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Case 1:98-cv-00614-JFM

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TennesseeValley Authority v.U.S. No. 01-249C July 14, 2005 Heritage Reporting Corporation Page 2078 to Page 2330

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Case 1:98-cv-00614-JFM
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Tennessee Valley Authority Page2186 THE COURT: Kiraly, I Mr. believe - Mr. Crawford? MR. CRAWFORD:further questions. No THECOURT: Shea, mayI excuse Mr. Mr. Kiraly as a witness? MR.SHE_A: You may, Your Honor. THE COURT: Kiraly, I maynowexcuse Mr. youas a witness,andI doso with appreciation, and thanksfor your testimony yesterday today. here and Youare excused. THEWITNESS: Thankyou, Your Honor. THECOURT: Thankyou. Now, before Ms. while we'regetting set upandMr. Palmer others and would start getting up, may use little set I this hiatusto make request counsel? really is my to It directed,Ms.Orfield, to the leadcounsel and Mr. Shea the counsel record.Obviously, as of there are embeddedMr..Kiraly's testimony, there have in as been some other witnesses, especially but Mr. Kiraly's testimony, some legal concepts~ And mymind, to some those,not all, but of some those of legal concepts reflectedin a are decisionby the Federal Circuit styled Wickham Contracting Company Fischer, 12 FR3d 1574, v. decided 1994. in Thatdealsspecifically with

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July 14, 2005 XMAX(28/28) Page2188 MS.SULLIVAN: are, Your Honor. We MR.LORE: Your Honor, I wondered maybe if wecouldjust takea veryquickbreakwhile weset up andif wecouldreconnoiter heremomentarily? THE COURT: in fact, we'll go off the Yes, recordfor a minute.Everyone stay, or they may can leave.It's upto them. MS. SULLIVAN: Thankyou, Your Honor. (Whereupon,short recesswastaken.) a MS. SULLIVAN: Your Honor, Ms. Heide Herrmann with Mr. Morgan Los Alamos. is in She'sa member our once.Just to speed of things a~ong, may ask, Ms. Hem-nan.n, I couldyou make sure the following exhibitsare easilyaccessible for Mr.Morgan: "l'he bindercontaining Defendant's Exhibit 5, the separate documents Defendant's Exhibit 5.034,5.063,Defendant's Exhibit 28, Defendant's Exhibit27, andDefendant's Exhibit37. Doyou haveall thosedocuments? MS. HERRMANN: I believe I do. Yes, (Discussion the record.) off THECOURT: Sullivan, would you Ms. formatlycall Mr. Morgan a witness? as MS. SULLIVAN: Yes, Your Honor. The government calls Robert Morgan its next L as

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Page2187 overhead AFUDC, mightpassin this casefor and what AFUDC, that is a casein whicha government but contractorwasmaking claim. a This case a little different.This is is just the reverse because government providing the is the service the privateparty, ratherthanthe to privateparty providing serviceto the government, a And what-I wouldaskcounsel do when my, to you're engagedpost-trial briefingin this case to in is dealwith the converse situation in contrast a to casesuchas Wickham. I getting through? Am I'm trying to beas brief andconcise I canin making as this request. MS. ORFIELD:think it's clear, Your I Honor. THE COURT: Thankyou, Ms. Orfield. Mr. Shea? MR.SHEA: Absolutely clear, Your Honor, yOU have may recalled,but I sort of argued to that begin litigation. the THEE COURT: understand,I understand. I It's just that because Mr.Kiraly'stestimony, of it's embedded the way all through, I just think and wehave dealwith this explicitly. Areweready, to Ms.Sullivan?

Page 2189 (1) witness. THE COURT: Morgan,I'm authorized by Mr. (2) the (3) statuteandrule to administer oathto youby (4) this remote means, you'retestifying by video if If (5) conference. I give youthe oath,will you (6) respond,please? Yes, (7) THEWITNESS: I will respond. (8) THE COURT: right, thank you. All (9) Whereupon(10) ROBERT MORGAN (11) a witness,called for examination, having been duly sworn, (12) was examined testified as follows: and (13) THEWITNESS:I do. (14) THECOURT: Would you please slate your full name the record? for (15) Robert L Morgan. (16) THEWITNESS: THECOURT: Thank you, Mr. Morgan. And, (17) proceed. (.18) Ms. Sullivan, you may MS, SULLIVAN: Thank you, Your Honor. (19) (20) DIRECT EXAMINATION "i~')-- BYMS. SULLIVAN: (22) Q. Mr. Morgan,whendid you serve as the known the Office of as (23) director of wha{became Management?. (24) Civilian RadioactiveWaste late January1983until sometime in (25) A. From

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Januaryof1984. Q. And the office called by a different was name when first became you director? Yes,it was different name. a Q. Anddo yourecall that name? the Waste ProjectOffice, as A. It was Nuclear I recall. Q. Mr. Morgan, wereyou selectedto be the how director? A. I wasselected by SecretaryHodel. Q. Andas director, to whom you report? did A. To the Secretary. Q. How many years were you with the Department of Energy its predecessor and agencies? A. I joined the Atomic EnergyCommission j in 1965 retired in 1988. and Q. Mr. Morgan, you hold a Bachelor's do degree? A. Yes, do. I Q. And fromwhere? A. TheUnitedStatesMilitary Academy. Q. When that degreeconferred? was A. 1952. Q. And what in subjectis that degree? A. Military engineering.

14, 2005 XMAX(29/29) Page2192 waterorganic pool reactorprogram at (1) of the heavy River. 1966 1973,I was senior site to the (2) Savannah at Park, (3) representative Canoga adjoiningto the and (4) nationalcore of the reactordevelopment (5) technology division of the Atomic Energy Commission. (6) '73 to 1980,I wasdeputy manager the Savannah of office. And thenin 1980,I was (7) Riveroperations of River operations (8) selectedas manager the Savannah (9) office. (10) Q. Anddid you remainthe manager the of (11) Savannah operations River office until youretired in (12) 1988? details in (13) A. Yes, thoughI hadsome Washington the Nuclear with Waste Policy Act andalso (14) the AssistantSecretary defense for programs. (15) (16) Q. Mr. Morgan,how have you beenemployed (17) sinceyouretired fromthe Department Energy of in (18) 1988? (19) A. Couldyou repeat the question, please? have you beenemployed since you (20) Q. Yes. How (21) retired fromDOE 19887 in 1988 until 1990,I did consultingwith (22) A. From variouscompanies weredoingbusiness that with the (23) Department Energy. then in 1990,I joinedan of And (24) whichwas doingenvironmental (25) 8Afirm called Mesa,

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Page 2191 Q. Mr. Morgan, you also hold a Master's do degree? A. Yes, I do. Q. Andwhere you obtain that Master"s did degree? A. FromMIT. Q. Andwhen that degree was conferred? A. 1959. whatsubject is your Master's degree? Q. And a degree civil in A. I have Master's engineering a Master's and degree nuclear in .engineering. Q. Mr. Morgan, youservein the Army? did A. Yes, did. I Q. For howlong? A. 13years. Q. And after youleft the Army, where wereyou first employed? A. At the Savannah River operationsoffice at the AtomicEnergyCommission. Q. Would please summarize you briefly your positionsfromthe time youjoinedthe Atomic Energy Commission the timeyouretired fromthe until Department Energy? of A. From 1965 1966,I was to division director

Page2193 impact statements the Department Energy. for of I left therein 1995. thensince1995, have And I been in consulting again. Q. Thankyou. Mr. Morgan,what was accomplished duringyouryear as director of the Office of Civilian Radioactive Waste Management? A. The first activity was notification of the the governments wereaffectedin the program. that They had, there was requirement a within the Nuclear Waste PolicyAct that theybe notified..Thesecond thing was regarding contract the with the utilities. TheFederalRegisternoticehadbeen sent out as the draft, it actuallygot to the Federal Register after I had arrived,but I hadnot seen when was it it transmitted the Federal to Register. (16) We resolved the comments that and from the then (17) published final ruling for the contract,We (18) startedinto the mission plan, which to try to was (19) integrate theactivities of the repository, all the (20) monitored retrievablestorage transportation and activities that would required be overthe Act. _(_21~)) you. I think you just said the (22) Q. Thank to but ask (23) answer this nextquestion, let me it wasthe status of the development the of (24) again. What contractwhen arrived at the Office of you (25) standard (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) (13) (14) (15)

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Tennessee Valley Authority Page2194 Civilian Radioactive Waste-Management? A. Therehadbeen draft of that contract a submitted the Federal to Register,andthen we received comments that draft, andthenon THECOURT: Morgan,we're making an Mr. adjustment, wedon't get feedback your voice so on transmission. just takea moment. It'll I think we'll befine now, Sullivan. Ms. MS. SULLIVAN: Thankyou, Your Honor. BY MS. SULLIVAN: let ask again, Q. Mr. Morgan, me the question what the statusof the development the. was of standard contractwhen arrived to bedirector of you the Office of Civilian Radioactive Waste Management? A. When arrived or accepted position in I the Washington, draft of the contracthadalready the been transmitted the Federal to Register for publication.After it was published, received we comments the utilities and statesandother from the interestedparties, andthen weresolved those comments submitted final ruling to the and the Federal Register. Q. Doyourecall meeting with utility representatives to the publication the final prior of standard contract?

14, 2005 XMAX(30/30) Page2196 they'rehearsay. (1) lawsuit, and THE COURT: Well, let's sort out relevance (2) Sullivan? (3) first. Ms. MS.SULLIVAN: Your Honor, my questions are (4) to meetings (5) geared the periodof contractformation, andinput that DOE with regard the final had to (6) contractandwhat inputsthere were that to (7) standard document.understand the standard I that contractis (8) (9) at issuein this caseandwhattermswereandwere duringthe period contract of .(10) not negotiated (11) formationis myquestion aboutmeetings with held (12) utilities. (13) THE COURT: Small, do you have anything Mr. (14) further? (15) MR.SMALL: Your Honor, the question in sucha termwasnegotiated (16) this casewouldbe whether (17) with TVA. (18) THE COURT: Liability has beenestablished. (19) However, do havea rate issuein the casethat has we (20) been raised regarding damages, I'm goingto take so (21) the testimony. Now, sinceweare past the relevance (22) objection, Mr. Small,doyou have something further (23) that you'dcareto add? MR.SMALL: Additionally, Your Honor,I (24) of (25) also hadan objectionon the grounds hearsay

No. 01-249C July

Page2195 (1) A. Yes. did (2) Q. With whom you ~eet? with representatives Edison of (3) A. I met several the utility members of (4) Electric Institute and (5) of EEland,I believe,several states. Q. Andwhatdid you discuss in your meeting (5) (7) with EEl? (8) A. They~felt very strongly that the contract shouldincludea rate of acceptance beginning in ~(~10)(9) whichwedenied. ~ 1998, (11) Q. Andwhatdid you discuss in your meeting? (12) Actually,let me back You up. test!fled that youmet (13) withseveral the utilities. Were of thereseveral (14) meetings youhadwithindividualutility that (15) represeniatives? (16) A. Primarily, there was as I recall, a a, (17) meeting EElwhere at severalof the utilities were (18) present,andI metalso with General Electric and and other (19) Westinghouse, I'm not sure of howmany with. (20) utilities wemet (21) Q. Andbriefly, whatwasthe issue that you Do (22) discussed? yourecall whatthe issue wasthat you (23) discussedwith GEand Westinghouse? (24) MR.SMALL: Objection, YourHonor, I don't (25) understand thesediscussions relevantto this how are

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Page2197 because anticipatedthat the witness being I was asked whatwassaid at a meeting that occurred many, many years ago. THECOURT: Well, if Mr. Morganwere to answer a certain person a certainthing, that said which would absolutelyremarkable this time, be at that would hearsay. herelates whathe now be If believes bethe gist of the meetings the to and pointsor objections were that posed, that's a different matter,that's not hearsay. so with And that as a general guide,let's goforward. Ms.Sullivan? MS.SULLIVAN: Thankyou, Your Honor, and I will tailor my question the Court'sguidance. to Thank you. ...... BY MS. SULLIVAN: Q. Mr. Morgan, testified that you metwith you GE Westinghouse. you recall the topics that and Do werediscussed during that meeting? A. Thetopic that were discussed were charges relatingto fuel prior to the establishmenttheI of mil per kilowatt hour. Theproblem that GE's was fuel did not havethe irradiation that Westinghouse did, andtherefore,there was goingto be more fuel elements GE submitted kilowatt hourthan from per

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Tennessee Valley Authority Page 2198 (1) there was from Westinghouse. (2) So wewere trying to formulate a wayto (3) makeit an equitable cost for both GEand This (4) Westinghouse. is the fuel that existed prior to (5) the establishment the 1 rail per kilowatts. The of had to (6) average of the expensesto GEand Westinghouse (7) be an average 1 rail per kil watt for the aggregate of ~

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(8) of ,~at fuel. ~" Q: Thank you, Mr. Morgan. Turning back to whatyou recall about your discussions regarding the rate of acceptance, believe youtestified that the I request the utilities with regardto the rate of of acceptancewas rejected. Whywas the request rejected? A. The Nuclear Waste Policy Act was a series of requirements I felt wereextremely that difficult to meet. There were manytechnical unknowns,what would be the licensing requirements from NRC,what wouldbe the characterization requirements a of repository, and that there wasthe potential intervention by some the stakeholders. of But I felt that there was potential that a Congress maychangethe law which, in effect, they did at a later point in time. SoI felt it was absolutely impossibleor incomprehensible that I

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(i) contract? (2) A. Yes. (3) Q. Andwere these documents sent directly to (4) you? (S) A. I beg your pardon? Q. Werethese documents sent directly to you? (6) A. Some themwere sent directly to me. of (7) weresent to the contracting officer whohad (8) Some (9) signedthe rule. But I did reviewall of these (10) records whenthey camein. (11) Q. And why did you review these documents? (12) A. BecauseI was held responsible for the (13) contract by the Secretary Energy I felt that I of and (14) hadto review those in the rule-making, andI had the the (16) responsibility of making decision as to whether (16) they wereincluded or not. (17) Q. Thank you, Mr. Morgan. (16) (19) (20) (21) (22) (23) (24) (25) ' MS. SULLIVAN: Your Honor, at this time, the government movesfor admission of Defendant's Exhibit 5, whichis the administrativerecord for the development ~e standard contract. I have of questions about two particular sets of comments in this document I mean,in this set of documents, but I wouldlike to move admission the entire for of record.

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Page 2199 wouldagree to an acceptance rate with all these unknowns. felt that that wouldbe just absolutely I inappropriate. Q. Mr. Morgan, do you have the exhibits that compriseDefendant's Exhibit 5 before you? MS. SULLIVAN: Ms. Herrmann, could you provide those exhibits to Mr. Morgan? Your Honor,

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this is a binder that's beenprovidedto the Court. THE WITNESS: Yes, I have. MS. SULLIVAN:Thank you. And, Your Honor, weelected not to usethe Tdal Director because,if wedid do that, wewouldlose Mr. Morgan's picture. BY MS. SULLIVAN: Q. So, Mr. Morgan, did you have an opportunity to review the stack of materials that's beenplaced in front of youprior to before webegantoday? A. This entire record was transmitted to meby (17) e-mail yesterday, and I spent last eveningand a (18) going throughthese records. (19) little time this morning (20) Q. Mr. Morgan, do you recognize the set of (21) documents before you to be the administrative record (22) to the standardcontract? (23) A. Yes, I do. (24) Q. Do you recall receiving these document~ in of (25) the course of the development the standard

Page 2201 THECOURT: Before we get Mr. Small's reaction to that request, wouldyouplease, Ms.Sullivan, identify for the Court exactly whatyou mean Defendant's Exhibit 5? by MS. SULLIVAN: Yes, Your Honor. Defendant'sExhibit 5, which are Defendant's exhibits, they're broken up through Defendant's Exhibit 5.000 through Defendant's Exhibit 5.086. THECOURT: Does that, and this is not going to makesense to Mr. Morgan,but does that essentially compdse this first volume?

MS. SULLIVAN:Yes, Your Honor, that has beenprovided to the Court. THECOURT: All fig,ht. Mr. Small? MR. SMALL: Your Honor, we do not dispute that the volume contains letters that werereceived by DOE regarding the standard contract, apparently, in 1983,but wejust hada few minutesto look at it. (19) On the other hand, YourHonor, the letters (20) predominantly- I mean,I think there might be one (21) in there from TVA,but predominantly,they're from (22) other utilities, not TVA. (23) Andto that extent, they're hearsay, and (24) also, YourHonor,the vast bulk of this record is (25) totally irrelevant to anyissue in this case, andto

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Tennessee Valley Authority Page2206 QI Mr. Morgan, you could I ask to turn to what (2) is marked Defendant's as Exhibit 0.34? (3) A. Yes, I havethat document. do this to (4) Q. Okay.Mr. Morgan, you recognize be a copy the Edison of ElectdcInstitute's comments (5) (6) on the standard contract,the draft standard (7) contract? (8) A. Yes. (9) Q. Doyou recall reviewing this set of (10) comments the timeit was at submitted? (11) A. DoI recall receivingthis? (12) Q. No, myquestion, do you recall reviewing (13) this document? (14) A. It's still - I still didn'thear the (15) question. (16) Q. Myquestion waswhetheryou recalled this document. (17) reviewing (18) A. Yes, I reviewedthis documenL you. Mr. Morgan, whatis your (19) Q. Thank as Electric (20) understanding to whatthe Edison (21) Instituteis? Electric Institute is an. (22) A. TheEdison of companies, I and (23) association electdcgenerating lobbying group. (24) believethat theyare a Washington (25) Q. Thank you. Mr. Morgan, would you please

XMAX(33/33) 14, 2005 Page2208 Q. Andthat second paragraph that page on (1) reads,"Thecontractshould includea recognition (2) will its (3) that DOE design facilities withthecapacity (4) to receiveSNF/HLW a rate commensurate the at with (5) amount SNF/HLW beinggenerated, of then togetherwith backlogof SNF/HLW. (6) the accumulated (7) We believe that DOE shouldbe ableto take (8) deliveryof SNF/HLW to that year's generation, equal (9) plus a reasonable share the backlog. of Whilethe (10) contractmay bethe appropriate not placeto commit (11) DOE a specific numerical to receivingrate, DOE (12) should recognize least qualitativelythe need at to annual receivingcapacityto handle (13) haveadequate (14) industryneeds. be with the direction (15) Thiswould consistent (16) of Section 302(a)(5) the Actthat DOE title of take as (17) to SNF/HLWexpeditiouslyas practicable upon of or A clause (18) request the generator owner. new (19) shouldbe added." then, Mr.Morgan, youturn the page, if (2o) And DOE that (21) the clausereads,"Whereas recognizes its of nuclear and/or fuel (22) ability to takedelivery spent (23) high-level radioactive wastemustbe commensurate of then being (24) with the amount suchfuel andwaste (25) generated, together with the amount such of fuel and No. 01-249C July

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Page2207 turn to page eight Of the letter from EEl? A. Pageeight? Q. Yes. And,Mr. Morgan, wouldlike to read I a portionof that first paragraph the record into and then ask youa question.Theparagraph begins, "Although contractis generallycomprehensive the and complete, there are twosignificant issuesonwhich the pr_oposed contractis silent, DOE performance standards purchaser and remedies. Article II states that the disposal servicesshall commence later not than January 31st, 1998, provisionconsistentwith a the Nuclear Waste Policy Act. However, other no milestones included,nor does contractcommit are the DOE acceptany given quantity of SNF/HLW." to Doyou seewhere I've read, Mr. Morgan? A. Yes, I see that. Q. Mr. Morgan, you recall the concernfrom do EElthat is raisedin the portionof the paragraph that I just read? A. Yes,I recall this concern;=Q. AndcouldI direct your attention to two pages later in the document, second the page the of attacheddetailed comments, you havethat pagein do front of you,Mr. Morgan? A. Yes, I do.

Page2209 (1) waste previouslygenerated, consistentwith Es and (2) obligation taketitle to such andwaste to fuel as (3) expeditiously practicable as upon request the the of (4) owner generator such or of fuel andwaste." (5) Mr. Morgan, yourecall reviewing do the on (6) materialthat I just readfromEEl's comments the contract? (7) draft standard (8) A. Yes,I recall that. Q. Mr. Morgan, DOE did considerthis request (9) of (10) by EElfor a qualitativedescription the rate of to (11) acceptance beincludedin the contract? considered andrejected it it. (12) A. We why it (13) Q. And was rejected? (14) A. Because the uncertainties the progra of of m (16) that I mentioned earlier;, and was it impossible for (16) meto commit a givenrate with the unknowns to that (17) wewerefacing. TheNuclear Waste Policy Act did not (18) includean acceptance rate, andso wewerewell within whatwefelt was law that waspassed the by (19) Congress. (20) would you please tum your (21) Q. Mr. Morgan, attention now what'smarked Defendant's to as Exhibit (22) (23) 5.063? (24) A. Yes, ma'am. (25) Q. Mr. Morgan, you recognizethis document do

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Tennessee Valley Authority Page2210 to be TVA's comments the standard on contract? A. This document I havedoesnot havea that cover letter ~ it, and I can't saywhether so this wasaddressed me,but I do know to that we've reviewedcomments TVA. from Q. And I coulddirect yourattentionto the if first page theexhibit,I believe fourthline of the down the first paragraph in reads,"TVA believes a separate contractshouldbe made eachreactor for unit." Doyouseethat? A. No,I don't. Thisis onpage the first page? Q. Thefirst pageundergeneral comments, the fourthline in thatfirst paragraph. A. Yes. believes~" Q. 'q-VA A. Yes. Q. Okay. Does that provideanyinsight as to whether these wereTVA'scomments the contract? on A. I don't understand question,I'm that sorry. Q. I'm beinginartful, andI apologize. You said that it doesn~ a cover have letter, but youdo recall receivingcomments TVA from that were reviewed, that correct? is

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XMAX(34t34) 14, 2005 Page2212 widebasis. Accordingly, followingDOE the responsibilitiesshould beadded Section of also to B Article V: DOE shall start accepting deliveryof SNF or HLW later than January not 31st, 1998 not less at than the annual rate of SNF and/orHLW then being is produced civilian nuclearpower from plants covered by the contractwith DOE disposalof SNF for and/or HLW. After January 3~lst, 1998,DOE shall be prepared acceptdelivery of SNF to and/or HLW produced to set dateon a schedule prior sufficient to provide deliveryconsistent for with decommissioning for purchasers, plans nuclear power plantsspecifiedin Appendix A." Mr.Morgan, yourecall reviewing do *..he provision the request the comments I just or and that read? A. I recall reviewingthese comments, they and weredenied. Q. And whywere they denied? A. It wouldbe unconscionable meas a for program director to make commitments held the that government responsible thingsthat I was sure for not that wecouldmeet because the uncertainties of of the program I discussed that earlier. I don't know No. 01-249C July

Page2211 A. That is correct. Q. Okay. without a coverletter, you But don't knowwhetherthese wereTVA'scomments? A. I can't, you know,say whether thesewere TVA comments to me,and, again, it's been long sent a time sinceI looked some these at of records. Q. Well, let meask youthis, do youagree that therearestatements regard that with to, mention in them,in this document? TVA A. Yes. Q. Mr. Morgan, wouldyou please turn to page five of this document? A. Yes. Q. AndI direct your attention to the middle of that page, I'm going reada sectioninto and to the recordthat begins,"In addition,a commitment to do nomore thanstart accepting deliveriesby 1998 is empty meaningless and without setting forth some reasonable minimum rate. of acceptance which corresponds the purposes the Act. Of course, with of under priority ranking the system the draft in contract,it would difficult at thetime be contracts are executed give eachpurchaser to assurances of at (24) deliveryacceptance anyspecific rate. be on (25) This could, however, done an industry (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) (13) (14) (15) (16) (17) (18) (19) (20) (21) (22) (23)

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Page2213 how to sayit, but it is not,it was else not requiredby Nuclear Waste Policy Act, andwedid not include it. Q. Mr. Morgan, would you nowlook at Defendant's Exhibit 28, please? MS. SULLIVAN: Your Honor, I understand that Defendant's Exhibit 28 hasalreadybeen admitted into evidence. THE COURT: Yes, on the 21st of June. MS. SULLIVAN: Thank you, Your Honor. BY MS. SULLIVAN: Q. Mr. Morgan, like youto turn to the I'd third page this document, is titled, of which "Summary Disposition of MajorTVAComments." of A. Yes. Q. Doyouhavethat in front of you? A. Yes. Q. And like to readthe comment the I'd and response then ask you a question. and "Comment: contract shouldaddressat The least the minimum duties DOE perform return must in for payments the NuclearWaste to Fund. "Response: made DOE little in the wayof substantive changes definingtheir responsibilities. Thesecond recital waschanged addingthe phrase by

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Reporting

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Case 1:98-cv-00614-JFM
BSA (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) (13) (14) (15) (16) (17) (18) (19)

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XMAX(35/35)

Tennessee Valley Authority v.U.S. No. 01-249C
Page 2214 'as expeditiously as possible regarding DOE's responsibilities for taking title to spentnuclear fuel or high-level radioactive waste.' Some clarifications were made regardingestablishmentof the acceptance priority ranking of purchasers. However, substantive dates or rates of removalof no SNF are established beyondthe requirementsof the Act, which requires DOE start accepting SNF to by 1998." Mr. Morgan,the last sentenceof that response that I read regardingsome clarifications were made,but no substantive dates or rates of removalof SNF were established, that statement, does it comport with your recollection of DOE's consideration of TVA's comments regarding the acceptancerate? A. Yes. Q. I nowdirect your attention to whatis page five of this document, it's marked but pagethree at the top. A. Page five? Q. Page five of the document,but it's marked pagethree, andit's with the third comment. The

July 14, 2005

(5) (6) (7) document? (8) A. I beg your pardon? (9) Q. Whydo you recall receiving this document? (10) A. Because wasthe samethemeafter the it 11) final rule-makingthat they had presentedto us (12) during the rule-making process. Q. Andwhat did you do in responseto this 13) 14) letter? A. I'm not sure what the responsewas. I (15) whetherit was (16) don't havethat - I don't know specifically or not. I can't say right now. (17) answered (18) I don'trecall. (19) (2o) (21) (22) (23) (24) (25) MS. SULLIVAN: Your Honor, at this time, I'd like to move admission Defendant's for of Exhibit 27. THE COURT: Mr. Small? MR. SMALL:Your Honor, I don't understand that the properfoundationhasbeenlaid for 27. It appears be a copyof an EdisonElectric Institute to

Page 2216 1983 letter fromEdison-ElectricInstitute to you. HaveI described the document correctly? A. Yes, I recall this document. Q. Anddo you recall receiving this document? A. Yes,specifically. Q. Andwhydo you recall receiving this

,,!

(20) (21) (22) (23) (24) number three is at the top. (25) A. Yes.

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Page221,5 Q. Great. I'll forego reading the comment, but t'll read the response and then ask you a question. "Response: DOE did not accept-FVA's suggestion that DOE should start accepting delivery of SNF and HLW 1998at a rate not less than that in which they are being produced the civilian nuclear by power.industry as a whole. Thefinal contract does obligate DOE issue not later than January1st, to 1987a capacity report for planning purposes and,. beginning April 31st, 1991, annual acceptance priority ranking the oldest SNF and HLW having pdority for receipt by the DOE repository. DOE is also obligated to provide annualreports giving the waste disposal program'splans and cost projections." Mr. Morgan, response the that I just read, does that comportwith your recollection of DOE's

Page 2217 (1) letter that wassent to DOE Mayof 1983. However, in (2) it wasnot part of the rule-making the standard for (3) contract. It was,as I understand testimony, it his (4) wassent after the close of the rule-making, and the (5) witness is unableto say what, if anything, wasdone toit. (6) in response THECOURT: Well, I don't have a difficulty (7) with the foundation in that respect because (8) (9) (10) (11) (12) (13) (14) (15) (16) (17) (18) Mr. Morgan testified he recalls specifically just receiving iL I've got a small problem relevance on because appears-thatthis letter andthe it attachmentrelate to the controversy in the eady mid380S over the wayin which the fee would be

consideration of "I'VA's comments regarding what should be included in the contract with regard to acceptance Tate? A. Yes. (21) Q. Mr. Morgan,could I now ask you to look at (22) (23) Defendant'sExhibit 27? (24) A. I have that. (25) Q. Mr. Morgan, this is a copy of a May20th,

computed. MS. SULLIVAN:Your Honor, I agree that that is the pdmary focus of the letter. However, there is an issue with regard - there's a mention made the acceptance of rate issue, and that's what I about, not about the fee (19) wantedto ask Mr. Morgan that I wasnot to ask any (20) issues, but I understood (21) substantive questions prior to seeking admissionof (22) the document. THE COURT:That's right. Where? (23) MS. SULLIVAN:If you look at the bottom (24) (25) paragraphthat begins, "Considering," there's a

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(12)

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Tennessee Valley Authority Page2218 sentence lines down begins'i"Several five that of these" - sorry, "However, problems many remain. Several theseare of such of magnitude," thenit and continues, "These includethe lack of standards or milestones DOE's for performance." And that was section the letter that the of I wasplanning askMr. Morgan to about. THECOURT: Mr. Small? MR.SMALL: haveno objection to the I letter coming for discussion that particular in of topic. THE COURT: right. It's admitted, All granted, limitedrelevance. of MS. SULLIVAN: Thankyou, Your Honor. (Defendant's Exhibit Number wasreceived 27 in evidence.) BYMS. SULLIVAN: Mr. Morgan, I direct yourattentionto can that last paragraph the first page,which was on I just discussing the Court,and like to read with I'd that paragraph the recordandthenaskyoua into question about it. "Considering compressed the schedule under which was it drafted,the disposal contract a is credible, althoughby no means perfect document. a

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XMAX(36/36) 14, 2005 Page2220 or the concept that it was bepaidfor by the was to utilities, whatever costwas,and that that annually, wewereto look at the rates that were charged see to if that covered costof the activities that we the weredoingin the program. Sowedid not commit specific receipt to ratesbecause the uncertainties faced in of that us this program. Q. Thank you, Mr. Morgan. Youcan set that document aside.Mr. Morgan, the time the standard at contractwas drafted, what the statusof the was design a repository? for A. I'd sayit was preconceptual. other In words,wedidn't havea complete conceptual design, but wehadbeen working a designfor the on repository. Q. And the time the standardcontract was at drafted, what the status of DOE's for was plan transporting spentnuclear fuel to a [eposit0ry? A. There were inadequatelicensed casks by NRC to move amount fuel that would projected, the of be andweenteredinto a fuel caskdevelopment program, so that wewouldhavecasksavailable to move the fuel when they wereneeded. Q. Mr. Morgan, what information would DOE have No. 01-249C July

Page2219 DOE staff worked hardin its development did and accommodate of the comments we submittedon many that the proposed contract. draft However, many problemareas remain. Several theseareof such of magnitude were a that it, normal commercial transaction, the contractwould never signed its currentform. These be in includea lack of standards milestones DOE's or for performance, absence utility review of rights onthe DOE program, inadequate protectionfor utilities against nuclear nonnuclear and liability," and it continues. Mr.Morgan, first question does my is, this statement comport with yourrecollection as to DOE's considerationof comments submittedby EEl? A. Yes. Q. Andthe statementaboutthe lack of standards milestones DOE's or for performance, does that also comport with your understanding to DOE's as treatmentof EEl's comments? A. Theunderstanding the NuclearWaste of PolicyAct, it was off-budget an item, and that the, that feescollected the utilities would from be (24) utilized to run the program develop repository and a retrievablestorage.Theidea here, (25) or a monitored (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) (13) (14) (15) (16) (17) (18) (19) (20) (21) (22) (23)

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Page2221 needed 1983 beableto either put a firm in to acceptance or a qualitative statement EEl rate like suggested the contract? into A. Couldyou repeat the question, please? Q. Sure. Whatinformation would DOE have needed 1983 be ableto either put a firm in to acceptance or a qualitative statement rate regarding the acceptance like EEl suggested the rate into standard contract? A. Well, wewould havehad to known,knowthe licensing requirements placed uponus by NRC. We would havehadto know potential interventionsor the lawsuitsthat couldcome us fromthe stakeholders. at We wouldhaveto haveall the informationdown whole in the repositoryto make it was acceptable sure an locationfor spent fuel, andI guess, know, you excuse but we'dneed crystal ball. me, a Q. Mr. Morgan, howwasthe specific acceptance rate to be determined? A. I don~tunderstand question. I guess that it was wewere that point in timelookingat a at later dateof establishing acceptance the rates. I believeit was something 1991, like that by that time, wefelt that wewould haveinformation available to make some commitments, whether be at it

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Case 1:98-cv-00614-JFM

Tennessee Valley Authority

Document 312-2

v.U.S. No. 01-249C July 14, 2005

Filed 10/17/2005

Page 10 of 12 XMAX(3"7/37)

(1) (2) (3) (4) (5) (6) (7) A. Wehad interactions with the states and (8) stakeholders. Wefocusedprimarily on putting that wouldreach the goals of the (9) together a program Policy Act with a repository, the (10) NuclearWaste (11) transportation requirementand the monitored workedon what wecalled a (12) retrievable storage. We (13) missionplan of howto get there whichintegrated all (14) (15) (16) (17) (18) (19) (2o) (21) these vadousparts. Q. Mr. Morgan, would you please look at Defendant's Exhibit 37? Mr. Morgan,Defendanf's Exhibit 37 is titled, "The Proceedings the 1983 of Civilian Radioactive WasteManagement Information

Page 2222 the repository or at the monitored retrievable storage facility. Q. Mr. Morgan,after the contract was issued in the FederalRegister and the contracts were signed, whatdid younext focus uponas director of the Office of Civilian Radioactive WasteManagement?

(1) (2) (3) (4) (5) However, document the itself is, I think, almost500, (6) if not over 500pages long. Let's see, it's about (7) 426 pageslong and contains manypapers and (8) statements by manypeople. (9) I don't seeanyrelevanceto all those (10) statements, Your Honor. I do understandthe (11) relevance of Mr. Morgan'sstatement, and I have no (12) (13) (14) (15) (16) 17) 18) 19) (20) (21) (22) (23) (24) (25)

Page 2224 MR. SMALL:Your Honor, I have no objection to the admissionof the cover pageand pages11 and 12, whichthis witness hastestified to as being the statementsthat he provided at the conference.

objectionto the admissibility of it, the coverand his statement, pages11 and 12. THE COURT: Ms. Sullivan? MS. SULLIVAN:Your Honor, I understand there's beenprevious discussion about the admission of this exhibit, and I wouldask Mr. Lo Readdress the issue. MR. LO RE: Yes, Your Honor, you may recall that this wasanexhibit, this exhibit is a larger version, if youwill, of PX-8.PX-8 exactly what is Mr. Smalljust described,whichis the cover of this meetingand I believe the paper that Mr. Morgan presented. the time that Plaintiffs moved the At for admissionof this document,we objected on the

Meeting," that took place December 12th through 15th of,1983. Have correctly described Defendant's I Exhbit 37 that you have before you?

A. Yes. (22) Q. Do you recall this meeting in December of (23) 1983? (24) (25) A. Yes, I do.

Page 2223 (1) Q. What was the purpose of the meeting? (2) A. To provide information to the utilities, (3) the contractors, stakeholders, of what wehad been (4) doing and wherewewere trying to go. Q. Could I direct your attention to pages11 (6) (6) and 12 of Defendant's Exhibit 37? A. Yes. (7) Q. Mr. Morgan, do you recognize those pages to (8) be a written set of your comments the meeting? at ¯ A. These are my commentsat this meeting. ¯ (111 ..~Q. Do you recall that you and others prepared that were compiledinto a meeting (12) written comments (13) record? (14) A. I don't understandthe question. (15) Q. Do you recall that you and others prepared written comments, that those written comments and (17) were compiledinto a meeting record? (18) A. Yes. Q. And why was that record compiled? (19) wantedto be totally open and have (2O) -.A. We (21) records of whattranspired in the process. (22) MS. SULLIVAN: Your Honor, at this time, (23) the governmentwould movefor admission of (24) Defendant'sExhibit 37 into evidence. (25) THE COURT: Mr. Small?

(1) (2) (3) (4) (5) (6) (7) (8) (9) 10) 11) (12) (13) (14) (15) (16) (17) (18) (19)

Page 2225 groundsof completeness explained that in fact and DX-37, which we have before, us was the complete version of the document. I will notefor the recordthat there are, as Mr. Smallpoints out, several - a number other of reports, written papers, including several papers that were wr'~en by TVAemployees.For purposesof completeness,we waited until we put Mr. Morgan on, but I believe he's just testified that the document itself is a compilationof papersfromthat meeting and therefore admissible. THE COURT: Mr. Small? MR. SMALL: Your Honor, I believe it is a compilation of papers from the meeting. That's certainly whatit appearsto be. Therehas beenno testimony,however, that it's an official public document anything like that adoptedby the or Department. Also, while there's beena reference to there were papers by TVAemployees, to my knowledge,

(20) there's beenno identification of which paperswere (21) by TVA employees. As I recall, there wasa reference perhaps (23) to one, but I don't recall anyreferenceother than. (24) to onesingle one, and Mr. Lo Rejust, I think, used (25) the wordplural, and I'm not aware that there are,

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BSA (1) (2) (3) (4) (5) (6) (7) (6) (9) (10) (11) (12) (13) (14) (15) (16) (17) (16) (19) (2O) (21) (22) Tennessee

Valley

Document 312-2
Authority v.U.S.

No.

Filed 10/17/2005
01-249C July

Page 2230 wouldbe a sufficient foundation. I heard him testify that these werewhateveryone said, but I did not hear the witnesstestify that he waspresent at the entire meeting. THECOURT: Well, no, but I think it's been established by Mr. Morgan that this wasintended to be a completecompilation of the presentationsat the meeting,and accordingly, DX-37 admitted, and it's is admitted lieu of PX-8. in (Defendant's Exhibit Number was received 37 in evidence.) . THE COURT: just note for the record that I pagesfive through sevenof this document appearto contain a statement by Daniel Boggs,Deputy Secretary, U.S. Department Energy. It's a good of thing this case isn't in the Sixth Circuit or Chief Judge Boggswould be recused from the case, and that's a re!ief to myfamily because of mysons, one myyoungestson is going to be clerking for Chief JudgeBoggsin about a month. Ms. Sullivan, you maycontinue. MS. SULLIVAN:Thank you, Your Honor, these

14, 2005 Page 2232

Page 11 of 12 XMAX(39/39)

(1) your comments? A. Yes,I do. (2) Q. Whydid you makethat statement? (3) A. Whydid I makethat statement? (4) Q. Yes. (5) I made because it the Nuclear Waste Policy (6) A. (7) Act clearly did not specify a repeatrate, but that that it may the intent, or our be (8) werecognized (9) programshould be put together to meetthe acceptance 10) rate that weweregoing to put into the missionplan (11) which, as I recall, there wasan increase in backlog 112) that wentuntil 2003,but with a lead time of about (13) five yearsto provideon-site storagethat, in '98,. any (14) that they wouldnot haveto make further for (15) commitments storage of fuel on-site. (16) Andthat's what wewere, that was a goal we (17) weretrying to achieve. Q. WasDOE obligating itself to accept fuel at (18) (19) the rate set forth in the missionplan? Was a DOE it obligation to accept fuel? 2o) A. Q. Yes. 21) Is that right? (22) A. At the rate set forth in the missionplan. 23) Q. (24) (25) A. Q. No. Whynot?

are mylast questions. BY MS. SULLIVAN: Q. Mr. Morgan,could I ask you to turn to (25)

Page 2231 (1) pages11 and 12 of Defendant's Exhibit 37? (2) A. Yes. Q. AndmayI direct your attention to the (3) paragraphin the ~ight-handcolumnwhichbegins, "1 wouldlike to talk," and111readthis paragraph into the record andask you a question or two. "1 would like to talk a little bit about the str.ategy as laid out in the missionplan andwhat that the (9) weintend to do. I think mostof youknow (10) Act requires that wereceive wastefrom utilities by (11) .January 1st, 1998. Technically, the Act does not waste or spent fuel we must begin (12) .,specify how much one (13) receiving at that time. In fact, if weaccepted (14) spent fuel elementin 1998, we wouldtechnically be (15) in accordancewith the AcL we (16) However, did not believe that that meets (17) the intent of the Act. Thebasic strategy which (18) we'veoutlined in the missionplan is that, beginning (19) in 1998,utilities will not haveto provideany (20) additional storagefacilities on-site. Duringthe (21) first year of the operationof the repositoryin (22) 1998,weshould be receiving fuel at a rate so that (23) no utility wouldhaveto add anyfurther storage (24) facilities either on-site or at anotherlocation." (25) Mr. Morgan, yourecall that portion of do (4) (5) (6) (7) (8)

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Page 2233 A. Becausethere's a, one of the - a commitment, contractual commitment one thing, a is and anotheris the missiongoal that weweretrying to meet.It wasnot a contractual requirement,but this is whatweinterpreted the NuclearWaste Policy Act to say. I will haveto say that there weretwo separate bills, one passedby the Houseand one passed the Senate, and that we did not have the by benefit of a conference repot[ to get to the final language. . So we had to assume intent becauseit the was not specified. Some the members Cong[ess of of wantedtotal emphasis monitoredretrievable on storage. Others wantedemphasison the repository: Sowe walkeda fine line between different the directions that we were headng from Cong[ess. Q. Mr. Morgan, you just testified abo~the intent of the NWPA, your statement,the I:~ortion and of your statementthat I read makes reference to a regarding the intent of the NWPA the Nuclear Waste or Policy Act. How did you determinewhat you, believed to be the intent of the NuclearWaste Policy Act? . A. Howdid we determine that? a. Yes. A. By reading the Nuclear Waste Policy Act;

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Document 312-2
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Tennessee Valley Authority Page2234 that was our, that was direction. our Q. From your review, did you havean understanding the NWPA that contained specific requirements regardingthe rate at whichDOE would accept spent nuclear from utilities? fuel the A. It wassilent on rate acceptance. Q. Did you understand from your reviewof the Act that DOE requiredto acceptspentnuclear was fuel at a rate that would preclude utilities from having add to furtherstorage facilities on-site? A. No, that wasnot a commitment a or requirement the Act. of Q. Anddid you understand from your review of the Act that DOE requiredto acceptspentnuclear was fuel at a rate that would work down backlog the of spentnuclear fuel in a specificamount time? of A. No,that was part of the Act either. not Q. Mr. Morgan, like to direct your I'd attentionto the nextparagraph yourstatement, of and like to read I'd that into the record then and askyoua couplequestions. Thatportion reads, "Afterthe initial operation therepository of through first fewyears,wewould the anticipatethat the weight acceptance fuel should the rate of of be of discharge reactorsthat are in operation from at

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XMAX(40/40) 14, 2005 Page2236 fromoperating reactorsonan annual basisin 2000 or 2001? A. Wehadestimatesfrom the industry what discharge weightsweregoingto be, but thosechanged everyyear somewhat, thesewereestimatesonly. so Q. Andto meet goalset forth in the the portionof yourstatement I just read,did you that envisionthat a second repositorywouldbe needed? A. Yes. Q. AndcouldI direct your attention backto that first paragraph I read? described that You the mission plan as containing strategy. Why you a do describe as containing strategy? it a A. It was strategy integrateall the a to activities under Nuclear the Waste PolicyAct, andit was plan that wewould a hopeto accomplish, we but were contractually not required doit. to Q. Sodid you understand this strategy, as you termed to bea contractual it, requirement? A. I beg your pardon? Q. Did you understand this strategy, as you've described to be, a contractual it requirement? not. A. Absolutely MS. SULLIVAN: Onemoment,Your Honor. THE COURT: Yes.

No. 01-249C July

Page2235 (1) the time. (2) Soby the year 2000 2001,weshouldbe or (3) accepting the repository amount fuel as in the of (4) being discharged the reactors. is from It (5) anticipated at that point, wewould at that look (6) bringinghome second a repository. According the to repository followsthe first (7) Act, the second by are (8) repository four or five years.We lookingat and use (9) the sensitivity of that sequence, wemay the repositoryto start working the backlog on of (10) second thenthe statement continues. (11) fuel." And do recall that portionof (12) Mr.Morgan, you (13) your statement? (14) A. Yes, do. I that statement? (15) Q. Andwhydid you make (16) A~ I made becausethought that's it I that we plan, though hadnot it (17) what hadin the mission published that point in time, but when a{ the (18) been plan, when finally published in late we that (19) mission (20) December the numbers, think, working of 1 down (2~) backlogs startedin the year2003, I was so off, so " (22) there's an inconsistency between statement my here the mission plan that came after thaL out (23) and the (24) Q. At the time you made statement, did DOE how spent nuclear fuel wouldbe discharged (25) know much

Page2237 MS.SULLIVAN: Nothingfurther, Your Honor, (1) we'refinishedwith our (2) thankyou. Mr. Morgan, but counsel has (3) questions, I believethat opposing questions, if you'll just stay where are. so you (4) some THE COURT: Morgan,I believe Mr. Small Mr. (5) the Valley Authoritywill have (6) representing Tennessee now. (7) time for cross-examination Mr. Small,you may (8) proceed. MR.SMALL: Thankyou, Your Honor. ¯ (9) (10) CROSS-EXAMINATION (11) BY MR. SMALL: you've testified that at least (12) Q. Mr. Morgan, (13) some utilities hadseriousreservations aboutthe (14) standard contractbecause the absence a rate of of (15) term,isn't that correct? (16) A. I cannot understand, didn't understand I (17) you all, sir. at (18) Q. Ill try agair~, Mr. Morgan. the summer In some utilities - let me start overagain, (19) of 1983, (2O) Mr. Morgan.Canyou hear meokay now? (21) THE COURT:Mr. Morgan? (22) THE WITNESS: I still didn't hear. I'm (23) sorry. I'm not - I don't understand. BY MR. SMALL: (24) (25) Q. Mr. Morgan, can you hear menow?

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