Free Response - District Court of Federal Claims - federal

Case 1:98-cv-00488-SGB

Document 362-2

Filed 07/21/2006

Page 1 of 4

Sacramento Municipal Utility District v. United States Fed. Cl. No. 98-488C Rancho Seco Spent Nuclear Fuel Summary of Government's Adjusted Damages per Court's Order Dated March 31, 2006

Description Total Damages Presented at Trial Table A Adjustments to Damages Stipulated Adjustments to Table A Claim Value after Table A Adjustments Table B Adjustments to Damages Claim Value after Table B Adjustments Table C Adjustments to Damages Claim Value after Table C Adjustments Table D Adjustments to Damages Claim Value after Table D Adjustments Table E Adjustments to Damages Claim Value after Table E Adjustments Other Costs from Court's Order Dated March 31, 2006 Spent Fuel Building Upgrade PCC Loan Workout Agreement Wet Pool Cost Savings Total Other Costs $ $ $ $ $ $ $ $ $ $ $ $

Total 78,558,211 (28,829,938) (6,514) 49,721,759 (15,219,032) 34,502,727 (12,566,244) 21,936,483 (4,618) 21,931,865 (754,057) 21,177,808

$

$

(450,000) (500,000) (4,196,360) (5,146,360)

Government's Adjusted Damages per Court's Order Dated March 31, 2006

$

16,031,448

Notes: \1 As prepared by Stephen J. Kiraly. \2 Tables A, D, and E were submitted on July 7, 2006. On July 20, 2006, SMUD indicated that it intends to make an adjustment to the labor costs in Table A, increasing SMUD's net claim by $2.6 million.

Case 1:98-cv-00488-SGB

Document 362-2

Filed 07/21/2006

Page 2 of 4

Sacramento Municipal Utility District v. United States Fed. Cl. No. 98-488C Rancho Seco Spent Nuclear Fuel Table A Net Claim Based on Court's Opinion and Removal of Pre-5/15/97 Costs

Table A

Costs Excluded Based on Court's Order Regarding Pre-5/15/97 Costs 01/01/92 05/01/97 Description Total Claim Table A Less: Total Labor Less: Total Indirect Labor Plus: Labor "16 Employees" Plus: Indirect Labor "16 Employees" Total Labor Adjustment Less: Corporate Allocation Adjusted Claim 04/30/97 $ 19,459,089 $ 05/31/97 (111,659) $ Subtotal 19,347,430

Post-5/15/97 Costs Remaining Based on Court's Order 06/01/97 11/01/99 10/31/99 $ 13,045,831 12/31/03 $ 46,164,950 $ Subtotal 59,210,781 $ Total 78,558,211

$ (3,306,969) $ (1,675,258) 1,042,293 586,550 (3,353,384) (377,262) $ 15,728,443 $

(74,579) $ (40,939) 37,223 19,216 (59,079) (14,197) (184,935) $

(3,381,548) (1,716,197) 1,079,516 605,766 (3,412,463) (391,459) 15,543,508

$

(1,993,535) $ (8,436,957) $ (899,565) (1,933,088) 1,039,812 2,522,889 503,399 (1,349,889) (7,847,156) (285,463) $ 11,410,479 $ 38,317,794 $

(10,430,492) $ (2,832,653) 3,562,701 \2 503,399 \3 (9,197,045) \4 (285,463) 49,728,273 $

(13,812,040) (4,548,850) 4,642,217 1,109,165 (12,609,508) (676,922) 65,271,781 \1

Notes: \1 Per Brinig Table A as presented to the court. \2 SMUD proposed changes to Table A would increase this number from $3.56 million to $6.01 million. \3 SMUD proposed changes to Table A would increase this number from $503,000 to $714,000. \4 Does not yet include adjustments due to exclusion of labor associated with dual-purpose activities.

Case 1:98-cv-00488-SGB

Document 362-2

Filed 07/21/2006

Page 3 of 4

Sacramento Municipal Utility District v. United States Fed. Cl. No. 98-488C Rancho Seco Spent Nuclear Fuel Table B Removal of Transportable Features of the Dual-Purpose Dry Fuel Storage System

Table B

Total 06/01/97 Description Transportable Features of Dry Fuel Storage System Costs in Mr. Kiraly's Expert Report Other Transportable Features Costs: Hartford Steam Boiler Inspection & Insurance Company Costs on Contract #H918 Duke Engineering Costs on Contract #H573 Orrick, Herrington & Sutcliffe Costs Bright & Brown Costs Other Suppliers Costs on Brinig Table B3 Total Transportable Features of Dry Fuel Storage System $ 10/31/99 (2,942,956) $ 11/01/99 12/31/03 Government Adjustment Total SMUD Adjustment (1,407,241) $ Difference 12,413,962

(10,878,248) $ (13,821,203) \1 $

$

(70,831) (452,622) (3,466,409) $

(691,168) (761,999) (24,374) (476,996) (79,619) (79,619) (46,347) (46,347) (32,868) (32,868) (11,752,624) $ (15,219,032)

\2 \3 \4 \5 \6 \7

$

(32,868) (1,440,109) $

761,999 476,996 79,619 46,347 13,778,924

Notes: \1 The Government presented evidence at trial regarding the value of the "dual-purpose" transportable features of the dry storage system as they related to Vectra and Transnuclear. I priced the damages based on support and information provided by Jerry Burford of Watkins Consulting, Inc., whom the Court qualified as an expert in, among other things, the management of nulear capital projects, and claim preparation (see 3/31/06 Opinion at page 50, footnote 34). See Stephen Kiraly expert report dated 11/22/04 (Bates: EXS 0060119 ­ 0060141). See Exhibit E-1-i to Stephen Kiraly Expert report at EXS 0050092-0050108. The costs for Vectra and Transnuclear, as presented on Kiraly Expert Report Exhibit E-1-i are presented below. Description Vectra TNW Totals $ $ Pre-5/97 3,217,330 3,217,330 $ $ 6/97 - 10/99 168,414 2,774,542 2,942,956 $ $ 11/99 - 12/03 10,878,248 10,878,248 $ $ Total 3,385,744 13,652,789 17,038,533

\2 Hartford Steam Boiler Inspection & Insurance Company provided quality assurance/quality control (QA/QC) for a system with both storage and transportable features, so costs would have been spent to monitor the fabrication of the transportable features. I have seen no evidence in the record that would allow an identification or isolation of the costs for QA/QC of the transportable features. Therefore, I question the claimed amount for the costs recorded to Contract #H917 totaling $761,999. \3 Duke Engineering agreed to Contract #H573 with SMUD to provide engineering and technical personnel to support the MP-187 transportation cask. I understand that the MP-187 relates to the off-site transportation of spent nuclear fuel, therefore I question the inclusion of the Duke Engineering costs in SMUD's claim. The accounting records provided to the Government indicate that Duke costs for Contract #H573 totaled $476,996. \4 Orrick, Herrington & Sutcliffe provided legal services regarding the loan workout agreement between SMUD and PCC. PCC fabricated the dual-purpose canisters licensed for the transportation of spent nuclear fuel. I have seen no evidence in the record that would allow an identification or isolation of the legal costs related to the transportable features. Therefore, I question the entire $69,380 in legal fees. \5 Bright & Brown provided legal services related to the administration of TNW contract #E776A. TNW was the contractor providing the dual-purpose system to SMUD. I have seen no evidence in the record that would allow an identification or isolation of the legal costs related to the transportable features. Therefore, I question the entire $46,347 in legal fees. \6 These costs relate to amounts questioned by Brinig on his Table B-3. \7 Adjustments do not include the SMUD internal labor associated with the dual-purpose activities, including any shift of some of the "16 employees" to a level below 50%.

Case 1:98-cv-00488-SGB

Document 362-2

Filed 07/21/2006

Page 4 of 4

Sacramento Municipal Utility District v. United States Fed. Cl. No. 98-488C Rancho Seco Spent Nuclear Fuel Table C Removal of Costs Attributable to Contracts, Leases, or Other Legal Obligations Executed Prior to 5/15/97

Table C

Total 06/01/97 Description Costs for Obligations Executed Prior to 5/15/97 WW Grainger Lehigh Testing Laboratories Packaging Technology Vectra Transnuclear West Total Transportable Features of Dry Fuel Storage System $ 10/31/99 (509) $ (1025) (1,149,366) (2,826,621) (3,977,521) $ 11/01/99 12/31/03 $ (8,588,723) (8,588,723) $ Government Adjustment (509) $ (1,025) (1,149,366) \1 (11,415,344) \2 (12,566,244) $ Total SMUD Adjustment (509) $ (1,025) (9,866) (167,835) (179,235) $ Difference (9,866) \3 981,531 11,415,344 12,387,009

$

Notes: \1 Some of the Vectra costs were removed in Table B, therefore, the remaining amounts are removed on this table. Description Total Vectra Costs Recorded After 5/15/97 Less: Costs Included on Table B Net Vectra Costs Recorded After 5/15/97 $ $ Amount 1,317,780 (168,414) 1,149,366

\2 Some of the TNW costs were removed in Table B, therefore, the remaining amounts are removed on this table. Description Total TNW Costs Recorded After 5/15/97 Less: Costs Included on Table B Net TNW Costs Recorded After 5/15/97 $ $ 6/97 - 10/99 5,601,163 $ (2,774,542) 2,826,621 $ 11/99 - 12/03 19,466,971 $ (10,878,248) 8,588,723 $ Amount 25,068,134 (13,652,789) 11,415,344

\3 Amount is included on Table E, i.e., the Brinig adjustment would remove the amount for a second time.