the missionplan is that beginning 1998 (7) will not haveto provideany additional storage (8) facilities onthe site. Q All right, sir. Now the wordyou used there (9) (10) wasstrategy. Did you believe that the information (11) you set out in the mission plan wasa contractual (12) requirement? (13) (14) A No. Q Whatwasit then? . A As required by the act, section 3, it wasan informational document, clearly not contractual. Q All right, sir. Andin your mindwhat did it represent to the program? A It represented the goals and what we would like to accomplish relative to specific activities. Q All right, sir. Andso with respect to your previous statement about dealing with the acceptance

(15) (16) (17) (18) (19) (20) (21) (22) (23) rate in the mission plan, we'll talk a little bit (24) aboutthe missionplan in a minute, but did you (25) perceive the rates in the missionplan to be

Page 3643 (1) preliminary draft of volume of the missionplan. 1 (2) Andyouhopedto havethat available to interested (3) parties, the states and others, by Christmas.Do you (4) see that? A Yes. (5) Q And do you recall whether or not you were (6) that draft missionplan available at or (7) able to make (8) aroundthat time? A I know we put out the mission plan around (9) the (10) that time. But I'm not sure whetherit made date or not. (11) Christmas Q All right. How about the fourth paragraph, (12) you (13) sir. Would havea look at that. I'm sorry. It's (14) the next paragraph. Okay. Do you see that paragraph (15) now, the onethat's highlighted, Mr. Morgan? (16) A Yes. (17) Q Would you read that first sentence,please, sir? (18) A I wouldlike to talk a little bit aboutthe (19) (2o) (21) (22) (23) (24) (25) strategy as laid out in the missionplan andwhat we intend to do. I think mostof youknow that the act requires that wereceive wastefrom the utilities by January 1, 1998. QAll right, sir. I'm sorry. I wasjust referring to the first sentence there.

Page 3645 (1) contractual requirements? (2) A No. QAll right, sir. Now,I wouldlike to refer (3) in (4) youto the last sentence that paragraph The in (5) I'm sorry, Dawn. last sentence that (6) same paragraph. you (7) Would just read that, please, sir? A During the first year of operation of the (8) (9) repository in 1998, weshould be receiving fuel at a haveto addanyfurther (10) rate so that no utility would (11) storagefacilities either on site or at another (12) location. Q All right, sir. Did youfeel that statement (13) (14) reflected contractual intent on the part of the (15) Department? (16) (17) (18) (19) (2o) (21) (22) (23) (24) (25) A No. Q All right, sir. Once,again, sir, whatdid you think it represented? A It wasin the plan to notify or let the utilities realize that they wouldnot haveto make additional commitments on-site storage after the for beginningof 1998.But they would- if you look at the missionplan, it shows Q Whichwe're going to do in just a minute. A It shows an increase of stored fuel because

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Yankee Atomic Electric v U.S Nos.; 98-126C, 98-154C, 98-474C August 2, 2004 Page3646 Page3648 did the (1) the rate starting in 1998 not meet discharge (1) storage unless utility applies and the for is InterimStorage Program. (2) ratesuntil later onin the program. (2) certified for the Federal (3) QAll right, sir. We'll lookatthat now, if (3) QAll right, sir. Doyourecall that that (4) youdon't mind. (4) represented viewat the time, that was your that (5) Yankee Atomic Exhibit636.All right. responsible providing for their own (5) utilities were (6) Mr. Morgan, showing now I'm you what'sPlaintiffs' on-siteinterimstorage? (6) additional this sir? A Yes. (7) Exhibit 636. Doyourecognize document, (7) A Yes. (8) (8) QAndonceagain in your mind, you intended the what (9) QAndis this the document was- that that (9) this planto inform utilities about they produced the program by during you[.tenure? (10) was (10) could anticipateas far as their additional storage? (11) A Yes. (11) A Yes. (12) QAll right, sir. If you'll lookat page 1-2, (12) QAll dght, sir. If wego to the bottom of (13) please, and last paragraph. the first sir, the And (13) 2-2and top of 2-4. the (14) sentence that paragraph, would just read in sir, you (14) All right, now, Morgan,believe Mr. I that (15) it. pages and there's a table that 2-2 2-4 (15) in between (16) A It is the department's intent to update this in But that (16) we'll talk about a minute. I believe this (17). mission planperiodically as the program progresses. that's highlighted on2-2, 2-4 - 2-4 is here (17) language that's of 1'11askyouto read (18) Q, I'm sorry, sir. Thefirst sentence (18) a continuation 2-2. So (19) highlighted there. when (19) that - just readit to yourselfandlet meknow finished. (20) A Oh,the first sentence. (20) you're (21) Q Yes,sir. Inthat paragraph? (21) A I'm finished. as in (22) A Themissionplan hasbeenprepared a (22) QAll right, sir. Now the first sentence of and (23) means both planningthe program demonstrating (23) there you say: Whilethe department's acceptance rate to of the is in (24) its conformancethe requirements the act. (24) during initial 5 years set to prevent, the do the for (25) QAll right, sir. And yourecall that (25) aggregate, need utilities to provide

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Page3647 that that's what intended mission to be you the plan at the time youpublished this document? A Yes. It wasan informational document. QAll right, sir. What relationship it did have the department's to contract withthe utilities? A None. Q Arid onceagain, sir, did this statement that's contained the - I apologize. memove in Let on to page 2-1, please. And actually, I want - sorry. Can to you blow up. this Thelast paragraph the oneI wanted is to ask youaboutthere, Mr. Morgan. you seethat? Do A Yes. QAll right, sir. Once again,that first sentence there, wouldyoureadthat? A This approach designed ensurethat all is to utilities will beableto establish planning firm schedules the disposition their radioactive for of waste sufficiently early to determine on-site their interimstorage needs prior to 1998. QAll right, sir. And just goon. Read the A Until 1998,each utility will be responsible for providing own its additional on-siteinterim

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Page3649 additionalon-site storage after 1998.Doyousee that there? A Yes. QIn that part of that sentence I read, that whatdoesin the aggregate mean? yourecall? Do A Thetotal discharge the utilities from versusthe acceptance the repository. at Q Okay.I'm sorry. When referred to the you in the aggregate, far as the department's as acceptance is concerned, rate whatwasA The total. Q What did you mean? A Thetotal. In the aggregate means you if look at the dischargewell, in total, youdon'tmost the utilities won'thave add of to on-site storage. QAll right, sir. And sentence the that begins planning the basis, do youseethat? A Yes. QIll read that. Theplanningbasis assumes that, after 1998, individual utilities who actually realize this need andthat is the need expanded for storage, believe will arrange the right to I for ship spentfuel to the Department a utility who from is nextin the queue shipment in allocation.

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Yankee Atomic Electric v U.S Nos.: 98-126C, 98-154C, 98-474C August 2, 2004 XMAX(69/69) Page3650 Page3652 Doyou see that? QAll right, sir. And youever represent did (1) A Yes. in with (2) to anybody discussions - well, anyutility QAndit goeson to saysubject to prior or that p~an (3) representatives anyone the mission approvalby the Department. yousee that? Do obligations? (4) reflectedcontractual A Yes. (5) A No, ldid not. Q Doyouunderstand that to refer to the (6) Q And that, sir, because the many is of exchange provision? that already testified to that (7) uncertainties you've A Yes. at (8) existed the time? QAll right, sir. Soas far as individual (9) A That's correct. utilities were concerned, theyhad if individual (10) QAir rigBt, sir. storage needs after 1998,youanticipated that they (11) Sir, the column that's entitled- the coulduse the exchange provisionto coverthat? (12) second column the left that's entitled annual from A Yes. (13) spentfuel generation, youseethat? do QAll right, sir. Could look at table 2-2. we (14) A Yes. I'm sorry.That'stableI1-1. That'swhat intended I (15) Q Mr. Mills said he believedthat this column to refer to. Can seethat, Mr. Morgan? you then or do (16) wasnot accurate.Did youhaveany reason A Yes, lcan. to (17) youhaveanyreasonnow doubt- to doubtthe QIn the lowerright-hand cornerit lookslike (18) validity of the figuresin that column? this page fell in between 2-2 and pages 2-1, right, 2~0)(19) A Thatwasthe information that wehadat the sir? time. A Yes. (21~ QA~Iright. Doyourecall what source the of Q Upat the top, that's called the Waste (22) the informationwas? Acceptance Schedule. you see that? Do (23) A No, I don't. A Yes. (24) QAll right, sir. But youbelievethat QAll right, sir. Doyourecognize waste this (25) information beaccurate to there?

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Page 3651 acceptance schedule? A Yes. Q And what it indicateto you? did A It indicated goal thefirst our on repository acceptance in 1988 5 yearsat one MTUs for rate, andthen subsequent yearsat 3,000MTU. It shows second the repository coming on line after the first 5 years. it hasa column Then of cumulative acceptance. the remaining And backlog, which doesn't start being reduced until 3 years after the second repository,or 2 yearsafter the second repository in placeand is operating. QAll dght, sir. Now, believeyou- you I may havemisspoken. believe yousaid it shows I a schedule beginning 1988.Youmeant in 1998,did you not? A 1998, yes. QAll dght, sir. And once again,it's - the ratesthat arereflected this table,did you in consider thoseto be contractualrequirements? A No. Q And why was that? A Because mission plan as stated in the section 3 was informationaldocument, a an not contractualdocument.

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Page3653 A Yes. QAll right, sir. Now, Morgan, Mills Mr. Mr. testified that hemet withyou after this draft mission planwas issued register his to disappointment, utilities' disappointment the with your statement aboutthe goal of preventing need the for additionalat-reactorstorage eventually and matching generation Doyourecall him the reg. talkingto youabout that? A I'm sure he did. QAll right, sir. And also said that the he acceptance schedule that's reflectedin this table I1-1 did not comport the agreed with understanding he hadwith you andother DOE that officials aboutthe acceptance that was rate expected underthe contract. Doyouremember that? A I did not havean agreement him as to with acceptance period. rate, QAll right, sir. Butdo yourecall him expressing opinionto youaboutthe rates that reflectedin the mission plan? A Start backoverQ All right,sir. A - because thinking I'm that you're still referringto agreements I had that with Mr.Mills.

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Yankee Atomic Electric v U.S Nos.: 98-126C, 98-154C, 98-474C August 2, 2004 Page3656 Page3654 (1) repositorydesign receipt rates?Had begun do you to And didn't have agreement Mr. Mills. I any with (2) that at the timethe contractwas formed? QAll right, sir. I believe saidthat you you A No. recalled Mills discussing Mr. with-you ratesthat the (3) QDoyourecall Mr. Mills representing you to (4) arereflected the draft mission in plan to rate the (5) or arguing youthat the acceptance under A Yes. (6) contractshould the repositorydesign be receiptrate? Q - that we've been talking about (7) A Therewasn'ta receipt rate under in the A Yes. (8) contract. Q - is that correct? (9) Q Yes, sir. Doyourecall that hesaid that the rates, A Sothe question again? (10), theschedule didn't comport the.ut_ili~!es' there with Q Yes.Doyourecall that Mr.Mills asserted (11) understanding hethoughthehadwith you and that be (12) to youthat that's the rate that should in the otherDOE officials aboutthe acceptance that rate (13) contract,the repository design receiptrate? theyexpected underthe contract? (14) A I don't - I'm sure that hecouldhave.I A I did not haveanyagreements Mr. Mills with or anyof the utilities asto ratesof acceptance. (15) don't know. Q Okay,sir. Hadhe doneso at the time, Q Underthe contract? a to (17) wouldyouhavemade representation himthat the A Under contractor relative to this the be design (18) contractreceiptrate would the repository schedule, table. this QAll right, sir. Just a fewmore questions (19) receiptrate? and believe befinished my I I'll with direct (20) A Absolutely not. would you not have testimony,Mr. Morgan. (21) Q Andwhywasthat?. Why Doyourecall if beforethe Nuclear Waste (22) doneso? we (23) A Because dealt with that in the PolicyAct, was therea specificstatutorydirection process. there was way And no that I (24) rule-making to DOE develop repository? to a would througha rule-making go process without, you A Not that I know of.

(1) (2) (3) (4) (8) (6) (7) (8) (9) (10) (11) (12) (13) (14) (15) (16) (17) (18) (19) (20) (21) (22) (23) (24) (25)

Page3655 Q Okay.By the way,after you took over the program, Mr. Brewer, Coffman, they have did Mr. did anything do with decisionmaking the program? to on A No. Q All right. Soyouandyour new staff in the - in the office were - were the sole the you individualsresponsible implementing act? for the A I was responsible Q Youwere? A - for implementing act. the stopped you;is that correct, with Q Thebuck sir? A Yes, sir. Q I'm sorry? A Yes, sir. Q And reported Secretary you to Hodel; that is correct? A That's correct. Q Okay.Between time the draft contract the was published the final contractwas and published, hadyou begun develop designfor the to the repository? A That wasin the process.So, yes, we would havestarted development a design. of Q Okay. What about specific design -

Page3657 in denying receiptrate and a (1) know, the contract, and and a otherwise. (2) turn around make - an agreement (3) That'sludicrous. QAll right, sir. Doyourecall if the (4) (5) contract did address manner whichDOE the in would (6) accept spent nuclear from utilities? fuel the (7) A Yes. In the appendices. QAll right. Anddo yourecall whatthe (8) said about in general? it (9) contract (10) A That there wouldbe a processthat wouldbe (11) an acceptance that wouldbenegotiatedwith DOE rate (12) at a later pointin time. 13) QAll right, sir. At the timethe contract (14) was finalized, did youknow whatthat rate would be? (15) A No. (16) MR.MILLER: right, sir. Just one All (17) moment, YourHonor,to make sure COURT: Takeall the time you need. (18) THE MR.MILLER: right. YourHonor,dueto All (19) of (20) thelateness thehour,is it all right that we for It be a (21) break tonight? may I have fewadditional I sort (22) questions. would of like to, especially the that. (23) considering hour,to consider (24) THECOURT: Sure. Wecan do that. (25) MR.MILLER: right. Thanks,YourHonor. All

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CONDENSED TRANSCRIPT AND CONCORDANCE PREPARED BY: HERITAGE REPORTING CORPORATION 1220L Street, N.W. Suite 600 Washington, DC 20005 Phone: 202-628-4888 FAX: 202-371-0935

Case 1:98-cv-00614-JFM
BSA Yankee Atomic Electric Page 3661

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IN THEUNITED STATES COURT FEDERAL OF CLAIMS 2) 3) YANKEE ATOMIC ELECTRIC COMPANY. ) 4) CONNECTICUT YANKEE ATOMIC POWER )Case NOS.: 5) COMPANY. MAINE and YANKEE ATOMIC 98-126C 6) POWER COMPANY, 98-154C T) Plaintiffs. 98-474C 8) 9) THEUNITED STATES, (I0) Defendant. (11) Courtroom 5 (12) (13) National Courts Building (14) 717 Madison Place. N.W. (15) Washington. D,C. (16) (17) Tuesday. August 2004 3. Volurre 16 (19) (20) l~qe parties met,pursuant thenotice to of at a.m. (21) theJudge. 10:00 (22) (23) BEFORE:THEHONORABLE JAMES MEROW F. (24) C25)

APPEARANCES CONTINUED: ON BEHALF MAINE OF YANKEE ATOMIC POWER COMPANY: JOSEPH FAY,ESQ. D. General Counsel Maine Yankee 321OldFerry Road Wiscasset. Maine 04578 (207) 882-5603

9) (1o) (11) On Behalf theDefendant: of (12) HAROLD LESTER. JR.. ESQ. (13) JOHN EKMAN, ESQ. (1~) MARIAN SULLIVAN, E. ESQ, (15) HEIDE HERRMANN. L. ESQ. (16) R. ALANMILLER. ESQ. (17) KEVIN CRAWFORD, B. ESQ. (IB) RUSSELL SHULTIS, ESO, (19) U.S. Department Justice of (20) Ii00 L Street, N.W. Washington.D.C. 20530 (21) (22) (202) 305-7562 (23) (24) *~'~Index appearsat end of transcript*** (25)

Page 3662 1) APPEARANCES: 2) ON BEHALF YANKEE OF ATOMIC ELECTRIC COMPANY. 3) CONNECTICUT ATOMIC YANKEE POWER COMPANY MAINE and 4) YANKEE ATOMIC POWER COMPANY: 5) JERRY STOUCK. ESQ. 6~ ROBERT SHAPIRO. ESQ. 7; PETER SKALABAN. ESQ. J. JR.. 8) VIVEK HATTI, K. ESQ 9) Spriggs HolIingsworth & (1o) 1350 Street. 1 N.W. (11) Washington.D.C. 20005 (12) (202) 898-5800 (13) (M) ON BEHALF YANKEE OF ATOMIC ELECTRIC COMPANY. (iS) CONNECTICUT YANKEE ATOMIC POWER COMPANY: (16) MERRILL ATKINS, J. ESQ. (17) Assisting GeneralCounsel (18) 19 Midstate Drive (~£) Auburn,Massachusetts 01560 (2o) (508) 721-3042 (Zl) (22) (Appearances Contlnued the NextPage.) on (24) (25)

Page 3684 PROCEEDINGS (i) (2) (3) MR. MILLER: YourHonor. appreciate we the (4) Court's indulgence letting getour thoughts in us (6) together overthe evening hours. justhaveone I (6) additional question Mr.Morgan my direct for on (7) examination. THE COURT: ahead, Go whenever you're (0) (9) ready. (to) Whereupon-(11) ROBERT MORGAN (12) a witness, called for examination, having beenpreviously and (13) duly sworn, was examined testified further as follows: (14) DIRECT EXAMINATION (Resumed) (15) BY MR.MILLER: (16) O. All right. Sir. if we could go back on ([7) Plaintiff's 678. Mr. Morgan, you recall we talked (18) about this exhibit yesterday in your testimony? (19) A. Yes. Andyourecall thisdocument, younot? do (20) Q. (21) A. Yes. Mr. Morgan. you recognize this. do you not. ~ ~(2~i Q. (23) as the secondpageof the statement you made the at (24} December 1983information meeting? A. Yes. (25)

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Page 3667 A. That's correct. Q, And after your approximately one-year (2) tenure as acting director of the NuclearWaste (3) with (4) Project Office, youdidn't follow whathappened (1) the nuclear wasteprogram after that time, did you? A. No, I wasbusy with other activities. Q. And you didn~ subsequently consult with (7) spent (S) any entity on issues that involved commercial (9) nuclear fuel? (lO) A. I think that whenMr. Ruschewas appointed, (11) we shared an apartment in Washington,D.C. and to say (12) that we never talked about the Nuclear WastePolicy (13) Act wouldbe incorrect. (14) Q. But other than your informal interactions

Q. Sir. ifyou can. just reading from the one-sentence paragraphthat begins. "This is our basic strategy." do you see that? A. Yes. Q. If you could just read that to the end of thepage. therestof thepage. please, andthen sir letme knowwhen you're done. A. I'mdonel Q. Could you justexplain the Court. to Mr.Morgan. whatit was youweretrying convey to in (ii) thislastpart yourstatement? of I wastrying convey to that. although the (12) A. scheduleswefelt were very tight, it was our intent (14) meetthe requirementsof the Nuclear Waste to Policy Act (15) and receive fuel in January1988, l'm sorry, sir. you said January19 -(16) Q. A. 1998. Q. All right, sir. (16) (19) A. And that even though it was tight, we had (20) the alternative to kick in, which was the monitored (211 retrievable storage program, and that wouldbe the (22) back up. Wewere also trying to do everything we (23) could relative to the repository by doing as many (24) things in parallel as we could to reduce the schedule.

(6)

(15) with Mr. Rusche? (16) A. That's correct.
(17) Q. Now, you spoke a numberof times in your (18) direct examination, Mr. Morgan,about what you did (19) not agreeto in termsof putting into the contract, (2o) but actually, while you wereat the Nuclear Waste (21) Project Office, the Department Energyneverreally of (22) defined howthe scheduling process for accepting (23) spent fuel wouldwork, isn't that true? (24) A, I believe that wasin the appendices the of (25) contract.

Page 3666 (1) Q. All right, sir, and so that's what youwere (2) trying to convey a result of your, of the last as (3) part of your statementthere? (4) A. Yes. (5) Q. All right, sir. (6) MR. MILLER:No further questions at this (7) time, Your Honor. (8) THE COURT:Okay. Cross-examination. (9) MR. MILLER: Mr. Morgan, do you need some (10) water up there? fit) THEWITNESS: would appreciate it. I (12) MR. MILLER: All dght. (13) CROSS-EXAMINATION (14) BY MR. SHAPIRO: (15) Q. Good morning, Mr. Morgan. (I 6) A. Good morning. (17) Q. I have a few questions for you. Let me (18) start off about, andI just wantto confirmsomething from your direct testimony. You (19) I think I understood Policy (20) first got a copyand read the Nuclear Waste (21) Act after the Secretary askedyou to take your (22) deposition, is that right? (23) A. That's correct. Q. So you weren't involved at all in the (24) of (25) development fhat Act?

Page 3668 Q. But while you were there, did the project (1) (2) office define how the scheduling processwould work? (3)_ A. Well, that wasdefined in the contract. (4) Q. I want to ask you a few questions about the (5) contract in just a moment. Morgan,while you Mr. (6) wereacting director, did youdeal with actual (7) pickups of spent nuclear fuel and high-level waste? (8) A. Did I deal with the acceptanceof fuel?

(9)
(10) (11) (12) (13) (14) (15) (16) (17) (18)

Q. Right. A. We accepted no fuel during the time that I

wasthere. Q. So you didn't have occasion to deal with those issues? A. That's correct. Q. Now, you were not actually involved in the decision to developthe standard contract on rule-making, were you? You weren't the one who decided to use a notice and comment rule-making (19) process to develop the project? (20) A. No, that had started before I arrived. Q. Andin fact, you don't knowwhy, in fact, (21) Policy Act even specified that the (22) the Nuclear Waste (23) programwould be pursued through contracts, do you? (24) A. I didn't, I don't understand question. the (25) Q. The Nuclear WastePolicy Act directs that

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Page 3673 Q. But nevertheless, Mr. Morgan,the subject (1) sure that the fee will providesufficient (2) to make (evenuesto cover the program,that wasimportant, (3) (4) wasn'tit? (5) A. Yes. (6) Q. And that was something that would have (7) concerned whenyou were acting director of the you (8) program? A. It wasrequired by the Act to assessthe (9) (10) onemill per kilowatt after a year. (11) Q. Well, this document actually cameout in (12) June1983,closer to six months, didn't it? A. That's whatit says. I don~know it if (13) at (~4) waspublished that point in time or if it was later. (16) published (16) (17) (18) (19) (20) (21) (22) (23) (24) (25) Q. And this documentwas prepared after extensive analyses, wasn'tit? MR. MILLER: Objection, Your Honor, foundation, the witness said he hadn't seenthe document. BY MR. SHAPIRO: Youweredirector of the program,weren't Q. you? A. Yes. Q. Well, if I could tumyour attention to the

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Page 3675 (1) determined whetherornot thatfee was going tobe (2) adequa~? A. I testified regardingthis table, whichis, I believe, the exact same numbers that were in the (4) mission plan, andthat's whatI testified to (5)

(~) (7)

yesterday. Q. And you thought that these numbers were reasonablefor purposes the analysis of making of sure that the fee wasadequate?

(10)

A. At this time, it was. Q. And other than the acceptance rate shownon (11) 11 (12) this table onpage of Plaintiff's Exhibit 971, (13) there is not another referencecasefor waste (14) acceptance,other than this one, whenyou were acting (15) director, wasthere? (16) A. This table was published in the mission 1983. (17) plan that cameout in December (18) Q. And this was, and the acceptancerate that's shown here, roughly 1,800 MTU year for the per (19) thereafter, that (20) first five years and then 3,000MTU (21) wasreally the only acceptance reference piece A. That was a reference case we were using at (22) ~,!~3) the time. (24} Q. You certainly weren't looking at any of (25) reference casethat would accept lesser amounts

(1)
(2) (3) (4) (S) (6) (7) (8) (9) (10) (~) (12) (13) (14) (15) (16)

Page 3674 third paragraph the first page, the samepage on we'relookingat, I'll readthat first sentence of that paragraph you. "This report presentsthe to results of extensiveanalysesthat explore the cost of implementinga nuclear waste disposal program." A. Yes. Q. Do you recall such analyses? A. I don't recall suchanalyses. This was not required by the Act until oneyear after the Act was enacted. Q. But it was important, wheneverthe timing was, to makesureyougot the analysis right to make sure the fee coveredthe cost of the program,wasn't it?

Page 3676 spent fuel, wereyou, than what's indicated here in (2) 978? A. No, but I do recall that the mission plan (3) that wasfinally submittedthe following year by Mike (4) had reduced numbersin it. (5) Lawrence Q. Well, I suspect we'll get to that mission (6) (7) plan whenwe get to Mr. Lawrenceor even Mr. Rusche (8) following your testimony, Mr. Morgan. A. Fine. (9) (1o) Q. I appreciate your help with that document. to (11) I wantto turn now a slightly different subject. Actually, it really concerns document the that (12) Mr. Miller just askedyouabout, but let meask you a (13) (14) few questions before we turn to that document.

(1)

A. That's correct. Q. If I could ask you to turn your attention to page11 of this document, you see that, do Mr. Morgan? (18) (19) A. Yes. (20) Q. Andon this page, in fact, there is a (21) referencecasefor receipt of spent nuclear fuel by (22) the government. shown It's there in that, in this (23) table? (24) A. That's correct. (25) Q. Andthis was part of the analysis that

(15) (16) (17) (18) (19) (20) (21)

It wasyour belief, when were acting you director, that the Department Energyshould adopt of

a strategy suchthat no utility wouldhaveto plan or construct additional at-reactor storage after 1998, isn't that correct? A. That's correct, Let mejust add that there would, there might have to have beencontracts by the (22) utilities enteredinto prior to January1998where (23) construction wouldbe going on after that date, so (24) that there would be no newcontracts required by the (25) utilities. Thatwasour intent.

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Page 3685 since you'veaskedfor it? I (1) weget to that now As (2) don't wantto deny youthe document. you'll see, Plaintiff's Exhibit 636. (3) this oneis marked (4) A. Correct. (5) Q. And we were starting to talk about the acceptancerates, which you spoke about to some (6) (7) extent yesterday, and those wereon a table on page (8) 2-3. Doyousee that table? (9) A. Yes. (10) Q. And do you see the acceptancerate that's (11) indicated there, again,it's 1,800MTU five years for (12) and then 3,000 MTU thereafter? A. Yes. Q. And you thought that was a reasonable rate for the program,correct? ) acceptance A. At that time, yes. ) Q. And this acceptancerate, again, the 1,800 (17) for thereafter, this (18) MTU five years and 3,000 MTU rate in the draft missionplan was (19) acceptance as (20) intendedto be enough, you indicated earlier, to (21) avoid the needfor additional at-reactor storage (22) after January31, 1998, correct? (23) MR. MILLER: Objection, asked and answered (24) numeroustimes. (25) THECOURT: Well, one more time won't hurt.

(3) (4) (5) correct? (6) A. TheAct says that, if the NRC defines core components high-level waste, they will be accepted as (7) (8) in the repository. Theyhaveto be defined as (9) high-level waste by NRC. (10) Q. I want to get to your understanding, (11) Mr. Morgan. (12) A. That was my understanding of what was in (13) the Act. Q. Let me ask you just a couple more (14) that this (15) questions. Wasn'tit your understanding that utilities had (16) high-level wasteincludedmatedal (17) taken from their core, including shrouds,holders, (18) end caps? (19) (20) (21) (22) (23) (24) A. At that time, there had not beena definition by NRC that this wasto be considered high-level waste,so I did not considerit. I

Page 3687 your understanding that the standardcontract's definition of high-level wastecoveredwastefrom utilities that they hadtakenfromthe coreof their reactors that the NRC consideredhigh-level waste,

believe it wasstill GTCC. Q. I'm going to turn back to your deposition again, andthis is on a different day. Andhere, I that's a little bit longer (25) havea questionand answer

Page 3686 (1) I'm goingto overrulethe objection. If youwill (2) answer? (3) THEWITNESS: Again, you will note that the in (4) when first repository opens 1998, there is an (5) still, on the right-handcolumn, increasein the I (6) backlog,andthat, when testified earlier, I (7) believe said that there wouldbe no needfor for (8) additional commitments construction of on-site (9) storage facilities, but.that there wouldbe some

~

(1°) 2))

(13) (14) (15) (16) saying? (17) A. That was our attempt. Q. Thebottomline is that, in your opinion, DOE should perform the removal of spent nuclear fuel (19) as fast as it reasonably could, didn't you? (20) A. I believe that was the intent of Congress (21) (22) and the Act. (23) Q. I wantto switch subjects just a little bit wasintended (24) to the kinds of things that the program (25) to accept. I want to focus on high-level waste. Was

commitments that would be in construction during that / time, after 1998. BY MR. SHAPIRO: Q. You couldn't solve all of the problemsthat utilities wouldhavein storing spentfuel, but you could solve a lot of them,is that whatyou're

/

(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12)

Page 3688 than the last one. Maybe would make it sense to put that in front of you, so wecan make sure we're all on the samepage, June 25th of 2002. Mr. Morgan,I'm going to refer youto page24. A. At which tab? Q. TheJune25th tab, the last one. A. What page, please? Q. 24. A. Yes. And readit for you.It's a little I11 Q. bit long. I'm going to start on line 13 where a questionbegins.It starts: "Okay. Andthen starting on line 11, your next answer,you said this, 'This to medeals with someof the high-level wastethat some the of utilities had takenfrom their core that the Nuclear Regulatory Commission considered defined as high-level waste' or maybe defining, it might be a transcription error."

(13) (14) (15) (16) (17) (18) (19) (20) "My questionis, Canyoutell mejust a (21) little bit moreaboutwhatyouhadin mindwith this (22) (23) (24) (25)

phrase'high-level waste' that some the utilities of had taken from their core? Whatmaterials are we talking about?" And your answer,"Some the material that of

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Yankee Atomic Electric v.U.S Nos.: 98-126C, 98-154C, 98-474C August 3, 2004 Page3695 Page3693 A. Yes. (1) there have a little bit of been (1) proceeding, might Q. Was possiblefor DOE predict, in it to (2) on (2) confusion that point. 1983,what rates theywould ableto usein be (3) the (3) Butultimately,we'retalkingabout (4) accepting in 1998? fuel (4) same relevancy. Thank for yourtime. you A. No. (5) You're welcome. (5) THEWITNESS: Q. Based your understanding the Act, the on of (6) (6) THE COURT: Anyredirect? (7) NWPA, it requirethat DOE did acceptspentnuclear Honor. (7) MR. MILLER: Shortredirect, Your (8) fuel and high-level waste startingin '98 at a rate (8) THE COURT: One moreroundhere. preclude utilities from adding further (9) that would REDIRECT EXAMINATION (9) facilities on-site? (10) storage BYMR. MILLER: (lO) (11) A. No,that was part of the Act. not (11) Q. Youthought you weregoingto get away, (12) Q. Was that a program goal that you hadat the didn't you, Mr. Morgan? (12) (13) timeyouweredirector THE COURT: don't blameyou, you want to I (13) (14) A. Thatwasa program that weidentified goal (14) goback Oregon, think. to I plan. (15) in the mission (15) THE WITNESS:nowlive in Colorado. I specifically (16) Q. Andis that a goal that DOE (15) THECOURT: Oh, Colorado. to (17) declined put in the contract? (17) BY MR. MILLER: say Q. Mr. Morgan, DOE did elect not to put a rate (18) A. Yes.I must that wehadn't identified, (19) at the time the contractwas signed prepared, or we (19) of acceptance the standard in contract? rates (20) hadnot identified the acceptance that welater (20) A. Yes. (21) included the mission in plan. We hadn'tgottenthat (21) Q. Was that a deliberate choiceon your part? (22) far at the timeof the contract.The required Act (22) A. Yes. the by (23) that wehave utilities sign a contract June (23) Q. Did DOE - well, can you tell mewhy feel (24) 30th, 1983,andwehadnot gottento anydesign, (24) youdidn't, that youdidn~ a specificrate of put (25) conceptual design the repository that time. on at in (25) acceptance the contract?

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Page3694 A. I felt that it, because the of uncertainties the program, of which I've discussed earlier, the NRC licensingprocess characterization, the R&D otheractivities, that I thought was and it not prudent put anacceptance in the to rate contract. Q. Andwhat about your knowledge the of technical technological scientific capabilities or or that youweregoing have have the to to at repository,did youknow whatthosewere that at time? A. Not in total because the fact that NRC of had identified the requirements licensing. not for Q. Okay. A. Andquite honestlyQ. I'm sorry. A. Geologists great.It's a historical are science, a predictivescience, theycantell not and youwhathappened million yearsago, but they five won'ttell youwhat'sgoingto happen tomorrow, and that was problem wehadto dealwith. a that Q. Sothat was concern yours? a of A. Yes,that wasa concern mine. of Q. In yourmind,I'm sorry, in yourmind, was this programfirst of its kindof project? a

Page3696 Q. All right, sir. In yourmind,Mr.Morgan, (1) a goal (2) what'sthe differencebetween program anda (3) contractualrequirement? A. They weretotally separate.Thecontract (4) the between andthe utilities, and DOE (5) was agreement goal our the (6) the program was bestefforts at meeting of were totally (7) requirements the Act. They / (8) different. (9) MR.MILLER: haveno further questions, I (10) YourHonor.Thank you, Mr. Morgan. COURT: Anything further?. (11) THE MR.SHAPIRO: Nothing further, Your Honor. (12) (13) THE COURT: right. You're excused,and All (14) thankyouvery much your testimony. for Thank you, sir. (15) THEWITNESS: Your Honor, the government (16) MR. MILLER: Rusche. (17) calls, as its next witness,Mr. Banard (18) WhereuponC. (19) BENARD RUSCHE havingbeen duly sworn, (20) a witness,called for examination, (21) was examined testified as follows: and (22) THECOURT: Just take a seat. (23) DIRECT EXAMINATION (24) BY MR. MILLER: (25) Q. Are you all set, Mr. Rusche?

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